Hilton Colombo Annual Report 2017

El o qu ent
Exceptional. Extraordinary.
H OT E L D E V E LO P E R S ( L A N K A ) P LC
A n n ua l R e p o r t 2017
Contents
The Hotel at a Glance........................................................................................................ 15
Financial Highlights............................................................................................................ 17
Chairman’s Message.......................................................................................................... 19
Competent Authority and the Board of Directors.......................................... 22
Management Team............................................................................................................ 27
Management Discussion & Analysis........................................................................ 29
Corporate Governance.................................................................................................... 33
Risk Management............................................................................................................... 36
Sustainability Report......................................................................................................... 39
Annual Report of the Directors on the Affairs of the Company............. 45
Directors’ Responsibility for Financial Reporting.............................................. 47
The Audit Committee Report...................................................................................... 48
Financial Reports
Independent Auditor’s Report.................................................................................... 51
Statement of Comprehensive Income.................................................................. 53
Statement of Financial Position.................................................................................. 54
Statement of Changes in Equity................................................................................ 55
Statement of Cash Flow.................................................................................................. 56
Notes to the Financial Statements............................................................................ 57
Notice of Meeting............................................................................................................... 79
Notes........................................................................................................................................... 80
Form of Proxy......................................................................................................................... 83
Corporate Information.......................................................... Inner Back Cover
El o qu ent
Exceptional. Extraordinary.
Staying true to the eloquence, style and elegance that is characteristic of the Hilton brand, every
facet of your stay has been improved upon to ensure that your experience at the Hilton Colombo
is nothing short of extraordinary. Our backbone is our exceptionally diligent workforce whose
passion for excellence and zeal to help the hotel transcend the norm and continuously evolve
has helped us succeed in providing our guests with the experience of a lifetime.
The cutting-edge training we have provided them with and the spirit to succeed that we have
imbibed in them has made our team the most sought after in the hospitality sphere, while the
priority we give them as an integral element in our operations has inspired unwavering loyalty.
Our three-decade long legacy will endure as we proceed into the year ahead, staying true to our
repute as a globally recognised beacon of personalised opulence.
Step into Sophistication
Soak in the ambience of luxury and class, a standard

that we have been upholding for decades in the
hospitality industry.
03
Hotel Developers (Lanka) PLC Annual Report 2017

First Impressions
From check in to check out, our commitment to the

needs of our guests is truly remarkable.
Service with a Smile
The warm and welcoming personality of all our team

members go a long way in creating memories that last
a lifetime.
A Good Eye
Our attention to detail is absolutely exceptional; it

is what sets us apart from the rest in the hospitality
industry.
Expert Care
We pride ourselves in possessing a team that is truly

professional; Masters of their art and in the nuances of
amazing service, they take experiences from ordinary
to extraordinary.
Setting the bar
Over the past few decades, we have set the standards

for world class service in Sri Lanka and will continue to
do so in the decades ahead.
The Hotel at a Glance
311 Fully Equipped Rooms

44 Luxury Suites
Executive lounge
All day Dining Restaurant
with Alfrasco Dining
Lounge & Bar
Coffee Shop
Fully Equipped Modern Kitchens
Authentic Chinese Restaurant
Multi Event Venues & Ballrooms
Financial Highlights
For the Year For the Year

ended ended
31st December 31st December
2017 2016
Room Revenue LKR '000 1,317,248 1,151,954
F&B Revenue LKR'000 1,635,026 1,330,543
Other Revenue LKR '000 63,088 58,183
Total Revenue LKR '000 3,015,362 2,540,680
Gross Profit Margin % 82 83

Profit/(Loss)before Tax LKR'000 172,976 172,944
Profit After Tax LKR'000 258,017 141,012
Earning/(Loss) per share LKR 0.13 0.07
Average Room Rate LKR 21,077 20,408
Occupancy % 57 47
Long Term Interest Bearing Borrowings LKR'000 Nil Nil

Total Equity LKR '000 14,022,329 13,772,897
Debt/Equity % 1.94 2.47
Total Assets LKR '000 15,428,109 15,362,703
17
Debt /Total Assets % 1.77 2.21
Current Assets LKR'000 755,730 1,016,007
Current Liabilities LKR'000 875,628 862,057
Current Ratio (times) 0.86 1.18
Quick Assets Ratio (times) 0.80 1.12
Annual Report 2017

Hotel Developers (Lanka) PLC
18
Chairman’s Message
Dear Shareholder,
“Now operating in It gives me joy to present the Annual Report and Audited Financial Statements of Hotel
a vibrant post-war Developers (Lanka) PLC for the 2017 financial year, which coincidentally marks 30 successful
years of operations for its leisure property, Hilton Colombo. Our journey over three decades
scenario, with Sri Lanka has been nothing short of inspirational, with Hilton entrenching itself as a brand that is
deeply committed to the long-term sustainability of Sri Lanka’s tourism industry, while
increasingly considered setting service standards benchmarks for the rest of the industry to emulate.
a mature democracy As the first international hotel brand to set up operations in Sri Lanka 30 years ago, Hilton
Colombo stayed the course during the ensuing three-decade strife in the island, standing
and one of the most as a beacon of comfort for tourists and local guests throughout – the presence of a Hilton
brand in the country offering them a reassuring promise. Over the decades, despite
peaceful places on growing competition, the stellar Hilton brand of service with the support of loyal Hilton
patrons has helped to sustain and expand market share.
earth, Hilton Colombo
Now operating in a vibrant post-war scenario, with Sri Lanka increasingly considered a
echoes the country’s mature democracy and one of the most peaceful places on earth, Hilton Colombo echoes
optimistic outlook. The the country’s optimistic outlook. The property is currently in the throes of a magical
transformation that will propel Hilton Colombo to new heights, leagues ahead of the latest
property is currently in international hotel brands entering Sri Lanka. It gives me great pride to announce that the
initial phase of refurbishment was successfully completed during the year under review, 19
the throes of a magical which encompassed the lobby and other public areas of the hotel. The new look and
aesthetics of the refurbished areas of the hotel have captivated our patrons.
transformation that Financial Performance
will propel Hilton Despite being in refurbishment mode over most of the year under review, the company
achieved a revenue increase from Rs. 2.5 Bn in the previous year to reach Rs. 3 Bn in 2017.
Colombo to new heights, Profit after tax increased from Rs. 141 mn to Rs. 258 mn . For this exemplary achievement,
I must thank the enduring commitment of our team and the unstinted loyalty of Hilton
leagues ahead of the Honours members and other local and foreign guests who continue to seek out the
Hilton brand of excellence and service. Many of our guests affirm that their experience
latest international at the Hilton Colombo is unparalleled, making them return to the property again and
again. During the year under review, the company ensured strict compliance to industry
hotel brands entering
Annual Report 2017

regulations and good governance practices. The company continues to maintain a
Sri Lanka” strong balance sheet coupled with prudent financial management systems and strategic
planning. We pledge to remain true to the ethos of Hilton Colombo as Sri Lanka’s beloved
brand and icon of its city centre and do everything possible to ensure the property reaches
new heights in the hospitality business.
Our projections for industry expansion remained solid, and I am pleased to note that this
was borne out by the fact that the tourism sector proved its mettle once again as one of
the mainstays of national economic growth during the year under review. We are optimistic
that recent measures by the government to put the national economy back on a growth
trajectory will serve the hospitality and tourism sectors well. The foundation has been set
for robust economic growth in the months ahead. The government has taken bold steps to
establish good governance and transparency. We expect the administration to take similar
Chairman’s Message
bold measures to drive tourism. As Sri Lanka emerges as a vibrant Although the tourism sector remains a promising foreign exchange
democracy and one of the most peaceful nations in the world, the earner of the economy, Sri Lanka has not yet tapped its full
industry expects the Government to take some bold and impactful potential in the global market.
measures to market Sri Lanka as a destination internationally, to
optimise the potential of this emerald isle. Globally, the tourism and hospitality sector continues to generate
vibrant commercial activity at every level of the international
Macro Industry and Economic Backdrop economy, generating revenues in excess of US$ 1.4 trillion and
The tourism industry remained the third-largest foreign exchange accounting for as much as 7% of total exports and 10% of global
earner in the country, despite recording a moderate growth of GDP in 2017. The year under review was characterised by sustained
tourist arrivals in 2017. Meanwhile, Sri Lanka’s real GDP growth growth in many destinations and a firm recovery in those that
decelerated further during 2017 to 3.1 per cent, from the growth of suffered decreases in previous years. Results were partly shaped by
4.5 per cent recorded in 2016. the global economic upswing and the robust outbound demand
from many traditional and emerging source markets, particularly
Although tourist arrivals recorded the highest annual arrivals of a rebound in tourism spending from Brazil and the Russian
2,116,407 in 2017, the year-on-year growth in arrivals moderated Federation after a few years of declines.
to 3.2 per cent. Flight cancellations and delays at the international
airport, due to partial operations at the international airport Future Outlook
until April 2017 owing to repairs and the upgrade of the runway These developments bode well for the future of Sri Lanka tourism.
contributed in some measure to sluggish performance in the I commend the ambitious initiatives taken by the Sri Lanka Tourism
tourism sector. Promotion Board to sustain and grow momentum in the industry.
20 Hilton Colombo’s refurbishment and renewed product in line with
India maintained its lead as the prime tourist source, contributing global Hilton brand standards will be the mainstay of Sri Lanka’s
mostly to the growth with 384,628 arrivals in 2017, while China bouquet of leisure properties. The completion of the first phase of
remained the second largest origin albeit recording a marginal refurbishment has already augmented our iconic service platform
decline, followed by the UK, Germany and France. These five largest and reiterated that the company has delivered on its promise of an
tourist source destinations together accounted for 51.2 per cent of elevated leisure offering to its loyal clientele.
tourist arrivals to Sri Lanka in 2017.
The final stage of refurbishment will commence in 2018 and boost
Despite a lower than expected growth in tourist arrivals, earnings profitability with extensive room refurbishment and new food
from tourism remained healthy with increased average spending and beverage offerings to enhance the portfolio of the hotel. I am
and duration of stay by tourists during 2017. Earnings from tourism confident that this strategic investment will further entrench Hilton
increased by 11.6 per cent to US dollars 3,925 million in 2017, in Colombo as the obvious choice amongst Sri Lanka’s finest hotels
comparison to US dollars 3,518 million in 2016. while supporting the national vision for the industry.
Annual Report 2017
Tourism earnings are expected to grow steadily over the medium- We have taken cognizance of escalating competition within the
term complemented by targeted promotional campaigns and industry and believe Hilton Colombo competes strongly on aspects
continued investment in upgrading and expanding tourism including its location, high level and consistency of service, quality
related infrastructure. Several policy initiatives and actions were of accommodation, food and beverage options, brand reputation
implemented in 2017 to harness the potential of Sri Lanka’s tourism and the Hilton Honours loyalty programme, which contributes
industry such as the New Tourism Strategic Plan 2017-2020 to almost 50% to our occupancy rate. Hilton Colombo has maintained
facilitate Tourism Vision 2025 and help achieve the United Nations’ its excellent service standards over three decades and the property
Sustainable Development Goals on tourism. prides itself on continuous adaption to emerging trends and
evolving customer expectations. Our superlative service standards
Accordingly, it is expected to raise earnings from tourism up to remain our core competitive advantage.
US dollars 7 billion, employ 600,000 workers in support industries,
and increase daily spending per tourist to 210 US dollars by 2020.
“The success of our business is linked to the success of our people. Our inspired
level of service is emblematic of our dedicated and skilled team of hospitality
professionals who consistently exceed guest expectations. Our staff is world-class
and can easily compete with the best of the best. It is our unique signature Hilton
service that keeps our guests returning to our property for every special occasion.”
Pillars of Our Success waste management systems across its operations. It is our way of
The success of our business is linked to the success of our people. doing our part to ensuring a safer, cleaner more sustainable planet
Our inspired level of service is emblematic of our dedicated and for the well-being of all Sri Lankans.
skilled team of hospitality professionals who consistently exceed
guest expectations. Our staff is world-class and can easily compete My gratitude also goes out to our clientele, both local and foreign,
with the best of the best. It is our unique signature Hilton service for seeking out our brand of service, accommodation, culinary
that keeps our guests returning to our property for every special experiences, extraordinary customer service and a warm sense
occasion. Employees who move on from Hilton always find their of belonging that make our guests feel instantly at home. We are
way back to us, claiming that the world-class training, dignity and grateful for their support and patronage.
warmth they receive in Hilton is something extraordinary. The 21
Hilton brand provides strong career progression supported by a Acknowledgements
structured talent development training programme. Our successful journey spanning 30 years was made possible
by the valuable contributions of all our stakeholders. They have
The Hilton Colombo salutes employees who have been standing loyally upheld the Hilton brand and we salute our guests, partners,
shoulder to shoulder with the hotel through 30 years. It is their suppliers, shareholders and the regulatory authorities for their
unwavering loyalty that helps us deliver our promise of eloquent support and guidance through the years. My colleagues on the
service with consistency. Board and the senior management and staff have been the pillars
of our success. Our people continue to lead our extraordinary
Our Hilton Honours loyal guests must be appreciated for service standards, led ably by an excellent General Manager, who
patronising the hotel despite the refurbishment process. Hilton has an eye for talent and attention to detail and a habit of going
Honors is our award-winning guest loyalty programme that above and beyond the call of duty that allows us to consistently
generates significant repeat business by rewarding guests with deliver on the promise of our brand. Our people are the heart of
Annual Report 2017

points for each stay at any Hilton properties worldwide. Hilton our operations and they have made Hilton Colombo what it is: a
Honors members represented a large share of our room occupancy source of inspiration and a warm and inviting space embedded
and contributed significant revenues during the year. in the collective consciousness of Sri Lankans as their all-time
favourite hospitality brand.
Further, the hotel remains invested in its local community,
conducting an array of social responsibility projects to improve
people’s lives. We are committed to having a positive economic and Hotel Developers (Lanka) PLC
social impact on the communities we engage with. Volunteerism is

a big part of our employee culture and Hilton Colombo is proud to Krishantha Prasad Cooray
inculcate this trait amongst its employees as ideal citizens. Chairman
Environmental responsibility has underscored our three-decade-

long journey and the hotel has adopted energy efficiency and
Competent Authority and the Board of Directors
22
Left to Right
Mr. Pravir Samarasinghe, Mr. Dhanuka Ranjith Samarasinghe, Ms. Sonali Liyanamana, Mr. Dinouk Colombage, Mr. Shezmin Mansoor,
Annual Report 2017
Ms. Dheeshana Ameresekere

23
Left to Right
Ms. Tehani Mathew, Mr. J. M. U. P. Jayamaha, Mr. Krishantha Prasad Cooray, Mr. C. Ramachandra, Mr. Athula Senanayake
Annual Report 2017

Mr. Krishantha Prasad Cooray Ms. Dheeshana Ameresekere

Chairman Director
Mr. Cooray, whose academic training has been in Political Science Ms. Dheeshana Ameresekere is the Managing Director of the
and Law, is a senior professional with many years of experience Award-Winning Boutique Hotel, The Theva Residency and Award-
in the corporate sector. Upon obtaining a Bachelor of Arts Winning Restaurant, The Theva Cuisine in Kandy. The Theva
(Honours) degree in Political Science and Law from the University Residency was awarded for “World Luxury Hotel Award for 2017”
of Middlesex, Krishantha Cooray joined the Richard Pieris Group as and is a “Winner of Trip Advisor Service Excellence Award” for
Head of Business Development. the last 8 years consecutively. The Theva Cuisine Restaurant was
selected as a “Winner of World Luxury Restaurant Award 2017” and
He went on to found the first completely independent publishing is a “Winner of Trip Advisor Service Excellence Award” for past 2
house owned by a public-quoted company. He has held several years. She holds a Bachelor of Science in Business Administration
executive positions in leading and innovative corporate entities (specialising in International Marketing) from the American
including the Ceylinco Group, the Richard Pieris Group and the University in Washington DC, USA, a Bachelor of Science in Travel
Maharaja Organization. He was instrumental in setting up Rivira Industry Management (specialising in Hotel Management) from
Media Corporation (Pvt) Ltd. under the Richard Pieris Group, serving the University of Hawaii, USA; and a Diploma in Restaurant, Travel
as a Founding Director and the Chief Executive Officer. The two & Tourism Management, Kapiolaani College, Hawaii, USA. She was
flagship newspapers launched under his direction, Rivira and previously the Resident Manager at The Park Street Hotel, Taru Villas,
The Nation, quickly made their mark as independent and widely Colombo; and Food & Beverage Coordinator and Guest Relations
circulated newspapers. As a Consultant to the Maharaja Group, Executive at Hilton Colombo.
Mr. Cooray instituted process and best practices to streamline and
24 ensure the unified executive coordination of news broadcasts
across the company’s TV and Radio stations. He is a regular Mr. Athula Senanayake
contributor to national newspapers in both English and Sinhala, Director
writing on a wide range of topics in the public interest. At present
Mr. Athula Senanayake is a hospitality professional who completed
he is a Board Member of DFCC Bank and Chairman/Managing
his higher studies at the renowned Institute of Hotel Management
Director of the Associated Newspapers of Ceylon Limited, more
and Tourism in Salzburg, Austria, graduating with distinction.
generally known as “Lake House”.
He went on to work at Hilton International in the UK for five years

at Park Lane, Kensington and Stratford-Upon-Avon hotels, rising
to manage the fine dining operation. On his return to Sri Lanka,
he was employed as Assistant Food and Beverage Manager at the
Hotel Lanka Oberoi (now Cinnamon Grand) and was then recruited
Annual Report 2017
to the launch team of the Colombo Hilton in 1987 in the capacity

of Food and Beverage Manager. He was involved in the pre- and
post- opening stages of the hotel that established itself as the
premier hotel in Colombo.
In 1991, he left to successfully launched Don Stanley’s group which

specialises in fine restaurant operation, niche market food supply
and bespoke catering services.
During his experience in the field that spans 40 years, he has

acquired an in-depth knowledge in dealing with international hotel
chain operators and is cognizant of all aspects of hotel operation
with an accent on food and beverage services.
Mr. J. M. U. P. Jayamaha Ms. Tehani Mathew
Director Director
Mr. Jayamaha is the Additional Director General of the Department Ms. Tehani Mathew holds a Bachelor of Arts in Political Science
of Public Enterprises of the General Treasury, Member of Board of from Columbia University, New York, USA, and Master of Science in
Directors of National Water Supply & Drainage Board, Lankaputhra Applied Psychology from University of Colombo. She is the Chief
Development Bank and Institute of Fundamental Studies. A Trustee of Expo 80 Foundation (Tyronne Fernando Foundation),
Member of the Sri Lanka Government Accountants’ service, with Moratuwa and Director of Vision Packaging (Pvt) Ltd, Packwell
nearly 25 years of experience in Financial and Accounting fields, he Lanka (Pvt) Ltd and LJM Peiris & Co. Ltd. She was the President
served in several key government entities including Ministries and of the Seva Vanitha Movement, Ministry of Information and
Departments. He holds a Masters Degree in Development Studies Broadcasting from 1990 to 1993, Ministry of Foreign Affairs from
from University of Colombo, Post-Graduate Diploma in Accounting 2002- 2004 and Volunteer Counsellor at Women in Need, from
and Financial Management from University of Sri Jayewardenepura, 1996- 2003. She is a member of the American Alumni Association
Diploma in Public Financial Management from Sri Lanka Institute of Sri Lanka and Women’s Chamber of Industry and Commerce, Sri
of Development Administration (SLIDA) and Licentiate Certificate Lanka.
from the Institute of Chartered Accountants of Sri Lanka. He was
a member of the Board of Directors of the Sri lanka Convention
Bureau. Mr. Shezmin Mansoor
Director
Mr. Mansoor completed his Bachelor’s Degree in Science, majoring
Ms. Sonali Liyanamana
in Supply Chain Management from Arizona State University, USA. 25
Director
He was awarded a Scholarship during his degree and featured
Ms. Sonali Liyanamana is a senior travel and tourism industry expert in the prestigious Dean’s List, awarded for outstanding academic
with over 25 years of experience in working with both local and results. Having over 19 years of experience across a diverse range
international companies. She has implemented company policy of industries including the Garments and Clothing industry in Sri
and strategy for including maximising bottom-line performance Lanka where he setup franchised brands, produced and exported
through P&L, staff management, loss-control, airline incentive attire, he worked as Supply Chain & Logistics Director in various
negotiations and product development. She has expertise in companies in USA and recently set up his own company in the
product development and marketing of international destinations, Gem & Jewellery industry. He is a member of the Federation of
group travel and leisure FIT travel planning, and is presently Chamber of Commerce and Industry of Sri Lanka (FCCISL) and a
working as the CEO of Interglobe Travel (Pvt) Ltd., a member of the member of the Sri Lanka Gem & Jewellery Association.
World Link Group of Companies. She is also serving as the Vice-
President of the Italian Business Council of Sri Lanka.
Annual Report 2017

Mr. Dinouk Colombage Mr. C. Ramachandra

Director Competent Authority
Mr. Colombage pursued a Bachelor of Arts degree at the University Mr. Ramachandra also functions as the Chairman of Asia Asset
of Sydney in Australia and majored in 20th Century History. After Finance PLC and as an Independent Non-Executive Director of
graduation in 2009, he returned to Sri Lanka where he worked UB Finance Ltd. He holds over 40 years experience in the fields
briefly at the British High Commission, then at the Sunday Leader of Auditing, Tea Exports, Financial Services and Packaging. He is
as a Deputy Sports editor. His tenure as the Deputy Sports Editor a Fellow of the Institute of Chartered Accountants of Sri Lanka
saw him cover the 2011 World Cup hosted by Bangladesh, Sri (ICASL). He served as a Partner of Messrs Hulugalle, Samarasinghe
Lanka and India. In 2012 he was appointed Features Editor of the & Company from 1975-78, then joined Lipton Ceylon Ltd in 1978
Sunday Leader. While holding this post he was sponsored by the and left in 1992 as Chief Accountant/Company Secretary, serving
US Embassy in Colombo for a reporting tour of the US during the six months in the UK Head Office of Lipton UK. Later, he functioned
US Presidential Election. In 2013, he was recruited by Al-Jazeera as General Manager of Commercial Bank of Ceylon’s Fund
English to report from Sri Lanka. During his time with Al-Jazeera, he Management Company; Finance Manager/Company Secretary of
has covered numerous issues including the Commonwealth Heads Varna Ltd; and Chief Financial Officer of Uni Walkers Group. He was
of Government Meeting (CHOGM) which was hosted in Sri Lanka the Executive Director of Uni Walker Packaging Ltd from 2005
in 2013. Mr Colombage is also the Working Director of Litro Gas -2015. He also served as Non-Executive Director of Sathosa Retail
Lanka Limited. Ltd, and as independent Director on the Boards of Capital Reach
Holdings Ltd, Capital Reach Credit Ltd and Capital Reach Leasing
Ltd (now Softlogic Finance).
Mr. Pravir Samarasinghe
26 Director
Dhanuka Samarasinghe
Mr. Pravir Samarasinghe is the Director/Group CEO of Overseas
Director
Realty (Ceylon) PLC the premier property company; the developers
of the World Trade Center, Colombo and Havelock City. Having returned from Australia following his education in 2004,
Dhanuka joined his family’s plantation and rubber manufacturing
He has 30 years of professional and commercial experience and business. He has since founded and as Chairman led TAD Holdings
serves on the Board of Directors of several public listed and unlisted (Pvt) Ltd in to one of Sri Lanka’s fastest growing Conglomerates.
Companies.
TAD Holdings currently has interests in the Power, Plantation, Real
He is a Board member of the Ceylon Chamber of Commerce and Estate, Hospitality and Commodity Brokering sectors.
the Vice Chairman of the Employers Federation of Ceylon. He was
the former Chairman of the Condominium Developers Association TAD Power currently owns close to 21 MW of Hydro Power in Sri
Annual Report 2017
of Sri Lanka, Sri Lanka Institute of Directors, Industrial Association Lanka. TAD Plantations (Pvt) Ltd is the holding company of a series
of Sri Lanka and past President CIMA Sri Lanka Division and former of estates totaling over 4000 acres; the plantation company owns
Council member CIMA Global. and manages a portfolio of low and mid grown tea and cinnamon
estates. It also owns and operates a number of tea factories.
He is a Fellow Member of the Institute of Chartered Accountants of
Sri Lanka and Chartered Institute of Management Accountants UK He is also the Chairman of Mercantile Produce Brokers, one of Sri
and holds a Masters Degree in Business Administration. Lanka’s top three tea and commodity brokerages and serves on the
Board of several other Organizations.

Management Team
27
Annual Report 2017

Left to Right
Mr. V. Kanagasabapathy, Mr. Shamahil Mohideen, Mr. Sudarshan Sri Rayen, Mr. Jude Wickramaratne Hotel Developers (Lanka) PLC
Management Team
Mr. V. Kanagasabapathy Mr. Sudarshan Sri Rayen

MPA (HARVARD), CPFA (LONDON) FCA, FPFA, FCMA, FMAAT MBA, B.SC (HONS), FCCA, ACMA
Advisor to the Board Chief Financial Officer
Mr. Kanagasabapathy, Retired Director General of Public Enterprises, Mr. Sudarshan Sri Rayen holds a Masters Degree in Business
General Treasury currently functions as member of the Finance Administration from the University of Colombo and a Bachelors
Commission of Sri Lanka, member of the Council of University of Degree with Honours in Physical Science from the University
Jaffna, President of the Association of Public Finance Accountants, of Peradeniya. He is also a Fellow Member of the Chartered
the Public Sector Wing of CA Sri Lanka; Chairman of the Public Association of Certified Accountants - UK and an Associate Member
Sector Accounting Standards Committee and Member of the of the Chartered Institute of Management Accountants - UK. He has
Governmental and Public Sector Enterprise Accounting Committee been with the Company since December 1987.
of the South Asian Federation of Accountants. He counts over
40 years of service in the public sector and was the Financial
Management Reform Co-ordinator in the Ministry of Finance Mr. Jude Wickramaratne
& Planning. Holds a Master’s Degree in Public Administration ACMA -UK
from Harvard University and is a Chartered Public Finance Accountant
Accountant, London. He is also a Fellow Member of the Institute of
Mr. Jude Wickramaratne is an Associate Member of the
Chartered Accountants of Sri Lanka, Association of Public Finance
Chartered Institute of Management Accountants - UK and is
Accountants of Sri Lanka, Institute of Certified Management
currently pursuing a Master’s Degree in Business Administration
Accountants of Sri Lanka and Association of Accounting
at Postgraduate Institute of Management-University of Sri
Technicians of Sri Lanka.
28 Jayewardenepura. He counts 9 years of experience in the field of
accounting and joined the Company in October 2012.
Past President of the Institute of Public Finance and Development

Accountancy of Sri Lanka. He was also the Financial Management
Advisor to the Ministry of Finance & Planning and Senior Financial
Consultant of the Academy of Financial Studies. He served as a
Board member of Bank of Ceylon and was a Director of People’s
Bank, Merchant Bank of Sri Lanka, State Mortgage & Investment
Bank and many other State Owned Enterprises. He served as
Director/Financial Consultant of Associated Newspapers of Ceylon
Limited as well.
Mr. Shamahil Mohideen

Annual Report 2017
ACMA - UK
Chief Operating Officer
Mr. Shamahil Mohideen is the Chief Operating Officer since May
2013. He is a member of the Chartered Institute of Management
Accountants (CIMA UK). His post qualifying experience spans more
than 20 years, having served in several leading corporates both
local and overseas in Senior Managerial positions. Prior to joining

Hotel Developers (Lanka) PLC he has served as a Director / Vice
President of Aitken Spence Power, owned by the Aitken Spence
Group.
Management Discussion & Analysis
“ During the year, revenue expanded

by 20% YoY up to Rs. 3.02 billion,
supported by increases in room revenue
from Rs. 1.2 billion in 2016, up to Rs. 1.32
billion, and F&B revenue from Rs. 1.33
billion up to Rs. 1.64 billion “
About Us Macro Economic Environment last year to strengthen democracy and

Hotel Developers (Lanka) PLC engages The adverse impact of natural disasters reconciliation, inclusive and equitable
in the hospitality trading business in Sri across the country rendered 2017 a growth and ensure good governance.
Lanka (referred to as ‘the company’ in challenging year for Sri Lanka in economic
this annual report). It owns and operates terms, leading its growth rate to decline to Performance of Global Tourism
Hilton Colombo Hotel. The company was a 16-year low of 3.1% in 2017. Prolonged Overall, global travel continued to grow
incorporated in 1983. drought and later, floods took a toll on strongly in 2017, consolidating the
growth and the external sector while tourism sector as a key driver in economic
Our Business Approach in Year 2017 raising inflation to 6.6%. However, a sharp development. Building on a consistent
29
The company implemented multiple increase in interest expenditure forced the high-growth momentum over gathered
key strategic imperatives during the overall deficit to increase slightly, while over the past decade, the international
year under review, in alignment with its public debt to GDP ratio decreased due to tourism industry recorded its highest
vision, objectives, strengths, weaknesses primary surplus and relatively low currency arrivals in the past seven years, expanding
and emerging opportunities and depreciation. Further during the year, the by 7% Year-on-Year (YoY) to 1,322 million
constraints in the operating environment. rupee depreciated by 2% against the US arrivals in 2017.
These strategies were focused on Dollar.
the expansion and refinement of Notably, the Asia Pacific region posted 6%
facilities and infrastructure in order to Among the three major activities YoY growth to close 2017 with 324 million
maintain and extend Hilton Colombo’s (agriculture, industries and services), the international tourist arrivals. South Asian
leadership position in corporate tourism, services activities, which makes the highest arrivals increased by 10% YoY, while arrivals
through refurbishment and continuous contribution (55.8%) to the GDP, recorded to South-East Asia expanded by 8% YoY.
a positive growth rate of 3.2% during 2017, Meanwhile, the Oceania region posted
Annual Report 2017

refinement of service quality through the
implementation of HR best practices. The when compared to the previous year. 7% YoY growth while the North-East Asian
company anticipates these investments to region’s increased by 3% YoY.
support the company to stay ahead of the Looking ahead, GDP growth is projected to
curve as the local tourism sector and city rebound in 2018 from a low base and reach Internationally, Chinese tourists remained
hotels sector place greater emphasis on around 4.5% in the medium term, driven by the highest spenders - contributing US$
MICE tourism. An overview of the national private consumption and investment. The 258 billion towards the industry, reflecting Hotel Developers (Lanka) PLC
economy and global and local tourism outlook for Sri Lanka’s economy remains growth of 5% YoY, followed by American
industry conditions provides the ideal favourable - provided the government tourists whose spending increased by 9%
backdrop against which to analyse the delivers its reform agenda of improving YoY to US$ 135 billion. German tourists
performance of the company in the 2017 competitiveness, governance and public accounted for US$ 84 billion in tourist
financial year. financial management. Furthermore, the spending, while British tourists accounted
government launched its ‘Vision 2025’ late for US$ 63 billion – each posting an
improvement of 3% YoY. Meanwhile, arrivals. Arrivals from France and Australia In the coming year, it is estimated that
spending by French tourists increased by remained relatively stable during the year, total arrivals will increase to 2.78 million
1% YoY to US$ 41 billion. with arrivals from each country being tourists. While arrivals figures posted strong
recorded at 97,282 and 81,281, reflecting growth, it is notable that during the same
Among notable developments within the growth of 1% YoY and 9% YoY respectively. period, room occupancy rates in graded
international tourism industry has been hotel establishments approved by the Sri
a rising emphasis on sustainable tourism, Other notable trends in arrivals were seen Lanka Tourism Development Authority
coupled with an increasingly sophisticated from the Maldives – which posted a 17% (SLTDA) declined marginally to 73.3% in
demand from the MICE tourism segment. YoY reduction to 79,371 visitors while 2017, compared with 74.8% in 2016. It is
The year witnessed burgeoning growth arrivals from the Netherlands recorded the believed that the continuing emergence
in MICE offerings that feature social highest levels of growth during the year, of Sri Lanka’s informal tourism sector may
engagement and social responsibility as expanding by 24% YoY up to 51,148 arrivals have had a role to play in this reduction
a key draw card. MICE attendees have in 2017. in occupancy rates, where occupancy in
higher expectations of combining business ungraded properties within the informal
travel with quality leisure time which Among the other notable trends in arrivals sector are not captured within official
means that MICE operators must work in during the year in review was a sharp figures.
collaboration with local stakeholders from increase in visitors from Latin America, up
city administrations, local tourist authorities, by 15% YoY to 6,482 visitors and a similar In that regard, the performance of tourism-
and community organisation’s in order to 10% YoY improvement in visitors from related earnings provided encouraging
capitalise on this lucrative niche segment. Australasia up to 92,003 arrivals. Instability signs of the industry’s overall performance,
30 Sri Lanka’s diverse tourist product makes it in the Middle-East was reflected in a 11% increasing by 3.2% YoY up to US$ 3.6
an ideal destination for MICE tourism. YoY reduction in visitors from the region, billion during the year in review, thereby
down to 95,581 arrivals, despite overall standing as the third-largest revenue earner
Sri Lanka tourism industry expands stable levels of tourism out of the entire for Sri Lanka, and contributing 14.2% of
The Sri Lankan tourism and hospitality region. foreign exchange earnings to the national
sector posted a strong performance over economy.
the year under review as tourist arrivals In terms of the purpose of visit to Sri Lanka,
increased to 2.12 million, over 2.05 million a majority of tourists (83.9%) visited the As the industry continues to make
arrivals in 2016. These strong improvements country for leisure. While, tourist arrivals for commendable progress towards
were supported by continuous and drastic business purposes accounted for 2.9%, the achieving the Government’s 2020 target
expansions in tourism related infrastructure share of tourist arrivals for other purposes, of establishing 75,000 rooms to cater to
development projects aimed at drastically such as visiting friends and relatives, 4.5 million tourist arrivals, one of the key
expanding room capacity and other religious and cultural purposes, health, issues for the industry is the gap in trained
education and sports, was 13.2% of total tourism professionals entering the sector,
Annual Report 2017
supplementary tourist services.

arrivals in 2017. relative to demand. While training capacity
In terms of source markets, India accounted is increasing domestically, it is anticipated
for the highest number of tourist arrivals In 2017, the average spending per tourist that such labour shortages will only be
to the island, posting 8% YoY growth to rose to US dollars 170.1 per day, from US exacerbated over the short-medium
reach 384,628 arrivals in 2017, followed by dollars 168.2 per day in 2016, as per the term - as more international hospitality
China, which accounted for 268,952 arrivals, latest annual survey conducted by the Sri franchises establish a presence in the
reflecting a 1% YoY reduction in arrivals. Lanka Tourism Development Authority country. Sufficient structural adjustments
(SLTDA). Further, the average duration of need to be developed to rationalise the
Meanwhile, arrivals from the United stay by a tourist was estimated at 10.9 days country’s labour force in order to channel
Kingdom rose to 201,879 visitors, reflecting in 2017, in comparison to 10.2 days in 2016. the workforce into productive sectors of
a 7% YoY improvement, while German the economy.
arrivals decreased by 2% YoY to 130,227
Operational Review
During the year, the company reached
a key milestone as Phase 01 of its
renovation drew to a close. The focus of
the refurbishment during the year was the
hotel lobby and public areas which opened
on schedule for operations in August 2017
- in time for the peak December tourist
season. Renovations were primarily focused
on incorporating international designs
with unique local elements that evoke Sri
Lanka’s rich environmental heritage, while
placing it in the context of the eloquent
and luxurious hospitality that embodies
Hilton Colombo.
Having previously taken cognizance of Notably, the hotel was also able to retain Another crucial source of strength for the
the rapidly escalating competition within its position as the foremost venue for Company is the Hilton Honours Loyalty
the domestic tourism industry and the hosting local and international MICE Programme which, combined with timely
Colombo City Hotel sector in particular, the events. As the island’s commercial capital marketing campaigns, has served to attract
management had taken proactive steps continues to develop the industry - and a steady stream of loyal Hilton patrons from 31
to initiate extensive renovations across the Colombo City Hotels in particular - are across the globe, bolstering revenues while
key public areas within Hilton Colombo. placing greater emphasis on attracting helping the property to further align with
This initiative was undertaken to further larger volumes of corporate tourism. In that the outstanding value proposition and
enhance the property’s ability to effectively context, the investments made towards brand image of Hilton Worldwide.
compete with newer entrants and preserve further enhancing the Hilton Colombo’s
its outstanding brand image in years to ability to host such events is anticipated An Eventful Year
come, particularly with regards to the to contribute substantially to the hotel’s Given Hilton Colombo’s outstanding
rapidly growing MICE tourism segment in revenue generation capacity moving reputation for luxurious and eloquent
which the Hilton Colombo continues to forward. hospitality experiences, the hotel
hold a strong leadership position. continued to be the centre of vibrant
activity throughout the year, including the
hosting of numerous flagship events in the
Annual Report 2017

country’s corporate and lifestyle calendar.
Special events added to the wealth of
diverse and unique events hosted at the
hotel to mark special occasions and festive
seasons of international and local cultural
significance. The activities culminated in
a series of festive events to coincide with Hotel Developers (Lanka) PLC
the December festive season during which

time tourist traffic to the hotel tends to
reach some of its highest peaks.
The hotel’s value proposition was further

strengthened by its eclectic culinary
Gross Profits
Strong top-line performances supported
notable improvements in gross profits
which expanded to Rs. 2.5 billion while
profits before tax remained stable at Rs.
173 million in 2017 as a result of additional
depreciation (Rs. 100 million) arising from
capitalisation of refurbished assets.
Profit After Tax

A strong improvement was observed in
the company’s Profit after tax earnings,
which closed the 2017 year at Rs. 258
million, compared to Rs. 141 million in the
preceding year.
options offered through the property’s informality makes it an ideal social and Creating Shareholder Value
three signature restaurants. Among the business hub within the hotel. Earnings per share rose from Rs. 0.07 in
hotel’s dining options are: The Curry Leaf, 2016 up to Rs. 0.13 per share by the end of
which serves some of the most sought- Financial Review the year in review.
32 after authentic star-class Sri Lankan cuisine During the year in review, your company
and an exquisite seafood market where was able to generate improved financial Future Outlook
patrons can handpick and customise performances across all key facets of The successful refurbishment helps Hilton
their order to best suit their taste and the business despite challenges posed Colombo sustain and grow its market
preferences; Graze Kitchen, among the to occupancy by the programme of share as the leading leisure brand in the
Hilton Colombo’s most recently additions renovations carried out during this period. country. The rejuvenated leisure property
that offers up a multifaceted restaurant Notwithstanding this, the company can leverage on its international brand
showcasing a live and interactive theater benefited from a steady stream of leisure recognition and appeal, its unmatched
of dining experiences that feature live tourists throughout the year. service levels and its impeccable quality
stations for the preparation of a wide
standards to capture opportunities as they
variety of cuisine spanning Sri Lankan Revenue emerge in the upcoming financial year.
dishes to Indian, Chinese, Japanese, Italian,
During the year, revenue expanded by
Mediterranean and Thai specialties; and Il
20% YoY up to Rs. 3.02 billion, supported The company is now gearing up to
Annual Report 2017
Ponte, an institution among enthusiasts of

by increases in room revenue from Rs. 1.2 commence the second phase of
Italian cuisine, offering a casual and relaxing
billion in 2016, up to Rs. 1.32 billion. The renovations at the hotel, which will drive
atmosphere overlooking the pool area,
hotel’s diverse food and beverage options further improvements to restaurants,
where diners can choose from a wide range
also proved a strong attraction for visitors, ballroom venues and guest rooms, which
of Italian specialties including home-made
leading to an expansion in F&B revenue is set to commence in the third quarter of
pasta and pizzas baked in a wood oven.
from a previous Rs. 1.33 billion up to Rs. 2018.
1.64 billion during the year in review.

The hotel’s Food and Beverage options are
Similarly, revenue from other operations Improved economic forecasts and
rounded out by its ever-popular poolside
increased from Rs. 58.2 million in 2016 up anticipated growth in inbound leisure and
bar and Lounge & Bar – which has been
to Rs. 63.1 million. business travellers paints a picture of an
redesigned along an eclectic urban park
exciting year ahead for Colombo’s leading
theme that offers relaxing views of the
leisure property.
hotel’s lotus pond whose sophisticated
Corporate Governance
The Board of Directors of Hotel Developers (Lanka) PLC is During the year ended 31st December 2017 the Board met on
committed and takes responsibility in maintaining the highest Nine (09) occasions and the number of meetings attended by the
standards of Corporate Governance in compliance with the Directors is given below:
Corporate Governance Rules of the Colombo Stock Exchange
and the “Code of Best Practice on Corporate Governance” of the Name of Director No of
Institute of Chartered Accountants of Sri Lanka. The Board of Meetings
Directors ensures that the Company’s responsibility to uphold the attended
highest standards of business integrity, ethical values, transparency Mr. K. P. Cooray
09
and professionalism in all its activities are maintained. (appointed w.e.f. 08.04.2016)
Ms. D. S. Ameresekere
07
The Board of Directors ( appointed w.e.f. 07.04.2015)
It is the responsibility of the Board of Directors to provide Mr. J. M. U. P. Jayamaha
09
entrepreneurial leadership for the Company, formulate corporate (appointed w.e.f. 01.03.2016)
strategic goals, values and standards, and review performance so Mr. A. Senanayake
08
that the Company could fulfill its obligations to its stakeholders. The (appointed w.e.f. 08.04.2016)
Directors of the Company as at 31st December 2017 were: Ms. T. S. A. Mathew
06
(appointed w.e.f. 08.04.2016)
Mr. Krishantha Prasad Cooray - Independent Mr. D. Colombage
Non-Executive Director 09
Ms. Dheeshana S. Ameresekere - Independent Mr. M. S. Mansoor
(appointed w.e.f. 08.04.2016) 33
Mr. J. M. U. P. Jayamaha - Non-independent Mr. W. S. L. A. D. R. Samarasinghe
Mr. Athula Senanayake - Independent Ms. S. Liyanamana
Ms. Tehani S. A. Mathew - Independent Mr. P. D. Samarasinghe
Mr. Dinouk Colombage - Independent
Non-Executive Director The Directors are provided with Monthly Accounts and Statutory
Mr. M. Shezmin Mansoor - Independent Compliance Statements and all matters of importance are
Non-Executive Director discussed and decisions are taken at the Board Meetings. Further,
Mr. W. S. L. A. D. R. Samarasinghe - Independent Board Papers are submitted in advance on issues which require
Non-Executive Director specific approval of the Board. Minutes of all Meetings are properly
Annual Report 2017

- Independent recorded and maintained by the Company Secretaries.
Non-Executive Director
Mr. Pravir Dhanoush Samarasinghe - Independent Internal Controls and Risk Management
Non-Executive Director The Board has introduced adequate internal controls and risk
management systems to safeguard the shareholder investments
and the Company’s assets. The Board is fully aware that internal
controls have inherent limitations and do not provide absolute
assurance against fraud and error.
The Board of Directors reviews the Monthly Accounts and the

performance of the Company against approved budgets on a
regular basis.
Corporate Governance
Audit Committee Remuneration Committee

The composition of the Audit Committee during the year ended The Board has constituted the Remuneration Committee during
31st December 2017 was as follows; the year ended 31st December 2017, in the following manner;
Name of the Director Name of the Director Appointed/

removed w.e.f.
Mr. Pravir Dhanoush Samarasinghe - Independent Mr. Athula Senanayake (Chairman) Appointed w.e.f.
Non-Executive Director 28.04.2016
(Chairman) Mr. Dinouk Colombage (Member) Appointed w.e.f.
Mr. J M U P Jayamaha - Non-Independent 28.04.2016
Non-Executive Director Mr. W S L A D R Samarasinghe (Member) Appointed w.e.f.
(Member) 28.04.2016
Mr. M Shezmin Mansoor - Independent Non- Mr. Krishantha Cooray Appointed w.e.f
Executive Director 16.01.2017
(Member)
The Remuneration Committee makes recommendation on
The Audit Committee scrutinise and analyse the Report on the remuneration matters to the Board.
Internal Controls of the Hotel Operations which is prepared by
the Internal Auditors Ms. Ernst and Young and ensure application Company Secretaries
of strict control over the affairs of the Hotel and the Company.
Company Secretaries provide advice to the Board on matters
The Audit Committee makes recommendations to the Board on
34 relating to the Companies Act and the Colombo Stock Exchange
necessary improvements to the internal control systems of the
regulations, in order to ensure that the Best Governance practices
Hotel/ Company. Audit Committee also reviews Quarterly Financial
are adopted by the Board and its Committees.
Statements which are released to the Colombo Stock Exchange,
before recommending to the Board and the Annual Financial
Statements before releasing the same for Audit.
Report of the Audit Committee is set out on page 48 of this report.
Compliance with Legal Requirements

All Directors have access to the Financial and Management Information of the Company. The Directors makes every endeavor to ensure
that the Company complies with laws and regulations and to exercise due diligence in managing the affairs of the Company. Additionally,
checks and controls are in place to ensure that the policies of the Board are complied with.
Annual Report 2017
As per Section 7.10 of the Listing Rules of the Colombo Stock Exchange the following disclosures are made accordingly and have complied
with the Corporate Governance Rules during the period under review is set out in the table below.
Rule Subject Applicable requirement Compliance Details

No. Status
7.10.1 Non-Executive At least 1/3 of the total number of Directors Complied All Directors are Non-Executive Directors
Directors should be Non-Executive Directors

7.10.2 Independent 2 or 1/3 of Non-Executive Directors, which is Complied
(a) & (b) Directors higher should be independent
Each Non-Executive Director should submit Complied

a declaration of Independence/ Non-
Independence in the prescribed format.
Rule Subject Applicable requirement Compliance Details
No. Status
7.10.3 Disclosure relating (a) Names of Independent Directors should Complied Please refer to information pertaining to
to Directors be disclosed in the Annual Report the Directors and Board sub Committees
in the Annual Report
7.10.5 Remuneration (a) There shall be a Remuneration Complied Please refer to information pertaining to
Committee Committee comprising of a minimum of two the Directors and Board sub Committees
Independent Non-Executive Directors in the Annual Report
7.10.6 Audit Committee The Company shall have an Audit Complied Please refer to information pertaining to
Committee the Directors and Board sub Committees
in the Annual Report.
7.10.6 (a) a) Shall Comprise of Non-Executive Complied
Composition of Directors a majority of whom shall be Audit Committee consists of 3 Non-
Audit Committee independent Executive Directors two are independent.
b) The Chairman of the Audit Committee or Complied
one member should be a member of a Chairman of the Audit Committee is
professional accounting body member of a Professional Accounting
Body.
Other Policies and Practices 35

Obtaining Independent Professional Advice
The Board in discharging its duties seeks independent professional advice from external parties when necessary, at the Company’s expense.
Dedication to matters of the Board and the Company

The Board of Directors devotes adequate time to the fulfillment of its duties of the Company. The Board has delegated the day to day
operations of the Company to the Chief Operating Officer and Chief Financial Officer of the Company.
By Order of the Board

Annual Report 2017

Dhanuka Ranjith Samarasinghe Dinouk Colombage
Director Director
23rd July 2018

Risk Management
Being in the forefront of a highly competitive industry that Management Team is responsible for the overall implementation of
resonates with the demand of attracting and retaining diversified the Board approved risk management policy.
markets amidst numerous challenges, Hilton Colombo considers
Risk Management as an integrated process in its pursuit in Risk Management Framework
delivering long term stakeholder value. In its’ current business The Risk Management team of Hilton Colombo is headed by the
environment where change has become the norm rather than the General Manager working closely with Hilton Worldwide in fulfilling
exception, the Hotel has consistently recognised the pivotal role its statutory, fiduciary and regulatory responsibilities within a well
it plays in balancing strategic planning with business execution formulated risk management framework. Functional heads of
and compliance. This facilitates informed decision-making and the Hotel together with the General Manager make up the Risk
a conscious evaluation of opportunities and their inherent risks Management team. A methodological process ensures that all
as such, enabling the Hotel to protect or enhance key assets relevant internal and external risks are identified with intelligence
appropriately. gathering, quality audits, safety audits, internal audits and means
such as customer feedback and incidents. These identified risks are
The Risk Management platform of Hilton Colombo is geared then assessed in terms of business impact, likelihood of occurrence
in identifying the types of risk exposure within the company, and velocity. Risks are mapped in terms of impact and probability,
measuring those potential risks and developing strategies to enabling the prioritisation of key risk exposures.
mitigate or control the same. Risk Management is an essential
element of our corporate governance structure and strategy The result of these risk rankings are tabulated in a risk grid that rates
development process and the Hotel has successfully and the risks in scale of ‘High to Insignificant’, which enables the Hotel
strategically structured appropriate systems, policies and to prioritise the risks and to plan out risk mitigation strategies under
36 procedures in all areas of operations with periodical reviews to the classification of preventive, detective and corrective action
ensure adequacy and adherence. plans.
Our risk management framework constantly reflects the changing The Risk Management Team of the Hotel reviews the identified risks
dynamics in the operating environment and are woven into in line on a monthly basis; the assigned risk owners are responsible for the
with our policy frameworks and international best practices where implementation of any mitigation action. The consolidated financial
applicable. and operational compliance report is received by the Management.
The Risk Management Team has also included the Risk Review on
The Management oversees and retain ultimate responsibility the agenda of Risk Management meetings.
for the risk management framework of Hilton Colombo. A Risk
Risk Category & Description Control Measures and Action Plans to Mitigate Risks
Annual Report 2017
Technology & Information Risk Implementation of a fully integrated, property management, material management, Point of
Risk of failure of electronic systems Sales and a financial information system, ensuring a seamless flow of information and operational
and inadequacy of information efficiencies.
systems
Existence and continuous improvement of a Disaster Recovery Plan in the event of a disruption of
failure in the system.
The IT Division of the Hotel has implemented controls to safeguard the computer installations of
the hotel to reduce downtime and ensure continuity of operation
Continuous review of network protection process is carried out to ensure information security
and integrity.
Internal Process & Procedures Clearly defined systems & procedures are in place to ensure compliance with internal controls
The risk of financial loss and which are periodically reviewed for their continued effectiveness.
disruption to business and
An internal Audit Team from Hilton Worldwide carries out regular reviews and reports on the
breakdown in Internal Controls
adequacy and effectiveness of these systems and level of compliance.
Natural or Man-made Disasters Adequacy of insurance covers are reviewed regularly and updated when necessary. Crisis
Loss of property and equipment management and business recovery plans have been adopted to safeguard the assets and
resulting in significant losses speedy recovery. These are being reviewed periodically.
Credit Risk A credit policy and stringent controls are in place to mitigate the impact of default. Credit limits
Exposure and losses due to default are reviewed on a regular basis.
of settlement debtors
Constant monitoring and review of debtor balances with collection targets and required
progressive action.
Liquidity Risk Regular review mechanisms are in place to monitor the performance of the company against
Inability to meet financial approved budget targets to achieve a balance between liquidity and profitability.
commitments on due dates.
Capital investments are planned so as not to adversely impact Cash Flows and gearing status of
the Company.
Hilton Colombo confirms that a process for identifying, evaluating and managing significant risks that endanger the achievement of the
strategic plan of the Hotel has been in place throughout the year in accordance with the guidelines set out by the Hilton Worldwide of 37
USA. Industry best practices and potential financial risks are taken into account. The Risk Management team has reviewed the Business Risk
Management process by the Hotel and has noted that risk management exercises have been conducted.
Below are some of the key items included in the risk register of Hilton Colombo along with the status and mitigation strategies for each, for
the financial year ending 31st December 2017.
Operational Risks
Competitive Risk Strict adherence to service standards to ensure superior quality in service delivery and value for
Reduction in market share, failure money
to be competitive resulting in lower
Upgrading and enhancing facilities and services.
occupancy and room rates due to the
Annual Report 2017

Refurbishment programme Reviewing and monitoring adherence to Brand Standards and Standard Operational Procedures
(SOP).
Anticipate competitor strategies and new entrants to market and formulate strategies
accordingly.
Constant creativity and innovation in products and services. Hotel Developers (Lanka) PLC
Continuous review of guest feedback and prompt response to issues in order to create customer
delight.
Risk Management
Brand Image & Reputational Risk Conduct regular brand audits and mystery audits for guests’ feedback covering both facilities
Ant or action that may cause material and services.
damage to the brand and reputation
Compliance with environmental, health & safety best practices by obtaining HACCP and other
of the company
quality certification standards.
Benchmark industry best practices in terms of both product and service.
Ensuring key managerial positions are held by suitably qualified and trained staff with sufficient
experience in the hotel industry.
Innovative service delivery in keeping with the brand promise.
Responsible corporate citizenship through CSR initiatives.
Human Resources Risk Structured training programmes, cross exposure training opportunities arising from the
Risk of losing key personnel and performance appraisal process.
skilled staff; inappropriate labour
Emphasis on good employer-employee relationships, employee welfare, and an effective and
action
open communication with the labour union to achieve a win-win outcome.
Fostering a spirit of unity and self belonging across the organisation via associate gatherings,
outings, family get-togethers and religious events.
38
Risk of injuries/health hazards due
Adjusting the salary level of the key team members to be more competitive in the market.
to employees being exposed to
hazardous work conditions/chemicals Strict adherence to laid down safety standards and procedures.
Annual Report 2017
Sustainability Report
The sustainability strategy adopted needs of the hotel’s guests, team members, programme. This utilises a comprehensive
by Hotel Developers PLC (HDL), which suppliers and business partners, while 10-point rating system that monitors
manages Hilton Colombo, is based on positively impacting local communities customer experiences and quantifies it to
integrated analysis, management and and providing continuous financial value to generate vital feedback that is leveraged
reporting of all material economic, shareholders. towards the continuous improvement of
social and environmental impacts of service and value proposition.
Hilton Colombo’s operations as part of a Our People
continuous and holistic effort to set new While infrastructure and facilities play a vital
The Hilton Colombo stands as an
benchmarks in responsible hospitality. role in enhancing customer experiences,
established leader in the Colombo City
the ultimate success of the company stems
Hotels sector. Its reputation for service
The hotel’s initiatives across these from the performance of its dedicated
excellence is a direct result of the efforts of
three pillars help to build a transparent team of team members in order to ensure
its valued team of team members. Towards
dialogue with all relevant stakeholders that each member of the team is engaged
this end, Hilton Colombo continues
and to facilitate the delineation of future and committed to the Hilton Brand Promise
to maintain a highly structured and
parameters for the management and of ensuring that every guest feels cared for,
progressive towards Human Resources
mitigation of economic, social and valued and respected.
Management – spanning recruitment,
environment impacts capable of ensuring
training and skills development together
sustainable growth in the long term. This engagement is primarily facilitated
with numerous initiatives aimed at
through the Blue Energy Committee to
strengthening team dynamics, improving
Sustainable Tourism maintain a service culture that will support
work-life balance and cultivating a new
In light of its 30th anniversary of vibrant the hotel team’s ability to live values, deliver 39
generation of leaders that will serve to
and eloquent hospitality in Sri Lanka, the promises and share stories, while being
power the hotel forward in years to come.
Hilton Colombo remains fully committed continually focused on the experience the
towards extending its long-standing hotel is creating for guests, team members
Blue Energy fuels growth
legacy as a responsible corporate citizen. and communities on the four pillars of
The resounding success that Hilton community relations, team relations, guest
Particularly in the context of 2017 having
Colombo continued to enjoy over the relations and sustainability.
been declared as the International Year
past year is a direct result of a progressive
of Sustainable Tourism by United Nations,
approach to the development and The committee comprises of a select
the hotel continuously strives to align itself
retention of valuable human capital. group of 50 team members from various
with global sustainable best practices,
Given that the hotel’s success rests on departments under the patronage of
in keeping with the lofty standards
the high level of satisfaction that it is Hilton’s Human Resources division and
maintained in relation to luxurious
able to deliver to each customer, Hilton the overarching leadership of the General
hospitality and meaningful sustainability
Colombo continuously monitors customer Manager of the hotel.
Annual Report 2017

established by the Hilton brand on a global
satisfaction through the Satisfaction and
scale.
Loyalty Tracking (SALT) online survey
During the year in review, the hotel

successfully extended its efforts to
cultivate new paradigms in sustainable
management through concerted efforts Hotel Developers (Lanka) PLC
aimed at continuously optimising human

capital. This was achieved while driving
extensive community engagement
projects and channeling investments
towards drastically mitigating the
environmental impacts of its operation in
a manner that proactively addresses the
During the year in review, these activities

were further complemented with the
launch of Thrive@Hilton initiative – focused
on enabling team members to grow and
flourish in body, mind and spirit through
continuous investments in the well-being
of team members that allows them the
space to flourish: through inspiration,
creativity and meaningful connections.
Recruitment, training and skills

development
Recruitment continues to be a challenge
and a top priority, given the continuing
gap in skilled professionals entering the Seated (From left to right)
R.J. Fernando (Radcliff ) T.N. De Mel (Tania), M.T. Bodinagoda (Bodi), H.C.D. Perera (Devika), H T.A Mendis (Heather), K.S.E
tourism and hospitality industry relative
Mohotti (Kapila)
to the rapidly expanding requirements
Standing (From Left to Right)
of the industry. The hotel recruits team V.G.S. Rohana (Rohana), R.M. Wise (Wise), A. Samson(Alex), D.D. Upali (Upali), N.J. Deshapriya (Deshapriya), T.D.A.
members based on unbiased criteria in Jayantha (Jayantha)
order to ensure that only the most qualified
40 candidates are selected in accordance with Leveraging regular in-house programmes together with Hilton’s global extensive online
the Hilton Colombo’s equal opportunity skills development programmes, training is offered under the following categories for
policy. Except for positions where a existing staff members:
particular skill and experience is required, yy Technical skills
most of the personnel are recruited as
yy Training related to various quality and safety standards
interns/trainees.
yy Soft Skills
Over the past three decades of its yy Leadership Development
operations, this policy has yielded strong
returns, with most of the hotel’s recruits Apprenticeships
having emerged as dynamic performers In addition to honing the talent of its permanent staff cadre, the hotel also conducts
that attain positions of leadership, ably programmes focused on attracting and retaining youth into the industry. These initiatives
supported by the hotel’s world-class include the opening of internships, industrial trainee and apprenticeship opportunities
Annual Report 2017
development and career progression organized in partnership with leading hospitality education institutes.
initiatives.
In that regard, Hilton Colombo continues

to maintain some of the strongest team
member retention rates in the industry – a
testament to its continuing efforts to set
new benchmarks in progressive Human

Resource Management.
Currently, Hilton Colombo maintains five yy Library Visit to Anuradhapura: Q&A session. During the session, the
apprentice programmes across different Members from Hilton Colombo, students were presented with an
departments in the hotel; working in close visited Anuradhapura district for a activity which involved them coming
collaboration with the National Apprentice Library visit on 31st May. During this up with innovative ideas that could
and Industrial Training Authority (NAITA); session, our team observed the actual happen in the future in which the
a government body established to train education process of the 60 girls in students enthusiastically participated.
youth on skilled jobs. Thambuththegama and Nochchiagama The students all expressed positive
schools and had an opportunity to energy towards the Youth Forum which
Current active apprenticeship programmes interact with students and educate was a success.
include them in the opportunities present in yy C
areer Guidance Workshop: 47 students
yy Kitchen Apprentice Programme the hospitality sector. who completed G.C.E. (A/L) Exam from
(duration : 30 months) yy C
areer Guidance Workshop and Sewanagala School, Hambantota,
yy Engineering Apprentice Programme Familiarisation Tour: Students from embarked on a familiarisation tour and
(duration : 24 months) Hospitality Education Institute, career guidance workshop at the Hilton
yy H
ousekeeping Apprentice Programme Colombo, visited the hotel for an Colombo on 23rd May. All participants
(duration : 12 months) informative session about careers in the had completed their primary education
hospitality industry. and were seeking job opportunities.
yy F ood & Beverage Apprentice
yy C
areer Guidance Workshop: A group of They were brought to Colombo and
Programme (duration : 18 months)
10 youth between the ages of 16 – 20, taught the basics of hospitality and
yy K itchen Stewarding Apprentice were taken around the hotel to show
from Sooriyawewa, in the Hambantota
Programme (duration : 12 months) the key areas of operation which 41
District, travelled to Hilton Colombo
to participate in a career guidance opened their eyes to the unlimited
Careers@Hilton possibilities in the hospitality industry.
and vocational training session. The
Additionally, the Hotel also continues to 2-hour session educated participants
host its annual Careers@Hilton –in the on opportunities available in the Championing women’s empowerment
month of May dedicated by all Hilton hospitality industry and the hotel. Another important focus of the Hilton
hotels and offices across the globe to brand’s approach to HR best practices
yy S ri Lanka Scouts Career Guidance
hosting activities aimed at encouraging is a consistent emphasis on women’s
Workshop: The Sri Lankan Scouts
and educating local youth and other job empowerment. In conjunction with the
Workshop was held on the 21st May
seekers about the potential opportunities International Women’s Day on 8 March,
at the Hilton Colombo Grand Ballroom
and benefits of a career in hospitality. First Hilton Hotels in Southeast Asia and India
with the participation of 450 young
initiated by Hilton CEO Chris Nasetta in engaged in community projects to amplify
scouts across the Island. During the
2014, Careers@Hilton continues to receive commitment towards gender equality and
workshop, Hilton Colombo conducted
Annual Report 2017

global patronage from all Hilton properties, women’s empowerment.
sessions on career guidance, table
and serve as an invaluable opportunity to
etiquette and the future of hospitality.
support Hilton’s commitment to connect, Having signed the CEO Statement
prepare or employ one million young yy H
ilton Colombo Youth Forum 2017: 359
of Support for the UN Women’s
people by 2019. students from schools and Institutes
Empowerment Principles in 2014, Hilton
around the country participated in the
has placed great emphasis on promoting
Hilton Colombo’s career and community 4th annual Youth Forum on 25th May.
women in leadership, engaging women
engagement programmes were held The session had a futuristic theme and
as business partners, and fostering
through the 2017/18 year. Some of the kicked off with a video depicting the
community partnerships that invest in
notable ones were: evolution of mankind to important
women and girls through education,
historical dates and important dates
yy R
oom to Read: Female students from training and professional development
related to Hilton. The students were
Monaragala district participated in given ample opportunities to speak
a Job Shadowing Programme at the with the General Manager in the final
hotel including an overnight stay.
The occasion was graced by the first female

Mayor in Colombo and the Ambassador of
the Kingdom of Netherlands during which
two panel discussions and Q&A Sessions
were conducted with the enthusiastic
participation of Sri Lankan female leaders,
including the Director of Human Resources
of Hilton Colombo. Importance was given
to designing innovative strategies to
invite and to retain more female talent in
the tourism sector of Sri Lanka which is
expected to be one the most sought after
destinations in global tourism by 2020.
Health and Safety

A crucial element of ensuring eloquent
hospitality is a stringent emphasis on
the highest possible safety standards to
ensure the health of both guests and team
members alike. Hilton Colombo has a Food
42 Safety & Hygiene Manager to monitor and
manage the entire food safety & hygiene
standards in the hotel as per global Hilton
worldwide standards.
Accordingly, preventive maintenance

programmes are regularly scheduled and
conducted to the highest standards to
ensure that all food processing/storage
equipment are operating at optimum
levels. Meanwhile, kitchen team are
regularly educated and monitored for food
During 2017, the hotel conducted various programmes such as workshops, career safety & hygiene and food allergy training
Annual Report 2017
guidance programmes and familiarisation tours targeting female students currently in order to ensure that guest preferences
studying in schools and hotel schools. Workshops were conducted for its female team and requirements are fully satisfied at all
members to appreciate and recognise their efforts for all what they do and to help them times.
‘Dream Big’. Various sessions were organized under the theme: ‘THRIVE’; BODY, MIND &
SPIRIT. Regular microbiological & chemical analysis
of drinking water, swimming pool water,
In parallel to celebrating International Women’s Day, the Tourism Economics and Hospitality cooling tower water, guest room water &
Management Unit of the Department of Economics, University of Colombo, and Hilton food processing water is carried out by an
Colombo organised “The Tourism Women Leaders” Summit on 11th March at the Hilton accredited laboratory to monitor the safety
Colombo. This summit was focused on the theme of “Gender Equality and Empowering levels and requirements.
Women for Tourism”.
Moreover, the air quality in the rooms and its engagement with the National yy P
roviding Nourishment at Colombo
the hotel is regularly tested for Indoor Air Cancer Hospital with 5 chefs and 35 Nawam Maha Perahera
Quality (IAQ) parameters. A new sprinkler team members helping to prepare Continuing its engagement with the
system has been put in place at the meals for 1,100 patients and staff at the rich and vibrant cultural traditions of Sri
hotel’s penthouse level to reduce the risk hospital together with special gifts for Lanka, 550 lunch & 550 dinners packets
of fire. We have successfully minimised patients in the Children’s Ward of the were provided to feed attendees at the
inconvenience to guests during the hospital. Additionally, the hotel made a Colombo Nawam Maha Perahera on
refurbishment by minimising noise levels. further donation of vital medication to both days of the event.
the hospital worth Rs. 1 million.
yy Sponsoring Charity Fashion show
Community yy E quipping Classrooms with
Hilton Colombo organised and hosted
A vital element in the hotel’s community computers in Welioya school
‘Rock the Runway’ - a special Charity
engagement strategy is team member Given the increasingly central role Fashion show, the proceeds of which
volunteerism under the umbrella of ‘Blue that technology is playing in driving were donated towards a water storage
Energy Community Team’. This foundation progressive change and opportunities and distribution project in aid of water-
functions with the assistance of the hotel for financial empowerment at every stressed communities in Walatchchi,
team’s enthusiasm for volunteering in all level of the domestic and global Anuradhapura.
its projects. The Hilton Colombo volunteer economy, the hotel continues to place
network enables team members to reach yy S ponsoring Sunera Foundation
great value on education, particularly
beyond their day-to-day work to contribute Fashion & Jewelry Show
in relation to technology. In order to
to the community and environment. further this commitment over the year The hotel sponsored the Fashion &
in review, 6 computers were donated Jewellery show in aid of the Sunera 43
The hotel encourages team members to together with necessary chairs and Foundation – including a high tea
engage in community activities without tables to furnish the computer lab at event for 400 attendees, during which
having to use their personal leave. These the Kalyanipura Vidyalaya in Welioya, a total of Rs. 1.29 million in charitable
multi-faceted initiatives are designed to powered by the efforts of volunteers donations was made to the foundation.
empower Sri Lankan communities through from the Hilton Colombo team. yy D
onating RO water plant to
targeted programmes aimed at supporting Anuradhapura village
yy F acilitating Sunshine Games for
opportunities for long-term growth.
differently-abled children Solely utilising the contributions of the
Working in partnership with the Rotary Hilton Colombo’s finance team, a total
Key activities carried out in the year under
Club, the hotel facilitated the hosting of Rs. 350,000 was donated towards the
review:
of Sunshine Games 2018 – a sports establishment of a Reverse Osmosis
yy Providing relief to flood victims festival for children with special needs Water Treatment Plant that has helped
Providing a much-needed measure between the ages of 10 to 21 years, to provide safe and clean drinking
Annual Report 2017

of relief for communities displaced including the donation of 550 lunch water to 300 students in a remote
by severe flooding during the year, packets, brought about by the efforts village in the Anuradhapura district.
the hotel donated 7,000 ready-to-eat hotel team members. yy N
ourishing SOS Children’s’ Village Sri
meals and 500 packs of dry rations yy S upporting Sports Day for the Lanka
and medication to flood victims. Disabled In order to support the ‘Expressions of
These contributions were enhanced Love’ project, the hotel donated 100
Working in partnership with the
by voluntary donations from team snack packs with the assistance of 5
Colombo Friend-in-Need Society,
members and distributed to flood team members to the SOS Children’s
Hilton Colombo donated 800 packets
displaced communities. Village Sri Lanka – a charitable
of food to participants at the Annual
yy S upporting the National Cancer Sports Day for the Disabled – Jaipur organisation working with children
Hospital Foot Programme who are orphaned, abandoned or
As part of the celebration of its 30th whose families are unable to care for
anniversary, the hotel sought to further
them by building families, facilitating hotels around the world to Lightstay, hotel premises. PET bottles are recycled in
education and integrating them into which will allow each hotel to measure accordance with contracts established with
the community. its environmental performance, including a third-party recycling company.
yy Donation to Children’s home energy and water consumption. LightStay
is a state-of-the-art, in-house measurement Furthermore, the hotel undertook a
Through the efforts of our team
platform that enables each hotel to poster campaign to raise awareness about
members, the company donated
measure and forecast usage based on food wastage amongst team members
linen items to the Peter Weerasekera
weather, occupancy and other conditions. complemented with other training and
Children’s Home in order to assist in the
It alerts management to the hotel’s overall management initiatives focused on reducing
hosting of its village fair.
performance and consumption supporting waste across all of the hotel’s operations.
yy Interactive session on ‘Breaking and encouraging educated decisions
Hospitality Myths’ aimed at ensuring corrective actions that Moving forward, the Hilton Colombo
The Hilton Colombo partners with will positively influence future performance. continues to adopt an approach to
Sri Lanka Institute of Tourism & Hotel environmental protection that emphasises
Management & the Colombo Academy Hilton Colombo, with its ongoing responsible and sustainable utilisation of
of Hospitality Management (William refurbishment, will include a wide variety of natural resources. This is aligned to its status
Angliss) to host a special interactive energy-saving features built into the design as a leader in the Sri Lankan hospitality
session on ‘Breaking Hospitality Myths’ of the newly-refurbished areas. New energy- sector and with the values established
conducted by 10 female leaders from saving equipment such as energy efficient by the hotel almost two decades ago
Hilton Colombo for 35 female students. air conditioning systems and LED lighting - at a time when sustainability and
44 were incorporated as part of continuing environmental impact were not considered
With the participation of 5 female leaders, renovations and further improvements important priorities for the local industry.
an interactive session was held at the will be made as renovations progress Having pioneered extensive environmental
Ladies College, Colombo on 9th March across the Hilton Colombo. Ambient protection initiatives, Hilton Colombo
for 35 female students, on “The varied room temperatures and other advanced continues to explore new methods of
opportunities available in the hospitality forms of energy saving features are being further reducing resource consumption
industry” and “Hospitality Myths”. incorporated across the refurbishment. and managing waste through the
development and promotion of sustainable
60 female prefects from Sri Sumangala Effective Waste Management energy saving practices such as the
BalikaVidyalaya, Panadura, attended a half- An additional feature of Hilton Colombo’s installation of waste treatment mechanisms
day workshop at the Hilton Colombo, which continuing commitment towards ensuring and the use of central water chillers for air
offered them insights into the hospitality optimal environmental standards is in conditioning with the long term objective
industry and provided career guidance relation to the management of outputs in of playing a vital role in reducing the global
whilst empowering female leadership. carbon footprint.
Annual Report 2017
relation to the disposal of organic and non-

organic waste. Organic waste is collected
Environment and then utilised for composting and To achieve these results, different strategies
animal feed. have been adopted over the years, starting
Conserving water, energy and embracing
with the education and awareness of all
other impactful sustainable practices are
Additional waste is further segregated into team members and guests as to the impact
just some of the other ways in which Hilton
dry and wet garbage along with separation wrong behaviour can have on energy saving
is spreading warmth and light around the
of glass and metal waste. In this process, projects and ensure that team members are
globe as part of our commitment to the
all solid waste generated gets proactively environmentally responsible and uphold
communities we serve.
separated at the respective of sources of these principles in their engagements with
origin in all departments such as the kitchen, suppliers and customers.
Energy Conservation with ‘LightStay’
restaurant and bar, housekeeping, linen
Hilton has actively upgraded its systems
room, maintenance, stores and guest rooms.
and technology for its more than 4,440
Segregation is routinely undertaken at the
Annual Report of the Directors on the Affairs of the Company
The Directors of Hotel Developers (Lanka) PLC are pleased to 9. BOARD OF DIRECTORS AND THEIR SHAREHOLDING
present their Report and the Audited Financial Statements of the The Directors of the Company as at 31st December 2017 were:
Company for the year ended 31st December 2017.
Mr. Krishantha Prasad Cooray - Chairman
1. REVIEW OF THE YEAR Ms. Dheeshana S. Ameresekere - Director
Mr. J. M. U. P. Jayamaha - Director
Review of the Company business and its performance during the
Mr. Athula Senanayake - Director
year ended 31st December 2017, with comments on financial
Ms. Tehani S. A. Mathew - Director
results and future strategic developments, are contained in the
Mr. Dinouk Colombage - Director
Chairman’s statement. (Page 19)
Mr. M. Shezmin Mansoor - Director
Mr. W. S. L. A. D. R. Samarasinghe - Director
2. THE PRINCIPAL ACTIVITY Ms. Sonali Liyanamana - Director
The principal activity of the Company is to carry on the business Mr. Pravir Dhanoush Samarasinghe - Director
of proprietors and operators of hotels and for such purpose to
construct, purchase, take on lease or otherwise acquire any lands, None of the above Directors of the Company hold shares in the
buildings and other property and to improve, equip and furnish the Company.
same.
10. INTEREST REGISTER
3. FINANCIAL STATEMENTS The Directors have made general disclosures as provided for in
The Financial Statements of the Company are given on page 53 to Section 192 (2) of the Companies Act No. 7 of 2007. Arising from
78. this, details of contracts in which they have an interest if any are
disclosed in Note 34.1 to the Financial Statements. 45
4. GOING CONCERN
The Directors are satisfied that the Company has adequate 11. REMUNERATION OF THE DIRECTORS
resources to continue its operations in the foreseeable future. The remuneration and other benefit of Directors during the
The financial statements of the Company have accordingly been accounting period are as follows;
prepared on a going concern basis.
Director’s emoluments Rs 4,853,000/-
5. AUDITORS REPORT
The Auditors Report on the Financial Statements of the Company is 12. DIRECTORS INTEREST/ RELATED PARTY
given on page 51. TRANSACTIONS
The above details are contained in Note 34 to the financial
6. ACCOUNTING POLICY statements. The Directors have no direct or indirect interest in any
The significant accounting policies adopted in the Preparation of contracts or proposed contracts with the Company other than
Annual Report 2017

the Financial Statements are given in Note 4 on page 58. those disclosed.
7. TAXATION 13. PAYMENTS TO AUDITORS

Provision for taxation has been computed at the rates given in Note The amount paid or payable to the Auditors for the year ended 31st
26 to the financial statements. December 2017 is Rs 2,469,000/-
8. DIVIDENDS 14. DONATIONS
The Directors do not recommend a dividend on ordinary shares The Company has not made any donations during the year ended
for the year ended 31st December 2017 in view of the on going 31st December 2017.
Refurbishment Program by the Company at an estimated cost of
US $ 52 Mn. 15. CORPORATE GOVERNANCE
The Company has put in place systems and procedures to ensure
the implementation of sound Corporate Governance Principles. An
Annual Report of the Directors on the Affairs of the Company
overview of such practices adopted within the Company is given 21. DIRECTORS’ RESPONSIBILITY FOR FINANCIAL
on pages 33 to 35 of the Annual Report. REPORTING
The Directors are responsible for the preparation of the financial
16. AUDIT COMMITTEE statements of the Company to reflect a true and fair view of its state
The Composition of the Audit Committee during the year ended of affairs. The Directors are of the view that these financial statements
31st December 2017, was as follows; have been prepared in conformity with the Sri Lanka Accounting
Standards and the Companies Act No. 07 of 2007. The Directors are
Name of the Director accordingly satisfied that the financial statements presented herein
Mr. Pravir Dhanoush Samarasinghe - Independent give a true and fair view of the state of affairs of the Company as at 31st
Non-Executive Director December 2017 and the profit for the year then ended.
(Chairman)
Mr. J M U P Jayamaha - Non-Independent 22. STATUTORY PAYMENTS
Non-Executive Director The Directors are satisfied that to the best of their knowledge and
(Member) belief, all statutory payments due to the Government and to the
Mr. M Shezmin Mansoor - Independent Non- employees of the Company have been made up to date.
Executive Director
(Member) 23. POST BALANCE SHEET EVENTS
No events have occurred after the balance sheet date which would
The report of the Audit Committee is given on page 48 of the
require adjustments to or disclosure in the Accounts, other than
Annual Report.
those given in Note 30.to the Accounts.
46
17. REMUNERATION COMMITTEE
24. AUDITORS
The Board has constituted the Remuneration Committee during
the year ended 31st December 2017, in the following manner; In terms of the 19th Amendment to the Constitution Auditor
General continues to be the Auditor of the Company.
Name of the Director Appointed/
removed w.e.f. 25. NOTICE OF MEETING
Mr. Athula Senanayake (Chairman) Appointed w.e.f. Notice of Meeting relating to Annual General Meeting of the
28.04.2016 Company is given on page 79 of the Annual Report.
Mr. Dinouk Colombage (Member) Appointed w.e.f.
28.04.2016 By Order of the Board of
Mr. W S L A D R Samarasinghe (Member) Appointed w.e.f. HOTEL DEVELOPERS (LANKA) PLC
28.04.2016
Mr. Krishantha Cooray Appointed w.e.f
Annual Report 2017
16.01.2017
Dhanuka Ranjith Samarasinghe Dinouk Colombage
18. CAPITAL EXPENDITURE Director Director
The details of material capital commitments are given in Note 31 to
the Financial Statements.
19. PROPERTY, PLANT AND EQUIPMENT S S P CORPORATE SERVICES (PRIVATE) LIMITED

Company Secretaries
The details of the property, plant and equipment are given in Note
12 to the Financial Statements.
23rd July 2018
Colombo
20. STATED CAPITAL
The Stated Capital of the Company as at 31st December 2017 was
Rs.20,466,456,858/- representing 2,046,645,686 ordinary shares of
Rs 10 each.
Directors’ Responsibility for Financial Reporting
The Company’s Financial Statements for the year ended 31st

December 2017 have been prepared and presented in conformity
with the requirements of the Sri Lanka Accounting standards, the
Listing Rules of the Colombo Stock Exchange & the Companies Act
No. 7 of 2007.
These Financial statements present a true and fair view of the

operations and the position of the Company for the year under
review.
The Directors have put in place systems and procedures which

enable adequate information to be captured, and which facilitate
the maintenance of accurate records.
Appropriate accounting policies have been adopted.
Internal controls have been implemented.
The Directors believe that they have taken all reasonable steps
to safeguard the assets of the Company, to ensure the integrity,
accuracy and safeguarding of operational data, and to prevent and 47
detect fraud and other irregularities.
The Directors also confirm to the best of their knowledge that all
taxes, duties and levies payable by the Company as at the Balance
Sheet date have been paid or where relevant provided for.
Auditor General has examined the financial and other records of

the Company. Their opinion is given in the Independent Auditors
Report.
On behalf of the Board
Annual Report 2017

Dhanuka Ranjith Samarasinghe
Director

Dinouk Colombage
Director
23rd July 2018

Colombo
The Audit Committee Report
Audit Committee Charter Institute of Development Administration (SLIDA) and Licentiate

Audit Committee operates as a Sub-Committee of the Board of Certificate from the Institute of Chartered Accountants of Srilanka.
Directors in terms of the mandates given in the Audit Committee
Charter to examine any matters relating to the financial affairs of Mr. Shezmin Manzoor completed his Bachelor’s Degree in
the Company and to review and monitor the financial reporting. Science majoring in Supply Chain Management from Arizona
State University, USA. He was also awarded a Scholarship during
Role of the Audit Committee his degree and was in the prestigious Dean’s List, awarded for
outstanding academic results.
Audit Committee acts as an effective forum to assist the Board
of Directors in discharging their responsibilities on ensuring the
Audit Committee Meetings
quality of financial reporting relating to;
During the year ended 31st December 2017, the Audit Committee
yy I ntegrity of Company Financial Statement and the Company
had 4 meetings. The Competent Authority, Advisor to the Board,
system of Internal Auditing and Financial Controls.
Chief Operating Officer, Chief Financial Officer, Accountant of HDL,
yy Performance of Internal Auditors. General Manager & Director Finance of Hilton Colombo, Internal
yy Annual Independent Audit of Company’s Financial Statement. Auditors Ernst & Young (E & Y), representatives from External
yy I mpartial review of the reports of internal and external audits Auditors and Management Auditors of Hilton Colombo attended
and taking into consideration findings and recommendations. the Audit Committee Meetings by invitation.
yy Compliance by the Company with statutory requirements.
Change of External Auditors
yy Adherence to the decisions of the Board of Directors.
With the enactment of the 19th Amendment to the Constitution
48 the Auditor General became the external Auditor of the Company
Composition of the Audit Committee since 2016. Accordingly the Financial Statement for the year ending
Audit Committee comprised of three Independent Non-Executive 31st December 2017 was audited by the Auditor General. Since
Directors and the composition is as follows: then the Auditor General’s Representative has been participating at
yy M
r. Pravir Samarasinghe ( Chairman) (Independent Non- the Audit Committee meetings as an observer.
Executive Director)
Review of Internal Control Systems
yy Mr.M.Shezmin Manzoor (Independent Non-Executive Director)
E & Y the Internal Auditors of the Company carried out detail audits
yy M
r.Priyanatha Jayamaha (Non-Executive Director and Treasury
of the hotel operations on the basis of the Audit Plan approved
Representative).
by the Audit Committee. Objectives of the Internal Audit were to
have an independent review of the system of internal controls
Mr. Pravir Samarasinghe is a Fellow Member of the Institute of
established by the Management and to determine the extent of
Chartered Accountants of Sri Lanka and a Fellow Member of the
adherence to the controls by the staff responsible for the function.
Annual Report 2017
Chartered Institute of Management Accountants – UK and holds a

The findings and the contents of the internal Auditors reports were
Masters Degree in Business Management and counts over 30 years
discussed with the Management and corrective measures had
of professional and commercial experience at Senior Management
been taken on a timely manner and such reports are presented to
level .
the Audit Committee.
Mr. J.M.U.P. Jayamaha is a member of the Srilanka Government
Review of Quarterly Financial Statements
Accountants’ service having many years of experience in Financial
Management in the public sector. Mr. Jayamaha holds a Master Quarterly Financial Statements of the Company were reviewed and
Degree in Development Studies from University of Colombo, Post recommended by the Audit Committee to the Board for approval
Graduate Diploma in Accounting and Financial Management from before releasing the same to the Colombo Stock Exchange (CSE).
University of Sri Jayewardenepura, Diploma in Public Financial
Management from Sri Lanka
Adoption of IFRS/ SLFRS Review of Draft Financial Statement for the year ended
The Company prepared its financial statements in accordance with 31st December 2017
the Sri Lanka Accounting Standards, as applicable for all periods to The draft Financial Statements for the year ended 31st December
date. 2017 pertaining to the Company were reviewed by the Audit
Committee, together with the External Auditors, Internal Auditors
Following the convergence of the Sri Lanka Accounting Standards and the Management Auditors of the Hotel Hilton Colombo.
with the International Financial Reporting Standards (IFRSs), all The Audit Committee was provided with confirmations and
existing / new Sri Lanka Accounting Standards were prefixed declarations as required, by the Chief Financial Officer. The Audit
as SLFRS and LKAS (referred to as “SLFRS” in these Financial Committee review facilitated that the said Financial Statements
Statements) and with effect from the financial periods beginning to be prepared in accordance with the Sri Lanka Accounting
on or after 1st April 2012, it became mandatory for the Company Standards and the information required by the Companies Act,
to comply with the requirements of the said / revised Sri Lanka No. 7 of 2007 therein and presented a true and fair view of the
Accounting Standards (LKAS/SLFRS). The adoption of new/revised Company’s state of affairs as at that date and the Company’s
financial reporting framework required amendments to the basis activities during the year under review.
of recognition, measurement and disclosure of transactions and
balances in the Financial Statements of the Company which are Conclusion
duly addressed in the Financial Statements for the year ended 31st The Audit Committee is of the view that adequate controls are in
December 2017. The transition and the resultant impact arising place to safe guard the Company’s assets and financial position
from the adoption of new/revised accounting standards on the and the results disclosed in the audited accounts are free from any
Financial Statements of the Company were audited by the Auditor material mis-statements.
General during the year ended 31st December 2017. 49
Review of Compliance Statements.

The committee reviewed the compliance statements to ensure that Pravir Samarasinghe
the company comply with all statutory requirements. In addition Chairman
the committee is satisfied that the company adheres to the Audit Committee
decision of the Board of Directors.
23rd July 2018
Annual Report 2017

Financial
Reports
Independent Auditor’s Report
To the Shareholders of the

Report of the Auditor General on the Financial Statements of the Hotel Developers (Lanka) PLC for the year ended 31
December 2017
The audit of the financial statements of the Hotel Developers (Lanka) PLC (“the Company”) for the year ended 31 December 2017
comprising the statement of financial position as at 31 December 2017 and the statement of comprehensive income, statement
of changes in equity and cash flow statement for the year then ended, and a summary of significant accounting policies and other
explanatory information, was carried out under my direction in pursuance of provisions in Article 154(1) of the Constitution of the
Democratic Socialist Republic of Sri Lanka.
Board’s Responsibility for the Financial Statements 51

The Board of Directors (“Board”) is responsible for the preparation and fair presentation of these financial statements in accordance with
Sri Lanka Accounting Standards and for such internal control as the Board determines is necessary to enable the preparation of financial
statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Sri
Lanka Auditing Standards. Those Standards require that I comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the
Annual Report 2017

Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Board, as
well as evaluating the overall presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Opinion
In my opinion, the financial statements give a true and fair view of the financial position of the Hotel Developers (Lanka) PLC as at 31
December 2017, and its financial performance and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards.
Independent Auditor’s Report
Emphasis of Matter
I draw attention to Note No. 12.3 to the financial statements which describe the fully depreciated assets at a cost of Rs.1,986,019,251 and
continue to be in use by the company. The Company has carried out detail assets verification and valuation of each and every asset with
the assistance of a Chartered Valuer and that assignment has come to its final stages of the reconciliation. My opinion is not qualified in
respect of this matter.
Report on Other Legal and Regulatory Requirements

As required by Section 163(2) of the Companies Act, No.07 of 2007, I state the followings:
a. The basis of opinion and scope and limitations of the audit are as stated above.
b. In my opinion :
- I have obtained all the information and explanations that required for the audit and as far as appears from my examination, proper
accounting records have been kept by the Company.
- The financial statements of the Company comply with the requirements of Section 151 of the Companies Act, No. 07 of 2007.
Report to Parliament
My report to Parliament in pursuance of provisions in Article 154 (6) of the Constitution will be tabled in due course.
52
H. M. Gamini Wijesinghe
Auditor General
Annual Report 2017
Statement of Comprehensive Income
For the Year ended

31.12.2017 31.12.2016
Notes Rs. ‘000 Rs. ‘000
Revenue 05 3,015,362 2,540,680

Cost of sales (550,824) (440,698)
Gross profit 2,464,538 2,099,982
Investment income 06 25,533 27,575
Other gains and losses 07 29,429 39,914
Administrative expenses (1,491,586) (1,331,329)
Depreciation (461,542) (368,254)
Other expenses (383,491) (294,905)
Finance costs 08 (9,905) (38)
Profit before taxation 09 172,976 172,945
Income tax expense 10 85,041 (31,933)
Profit after taxation for the period 258,017 141,012
Other comprehensive income

Actuarial Gain/( loss )on employee benefit obligations 2,415 (5,065)
Total comprehensive income/ (expense) for the period 260,431 135,947
53
Earning per share - Basic (Rs.) 11 0.13 0.07
The accounting policies and notes from 1 to 35 form an integral part of these financial statements.
Annual Report 2017

Statement of Financial Position
As at As at
31.12.2017 31.12.2016
Assets Rs. ‘000 Rs. ‘000
Non-current Assets
Property, plant & equipment 12 7,818,434 7,449,712
Leasehold land 13 6,610,530 6,681,237
Capital work-in-progress 243,414 215,747
Total Non-current Assets 14,672,378 14,346,696
Current Assets
Inventories 14 58,009 51,488
Trade and other receivables 15 151,640 148,843
Amount due from related parties 16 1,354 1,767
Other assets 17 183,520 216,145
Current financial assets 18 135,608 202,660
Cash and bank balances 19 225,599 395,104
Total Current Assets 755,730 1,016,007
Total Assets 15,428,109 15,362,703
Equity and Liabilities

Shareholders’ Equity
Stated capital 20 20,466,456 20,466,456
Reserves 21 161,348 21,896
Accumulated loss (6,594,476) (6,715,455)
Total Equity 14,033,329 13,772,897
54
Non-current Liabilities
Retirement benefit obligations 22 122,581 125,326
Deferred tax liability 23 396,570 499,215
Retention Fees - Refurbishment Project - 103,208
Total Non-current Liabilities 519,152 727,749
Current Liabilities
Trade and other payables 24 479,574 511,209
Amount due to related parties 25 12,558 10,598
Retention Fees - Refurbishment Project 111,028 -
Bank overdraft 272,468 340,250
Total Current Liabilities 875,628 862,057
Total Liabilities 1,394,780 1,589,806
Total Equity and Liabilities 15,428,109 15,362,703
Annual Report 2017
Net Assets pe share - (Rs.) 6.86 6.73
I certify that these financial statements have been prepared in compliance with the requirements of the Companies Act No. 07 of 2007.
Head of Finance
The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of the Board on
28th May 2018.

Director Director
Statement of Changes in Equity
Stated Capital Furniture, Fittings Accumulated Total

& Equipment Loss
Replacement
Reserves
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Balance as at 01st January 2016 20,466,456 117,421 (6,946,927) 13,636,951
Profit for the 12 Months period - - 141,012 141,012
Actuarial gain/(loss) on employee benefit (5,065) (5,065)
obligations, net of taxes - loss
Replacement of furniture, fittings & equipment - (203,914) 203,914 -
Transfers to furniture, fittings & equipment reserve - 108,389 (108,389) -
Balance as at 31st December 2016 20,466,456 21,896 (6,715,455) 13,772,897
Profit for the 12 Months period - - 258,017 258,017
Actuarial gain/(loss) on employee benefit - - 2,415 2,415
obligations, net of taxes - loss
Replacement of furniture, fittings & equipment - (128,983) 128,983 -

Transfers to furniture, fittings & equipment reserve - 268,435 (268,435) -
Balance as at 31st December 2017 20,466,456 161,348 (6,594,476) 14,033,329
The accounting policies and notes from 1 to 35 form an integral part of these financial statements. 55
Annual Report 2017

Statement of Cash Flow
For the Year ended

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Profit before taxation 172,976 172,944
Adjustment for
Depreciation and amortisation 461,542 368,254
Provision for defined benefit plans 22,576 18,307
Provision for breakages 1,329 (98)
Interest expenses 9,905 38
Profit on sale of property, plant & equipment (6,620) (4,238)
Impairment of Debtors - (9,158)
Unrealised Exchange Gain (884) (9,428)
Interest income (25,533) (27,575)
Operating profit before working capital changes 635,291 509,047
(Increase)/ decrease in inventories (6,521) (13,378)

(Increase)/ decrease in receivables (2,797) 10,551
Increase/decrease in amounts dues to related parties 2,373 (6,872)
56 (Increase)/ decrease in other assets (2,570) 191,714
Increase/ (decrease) in trade & other payables (32,963) 114,162
Cash generated from operations 592,813 805,223
Tax paid (20,737) (45,366)
Payment of retirement benefits (22,907) (2,571)
Net cash generated from operating activities 549,169 757,286
Cash Flows from Investing Activities

Purchase of property, plant & equipment (111,128) (181,729)
Investment in capital work-in-progress (629,947) (1,325,914)
Proceeds from sale of property, plant & equipment 6,620 4,238
Investments in financial assets - 561,334
Interest income received 25,533 27,575
Net cash used in investing activities (708,923) (914,495)
Annual Report 2017
Cash Flows from Financing Activities

Finance Cost (9,905) (38)
Net cash used in financing activities (9,905) (38)
Net increase/(decrease) in cash & cash equivalents (169,659) (157,247)

Cash & cash equivalents at the beginning of the year (Note 27.1) 258,398 414,761
Cash & cash equivalents at the end of the period (Note 27.2) 88,739 257,514
Notes to the Financial Statements
For the Twelve Months Ended 31st December 2017
1. CORPORATE INFORMATION 2.3 Functional and Presentation of the Company to make judgments,
1.1. General Currency estimates and assumptions that affect the
The financial statements are presented in reported amounts of income, expenses,
Hotel Developers (Lanka) PLC is a limited
Sri Lankan Rupees, which is the Company’s assets and liabilities, and the disclosure
liability company incorporated and
functional currency and presentational of contingent liabilities, at the end of the
domiciled in Sri Lanka. The registered
currency. All financial information reporting period. However, uncertainty
office and the principal place of business
presented in Sri Lanka Rupees is rounded to about these assumptions and estimates
of the company is located at No. 02,
the nearest rupee unless otherwise stated. could result in outcomes that require
Sir Chittampalam Gardiner Mawatha,
a material adjustment to the carrying
Colombo 2.
2.4 Comparative Information amount of the asset or liability in future
periods. Hence, actual experience and
1.2. Principal Activities and Nature of The accounting policies have been
results may differ from these judgments
Operations consistently applied by the Company
and estimates.
Hotel Developers (Lanka) PLC is engaged with those of the previous financial in
in the business of hospitality trade, owning accordance with LKAS 01 - presentation of
In the process of applying the company’s
Hilton Colombo Hotel. financial statements.
accounting policies, management has
made the following judgments, estimates
1.3. Date of Authorisation for Issue 2.5 Materiality & Aggregation
and assumptions which have the
The financial statements were authorised In compliance with LKAS 01 on most significant effect on the amounts
for issue by the Board of Directors on 28th presentation of financial statements, each recognised in the financial statements:
May 2018. material class of similar items is presented
separately in the financial statements. Items
57
a) Taxation
of dissimilar nature or functions too are
The Company is subject to income
2. BASIS OF PREPARATION presented separately, if they are material.
taxes and other taxes including value
2.1. Statement of Compliance added taxation and nations building tax.
Financial assets and financial liabilities are
The financial statements of the company Significant judgment was required to
offset and the net amount reported in
(statement of financial position, statement determine the total provision for current,
the statement of financial position, only
of comprehensive income, statement deferred and other taxes pending the
when there is a legally enforceable right
of changes in equity, statement of cash issue of tax guidelines on the treatment
to offset the recognised amounts and
flows together with accounting policies of the adoption of SLFRS in the financial
there is an intention to settle on a net
and notes) are prepared in accordance statements and the taxable profit for
basis, or to realise the assets and settle
with Sri Lanka Accounting Standards, the purpose of imposition of taxes.
the liability simultaneously. Income and
commonly referred to as SLFRS as issued Uncertainties exist, with respect to the
expenses are not offset in the statement of
Annual Report 2017

by the Institute of Chartered Accountants interpretation of the applicability of tax
comprehensive income unless required or
of Sri Lanka and in compliance with the laws, at the time of the preparation of these
permitted by any accounting standard or
requirements of the Companies Act No.07 financial statements.
interpretation, and as specifically disclosed
of 2007. in the accounting policies.
The Company recognised assets and
2.2 Basis of Measurement liabilities for current, deferred and other
taxes based on estimates of whether Hotel Developers (Lanka) PLC
The financial statements have been 3. SIGNIFICANT ACCOUNTING
additional taxes will be due. Where the
prepared on the historical cost basis except JUDGMENTS, ESTIMATES AND
final tax outcome is different from the
for the following material item in the ASSUMPTIONS
amounts that were initially recorded,
statement of financial position: The preparation of financial statements such differences will impact the income,
yy l iability of defined benefit obligation is requires the application of certain critical deferred and tax amounts in the period in
recognised as the present value of the accounting assumptions relating to the which the determination is made.
defined benefit obligation. future. Further, it requires the management
b) Useful Life-time of the Property, Plant In determining the appropriate discount c) Interest
and Equipment rate, management considers the yield Interest income is recognised using the
The Company reviews the residual values, of Sri Lanka Government bonds with Effective Interest Rate (EIR) method.
useful lives and methods of depreciation of extrapolated maturities corresponding
assets as at each reporting date. Judgment to the expected duration of the defined d) Rental Income
of the management is exercised in the benefit obligation. The mortality rate is
Rental income is recognized on accrual
estimation of these values, rates, methods based on publicly available mortality
basis.
and hence they are subject to uncertainty. tables. Future salary increases are based
on expected future inflation rates and
4.2 Expenditure Recognition
c) Going Concern expected future salary increase rate of the
Company. Expenses are recognised in the statement
The Directors have made an assessment of comprehensive income on the basis
of the Company’s ability to continue as of a direct association between the cost
4. SUMMARY OF SIGNIFICANT
a going concern and are satisfied that it incurred and the earning of specific items
ACCOUNTING POLICIES
has the resources to continue in business of income. All expenditure incurred in
for the foreseeable future. Furthermore, The significant accounting policies applied
running the business and in maintaining
the board is not aware of any material by the Company in preparation of its
property, plant and equipment in a state
uncertainties that may cast significant financial statements are included below.
of efficiency has been charged to the
doubt upon the Company’s ability to The accounting policies set out below have
statement of comprehensive income.
continue as a going concern and they do been applied consistently to all periods
not intend either to liquidate or to cease presented in theses financial statements,
For the purpose of presentation of the
58 operations of the Company. Therefore, unless otherwise is indicated.
statement of comprehensive income, the
the financial statements continue to be “function of expenses” method has been
prepared on the going concern basis. 4.1 Revenue Recognition
adopted, on the basis that it presents
Revenue is recognised to the extent fairly the elements of the Company’s
d) Impairment Losses on Financial Assets that it is probable that the economic performance.
The company assesses at each reporting benefits will flow to the Company and the
date or more frequently to determine revenue and associated costs incurred or Income tax expense comprises current
whether there is any objective evidence to be incurred can be reliably measured. and deferred tax. Income tax expense
whether an impairment loss should Revenue is measured at the fair value of is recognised in the statement of
be recorded in the statement of the consideration received or receivable comprehensive income.
comprehensive income. net of trade discounts and sales taxes. The
following specific criteria are used for the 4.3 Taxation
purpose of recognition of revenue.
4.3.1 Current Tax
Annual Report 2017
e) Defined Benefit Plans

a) Services Current tax assets and liabilities consist of
The cost of defined benefit plans are amounts expected to be recovered from or
determined using actuarial valuations. An Revenue from rendering of services is
paid to the Commissioner General of Inland
actuarial valuation involves making various recognised in the accounting period
Revenue in respect of the current year and
assumptions which may differ from actual in which the services are rendered or
any adjustment to tax payable in respect of
developments in the future. These include performed.
prior years. The tax rates and tax laws used
the determination of the discount rate, to compute the amount are those that are
future salary increases, mortality rates, etc. b) Rooms and Outlet Revenue
enacted or substantially enacted as at the
Due to the complexity of the valuation, Room revenue is recognised on the rooms reporting date.
the underlying assumptions and their long occupied on a daily basis and food and
term nature, a defined benefit obligation beverage revenue is accounted for at the 4.3.2 Deferred Tax
is highly sensitive to changes in these time of sale.
Deferred tax is provided using the liability
assumptions. All assumptions are reviewed
method on temporary differences at the
at each reporting date.
reporting period date between the tax Cost Model De-recognition
bases of assets and liabilities and their Property, plant and equipment is stated Property, plant and equipment are
carrying amounts for financial reporting at cost, excluding the costs of day–to–day derecognised on disposal or when no
purpose. servicing, less accumulated depreciation future economic benefits are expected
and accumulated impairment in value. from its use. Any gain or loss arising on
Deferred tax assets are recognized for all Such cost includes the cost of replacing de-recognition of the asset (calculated as
deductible differences. Carry forward of part of the equipment when that cost is the difference between the net disposal
unused tax credits and unused tax losses, incurred, if the recognition criteria are met. proceeds and the carrying amount
to the extent that it is probable that taxable of the asset) is recognised in ‘other
profits will be available against which the Subsequent Cost operating income’ in the statement of
deductible temporary differences and the comprehensive income in the year the
Subsequent expenditure incurred for
carry forward of unused tax credits and asset is derecognised.
the purpose of acquiring, extending,
unused tax losses can be utilised.
or improving assets of a permanent
nature by means of which to carry on 4.4.2 Impairment of Non–financial
The carrying amount of a deferred tax Assets
the business or to increase the earning
asset is reviewed at each reporting
capacity of the business is treated as The Company assesses at each reporting
date and reduced to the extent it is no
capital expenditure and such expenses date whether there is an indication that
longer probable that sufficient taxable
are recognized in the carrying amount of an asset may be impaired. If any indication
profit will be available to allow all or part
an asset. The costs associated with day- exists, or when annual impairment testing
of the deferred tax asset to be utilised.
to-day servicing of property, plant and for an asset is required, the Company
Unrecognised deferred tax assets are 59
equipment is recognised in the statement estimates the asset’s recoverable amount.
reassessed at each reporting date and are
of comprehensive income as incurred.
recognised to the extent that it is probable
4.5 Prepaid Lease Rental
that future taxable profit will allow the
Depreciation The leasehold land is being amortised on
deferred tax asset to be recovered.
Depreciation is calculated using the an equal annual basis over 99 years, which
Deferred tax assets and liabilities are straight–line method to write down the is the period of the lease. The amortisation
measured at the tax rate that are expected cost of property and equipment to their commenced from June 2012.
to apply in the year when the assets are residual values over their estimated useful
realised or the liabilities are settled, based lives. Depreciation is charged from the 4.6 Inventories
on tax rates and tax laws that have been date of purchase to the date of disposal Inventories are valued at the lower of cost
enacted or subsequently enacted at the on prorate basis. The rates of depreciations and estimated net realisable value, after
reporting date. based on the estimated useful lives are as making due allowances for obsolete and
follows: slow moving items. Net realisable value
Annual Report 2017

4.4 Non-financial Asset is the price at which inventories can be
Category of asset %
4.4.1 Property, Plant and Equipment sold in the normal course of business after
Buildings 2.5 allowing for cost of realisation and/ or cost
a) Recognition and Measurement Plant and machinery 7.5 of conversion from their existing state to
Property, plant & equipment are recognised Refrigerators & kitchen equipment 7.5 saleable condition.
if it is probable that future economic Computers & televisions 20 Hotel Developers (Lanka) PLC
benefits associated with the asset will flow Motor vehicles 25 The cost of each category of inventory is
to the entity and the cost of the asset can Furniture, fittings & equipment 10 determined on the weighted average basis.
be measured reliably in accordance with Operating Equipment 33
LKAS 16 - property, plant & equipment.
Initially property and equipment are The asset’s residual values, useful lives and
measured at cost. methods of depreciation are reviewed, and
adjusted if appropriate, at each financial
year end.
4.7 Financial Assets – Recognition and Subsequent to initial measurement, held drawdown, is expected to be retained by
Measurement to maturity financial investments are the Company, and not sold in the short
4.7.1 Initial Recognition measured at amortised cost using the term, the commitment is recorded only
Effective Interest Rate (EIR), less impairment. when it is an onerous contract that is likely
All financial assets are initially recognised
to give rise to a loss.
on the trade date, i.e., the date that
c) Loans and Receivables
the Company becomes a party to the
Loans & receivables include non– derivative d) Available-for-sale Financial
contractual provisions of the instrument.
financial assets with fixed or determinable Investments
This includes ’regular way trades’: purchases
or sales of financial assets that require payments that are not quoted in an active Available for sale are those which are
delivery of assets within the time-frame market, other than: neither classified as held for trading nor
generally established by regulation or designated at fair value through profit or
yy Those that the Company intends to sell
convention in the market place. loss. The Company has not designated any
immediately or in the near term and
loans or receivables as available-for-sale.
those that the Company, upon initial
4.7.2 Initial Measurement recognition, designates as at fair value
After initial measurement, available-for-
The classification of financial instruments through profit or loss
sale financial investments are measured
at initial recognition depends on their yy Those that the Company, upon initial at fair value. Unrealised gains and
purpose and characteristics and the recognition, designates as available for losses are recognised directly in equity
management’s intention in acquiring them. sale (other comprehensive income) in the
All financial instruments are measured
yy Those for which the Company may “available-for-sale reserve”. When the
initially at their fair value including
60 not recover substantially all of its initial investment is disposed of, the cumulative
transaction costs, except in the case of
investment, other than because of gain or loss previously recognised in
financial assets and financial liabilities
credit deterioration equity is recognised in the statement of
recorded at fair value through profit or loss.
comprehensive income in other operating
After initial measurement, loans and income.
4.7.3 Subsequent Measurement
receivables are subsequently measured
The Company subsequently measures at amortised cost using the EIR method 4.7.4 Reclassification of Financial Assets
non-derivative financial assets categorising less allowance for impairment. Amortised The Company may reclassify non-
them in to the categories of financial assets cost is calculated by taking into account derivative financial assets other than
at fair value through profit or loss, held-to any discount or premium on acquisition those designated at FVTPL upon initial
maturity investments, loans and receivables and fees and costs that are an integral part recognition, in certain circumstances:
and available-for-sale financial assets. of the EIR. The amortisation is included
in ‘interest income’ in the statement of yy Out of the held-for-trading category
a) Financial assets at Fair Value Through and into the available for sale, loans
Annual Report 2017
comprehensive income. The losses arising

Profit or Loss (FVTPL) from impairment are recognised in the and receivables, or held-to-maturity
A financial asset is classified as fair value statement of comprehensive income in categories.
through profit or loss if it is held for trading ‘impairment gain/ (loss) on loans and yy Out of the ‘available-for-sale’ category
or is designated at fair value through profit receivables’. and into the ’loans and receivables’ ,
of loss. ‘held for trading category’ or ‘held-
The Company may enter into certain to-maturity’. Reclassifications are
b) Held-to-maturity Financial lending commitments where the loan, on recorded at fair value at the date of
Investments drawdown, is expected to be classified reclassification, which becomes the
Held-to-maturity financial investments as held-for-trading because the intent is new amortised cost. For a financial
are non–derivative financial assets with to sell the loans in the short term. These asset reclassified out of the ’available-
fixed or determinable payments and fixed commitments to lend are recorded as for-sale’ category, any previous gain
maturities, which the Company has the derivatives and measured at fair value or loss on that asset that has been
intention and ability to hold to maturity. through profit or loss. Where the loan, on recognised in equity is amortised to
profit or loss over the remaining life yy The Company has neither 4.8 Cash and Bank Balances
of the investment using the EIR. Any transferred nor retained Cash and bank balances are defined as
difference between the new amortised substantially all the risks and cash in hand and balances with banks. For
cost and the expected cash flows is rewards of the asset, but has the purpose of statement of cash flows,
also amortised over the remaining life transferred control of the asset. cash and cash equivalents consist of cash
of the asset using the EIR. If the asset in hand and deposits in banks net of
is subsequently determined to be When the Company has transferred outstanding bank overdrafts. Investments
impaired, then the amount recorded in its rights to receive cash flows from an with short maturities i.e. three months or
equity is recycled to the statement of asset or has entered into a pass–through less from the date of acquisition are also
comprehensive income statement. arrangement, and has neither transferred treated as cash equivalents.
yy Out of the ‘held-for-trading’ category nor retained substantially all of the risks
and into the ‘loans and receivables’ and rewards of the asset nor transferred 4.9 Stated Capital
category if it meets the definition control of the asset, the asset is recognised
Ordinary shares are classifies as equity.
of loans and receivables and the to the extent of the Company’s continuing
Equity instruments are measured at the
Company has the intention and ability involvement in the asset. In that case, the
fair value of the cash or other resources
to hold the financial asset for the Company also recognises an associated
received or receivable, net of the direct
foreseeable future or until maturity. If liability. The transferred asset and the
costs of issuing the equity instruments.
a financial asset is reclassified, and if associated liability are measured on a basis
the Company subsequently increases that reflects the rights and obligations that
4.10 Retirement Benefit Obligations
its estimates of future cash receipts the Company has retained. Continuing
involvement that takes the form of a 4.10.1 Defined Benefit Plan – Gratuity
as a result of increased recoverability 61
of those cash receipts, the effect of guarantee over the transferred asset is The liability recognised in the statement
that increase are recognised as an measured at the lower of the original of financial position represents the present
adjustment to the EIR from the date of carrying amount of the asset and the value of the defined benefit obligation at
the change in estimate. maximum amount of consideration that the reporting date estimated based on
the Company could be required to repay. actuarial valuation using the projected unit
Reclassification is at the election of the credit method. The actuarial valuations
management, and is determined on an 4.7.6 Identification, Measurement and involve making assumptions about
instrument by instrument basis. Assessment of Impairment discount rates and future salary increases.
At each reporting date the Company A defined benefit obligation is highly
4.7.5 De-recognition of Financial Assets assesses whether there is objective sensitive to changes in these assumptions.
evidence that financial assets not carried These benefits are not externally funded.
A financial asset (or, where applicable a
part of a financial asset or part of a group at fair value through profit or loss are
The Company recognises all actuarial
Annual Report 2017

of similar financial assets) is derecognised impaired. A financial asset or a group of
financial assets is impaired when objective gains and losses arising from defined
when:
evidence demonstrates that a loss event benefit plans immediately in the other
yy The rights to receive cash flows from has occurred after the initial recognition comprehensive income.
the asset have expired. of the asset(s), and that the loss event has
yy The Company has transferred its rights an impact on the future cash flows of the However, as per the Payment of Gratuity
to receive cash flows from the asset asset(s) that can be estimated reliably. Act No. 12 of 1983, the liability to pay Hotel Developers (Lanka) PLC
or has assumed an obligation to pay gratuity arises only on completion of 5
the received cash flows in full without The Company writes off loans and years of continued service.
material delay to a third party under a advances and investment securities when
‘pass–through’ arrangement and either: they are determined to be uncollectible. 4.10.2 Defined Contribution Plan
yy The Company has transferred A defined contribution plan is a post-
substantially all the risks and employment benefit plan under which
rewards of the asset or
an entity pays fixed contributions into Upon initial recognition, transaction cost amount of the obligation. The expense
a separate entity and will have no legal are directly attributable to the acquisition relating to any provision is presented in the
or constructive obligation to pay further are recognised in profit or loss as incurred. statement of comprehensive income net of
amounts. Obligations for contributions to The criteria for designation of financial any reimbursement.
defined contribution plans are recognised liabilities at FVTPL upon initial recognition
as an employee benefit expense in the are the same as those of financial assets at 4.13 Statement of Cash Flows
statement of comprehensive income as FVTPL. The cash flow statement has been prepared
in the periods during which services are using the indirect method, as stipulated in
rendered by employees. b) Other Financial Liabilities LKAS 7- statement of cash flows. Cash and
Other financial liabilities including deposits, cash equivalents comprise of cash in hand,
a) Employees’ Provident Fund debt issued by the Company and the other cash at bank and bank overdrafts.
The company and employees contribute borrowed funds are initially measured at
12% and 8% respectively on the salary of fair value less transaction cost that are 4.14 Segmental Information
each employee to the approved Provident directly attributable to the acquisition and A Segment is a distinguishable component
Fund. subsequently measured at amortised cost engaged in providing services and that
using the EIR method. Amortised cost is subject to risks and returns that are
b) Employees’ Trust Fund is calculated by taking into account any different to those of other segments. The
The Company contributes 3% of the salary discount or premium on the issue and Company does not have distinguishable
of each employee to the Employees’ Trust costs that are an integral part of the EIR. components to be identified as a segment
Fund. as all operations are treated as one
62 4.11.2 De-recognition of Financial segment.
4.11 Financial Liabilities Liabilities
4.11.1 Initial Recognition and A financial liability is de-recognised 4.15.1 Standards Issued But Not Yet
Measurement when the obligation under the liability Effective
is discharged or cancelled or expires. The standards and interpretations that
The Company classifies financial liabilities in
Where an existing financial liability is are issued but not yet effective up to the
to financial liabilities at Fair Value Through
replaced by another from the same date of issuance of the Hotel’s financial
Profit or Loss (FVTPL) or other financial
lender on substantially different terms, statements are disclosed below. The
liabilities in accordance with the substance
or the terms of an existing liability are Hotel intends to adopt these standards, if
of the contractual arrangement and the
substantially modified, such an exchange or applicable, when they become effective.
definitions of financial liabilities.
modification is treated as a de-recognition
of the original liability and the recognition SLFRS 9 Financial Instruments
The Company recognises financial liabilities
of a new liability. The difference between SLFRS 9 replaces the existing guidance
in the statement of financial position
Annual Report 2017
the carrying value of the original financial in LKAS 39 Financial Instruments:

when the Company becomes a party to
liability and the consideration paid is Recognition and Measurement. SLFRS
the contractual provisions of the financial
recognised in profit or loss. 9 includes revised guidance on the
liability.
classification and measurement of financial
4.12 Provisions instruments, a new expected credit loss
a) Financial Liability at FVTPL
Provisions are recognised when the model for calculating impairment on
Financial liabilities at FVTPL include
Company has a present obligation (legal financial assets, and new general hedge
financial liabilities held-for-trading or
or constructive) as a result of a past event, accounting requirements. It also carries
designated as such upon initial recognition.
and it is probable that an outflow of forward the guidance on recognition and
Subsequent to initial recognition, financial
resources embodying economic benefits derecognition of financial instruments from
liabilities at FVTPL are measured at fair
will be required to settle the obligation LKAS 39.
value, and changes there in recognised in
and a reliable estimate can be made of the
profit or loss.
SLFRS 9 is effective for annual reporting The following amendments and
periods beginning on or after 1 January improvements are not expected to have
2018, with early adoption permitted. a significant impact on the Company’s
Financial Statements.
SLFRS 15 Revenue from Contracts with
Customers yy A
mendments to SLFRS 10 and LKAS 28:
SLFRS 15 establishes a comprehensive Sale or Contribution of Assets between
framework for determining whether, how an Investor and its Associate or Joint
much and when revenue is recognised. Venture.
It replaces existing revenue recognition yy LKAS 7 Disclosure Initiative -
guidance, including LKAS 18 Revenue, LKAS Amendments to LKAS 7.
11 Construction Contracts and IFRIC 13
yy LKAS 12 Recognition of Deferred
Customer Loyalty Programmes.
Tax Assets for Unrealised Losses -
Amendments to LKAS 12.
SLFRS 15 is effective for annual reporting
periods beginning on or after 1st January yy S LFRS 2 Classification and
2018, with early adoption permitted. Measurement of Share-based Payment
Transactions - Amendments to SLFRS 2.
SLFRS 16 Leases
SLFRS 16 provides a single lessee
accounting model, requiring leasses to 63
recognise assets and liabilities for all leases
unless the lease term is 12 months or less
or the underlying asset has a low value
even though lessor accounting remains
similar to current practice. This supersedes:
LKAS 17 Leases, IFRIC 4 determining
whether an arrangement contains a
Lease, SIC 15 Operating Leases- Incentives;
and SIC 27 Evaluating the substance of
Transactions Involving the Legal form of a
Lease. Earlier application is permitted for
entities that apply SLFRS 15 Revenue from
Contracts with customers.
Annual Report 2017

SLFRS 16 is effective for annual reporting
periods beginning on or after 1st January
2019.
Pending the completion of the detailed Hotel Developers (Lanka) PLC

impact analysis, possible Impact from SLFRS
9, SLFRS 15 and SLFRS 16 is not reasonably
estimable as of the reporting date.
5. Revenue
31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Room revenue 1,317,248 1,151,953

Food and Beverage revenue 1,635,026 1,330,543
Other operating departments 63,088 58,184
3,015,362 2,540,680
6. Investment Income
31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Interest income - Loans and Receivables

Interest on treasury bills 8,738 1,062
Interest on staff loans 5 9
Interest on RFC accounts 999 1,542
Interest on fixed deposits 14,089 11,596
Interest income on FF&E replacement reserve 1,702 4,995
64
Interest on call deposits - 8,371
25,533 27,575
7. Other Gains and Losses

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Profit on disposal of plant & equipment 6,620 4,238

Shop rentals 10,200 11,400
Exchange gain unrealised 884 9,428
Exchange gain realised 636 4,924
Annual Report 2017
Other income 50 -
Sundry income 11,039 9,924
29,429 39,914
8. Finance Costs
31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Bank charges 81 38
Overdraft interest 9,824 -
9,905 38
9. Profit for the Period
31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Profit for the period is stated after charging all expenses including the following:
Directors’ emoluments 4,853 6,397
Auditors’ remuneration - Company 916 600
- Colombo Hilton 1,553 1,401
Depreciation 461,542 368,254
Staff costs (including the following employee benefit plan costs) 448,163 413,941
- Defined benefit plan cost - Gratuity 22,577 18,307
- Defined contribution plan costs - EPF & ETF 60,735 59,045
Management fees 29,625 18,972
Group service & benefit charge - Hilton International 61,164 51,478
Legal fees 140 100
10. Income Tax Expense

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
65
Provision for the period 11,691 11,394

Previous year under provission 5,913 47
Deferred tax (income) expense (102,645) 20,491
(85,041) 31,932
10.1 A reconciliation between Taxable Profit and Accounting Profit for the years ended 31st December 2017 and 31st December 2016 are
as follows
31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Accounting profit before income tax 172,976 172,944
Annual Report 2017

Aggregate disallowed items 567,223 446,113
Aggregate allowable expense (647,558) (532,698)
Trading profits and other sources of income @ 12% 92,641 86,359
Other sources of income liable @ 28% 24,534 26,024
Total taxable profit 117,175 112,383
Loss claimed (41,011) (38,984)
Taxable profit 76,164 73,399 Hotel Developers (Lanka) PLC
Taxable trading profit @ 12% 60,217 55,484

Taxable other source of income @ 28% 15,947 16,916
Tax on trading profit 7,226 6,658

Tax on other source of income 4,465 4,736
Current year total tax expense 11,691 11,394
10.2 Deferred tax

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Deferred tax arising from:

- Origination and reversal of temporary difference (Note 23) 102,645 20,491
Total deferred tax charge 102,645 20,491
10.3 Tax losses carried forward

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Tax losses brought forward 9,743,748 9,782,732

Tax losses set off in the current period (41,011) (38,984)
Tax losses carried forward for future periods 9,702,737 9,743,748
11. Earning Per Share - Basic

Basic earning per share is calculated by dividing the profit for the year attributable to ordinary shareholders by the ordinary shares
66 outstanding during the year.
31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Profit per ordinary share 0.13 0.07
Amount used as the numerator Rs. ‘000 Rs. ‘000
Profit attributable to the ordinary shareholders 258,017 141,012
Amount used as the denominator Nos. ‘000 Nos. ‘000
Weighted average number of ordinary shares for the purpose of basic profit per share 2,046,646 2,046,646
Annual Report 2017
12. Property, Plant and Equipment
Property, Plant and equipment Buildings on Plant & Hotel Motor Refrigerator Television & Operational Total
leasehold land machinery Rs. furniture & vehicle Rs. & kitchen computers Equipment Rs. '000
Rs. '000 '000 fittings '000 equipment Rs. '000 Rs. '000
Rs. '000 Rs. '000
Cost/ Revaluation
Reclassified Balance as at 31st December 2015 6,667,589 482,118 1,117,174 92,939 437,475 261,553 - 9,058,847
Additions during the year 8,383 4,253 31,937 - 18,228 15,763 105,332 183,896
Transfers from Capital Working Progress 1,844,960 61,372 328,883 - 275,219 390 13,994 2,524,819
Balance as at 31st December 2016 8,520,932 547,743 1,477,994 92,939 730,922 277,706 119,326 11,767,562
Additions during the year 14,876 14,900 47,725 - 20,019 11,064 2,545 111,128
Transfers from Capital Working Progress 492,342 - 30,690 - 125,397 - - 648,428
Accumulated Depreciation
Balance as at 31st December 2015 1,954,293 432,694 1,011,125 84,569 314,121 223,504 - 4,020,304
Charge for the year 183,737 12,206 42,376 6,281 25,059 16,312 11,577 297,547
Previously reported balance as at 31st December 2,138,029 444,899 1,053,500 90,849 339,180 239,815 11,577 4,317,851
2016
Reversal of over provision - - - (1,352) - - - (1,352)
Adjusted balance as at 31st December 2016 2,138,029 444,899 1,053,500 89,497 339,180 239,815 11,577 4,316,499
Charge for the year 218,892 12,775 60,687 2,195 39,644 17,635 40,357 392,184
67
Written Down Value
Balance as at 31st December 2015 4,713,296 49,424 106,050 8,370 123,354 38,049 - 5,038,544
Previously reported balance as at 31st December 6,382,902 102,844 424,494 2,090 391,742 37,891 107,749 7,449,712
2016
Adjusted balance as at 31 December 2016 6,382,902 102,844 424,494 3,442 391,742 37,891 107,749 7,451,063
Balance as at 31st December 2017 6,671,229 104,968 442,221 1,246 497,514 31,319 69,937 7,818,434
Hotel Developers (Lanka) PLC has full possession and control of the property, plant & equipment of the hotel.
12.2 A bridge was constructed in 1998 linking the World Trade Centre and Hilton Hotel at a cost of USD 360,000. Overseas Realty Ltd and
Hilton International contributed US $ 180,000 and US $ 90,000 respectively, and the company contributed the balance amount. USD 90,000
incurred by the company has been capitalised in the financial statements under buildings.
Annual Report 2017

12.3 Property, plant & equipment at a cost of Rs. 1,986,019,251/- (Y/E2016 - 1,933 Mn) have been fully depreciated and continue to be
in use by the company.The company has carried out detail assets verification & valuation of each and every asset with the assistance of a
Chartered Valuer, facilitated by M/s. Ernst & Young. Now this assignment has come to its final stages of the reconciliation.
12.4 The building was revalued in 2010 by the Government Chief Valuer at Rs. 5,600Mn
The company elected to recognise the revalued amount of the building as the deemed cost under the previous accounting standard
(SLAS) at the date of transition to LKAS. As a result, the company has transferred the evaluation reserve of 4,706,460 (LKR’.000) to retained Hotel Developers (Lanka) PLC
earnings at the date of transition.
12.5 The phase 01 of the refurbishment has been completed in August 2017. The capitalisation cost derived is based on the estimated
cost to completion from cost consultant’s report.
13. Leasehold Land

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Balance B/F 6,681,237 6,751,944

Amortization for the period (70,707) (70,707)
Balance C/D 6,610,530 6,681,237
The leasehold land is for a period of 99 years effective from 28th June 2012. The leasehold land value amounting to Rs. 7 Bn. has been
capitalised and shares issued to the Government of Sri Lanka. Further, approval of Cabinet of Ministers was granted on 3rd October 2012 to
lease the land in which the Sport Complex is built for a period of 5 years on a rent free basis commencing from 28th June 2012. In terms of
the cabinet decision dated 13/12/2016, the lease of this land has been extended up to June 2111 in line with the lease of the main building
and the lease terms are yet to be finalised.
14. Inventories
31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Food 11,748 7,067

68 Beverages 34,494 32,576
General stores 8,163 8,279
Engineering stores 3,604 3,566
58,009 51,488
15. Trade and other Receivables

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Trade receivables 153,388 150,591

Less: Impairment of debtors (1,748) (1,748)
151,640 148,843
Annual Report 2017
16. Amounts due from Related Party

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Hilton Garden Inn - 201

Hilton Singapore - 49
Hilton Colombo Residence 240 1,339
Hilton International - 63
Hilton Goa - 115
Hilton Kualapur 196 -
Hilton Weerawila 918 -
1,354 1,767
17. Other Assets
31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Deposits, prepayments and advances 86,421 96,926

Other receivables 45,468 32,392
Advances - Refurbishment expenses 26,950 65,277
Income tax receivable 24,681 21,550
183,520 216,145
18. Current Financial Assets

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Short-term Investments
Call deposits 114,558 172,042
114,558 172,042
FF&E Reserve Investment
21,050 30,618 69
Total Short-term Investment 135,608 202,660
Investments for FF&E Reserve are restricted in use and to be used for the replacement of furniture, fittings and equipment as per Article
V Section 4 of the Management Agreement entered into between Hilton International Management Corporation and Hotel Developers
(Lanka) PLC dated 18th October 2012. Since this investment has been utilised for Hotel refurbishment, it has now been re-classified as
current financial assets from the previous classification of non-current financial assets.
19. Cash and Bank Balances

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Annual Report 2017

Saving A/C BOC - US$ 32,544 250,301
Operating Bank A/C 193,005 144,753
Cash 50 50
225,599 395,104
The year end balance in the USD saving account has been translated to functional currency of Sri Lankan Rupees at the closing rate as at Hotel Developers (Lanka) PLC
balance sheet date in terms of the accounting standards.
20. Stated Capital

20.1 Issued and fully paid
31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
2,046,645,685 Ordinary shares 20,466,456 20,466,456
21. Reserves
31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Furniture, fittings & equipment replacement reserve (Note 21.1) 161,348 21,896
21.1 Furniture, Fittings and Equipment Replacement Reserves

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Balance at the beginning of the year 21,896 117,421

70 Add: Provision made during the year 268,435 108,389
Less: Amounts transferred to equity statement
Amounts utilised for purchase & replacement
- of furniture & fittings (128,983) (203,914)
Balance at the end of the year 161,348 21,896
An amount equivalent to USD 700,000 has been transferred to furniture, fittings & equipment reserve during the year.
22. Retirement Benefit Obligations

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Annual Report 2017

Charge for the year 9,105 7,855
Recognition of transitional liability /(asset) and actuarial loss/(gain) 10,042 9,042
Loss/ (gain) arising from changes in the assumptions
or due to (over)/under provisions in the previous years (12,457) (3,976)
Interest cost for the year 13,472 10,452
Payments made during the year (22,907) (2,571)

The retirement benefit obligation of the company is based on the actuarial valuation carried out by Messrs. Piyal S. Goonetilleke and
Associates. All assumptions remain the same, except for the discount rate assumption and the annual basic salary increase and no material
change is expected in the contribution to the defined benefit plan for the next annual reporting period. The discount rate was revised
to 10.25% (vs 10.75% last year) to reflect the yield rates of the Treasury Bonds. The principal assumptions used in determining the cost of
employee benefits were:
Discount rate 10.25% 10.75%

Future salary increase 6.00% 9.00%
Sensitivity & maturity profile Discount Rate Salary Increment

2017 2016 2017 2016
Increase by one percentage point (4,934) (4,928) (4,751) 5,140

Decrease by one percentage point 4,510 5,417 4,414 (4,761)
31.12.2017
Rs. ‘000
Maturity analysis of the payments as at 31 December 2017 - Undiscounted

With in next 12 Months 4,720
Between 1 and 2 years 16,542
71
Total Expected payments 121,393
23. Deferred Tax Liability

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000

Deferred tax expense/(income) (102,645) 20,491
Annual Report 2017

23.1 The closing deferred tax liability balance relates to the following:
31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Accelerated depreciation for tax purposes 732,903 603,481

Retirement benefit obligation (17,161) (15,039) Hotel Developers (Lanka) PLC
Deferred tax asset relating to utilisation of brought forward (319,172) (89,227)

- tax losses
396,570 499,215
The deferred tax has been calculated at the rate of 14% in 2017 (12% in 2016)
24. Trade and other Payables

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Trade payables 138,318 122,405

Sundry creditors and including accrued expenses 151,512 183,417
Management fee payable 7,654 9,774
Deposits payable 68,228 95,490
Other liabilities 39,860 30,842
Replacement of breakages 10,938 9,609
Statutory payables 63,064 59,672
479,574 511,209
25. Amounts due to Related Parties

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Hilton International Asia Pacific 6,874 6,197

Hilton International USA 5,684 4,401
72 12,558 10,598
26. Income Tax Liability

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Opening balance (21,548) 12,379

Provision for the period 11,691 11,394
Previous year under provision 5,913 47
Tax credit
Economic Service Charge (12,313) (12,817)
Annual Report 2017
Withholding tax (1,409) (1,160)

Notional tax (1,044) (1,443)
Self assessment payment (5,971) (29,948)
Balance at the end of the year (current year balance transferred to Other Assets) (24,681) (21,548)
27. Notes to the Cash Flow Statement
27.1 Cash and Cash Equivalents at the Beginning of the Year
31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Cash and bank balance 395,104 215,214

Treasury Bills - 59,325
Bank overdraft (340,250) (126,414)
Unrealized exchange gain on USD Saving deposit 884 9,428
258,398 414,761
27.2 Cash and Cash Equivalents at the end of the Year

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Cash and bank balance 225,599 395,104

Bank overdraft (272,468) (340,250)
88,739 257,514
73
28. Analysis of Financial Instruments by Measurement Basis As at 31st December 2017

31.12.2017 31.12.2016
Rs. ‘000 Rs. ‘000
Financial assets by categories

Financial instruments in current assets
Trade and other receivables 151,640 148,843
Other assets 183,520 216,145
Amounts due from related party 1,354 1,767
Other current financial assets 135,608 202,660
Cash in hand and at bank 225,599 395,104
Annual Report 2017

Total 697,721 964,519
Financial liabilities by categories

Financial Instruments in current liabilities
Trade and other payables 490,021 511,209
Amounts due to related party 12,558 10,598 Hotel Developers (Lanka) PLC
Bank overdrafts 272,468 340,250
Total 775,047 862,057
29. Financial Risk Management

The Company’s activities are exposed to a variety of financial risks such as market risk (including currency risk, interest rate risk and price
risk), credit risk and liquidity risk. The Company’s overall risk management process focuses on the unpredictability of financial risks and seeks
to minimise potential adverse effects on the Company’s financial performance. Risk management is performed by the finance department
under policies approved by the Board of Directors.
The principal financial instruments of the Company comprise of short term deposits, money market investments, and cash. The main
purpose of these financial instruments is to raise and maintain liquidity for the Company’s operations, and maximise returns on the
Company’s financial reserves. The Company has various other financial instruments such as trade receivables and trade payables which
arise directly from its business activities.
29.1 Credit risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a
financial loss. The Hotel is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities.
The Hotel trades only with recognised, credit worthy third parties. It is the Hotel’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
Hotel’s exposure to bad debts is not significant.
With respect to credit risk arising from the other financial assets of the Hotel, such as cash and cash equivalents, other non-financial assets
74 and amounts due from related parties, the Hotel’s exposure to credit risk arises from default of the counterparty. The Hotel manages its
operations to avoid any excessive concentration of counterparty risk and takes all reasonable steps to ensure the counterparties fulfil their
obligations.
29.2 Credit risk exposure

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). The following table shows the maximum risk positions.
As at 31st December 2017

In Rs. ‘000 Cash in hand Short term Trade and Amounts due Total
and at bank investments other receivable from related
parties
Annual Report 2017
Deposits with bank 135,608 135,608

Amounts due from related parties 1,354 1,354
Cash in hand and at bank 193,055 32,544 225,599
Total credit risk exposure 193,055 168,152 151,640 1,354 514,201
29.2 Credit risk exposure (contd.)
As at 31st December 2016

In Rs. ‘000 Cash in hand Short term Trade Amounts due Total
and at bank investments and other from related
receivable parties
Deposits with bank 202,660 202,660

Amounts due from related parties 1,767 1,767
Cash in hand and at bank 144,803 250,301 395,104
Total credit risk exposure 144,803 452,961 148,843 1,767 748,374
29.3 Trade and other receivables
As at 31 December As at 31 December
2017 2016
Neither past due nor impaired 121,542 107,694
30-60 18,894 28,118
61-90 5,252 7,707
impaired
Past due
75
but not
91-120 918 556

121-150 1,817 527
151> 4,965 5,988
impaired
Gross carrying value 153,388 150,591
Less: impairment provision
Individually assessed impairment provision (1,748) (1,748)
Total 151,640 148,843
29.4 Amounts due from related parties

The balance consists of amount due from affiliate companies of The Hilton Chain.
Annual Report 2017

29.5 Credit risk relating to cash and cash equivalents
The company maintains an authorised list of acceptable cash counterparties based on current ratings and economic outlook, taking into
account analysis of fundamentals and market indicators. The Hotel held cash and cash equivalents of Rs. 88,739,077/- as at 31st December
2017 (as at 31st December 2016 - Rs. 257,513,892/-).

29.6 Liquidity risk

The Company’s policy is to hold cash at a level sufficient to ensure that the Company has available funds to meet its short and medium
term funding obligations, including organic growth, and to meet any unforeseen obligations and opportunities.
The Company monitors its risk to a shortage of funds using a daily cash management process. This process considers the maturity of both
the Company’s financial investments and financial assets (e.g. accounts receivable, other financial assets) and projected cash flows from
operations.
Net (debt)/cash As at 31st As at 31st

December December
In Rs. 2017 2016
Short term investments 135,608 202,660

Cash in hand and at bank 225,599 395,104
Total liquid assets 361,207 597,764
Bank overdrafts 272,468 340,250

Total borrowings 272,468 340,250
Net (debt)/cash 88,739 257,514
29.7 Maturity analysis

76
The table below summarises the maturity profile of the Hotel’s financial liabilities at 31st December 2017 based on contractual
undiscounted payments.
As at 31 December 2017 As at 31 December 2016
Within one Total Within one Total
In Rs. year year
Trade & other payables 479,574 479,574 511,209 511,209

Amounts due to related parties 12,558 12,558 10,598 10,598
Retention Fees - Refurbishment Project 111,028 111,028 103,208 103,208
Bank overdrafts 272,468 272,468 340,250 340,250
875,628 875,628 965,265 965,265
Annual Report 2017
29.8 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. The
Hotel is exposed to market risk through its use of financial instruments and specially to currency risk, and certain other price risks.
30. Events after the Reporting Date
There have been no material events after reporting date that require adjustment to or disclosure in the financial statements.
31. Capital Commitments

There were no capital commitments or contingent liabilities that requires disclosures in these financial statements other than the following:
31.1 The company has commenced a major refurbishment of the hotel from October 2014. Accordingly, Hilton Colombo has been
undergoing major renovations from 2014, which will see improvements across the property including rooms, food and beverage outlets
and meeting spaces. The refurbishment programme is budgeted at US $ 52Mn including duties and will be financed by USD loan
amounting to US$ 27Mn and the balance from internally generated funds. Capital commitment approved by the Board but not contracted
for amounts to approximately USD 27Mn (Rs.4.1Bn.).
The values of the contracts that the company has already entered into on the refurbishment and in balance outstanding are as follows.
USD ‘000 Contract Value Amount Paid Balance
Civil/Fit Out/Other Contracts 17,945 13,839 4,106

Consultancy Contracts 5,730 5,217 513
77
32. Contingent Liability
The hotel is a defendant in several lawsuits in respect of termination of employment and compensation for loss and damages due to power
interruption during a function. The management is unable to predict the outcome of such cases on the date of the issue of the financial
statements. Accordingly, no provision for any liability has been made in these financial statements.
By a Notice Published in the Gazette dated 6th July 2007 the Colombo Municipal Council has revised the license fee in relation to the
hotels, restaurants and lodging places for the period applicable from 1st January 2007. Hotels in the city of Colombo including the Hilton
Colombo had protested against the increase of the said license fee and the matter is under negotiation with the Ministry of Tourism which
has intervened to resolve the matter. Based on the minute of Tourist Hotel Association of Sri Lanka dated on 28th July 2011, the hotel is
providing provision of Rs. 50,000/- per month. The management believes the license fee claimed by the CMC will not be paid as similar
claims made by the CMC in respect of year 2007, 2008, 2014 and 2015 were successfully challenged in courts by Hotel Developers (Lanka)
PLC and the said claims made by CMC were dismissed by the Magistrate Court of Sri Lanka. However, Hilton Colombo maintains a provision
of LKR 6,932,522 as at December 31, 2017 in respect of the said legal case.
Annual Report 2017

33. Assets Pledged as Securities
The Company has mortgaged the main property of the Hotel against the loan agreement signed with Bank of Ceylon & Sampath Bank PLC
for a syndicated loan facility of USD 27Mn for the refurbishment project. However, this loan facility has not been utilised to date.
34. Related Party Disclosures

34.1 Transaction with Key Management Personnel
Related Parties include key management personnel defined as those persons having authority and responsibility for planning, directing
and controlling the activities of the company. Key management personnel include members of the Board of Directors of the company and
the Competent Authority who has been appointed in terms of the provisions of the revival of underperforming or under utilised assets act
no. 43 of 2011.
Directors’ emoluments and payments to Competent Authority paid during the period amounts to Rs. 6,052,500/- (Y/E 2016 -
Rs. 7,597,000/=).
Mr. Krishantha Cooray, Ms. Dheeshana Ameresekere, Mr. Priyantha Jayamaha, Mr. Athula Senanayake, Ms. Tehani S. A. Mathew, Mr. Dinouk
Colombage, Mr. M.Shezmin Mansoor, Mr. W. S. L. A. D. R. Samarasinghe, Ms. Sonali Liyanamana, Mr. Pravir Samarasinghe were nominated as
the Directors by the Government of Sri Lanka. The Government of Sri Lanka presently holds 100% of the Ordinary Share Capital.
35. Litigation as of the reporting date

35.1 SC HCCA LA 225/16
This is an appeal filed by Cornel & Co Ltd against the order of court dated 31st March 2016 in HCCA LA 69/14. The case has been re-fixed for
support on the 12th Octorber 2018.
78
35.2 H.C. [Civil] 1/98 [2] [ Date of filing 31/3/1998]
This case has been filed by Cornel & Co Ltd., against Mitsui & Co Ltd, Taisei Corporation and 9 other Defendants, including HDL [5th
Respondent].
The Plaintiff filed action in the High Court of the Western Province and supported and obtain an exparte Enjoining Orders in terms of
prayers [m] and [n] of the Plaint, preventing the implementation of the Settlement Agreements.
This case has been laid by since 29.10.2003 pending a settlement [if any].
35.3 D.C. COLOMBO CASE NO. 21819/MR

This action has been instituted by Mr. Nihal Sri Amarasekera for Judgement against the 1st Defendant, Mr. Gamini Lakshman Pieris in a sum
of Rs. 35,938,000.00 and Rs. 36,071,000.00. HDL is the 2nd defendant.
Annual Report 2017
The case has been laid by since 17th March 2004 pending a settlement [if any]
35.4 D.C. Colombo Case No. 15322/MR

[Date of Filing 4/8/1994]
HDL is the Plaintiff in this Action.
This action has been instituted for Judgement against the Defendant Mr. Nihal Sri Amarasekera to recover a sum of Rs. 26,626,613.00 with
legal interest thereon.
The case has been laid by since 28th February 2007 pending a settlement [if any].
Notice of Meeting
NOTICE is hereby given that the ANNUAL GENERAL MEETING of NOTE :

HOTEL DEVELOPERS (LANKA) PLC will be held at the Opel 2 ( 3rd yy A
member of the Company is entitled to appoint a Proxy to
Floor) of Hilton Colombo , Sir Chittampalam A Gardiner Mawatha, attend and vote on his or her behalf.
Colombo 02 on 02nd August 2018 at 3.30 p.m.
yy A Proxy need not be a member.
AGENDA yy A
Proxy form which is enclosed should be deposited at the
Registered Office of the Company not less than 48 hours before
1. To pass the following resolution to accept the Notice of
the meeting.
Meeting.
“RESOLVED that the Notice dated 23rd July 2018 convening
the Annual General Meeting of the Company be and is hereby
accepted as a valid notice irrespective of the fact that the
meeting has been called with shorter notice than that specified
in the Articles of Association and in the Companies Act No.07 of
2007”.
2. To receive and consider the Annual Report of the Board of
Directors, Statement of Accounts and the Balance Sheet of the
Company for the year ended 31st December 2017 together
with the report of the Auditors thereon.
3. To note that the Auditor General continues to be the Auditor
of the Company pursuant to the 19th Amendment to the 79
Constitution.
By order of the Board of Directors of

HOTEL DEVELOPERS (LANKA) PLC
S S P CORPORATE SERVICES (PRIVATE) LIMITED

SECRETARIES
23rd July 2018
Annual Report 2017

Colombo

80
Notes
81

82
Notes
Form of Proxy
I/We . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of
............................................................................................................................................................................................
being a member/members of Hotel Developers (Lanka) PLC hereby appoint:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or failing him/her
Mr. Krishantha Prasad Cooray of Colombo failing him

Ms. Dheeshana S. Ameresekere of Colombo failing her
Mr. J.M.U.P. Jayamaha of Colombo failing him
Mr. Athula Senanayake of Colombo failing him
Ms. Tehani S. A. Mathew of Colombo failing her
Mr. Dinouk Colombage of Colombo failing him
Mr. M. Shezmin Mansoor of Colombo failing him
Mr. W. S. L. A. D. R. Samarasinghe of Colombo failing him
Ms. Sonali Liyanamana of Colombo failing her
Mr. Pravir Dhanoush Samarasinghe of Colombo failing him
as my/our proxy to represent me/us to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on
the 02nd August 2018 and at any adjournment thereof and at every poll which may be taken in consequence thereof.
83
Agenda Item For Against
1. To accept the Notice of Meeting
2. To receive and consider the Report of the Directors and the Statements of Accounts for the year ended
31st December 2017 together with the Report of the Auditors thereon.
3. To note that the Auditor General continues to be the Auditor of the Company pursuant to the 19th
Amendment to the Constitution.
Signed this ……………………………… day of ………………………….2018
……………………………...
Annual Report 2017

Signature of the Shareholder
Note:
1. Instructions as to completion are noted on page 4.
2. A Proxy need not be a member of the Company
3. Please mark “X” in appropriate cages to indicate your instructions as to voting.

Instructions as to Completion of Proxy
1. Kindly perfect the Form of Proxy by legibly filling your full name
and address, signing in the space provided, and filling in the date of
signature.
2. If the Proxy Form is signed by an Attorney, the relative Power of
Attorney should also accompany the Proxy form for registration, if
such Power of Attorney has not already been registered with the
Company.
84 3. In the case of Company/Corporation, the Proxy must be filled and
attested in the legally prescribed manner.
4. The completed Form of Proxy should be deposited at the office of
the Secretaries, S S P Corporate Services (Private) Limited, No. 101,
Inner Flower Road, Colombo 03, not less than 48 hours, before the
Meeting.
5. A shareholder appointing a Proxy (other than a Director of the
Company) to attend the meeting should indicate the Proxy holder’s
National Identity Card (NIC) number on the Form of Proxy and
request the Proxy holder to bring his/her National Identity Card with
him/her.
Annual Report 2017
Corporate Information
Name of the Company : HOTEL DEVELOPERS (LANKA) PLC
Legal Form : A Public Quoted Company with Limited Liability
Date of Incorporation : 15th March 1983
Company Registration No. : PQ 143
Competent Authority : Mr. Chandrakumar Ramachandra
Directors : Mr. Krishantha Prasad Cooray - Chairman

Mr. J. M. U. P. Jayamaha
Mr. Athula Senanayake
Ms. Dheeshana S. Ameresekere
Ms. Tehani S. A. Mathew
Mr. Dinouk Colombage
Mr. M Shezmin Mansoor
Mr. W. S. L. A. D. R. Samarasinghe
Mr. Pravir Dhanoush Samarasinghe
Registered Office : Hotel Developers (Lanka) PLC

C/o Hilton Colombo
No. 2, Sir Chittampalam A Gardiner Mawatha
Colombo 02
Tel : + 94 11 2433435
Fax : + 94 11 2446545
E-mail : hdl_hilton@sltnet.lk
Web site : www.hoteldevelopers.lk
Secretaries and Registrars : S S P Corporate Services (Private) Limited

No. 101, Inner Flower Road
Colombo 03
Bankers : Bank of Ceylon

Corporate Branch
No. 4, Bank of Ceylon Mawatha
Colombo 01
Lawyers : M/s. D.L.& F. De Saram

Attorneys-at-Law and Notaries Public
47, Alexandra Place
Colombo 7.
Auditors : Auditor General

Department of the Auditor General Concept & Designed by
Polduwa Road
Battaramulla
Printed by Printel (Pvt) Ltd
www.hoteldevelopers.lk

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Hilton Colombo Annual Report 2017

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El o qu ent

Soak in the ambience of luxury and class, a standard

Hotel Developers (Lanka) PLC Annual Report 2017

From check in to check out, our commitment to the

The warm and welcoming personality of all our team

Our attention to detail is absolutely exceptional; it

We pride ourselves in possessing a team that is truly

Over the past few decades, we have set the standards

311 Fully Equipped Rooms

For the Year For the Year

Gross Profit Margin % 82 83

Long Term Interest Bearing Borrowings LKR'000 Nil Nil

Annual Report 2017

Annual Report 2017

Annual Report 2017

social impact on the communities we engage with. Volunteerism is

Environmental responsibility has underscored our three-decade-

Ms. Dheeshana Ameresekere

Annual Report 2017

Mr. Krishantha Prasad Cooray Ms. Dheeshana Ameresekere

He went on to work at Hilton International in the UK for five years

to the launch team of the Colombo Hilton in 1987 in the capacity

In 1991, he left to successfully launched Don Stanley’s group which

and bespoke catering services.

During his experience in the field that spans 40 years, he has

Annual Report 2017

Mr. Dinouk Colombage Mr. C. Ramachandra

Board of several other Organizations.

Annual Report 2017

Mr. V. Kanagasabapathy Mr. Sudarshan Sri Rayen

Mr. Shamahil Mohideen

local and overseas in Senior Managerial positions. Prior to joining

“ During the year, revenue expanded

About Us Macro Economic Environment last year to strengthen democracy and

Annual Report 2017

supplementary tourist services.

Annual Report 2017

the December festive season during which

The hotel’s value proposition was further

Profit After Tax

Ponte, an institution among enthusiasts of

1.64 billion during the year in review.

Annual Report 2017

assurance against fraud and error.

The Board of Directors reviews the Monthly Accounts and the

Audit Committee Remuneration Committee

Name of the Director Name of the Director Appointed/

Report of the Audit Committee is set out on page 48 of this report.

Compliance with Legal Requirements

Rule Subject Applicable requirement Compliance Details

Directors should be Non-Executive Directors

Each Non-Executive Director should submit Complied

Other Policies and Practices 35

Dedication to matters of the Board and the Company

By Order of the Board

Annual Report 2017

23rd July 2018

Annual Report 2017