ASIAN HOTELS AND PROPERTIES PLC AnnuAl RepoRt 2012/13

ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012/13

ContentsFinancial Highlights 2Chairman’s Statement 8Management Discussion and Analysis 14Board of Directors 22Annual Report of the Board of Directors 24Risk Management 30Corporate Governance 34Sustainability Report 62Report of the Audit Committee 122Statement of Directors’ Responsibility 124Independent Auditors’ Report 125Statement of Income 126Statement of Comprehensive Income 127Statement of Financial Position 128Cash Flow Statement 129Statement of Changes in Equity 130Notes to the Financial Statements 131Consolidated Value Added Statement 167Information to Shareholders & Investors 1685 Year Financial Review of the Group 1715 Year Financial Summary Cinnamon Grand Hotel 172Notice of Meeting 173Notes 174Form of Proxy 175Corporate InformationBack Inner Cover

1PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13PASSIONOur philosophy is one of passion, a commitmentto what we do and the services we offer. It is onethat has been inculcated into each and every oneof our staff, which motivates them to be the bestthat they can be. It is what drives us, to constantlydeliver on our promise of delivering value to ourstakeholders as well as luxury to all those whoexperience our properties. It improves our eye fordetail and ensures that we go that extra mile tomake everything truly world class. Our passion iswhat makes a big difference.

financial highlightsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /132Rs. 3.1bnGroup Profitafter taxRs.7.8 bnGroup RevenueRs.5.63Earnings per Sharecorporate missionTo generate long-term,sustainable, shareholder wealthby developing the capacity toadd value to land, buildingsand related investments andcombine them uniquely so thatthey complement and reinforceeach other.groupfinancials2012 / 13business valuesTo provide a return on investmentabove the risk free investmentrate to shareholders. To increaseproductivity of the workforceand provide training in order toimprove their knowledge, skillsand attitudes and to optimisethe use of available resources.To adhere to the highest levels ofintegrity, transparency and ethicalconduct.Rs. 2.3bnCompany Profitafter taxRs.5bnCompany RevenueRs.4DividendPer Share

PASSION3 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13financial highlightsgroup financial highlights of 2012/132013 2012Rs. ’000 Rs. ’000Revenue 7,890,978 8,855,241Gross Profit 4,823,417 4,377,776Profit After Tax 3,097,386 2,502,458Shareholders Funds 21,697,468 14,979,000Market Capitalisation 30,994,271 34,536,473Earnings per Share (Rs) 5.63 4.85Market Value Per Share (Rs) 70 78Current Ratio (Times) 3.63 2.47Dividend Per Share (Rs) 4.00 2.00Net Assets Per Share (Rs) 49.0 33.8Dividend Payout Ratio (Percentage) 71.0% 41.2%Financial Calendar 2012/13Interim Reports1st Quarter 31st July 20122nd Quarter 31st October 20123rd Quarter 28th January 2013Annual Reports2011/12 25th May 20122012/13 23rd May 2013DividendsFinal Dividend of Rs.3/- per sharefor the year 2011/12 was paid on 15th June 2012.Interim Dividend of Rs.1/- per sharefor the year 2012/13 was paid on 7th Dec 2012.Meetings18th Annual General Meeting 25th June 201219th Annual General Meeting 24th June 2013

PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /134“Even though we are the recipients of many awards and accolades, we don’t merely rest onour laurels but aspire to be the benchmark in quality and excellence which is a passion wedisplay every day, in our efforts to deliver the best to all our stakeholders”.

PASSION5 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13“A place where guestsare cared for, where staffgo the extra mile to makethem feel welcome andtruly special.”- Deepika -

PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /136

PASSION7 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13chairman’sstatement“Epitomising the very best in Sri Lanka’sleisure sector, yet again AHPPLC continuedto raise the bar by delivering greater value toboth the Property Development andHotel sectors.”- Susantha Ratnayake -

chairman’s statementPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /138The year 2012 was an eventful one for AsianHotels & Properties PLC (AHPPLC). In itsiconic role as the front runner in Sri Lanka’sleisure sector, your Company continued toreshape the industry landscape in the yearunder review. Hence it is with pleasure thatI present to you the Annual Report andStatement of Accounts of your Company forthe year ended 31st March 2013.The year 2012 was a momentous one forglobal tourism with the industry reaching ahistorical milestone, despite a relative weakglobal economic. As indicated by the WorldTourism Barometer, international touristarrivals surpassed one billion, translating intoa 4 per cent growth compared to the previousyear.Sri Lanka’s tourism industry crossed the onemillion tourist arrivals mark,ending the yearwith arrivals of 1,005,605 for the calendaryear 2012. The predominant contributors toarrivals were the Western European touristswho made up 37 per cent of the total,amounting to 373,063 arrivals. South Asiantravellers were the second largest contributorsaccounting for 25 per cent, an equivalentof 247,559 visitors to the island. Industryearnings also reached an all-time high ofUSD 1.039 Billion, an increase of 25 percent compared to the previous year. Theseencouraging signs are a testament to thecountry’s growing popularity as a high profilehospitality destination replete with worldclassfacilities capable of attracting the mostdiscerning international travellers.Performance Overview“Passion”, the theme of this year’s AnnualReport reverberated through all that we did in2012. Epitomising the very best in Sri Lanka’sleisure sector, yet again AHPPLC continuedto raise the bar by delivering greater value toboth the Property Development and Hotelsectors.AHPPLC generated revenue of Rs. 7.8 Billionduring the financial year ending 31st March2013, with both PBT and PAT recordinghealthy growth. The PBT for the year underreview was Rs. 3.3 Billion, an increase of26 per cent compared to the previous year.Consequently, PAT also experienced a 24per cent increase to close the year at Rs.3.1Billion. Earnings Per Share (EPS) was Rs.5.63 for the financial year demonstrating agrowth of 16 per cent.Cinnamon Grand ColomboThe Cinnamon Grand Colombo (CGC),AHPPLC’s flagship hotel under the“Cinnamon”brand, continues to retain itsenviable position as the leading hotel in thecountry. It is heartening to witness CGC’sgrowing market share, YOY revenue growth,improving profitability and intensifyingcustomer satisfaction. These parametersform the pillars of our success, and continueto support CGC’s position as the undisputedleader among star class city hotels inColombo.The Hotel’s primary business driver continuedto be the corporate segment followed byleisure and MICE sectors. CGC’s success isportrayed by the 32 per cent premium marketshare enjoyed by the property. Online pollssuggest that a majority of the customersrate CGC as the preferred choice on manypopular travel websites. Available online dataalso indicated customers’ willingness to paya premium price for accommodation andaccess to facilities at the CGC.With occupancy levels of 72 per centthroughout the year, CGC was able toconclude the year with room revenue reachingRs. 2.4 Billion a 28 per cent increase overthat of the previous year. During the year,CGC’s exclusive F&B outlets and numerousBanquet Rooms received the highestnumber of F&B covers among the cityhotels. Correspondingly, restaurant revenueincreased by 14 per cent during the year andexceeded the Rs. 1 Billion milestone, whileBanquet revenue grew by 19 per cent. It isnoteworthy that growth in all F&B revenuestreams resulted in a 16 per cent growth intotal F&B revenue during the year.Cinnamon Lakeside ColomboIn the year under review,Cinnamon LakesideColombo (CLC) witnessed an increase in theleisure customer segment with a year on yeargrowth of 32 per cent, enabling the hotel tomaintain a consistent occupancy rate of 60per cent throughout the year. CLC recordedtotal revenue of Rs. 2.8 Billion during the yearunder review, a 20 per cent increase over thatof the previous year. PBT increased by 63 percent to reach Rs. 1.2 Billion which included afair value gain on investment property of Rs.289 Million. F&B revenue also grew by 15 percent to reach Rs. 1.2 Billion as against Rs. 1.0Billion recorded in 2011/12.CLC was also the recipient of a number ofawards and accolades during the year. Keyamong them was the recognition received asthe “Best Luxury Hotel in Sri Lanka” awardedat the “Business Destinations Travel awards2012”.Property DevelopmentAs anticipated all property developmentprojects were completed as at 31st March

PASSION9 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13chairman’s statement2013. In the short term, we expect theCrescat Boulevard Shopping Mall (CBSM) tobe the predominant contributor towards theproperty development sector revenue stream.CBSM recorded revenue of Rs. 258 Millionfor the year and experienced a 6 per centincrease in foot traffic.Future OutlookIn pursuance of our goal to capture a broadershare of the local market and establish a firmregional footprint, we hope to evolve andshowcase a more cosmopolitan identity. Ibelieve these future aspirations are inimitablylinked to enduring partnerships that we hopeto forge with internationally reputed hospitalitypartners.AppreciationsMy heartfelt thanks go to AHPPLC’s Boardof Directors for the guidance and supportextended to me at all times. I take thisopportunity to thank our valued clientelefor their unquestionable loyalty throughoutthe years. My appreciation also goes tothe respective teams at CGC, CLC and theproperty division for the commitment andhard work which has been instrumental in oursuccess. I extend my sincere gratitude to allstakeholders and business partners for thecooperation extended in all our endeavoursand look forward to your continued support inthe years ahead.Susantha RatnayakeChairmanAsian Hotels and Properties PLC23rd May 2013

PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1310Our passion to constantly innovate and re-invent the hospitality industry has set usapart from the rest and we will continue to do so in revolutionising and surpassing theexpectations of Sri Lankan hospitality.

PASSION11 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13“Buildings are justbuildings. It’s thepeople who make thelocation memorable.They help create the mostunforgettablememories.”- Rasika -

PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1312

PASSION13 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13ManagementDiscussionand Analysis“In the year under review the “Cinnamon”brand continued its dominance in the CityHotel market. The Cinnamon brand continuesto reinforce its presence as a truly indigenousbrand among city hotels in Colombo.”

Management Discussion and AnalysisPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1314Global Tourism – A snapshot of 2012The weakening US economy and theescalating Eurozone debt crisis only servedto further deepen global economic turmoilin 2012. The global tourism industryhowever, was seemingly unaffected by theseintensifying tensions and the sector grew by4 per cent to exceed 1 Billion internationaltravellers during the year. (source: The WorldTourism Barometer published by UNWTO).The changing global travel patterns during2012 indicated the growing popularity ofthe Asia Pacific region as a preferred traveldestination. Travellers opting for the AsiaPacific region grew by 7 per cent during theyear with the numbers travelling to SouthEast Asia growing by an outstanding 9 percent. Furthermore, travel to South Asia andOceania increased by 4 per cent during 2012.Meanwhile, Western Europe being the mostvisited region in the world, for decades, sawtotal visitors increase only by a marginal 3 percent in 2012. Central and Eastern Europedestinations on the other hand experienced afar greater influx of visitors amounting to an 8per cent increase. (source: The World TourismBarometer published by UNWTO).UNWTO forecasts indicate that internationaltravel would increase by a further 3 to 4 percent in 2013. From a regional perspective,the forthcoming year is expected to be apromising one for the Asia Pacific region,in particular the South Asian sector. With atendency for above average growth, touristarrivals in this region are estimated to grow bya further 5 to 6 per cent in the year ahead.Sri Lanka’s economic environmentThe Sri Lankan economy grew by 6.4 percent in 2012 and inflation was maintainedat single digits for a fourth consecutiveyear, despite several global and domesticchallenges.To strengthen the macroeconomicenvironment in the country, the CentralBank and the Government implemented acomprehensive policy package in early 2012.To reign in uncontrolled credit growth, theCentral Bank introduced a systematic interestrate policy which saw three consecutiveinterest rate hikes during the year. Parallelto this, the Government’s commissionedchanges to the exchange rate policy andimport duty structure in order to arrest thewidening trade deficit. Consequently, theRupee was allowed to free float against theUS dollar, while changes in the import dutystructure were aimed at curbing the demandfor imports.All key sectors made positive contributionstowards the country’s economy with thehotels and restaurants contribution to GDPgrowing by 20 per cent to reach Rs. 21,029Million in 2012 compared to Rs. 17, 501Million in 2011. As a share of GDP, the hotelsand restaurants industry’s input increasedfrom 0.6 per cent in 2011 to 0.7 per cent in2012.Sri Lanka’s Tourism industryTourist arrivals in 2012 easily overshot thetargeted 950,000 visitors, to reach the1 million landmark recording 1,005,605arrivals for the year. This was an increase of17.5 per cent over the 855,975 visitors in2011. Consequently, earnings from tourismexceeded the historical USD 1 Billionmilestone, to end the year with a total revenueof USD 1.039 Billion. This was a monumental25.1 per cent growth comparative to theprevious year.ThousandsTourist Arrivals to Sri Lanka By Month(Source : Sri Lanka Tourism)140120100806040200$3,500$3,000$2,500$2,000$1,500$1,000$5000JanuaryFebruaryMarchAprilMayJune2011 2012JulyAugustSeptemberOctoberTourist Arrivals to Sri Lanka in 2012by CountryOther 26%Ukraine 2%Switzerland 2%Malaysia 2%China 3%Russia 3%Japan 3%Netherlands 3%USA 3%Canada 3%Maldives 5%Australia 5%France 6%Germany 7%UK 11%India 18%Per Capita GDP at Market PricesNovemberDecember2008 2009 2010 2011 2012Source : Central Bank of Sri Lanka Annual Report

PASSION Management Discussion and Analysis15 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13It is noteworthy, that a series of strategicinitiatives launched in 2011 to strengthen thecountry’s tourism sector came into fruition in2012. In particular, the extensive promotionalcampaigns together with the activation of newair routes connecting the island to the Middle-East and Australia succeeded in diversifyingthe country’s tourism market. Accordingly2012 witnessed a notable change in theprofile of arrivals to the country, capturing asignificant increase in both high-end leisureand business travellers.Group Financial ReviewMarket ShareIn the year under review the “Cinnamon”brand continued its dominance in the CityHotel market. Enjoying a staggering 50.4per cent market share in this segment, theCinnamon brand continues to reinforce itspresence as a truly indigenous brand amongcity hotels in Colombo.Revenue and ProfitabilityAHPPLC’s revenue decreased 11 per centfrom Rs. 8.8 Billion in 2011 to Rs 7.8 Billionin the year under review. The drop in therevenue from the Property Division was amplycompensated by an increase in revenue of 22per cent and 20 per cent in Cinnamon GrandColombo and Cinnamon Lakeside Colombo,respectively. In addition, a combination ofsound financial principles and stringentfinancial management ensured that AHPPLC’sNet Finance Income grew by an exceptional315 per cent.The cost of sales represented 54 per cent ofthe total Group expenses, with administrativeexpenses taking up 29 per cent of Groupexpenses during the year under review. Therewas a noteworthy decline in finance costs,which made a considerable impact on thecomposition of total Group expenditure forthe year under review. The dramatic reductionin finance cost is indicative of the meticulousfinancial planning, consequently resulting inconsiderable value addition to the Group’sbottom line.Thereby the Group was able to improvethe annual PBT by 26 per cent from Rs.2.6 Billion in 2011/2012 to Rs. 3.3 Billionin 2012/2013. Similarly, the Group PATalso grew by Rs. 595 Million, a 24 per centincrease comparative to the previous year.The gradual upward incline in PAT since2009, is indicative of AHPPLC’s potential forprofit growth. This was once again reflectedthrough the sharp increase in Net profitmargins for the year, from 28.3 per cent in2011/12 to 39.3 per cent in 2012/13.Cinnamon Grand Colombo (CGC)OverviewCGC, is a truly indigenous entity that emulatesworld class glamour and service standardsand has catapulted to the apex of Sri Lanka’sleisure sector. As the definite trailblazer inSri Lanka’s city hotel milieu, CGC continuesto redefine industry benchmarks. An evergrowing portal of value added services aimsto further enhance quality standards on parwith star class international hotels. Stemmingfrom this motive, CGC’s promotional andpublicity drive focuses on distinguishing theproperty as a “Cut above the Rest”. Hence,we have been able to consistently retain our32 per cent domination in the Colombo’s cityhotel arena for the past three years.Rs.Mn3,5003,0002,5002,0001,5001,0005000Group Profit After Taxation2009 2010 2011 2012 2013Segment Analysis of the Group RevenueGroup Expenses Analysis 2012/13Rooms 48%Food &Beverages 39%Other 6%InvestmentProperty 6%Shop RentalIncome 1%Cost of Sales 54%DistributionExpenses 3%AdministrativeExpenses 29%Other OperatingExpenses 10%Finance Cost 0%Income TaxExpense 4%

Management Discussion and AnalysisPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1316In recent times, CGC has emerged asthe preferred host hotel for many highprofile events, both local and international,primarily due to its authentic Sri Lankanidentity. In 2012, we had the honour ofhosting a number of international teamsthat were part of the ICC World T20 Crickettournament. Additionally, being chosen asthe resident hotel for the final contenders inthe tournament added a considerable boostto CGC’s client profile. In pursuance of ourgoal to add value to our customer experience,we also provided ground-catering servicesat all match venues in Colombo. Moreover,the CGC was appointed the official caterer inColombo catering to the meal requirementsof players, VIP’s and invitees during the entireT20 tournament.Additionally, CGC was the host hotel for anumber of International conferences andworkshops during the year including, TheCommonwealth Parliamentarians Dinnerhosted by Prof. G.L. Peiris, The SAARCFuture Government Congress hosted byICTA for all Foreign Ministers representingSAARC nations, The Sri Lanka UK Society gettogether and The Regional Managers meetingof The Standard Chartered Bank in additionto the Asia Pacific Entrepreneurs Awards thatwere held at the CGC. The State Banquetfor the Gemunu Regiment to celebratethe Re-awarding of Presidential colours inhonour of H.E. Rajapakse was also held atthe CGC, while the CGC was appointed theofficial caterer for the State Banquet held forCommon Wealth Parliamentarians, hostedby H.E. Rajapakse at the Presidents’ House.Furthermore, CGC was chosen by a numberof diplomatic missions to host a series ofhigh profile diplomatic events including theNational Day cocktails hosted by The RoyalThai Embassy and Cocktails hosted by TheEmbassy of Japan in honour its national day ,among others.Business ReviewTo date, CGC remains the undisputedmarket leader in its field, as determined byindustry KPI’s of market share and revenueshare. Throughout the year under reviewCGC maintained a 32 per cent market shareand a 33.7 per cent revenue share amongcity hotels in Colombo. Moreover, the YieldPremium for 2012 stood at 132 per cent anincrease of 3.6 per cent over the previousyear.Meanwhile, Market Penetration experienced amarginal increase to end the year at 126 percent, being the strongest amongst the fivestar city hotels. Apart from these indicators,CGC maintained a strong, consistent overallperformance during 2012, easily surpassingall other industry KPI’s as well.CGC’s position as the market leader amongcity hotels in Colombo has resulted in higherthan average occupancy levels. In the yearunder review CGC’s occupancy levels wereconsistent at 72.4 per cent. CGC sold132,361 rooms for the period ended 31stMarch 2013, a marginal 3 per cent increasefrom the 128,675 rooms sold in the previousyear. In the year under review, CGC’s RoomRevenue Per Available Room ( Rs.13,454)was the highest amongst contemporary fivestar city hotels in Colombo.The year also witnessed a significantgrowth in the corporate business segmentamong the city hotels in Colombo. CGC’saggressive strategies to tap into thislucrative market were highly successful, withcorporate business increasing by a notableRs.Mn5,0004,5004,0003,5003,0002,5002,0001,5001,0005000Rs.Mn2,0001,8001,6001,4001,2001,000800600400200080%70%60%50%40%30%20%10%0Cinnamon Grand Revenue2009 2010 2011 2012 2013Cinnamon GrandProfit Before Tax2009 2010 2011 2012 2013Cinnamon Grand Occupancy2009 2010 2011 2012 2013

PASSION17 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Management Discussion and Analysis11 per cent. The steepest growth inclinehowever, was seen in the MICE (Meetings,Incentives, Conventions and Meetings)business segment. Triggered primarily by theinaugural Sri Lanka Premier League (SLPL)T20 Championship and the World T20Championship held in Sri Lanka. The MICEbusiness grew by an impressive 30- per centduring the year. Growth in online businessvia Global Distribution Systems (GDS) wasa key determinant in CGC’s success storyduring the year under review. During 2012GDS business accounted for 14.4 per centof the total room nights sold compared with10.8 per cent recorded in the previous year,a 37 per cent YoY increase. During the yearthe GDS portfolio was extended to includea number of high profile travel websitesincluding www.expedia.com and www.makemytrip.com in addition to the existinglistings with www.travelclick.com, www.agoda.com and www.booking.com.CGC has reinvented the wheel when it comesto service charge payouts to employees andcontinues to sustain levels, well above theindustry average of Rs. 29,381 per month.CGC maintained an average service chargepayment of Rs. 33,741 per month perassociate, throughout 2012, with highestoutlay of Rs. 42,037 per associate recordedin the month of December 2012. Hence,CGC has earned the distinct reputation forachieving the highest service charge levelsamong 5 star hotels in Colombo.Revenue and ProfitabilityOwing to a dramatic increase in roomrevenue and F&B income, CGC was able torealise a notable revenue growth of 22 percent with total revenue amounting to Rs.4.6 Billion in 2012/13 compared to Rs. 3.8Billion in 2011/2012. Profit Before Tax (PBT)also increased to Rs. 1.7 Billion from Rs.1.11 Billion recorded in the previous year, asubstantial increase of 54 per cent.The upsurge in occupancy together with thepositive impacts of a higher Average RoomRate (ARR) culminated in a 28 per centincrease in room revenue for the year underreview. The improvement in room revenuefrom Rs. 1.9 Billion in 2011/12 to Rs. 2.4Billion in 2012/13 was the primary contributortowards profit growth in 2012/13. F&Brevenue also made a significant contributiontowards profitability, with an increase inrevenue of Rs. 268 Million for the year underreview. CGC’s 13 F&B outlets & Banquetvenues, accounted for total revenue ofRs. 1.9 Billion during the year, up 16 percent from the Rs. 1.6 Billion in 2011/12.Restaurants and Bars serviced a total of752,839 covers generating revenue of Rs. 1.1Billion for the year, while Banquets contributedRs. 771 Million towards revenue by servicing215,810 covers.CGC strongly believes in affordableindulgence for all ages and caters to a widerange of customers without compromisingon quality. We offer a wide array of affordableoptions for diners at our signature restaurants,including; Tao for fusion fare, Lagoon forseafood, Echo for Italian cuisine,The LondonGrill, for fine dining and Nuga Gama for SriLankan Village Cuisine & Chutneys for SouthIndian fare. In addition, CGC offers the highestnumber of buffet options in the city with theTaprobane restaurant the preferred choice forits international buffets and Sunday brunches.CGC was one of the principle contributorstowards the bottom line of the JKH leisureRs.20,00018,50016,00014,00012,00010,0008,0006,0004,0002,0000Rs.Mn2,5002,0001,5001,0005000Rs.40,00035,00030,00025,00020,00015,00010,0005,0000Cinnamon GrandAverage Daily Rate2009 2010 2011 2012 2013Cinnamon GrandF & B Revenue Growth2009 2010 2011 2012 2013Cinnamon Grand AverageService Charge2009 2010 2011 2012 2013

Management Discussion and AnalysisPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1318sector during the year under review. With aphenomenal 33 per cent contribution towardsthe profitability of the JKH leisure sector, CGCalso made a steady 10.9 per cent contributiontowards the overall profitability of the JKHGroup. These remarkable achievements area testament to the strength and stability ofGCC’s identity as the undisputed frontrunnerin Sri Lanka’s city hotel segment.Adequacy and ComplianceDespite the resounding success in all aspectsof business, CGC is far from complacent.Ever mindful of business influences that maynegate business success, the Companyseeks to address each challenge withcalculated accuracy combined with prudentvitality. CGC has thus managed to thwartnegative elements and chart its own courseto success. While realising the importanceof moving with the times, the Companyalso understands that it is vital to remain afew steps ahead of industry peers. Hencethe need to diligently monitor systems andprocesses while engaging resources todevelop the company’s human capital.Product development is another key area thatwarrants a great deal of attention. In order tomitigate any negative impacts on the businessCGC believes it is imperative to remainup-to-date on all operational aspects wherepre-emptive action is undoubtedly the key toenduring success.Looking AheadIn the year ahead, CGC envisages vastpotential for growth in the corporate businesssegment. In readiness to tap into this area, itis vital that the hotel continues to remain a cutabove the rest, particularly with emerging newcontenders in the market. In doing so, CGCwill realign its strategic thrust to retain existingcustomers while working parallel to garnera share of the potential customer base byenhancing the current product portfolio andservice offerings.Cinnamon Lakeside Colombo (CLC)Business ReviewThe newly refurbished CLC has been steadilygaining popularity both among internationaltravellers and locals seeking dining andentertainment. The scheduled completionof the refurbishment in 2012 ensured thatCLC enjoyed a commendable year albeit ata slower pace. With 76,199 room nights soldduring the year, the average occupancy rateat the hotel improved to 60 per cent. Thebusiness segment demonstrated gains ofapproximately 7 per cent, while Leisure andMICE increased by 32 per cent and 12 percent respectively compared to the previousyear.Following the refurbishment CLC nowoffers an upgraded room structure with 164Superior, 133 Premium, 29 Executive Floorrooms and 20 Suites. The increase in thenumber of premium rooms by 20 per centcalled for a revision in the room rate from thestandard minimum rate of US$ 125 to US$135.During the year, CLC’s market share saw amarginal increase from 17.3 per cent to 18.2per cent, while market penetration levelsremained strong at 103% for 2012. Yieldpremium was 103.4% at for the year.Revenue and ProfitabilityCLC recorded room revenue of Rs. 1.3Billion in the financial year under review. TheMarket Share Comparison of City HotelsRs.13012512011511010510095Group Revenue CompositionCinnamon CityHotels 50.4%Other CityHotels 49.6%CinnamonGrand 59%PropertyDivision 5%CinnamonLakeside 36%Annual Average Exchange Rate - USD2008 2009 2010 2011 2012Source : Central Bank of Sri Lanka Annual Report

PASSION19 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Management Discussion and AnalysisRoom Revenue per available room for theyear was Rs. 10,560/-, a substantial increasefrom Rs. 8,298/- recorded in the previousyear. F &B revenue was Rs. 1.2 Billion, withbanquets and restaurants contributing Rs.561 Million and Rs. 632 Million respectively.Total Restaurant covers stood at 425,918compared to last year’s 415,690. Meanwhile,total banquet covers during the year was182,802 compared to 174,119 covers in theprevious year.During the year CLC expanded its F&Bofferings to encompass a wider selectionof dining and entertainment choices onpar with any star class international resort.Following the launch of its unique floatingrestaurant, 8 Degrees on the lake in 2012,the property now consists of a total of eightdining and bar venues. With the countrygearing for high-end tourists and planningproducts and services aligned to this vision,CLC aims to set a benchmark by offering aworld class cruise dining experience aboarda twin deck catamaran. The cruise offers anintimate onboard setting that accommodatesan exclusive Group of 100 diners per sitting.Aboard 8 Degrees on the Lake, dinerscan experience a truly world class diningexperience while leisurely cruising the BeiraLake.Crescat Boulevard & Shopping Mall(CBSM)CBSM is the premier shopping complex inColombo. The iconic complex has the addedadvantage of being located in one of the mostprestigious locations in the city, while alsobeing in close proximity to leading star classhotels and a number of upscale propertydevelopments. CBSM offers shoppers a trulyinternational shopping experience by offeringleading international brand stores includingClarks, Fila, Addidas, Reebok, Tag, HarmonCardon, Samsung and Nokia. To complementthese international brands, a number ofwell-established local brands like Hameedia,Yoland, Avirate and Stone N String havemade their presence, further enhancing theshopping experience.IFRS ConvergenceUnder the directives of the Institute ofChartered Accountants of Sri Lanka (CA SriLanka), the financial statements for 2012/13are reported under SLFRS/LKAS along withthe re-statement of figures for 2011/12 forcomparison purposes.Impact to financial statementsThe following is a summary of the disclosuresand the impact to the financial statement fromthe adoption of SLFRS/LKAS reporting.• Change in composition of the IncomeStatement with the inclusion of thenew line item ‘Results from OperatingActivities’.• The segregation of net finance cost isshown in the Income Statement itself asfinance expense and finance income.• Introduction of ‘Statement ofComprehensive Income’ which includesmovement in currency translation offoreign operations, gains/losses on fairvaluations of available for sale financialassets, share of other comprehensiveincome of equity accounted investmentsetc. Transactions of similar nature wererouted directly through the Statement ofchanges in Equity under SLAS.• SLFRS/LKAS requires notes on ‘FirstTime Adoption of SLFRS/LKAS’. Thisincludes statements and policies on SLAShistorical figures reconciled under SLFRS/LKAS. Note that the first day of transitionis taken as April 1st 2011.• New notes on financial instruments andexposure of market risk, credit risk andliquidity risk of said instruments.

PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1320Luxury lies in the details and it’s these details that makes guest experiences unforgettableand keep them coming back for more. Our passion lies in making sure that each individualexperiences our unique brand at its finest, without compromising on value and elegance.

PASSION21 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13“Whatever we do, we dowith a passionate heartbecause we believe indelivering the best anytimeanyhow anywhere. It’swhat we’re all about.”- Chris -

oard of directorsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1322Susantha RatnayakeChairmanMr. Susantha Ratnayake was appointedas the Chairman and CEO of John KeellsHoldings PLC in January 2006 and hasserved on the JKH Board since 1992/93.He is also the Chairman of many of thelisted and un-listed companies within theGroup. Mr. Ratnayake is the Chairman ofthe Ceylon Chamber of Commerce, ViceChairman of the Employers’ Federationof Ceylon and serves on several clustersof the National Council for EconomicDevelopment. He has over 35 years ofmanagement experience, all of which iswithin the John Keells Group.Ajit GunewardeneDirectorMr. Ajit Gunewardene is the DeputyChairman of John Keells Holdings PLCand has been a member of their Board forover 20 years. He is a Director of manycompanies in the John Keells Groupand is the Chairman of Union AssurancePLC. He is a member of the board ofSLINTEC, a company established for thedevelopment of nanotechnology in SriLanka under the auspices of the Ministryof Science and Technology. He has alsoserved as the Chairman of the ColomboStock Exchange and Nations Trust BankPLC. Mr. Gunewardene has a degree inEconomics and brings over 31 years ofmanagement experience.Ronnie PeirisDirectorMr. Peiris was appointed as a Director ofAsian Hotels & Properties PLC in 2003.Appointed to the John Keells HoldingsPLC Board during 2002/03, Mr. Peiris hasoverall responsibility for Group Finance,including Taxation, Corporate Finance,Treasury, Group Initiatives, and theInformation Technology functions at thecentre. He was previously the ManagingDirector of Anglo American Corporation(Central Africa) Limited in Zambia.He has over 40 years of finance andgeneral management experience in SriLanka and abroad. He is a Fellow ofthe Chartered Institute of ManagementAccountants, UK, Association ofChartered Certified Accountants, UK,and the Society of Certified ManagementAccountants, Sri Lanka and holds an MBAfrom the University of Cape Town, SouthAfrica. He is a member of the committeeof the Ceylon Chamber of Commerce,Chairman of its Taxation Sub Committeeand also serves on its Economic, Fiscaland Policy Planning Sub Committee. Heis a Director of several companies in theJohn Keells Group.Cholmondeley PintoDirectorMr. Pinto was appointed as a Non-Executive Director and as the chairmanof the Board Audit Committee of AsianHotels And Properties PLC in July2011. He is a Fellow of the Institute ofChartered Accountants of Sri Lanka with40 years of post-qualifying experience,in the profession and in industry. Beforereturning to Sri Lanka in 2006 after aspell of 32 years abroad, he worked forSAB Miller PLC for 23 years, the world’ssecond largest multinational breweriesgroup, holding CFO positions in its listedsubsidiaries in several countries. Hecurrently works as a beverage industryconsultant and is semi-retired. He is alsoa Non-Executive Director of Trans AsiaHotels PLC.

PASSION board of directors23 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Sanjiva SenanayakeDirectorMr. Senanayake was appointed to theBoard of Asian Hotels and Properties PLCas an Independent Director in September2009. He has served in several keypositions in national and internationalorganisations.Mr. Senanayake joined IFC in June 1998and held the position of Country Managerfor Sri Lanka and Maldives until April 2006when he was appointed as the Head ofFinancial Markets Investments – WestAfrica. He held this position until hisretirement in April 2009. Prior to joiningIFC he served as the Assistant GeneralManager-Treasury and InvestmentBanking at National Development Bankof Sri Lanka and as Consultant-Treasuryand Business Development at CommercialBank of Ceylon.Prior to that he held several key positionsin the Citibank group in Sri Lanka andoverseas. Mr. Senanayake holds aBSc degree in Electronic and ElectricalEngineering from King’s College, Universityof London and an MSc in CommunicationEngineering from the Imperial College ofScience and Technology, University ofLondon. He is also a Director of SampathBank PLC, Hemas Power PLC, andHemas Pharmaceuticals Ltd.Shirani JayasekaraDirectorMrs. Jayasekara was appointed as aDirector in September 2009. She hasover 30 years experience combining;Finance, IT, Audit and Risk Managementin Sri Lanka, Zambia and Bahrain. Shecurrently serves as an advisor to CarsonsCumberbatch PLC, in relation to Audit,covering group interests in Sri Lanka,Indonesia and Malaysia.She has been selected to serve onvarious committees of the Institute ofChartered Accountants of Sri Lanka suchas the Annual Report Awards Committee(Sustainability Reporting) and AuditCommittee of the Institute. She is alsoan external Independent Director at LBFinance. She is a Fellow of the Instituteof Chartered Accountants of Sri Lankaand a Fellow of the Chartered Institute ofManagement Accountants UK.Rohan KarunarajahDirectorMr. Karunarajah joined the John KeellsGroup in 2003 as General Manager forthe Colombo Plaza and was appointeda Director in March 2005. A careerHotelier counting over three decades inthe international hospitality industry, hecurrently holds the position of GeneralManager, Cinnamon Grand and, SeniorVice President, John Keells HoldingsPLC., having served as General Managerfor the Bristol Marriott and the MarriottMarble Arch, London. He read for hisMasters in Hospitality and BusinessStudies from the Thames Valley University,London.Suresh RajendraDirectorMr. Rajendra was appointed as a Directorin January 2006. He is President, PropertyGroup of John Keells Holdings PLC.He also serves as a Director in manycompanies of the John Keells Group. Hehas over 18 years of experience in thefields of finance, travel and tourism, andbusiness development acquired both in SriLanka and overseas. Prior to joining theGroup, he was the head of commercialand business development for NRMAMotoring & Services in Sydney, Australia,Director/General Manager of AitkenSpence Hotel Managements (Pvt) Ltd.and also served on the Boards of the hotelcompanies of the Aitken Spence Group.Mr. Rajendra is a Fellow of the CharteredInstitute of Management Accountants, UK.

annual report of the board of directorsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1324The Directors have pleasure in presentingto members their Report together with theAudited Financial Statements for the yearended 31st March 2013 to be presentedat the 19th Annual General Meeting of theCompany.Principal ActivitiesThe Company is engaged in Hoteliering andProperty Development/Management. TransAsia Hotels PLC (Cinnamon Lakeside) is aSubsidiary of the Company and its principalactivity is Hoteliering. There has been nomaterial change to the activities of theCompany or of the Subsidiary during theperiod under review.Review of Business and FutureDevelopmentsThe financial and operational performance,during the year ended 31st March 2013 andfuture business development of the Companyand Group, is provided in the Chairman’sStatement, the Management Discussion andAnalysis of Operation, Sustainability Reportand the Financial Review. These reports,which form an integral part of the Directors’Report, together with the Audited FinancialStatements, reflect the state of affairs of theCompany and Group for the financial year2012/2013.Financial Statements and Auditors’reportThe Financial Statements duly signed by theDirectors is provided on pages 126 to 166and the Auditors’ Report on the FinancialStatements is provided on page 125 of thisAnnual Report.Segment ReportingSegment wise contribution to Group revenue, results, assets and liabilities are provided in Note38 to the Financial Statements.RevenueRevenue generated by the Company amounted to Rs. 5,050 Mn (2012 - Rs. 6,479 Mn),whilst Group revenue amounted to Rs. 7,891Mn (2012 - Rs. 8,855 Mn).Contribution toGroup revenue, from the different business segments are provided in Note 38 to the FinancialStatements.Results and AppropriationsThe profit after tax of the Company was Rs. 2,292 Mn (2012- Rs. 2,007 Mn) whilst the Groupprofit attributable to the equity holders of the Parent Company for the year was Rs. 2,494 Mn(2012 – Rs. 2,148 Mn). A detailed description of the Group results and appropriations are givenbelow.2012/13 2011/12Rs. ‘000Rs.‘000Net Profit for the year after providing for expensesincluding Depreciation on Property, Plant andEquipment was: 3,336,251 2,654,511From which Income Tax has been deducted of: (238,865) (152,053)Leaving thereafter a Net Profit After Tax of: 3,097,386 2,502,458The amount attributable to Minority Interestwhich has been deducted is: (603,090) (353,581)Leaving a Profit Available to the Group of: 2,494,296 2,148,877The Brought Forward Profit is: 6,405,690 5,109,148Transferred to Revenue Reserve of: 28,175 33,215Final Dividends paid (1,328,326) (442,775)Interim Dividends Paid (442,775) (442,775)Leaving an un-appropriated balance to be CarriedForward of: 7,157,061 6,405,690

PASSION annual report of the board of directors25 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Accounting PoliciesThe Group prepared its Financial Statementsfor the period up to 31st March 2012 inaccordance with Sri Lanka AccountingStandards, which were in effect up to thatdate. Following the convergence of Sri LankaAccounting Standards with InternationalFinancial Reporting Standards (IFRSs),all existing new Sri Lanka AccountingStandards were prefixed as SLFRS andLKAS to present Sri Lanka AccountingStandards corresponding to InternationalFinancial Reporting Standards and Sri LankaAccounting Standards corresponding toInternational Accounting Standards (IASs),respectively. Accordingly the Group adoptedthese new Sri Lanka Accounting Standardscommonly known as SLFRS/LKASsapplicable for the financial year commencing1st April 2012.These Financial Statementsfor the year ending 31st March 2013 of theGroup are the first prepared in accordancewith SLFRS/LKAS and Sri Lanka AccountingStandard SLFRS 1 on “First time adoptionof Sri Lanka Accounting Standards”. Theaccounting policies adopted in preparation ofthe Financial Statements are given on page131 of this Report.DividendsA Final Dividend of Rs. 3/- per share for thefinancial year ended 31st March 2012, waspaid during the current financial year on15th June 2012 to those shareholders in theregister as of 05th June 2012, resulting in atotal cash pay out amounting to Rs. 1,328Mn.Interim Dividend of Rs.1/- per share for theyear ended 31st March 2013, amountingto Rs. 442 Mn was paid on 07th December2012.The Board of Directors, has declared a FinalDividend of Rs. 3/- per share for the financialyear ended 31st March 2013. The FinalDividend will be paid on 14th June 2013 tothose shareholders on the register as at 4thJune 2013.As required by Section 56 (2) of theCompanies Act No 7of 2007, the Board ofDirectors has confirmed that the Companysatisfies the Solvency Test in accordancewith Section 57 of the Companies Act No. 7of 2007 and has obtained a certificate fromthe Auditors, prior to declaring the abovedividends.Property, Plant and EquipmentThe book value of Property, Plant andEquipment as at the balance sheet dateamounted to Rs. 15,029 Mn (2012 – Rs.9,160 Mn) and Rs.18,309 Mn ( 2012 –Rs.12,005 Mn) for the Company and Grouprespectively.Capital expenditure for the Company andGroup amounted to Rs. 283 Mn (2012 - Rs.214 Mn) and Rs. 489 Mn (2012 – Rs.579 Mn),respectively.Total Freehold Land available - Asian Hotelsand Properties PLC A8. R00. P05.08Total Leasehold Land available - Trans AsiaHotels PLC A07. R01. P24.80Details of Land and Buildings with net bookvalues including details of Property, Plant andEquipment of the Group and their movementsare given in Note 14 to the FinancialStatements on page 142.Market Value of PropertiesThe Land and Buildings of the Group wererevalued on 31st March 2013 by M/s P.B.Kalugalagedara & Associates, CharteredValuation Surveyor.Details of property valuations, including thevaluation methods are provided in Note 14 tothe Financial Statement on page 142 of thisreport.Investment PropertiesIn accordance with SLAS 40 - InvestmentProperty (2005), the net book value ofproperties held to earn rental income, andproperties held for capital appreciation havebeen classified as Investment Properties. Thedetails of Investment Properties are explainedin Note 16 to the Financial Statements onpage 144.Investment in SubsidiaryCompany No. of %Shares HoldingTrans AsiaHotels PLC(Quoted) 86,823,028 43.41Stated capitalThe Stated Capital of the Company as at31st March 2013 is Rs. 3,345 Mn (2012 –Rs. 3,345 Mn) comprising of 442,775,300Ordinary Shares.Share InformationThe market value of an Ordinary Share of theCompany as at 31st March 2013 was Rs.70.00 (31st March 2012 – Rs. 78.00).

annual report of the board of directorsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1326The distribution and composition ofshareholders and the information relating toearnings, dividend, net assets, and marketvalue per shares is given in the ShareInformation and Five (5) year financial reviewsection of the Annual Report.Major ShareholdersDetails of the twenty largest shareholdersof the Company and the percentages heldby each of them are disclosed in the ShareInformation section of the Annual Report onpage 170.ReservesTotal reserves as at 31st March 2013 for theCompany and Group amounted to Rs. 16,384Mn ( 2012 - Rs. 10,021 Mn) and Rs. 18,352Mn (2012 - Rs. 11,633 Mn), respectively.The movements and composition of theCapital Reserves and Revenue Reservesduring the year are disclosed in the Statementof Changes in Equity.DirectorsThe Board of Directors of the Company as at31st March 2013 and their brief profiles aregiven in the Board of Directors section of theAnnual Report.The Directors of the Company who heldoffice during the year under review are set outbelow.Mr. S.C. Ratnayake - ChairmanMr. A.D. Gunewardene - Managing DirectorMr. J.R.F. PeirisMr. R.J. KarunarajahMr. S. RajendraMr. C.J.L. PintoMr. S.K.G. SenanayakeMrs. S.A. JayasekaraMr. S.K.G. Senanayake and Mrs. S.A.Jayasekara retire by rotation in terms ofArticle 84 of the Articles of Association of theCompany and being eligible for re-election arerecommended by the Board for re-election.The Directors of Trans Asia Hotels PLC[Subsidiary] who held office during the yearunder review are set out below:Mr. S.C. Ratnayake - ChairmanMr. A.D. GunewardeneMr. J.R.F. PeirisMr. D.S.J. Pelpola (resigned with effect from26/06/2012)Mrs. R.L. Nanayakkara (resigned with effectfrom 26/06/2012)Mr. N.L. GooneratneMr. C.J.L. PintoMr. E. H. WijenaikeMr. D.S.J. Pelpola and Mrs. R.L. Nanayakkararesigned from the Board with effect from 26thJune 2012.Mr. E.H. Wijenaike was appointed to theBoard with effect from 27th June 2012.Board CommitteesBoard Audit CommitteeThe following members serve on the BoardAudit CommitteeMr. C.J.L. Pinto - ChairmanMr. S.K.G. SenanayakeMrs. S.A. JayasekaraThe report of the Audit Committee is given onpage 122 of this Report.Human Resources and CompensationCommitteeThe Human Resources & CompensationCommittee of the Parent Company JohnKeells Holding PLC (JKH) functions asthe Human Resources & CompensationCommittee of the Company, as permittedby the listing rules of the Colombo StockExchange.Mr. E.F.G. Amerasinghe - ChairmanMrs. S. TiruchelvamDr. I. CoomaraswamyMr. A.R. GunasekaraThe Report of the Human Resourcesand Compensation Committee and theremuneration policy is given in the CorporateGovernance section of the Annual Report.Nominations CommitteeThe Nomination Committee of the ParentCompany John Keells Holding PLC(JKH)functions as the nomination committee of theCompany.The Nominations Committee comprisesthree Independent Directors and one NonIndependent Director namely as at 7th March2013:Mr. T. Das - ChairmanMr. S. Enderby*Mrs. S. TiruchelvamMr. S. C. Ratnayake (Non Independent)*resigned from 8th March 2013The Report of the Nominations Committee isgiven in the Corporate Governance section ofthe Annual Report.

PASSION27 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13annual report of the board of directorsInterests RegisterThe Company has maintained an InterestsRegister as contemplated by the CompaniesAct No 7 of 2007. In compliance with therequirements of the Companies Act No. 7of 2007, this Annual Report also containsparticulars of entries made in the InterestsRegister of the Subsidiary which is a PublicLimited Company.Interests in contractsThe Directors have all made a generaldisclosure to the Board of Directors asrequired by Section 192 (2) of the CompaniesAct No. 7 of 2007 and no additional interestshave been disclosed by any Director.Directors’ RemunerationDetails of the remuneration and other benefitsreceived by the Directors of the Companyand the Group are set out in Note 10 of theFinancial Statements.Indemnities and RemunerationThe Board approved the payment to Mr. R.J.Karunarajah and Mr. S. Rajendra, ExecutiveDirectors, of:• An increment from 1st July 2012 basedon the individual performance ratingobtained by the Executive Directors interms of the Performance Managementsystem of the John Keells Group; and• Short term variable incentive based onindividual performance, organisationperformance and role responsibilitybased on the results of the financial year2011/2012, paid in July 2012.The Remuneration Committee of John KeellsHoldings PLC (being the holding companyof Asian Hotels and Properties PLC) has notrecommended an increment in fees to the Non-Executive Directors of the Company. The feespayable to Non-Executive nominees of John Keells Holdings PLC are paid to the Company andnot to individual Directors.Particulars of entries in the interests register of subsidiaryTrans Asia Hotels PLCIndemnities and remunerationThere have been no changes in Remuneration paid to the Directors of Trans Asia Hotels PLC forthe financial year ended 31st March 2013.Further to the appointment of Mr. E. H. Wijenaike as a Non-Executive Director of Trans AsiaHotels PLC with effect from 27th June 2012, the Board approved the payment to Mr. E.H.Wijenaike of the standard Non-Executive fees approved by the Board for Non-ExecutiveDirectors which are commensurate with the market complexities of the Company.Directors’ ShareholdingsThe shares held by Directors’ and their spouses in the Company as at 31st March 2013 are asfollows;Director Shareholding ShareholdingAs atAs at31.03.2013 31. 03.2012Mr. S.C. Ratnayake 20,000 20,000Mr. A.D. Gunewardene NIL nILMr. J.R.F. Peiris NIL nILMr. R.J. Karunarajah 200 200Mr. S. Rajendra NIL NILMr. S.K.G. Senanayake NIL nILMrs. S.A. Jayasekara NIL nILMr. C.J.L. Pinto 7,800 7,800(Joint account with Mrs. M.R.C. Pinto)Corporate GovernanceCorporate Governance practices and principles with respect to the management and operationsof the Company are set out on pages 34 to 57 of this Report.The Directors confirm that the Company is in compliance with the Listing Rules of the ColomboStock Exchange and has adopted the relevant Rules on Corporate Governance issued by theSecurities & Exchange Commission of Sri Lanka and the Institute of Chartered Accountants ofSri Lanka.

annual report of the board of directorsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1328SustainabilityThe Company has taken specific steps,particularly, in ensuring the conservation ofits natural resources and environment as wellas addressing material issues highlightedby its stakeholders. Every endeavour ismade to minimise the adverse effects on theenvironment to ensure sustainable continuityof our natural resources. The Company’ssustainable practices are detailed on pages62 to 117.EmploymentThe Company has an equal opportunitypolicy in respect of employment and theseprinciples are enshrined in specific selection,training, development and promotion policies,ensuring that all decisions are based on merit.The Group practices equality of opportunityfor all employees irrespective of ethnic origin,religion, political opinion, gender, maritalstatus or physical disability.Details of the Group’s human resourceinitiatives are detailed in the employees’section of the Sustainability Report.The number of persons employed by theCompany and Group as at 31st March 2013was 1,225 (2012 – 1,265) and 2,067 (2012 –2,103) respectively.There have been no material issues pertainingto employees and industrial relations of theCompany and the Group during the FinancialYear.Supplier PolicyThe Group applies an overall policy ofagreeing and clearly communicating termsof payment as part of the commercialagreements negotiated with suppliers, andendeavours to pay for all items properlycharged in accordance with these agreedterms. As at 31st March 2013, the trade andother payables of the Company and Groupamounted to Rs. 465 Mn (2012 – Rs. 615Mn) and Rs.643 Mn (2012 - Rs. 845 Mn),respectively.Statutory PaymentsThe Directors confirm that to the best oftheir knowledge, all taxes, duties and leviespayable by the Company and its Subsidiary,all contributions, levies and taxes payable onbehalf of, and in respect of the employeesof the Company and its Subsidiary, and allother known statutory dues as were due andpayable by the Company and its Subsidiaryas at the Balance Sheet date have beenpaid or, where relevant provided for, exceptas specified in Note 39 to the FinancialStatements, covering Contingent Liabilities.Risk ManagementThe Board confirms that there is an ongoingprocess of identifying, evaluating andmanaging any significant risks faced bythe Company, where annual risk reviewsare carried out by the Enterprise RiskManagement Division and the risks are furtherreviewed each quarter by each businessunit. The headline risks of each companyis presented to its respective Board AuditCommittee for review by the business unit.The details of the Risk Report and RiskManagement Process are set out on pages30 to 33 of this Report.Internal ControlThe Board, through the involvement of theGroup Business Process Review (Group BPR)Division, takes steps to gain assurance onthe effectiveness of control systems in place.The Audit Committee receives regular reportson the adequacy and effectiveness of internalcontrols in the Company, compliance withlaws and regulations and established policiesand procedures of the Company.The Head of Group Business Process ReviewDivision has direct access to the Chairmanof the Audit Committee. Reports of theoutsourced internal auditors are also reviewedby the Committee on matters pertaining to theCompany.The Directors acknowledge their responsibilityfor the Company’s systems of internalcontrols. The statements of CorporateGovernance on pages 34 to 57 sets outin detail the Company’s system of internalcontrols.Related Party TransactionsThere were no related party transactionsrequired to be disclosed under the ListingRules of the Colombo Stock Exchange otherthan as disclosed under Note 35 to theFinancial Statements.DonationsTotal Donations made by the Companyduring the year amounted to Rs. 6.9 Mn anddonations made by the Group amounted toRs.10.9 Mn (31st March 2012-CompanyRs. 6.9 Mn/Group Rs. 10.6 Mn).Events Subsequent to the BalanceSheet DateExcept for the matters disclosed in Note 41to the Financial Statements on Page 166there are no material events which requireadjustments or disclosure in the FinancialStatements.

PASSION29 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13annual report of the board of directorsGoing ConcernThe Directors are satisfied that the Companyand its Subsidiary have adequate resourcesto continue in operational existence for theforeseeable future, to justify adopting theGoing Concern basis in preparing theseFinancial Statements.Annual General MeetingThe 19th Annual General Meeting will be held at the Ceylon Chamber of Commerce, No. 50,Navam Mawatha, Colombo 2, on 24th June 2013 at 11am. The Notice of Annual GeneralMeeting appears on page 173 of the Annual Report.This Annual Report is signed for and on behalf of the Board of Directors by;AuditorsThe retiring Auditors Messrs. KPMG,Chartered Accountants, have expressedtheir willingness to continue in office. TheAudit Committee at a meeting held on17th May 2013 recommended that they bere-appointed as Auditors. Resolution to reappointthem and to authorise the Directors todetermine their remuneration will be proposedat the Annual General Meeting to be held on24th June 2013.The Independent Auditors’ Report to theshareholders is given on page 125.The Audit Committee reviews theappointment of the Auditor, its effectiveness,independence and its relationship with theCompany, including the level of audit and non-audit fees paid to the Auditor.The Auditors do not have any relationship[other than that of an Auditor] with theCompany or its Subsidiary.Annual ReportThe Board of Directors approved theConsolidated Financial Statements on 23rdMay 2013. The appropriate number ofcopies of this Report will be submitted to theColombo Stock Exchange and to theSri Lanka Accounting and Auditing StandardsMonitoring Board on 31st May 2013.DirectorBy Order of the BoardKEELLS CONSULTANTS (PRIVATE) LIMITEDSecretariesColombo23rd May 2013Director

isk managementPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1330Asian Hotels and Properties RiskManagement process is designed toanalyse the exposure on various risks, byidentifying vulnerability and the probabilityof occurrence along with its impact to thebusiness operation. Through this processwe have developed a better understandingof key risks, encouraged and facilitated thesharing of best practices across the individualbusiness units and reduced the overall costof risk by continuously improving our riskmanagement approaches. Thereafter, actionthat should be taken to mitigate the impact ofsuch risks to the business are discussed atvarious levels of the Company and correctivemeasures are implemented promptly.The Company has recognised the RiskManagement process as an essentialcomponent of both the investmentmanagement process for investors in ourproducts as well as in our approach tomaintaining high quality sustainability businessfor our shareholders. This framework isdesigned to balance corporate oversight witha well-defined Risk Management processes.Enhancements are continuously made to theRisk Management framework throughout2012/13 based on the guiding principlesof the Enterprise Risk Management (ERM)process recommended by the John KeellsGroup Sustainability and Enterprise RiskManagement Division. During the secondquarter, the Enterprise Risk Managementdivision in conjunction with the heads ofbusiness units undertook a comprehensiverisk assessment of all structural, operational,financial and strategic risks that might preventeach business unit meeting it’s objectives.During such risk reviews, the Enterprise RiskManagement division facilitated and acted inthe capacity of catalysts, in assisting businessunits in identifying their overall risks.The Group Management Committee of theHotel and Property divisions along with theAudit Committee work closely with the Boardof Directors, who are in turn responsible for:• Establishing core standards for themanagement, measurement and reportingof risk.• Identifying, assessing, communicatingand monitoring risks on a Company widebasis.• Engaging with senior management on afrequent basis regarding material matterswith respect to risk-taking activities in thebusinesses and related Risk Managementprocesses.Risk Management ProcessThe Risk Management Process is carriedout in order to identify risk events andrank each risk by assigning a risk rating.This is assessed by the likelihood ofoccurrence [Probability], the level of impactto the Company and the velocity of risk isalso a factor when assessing risks. TheManagement Committee of each businessunit was appraised of the high level risks andcore sustainability risks that emerged duringthe risk review process and risk mitigationaction plans were presented for reviewby the Audit Committee. Risk reviews arecarried out on a quarterly basis to monitorand manage the status of risks mitigationactivities. The process is reviewed by theGroup Management Committee and theGroup Executive Committee of John KeellsHoldings PLC. The Audit Committee overseesthe process on behalf of the Board.The risk exposure and profile of the Group didnot change significantly during thelast year. A review of the key risks thatcould materially affect the Asian Hotels andProperties PLC along with control measuresand action plans implemented to mitigatethem are set out on the next page.

PASSION risk management31 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Risk Category and DescriptionStrategic risksBusiness Risk• The performance of the Company could be adversely affected dueto intense competition, unfavourable economic conditions and newentrants.Operational RisksCommercial Relationship Risk• Both business units of Asian Hotels and Properties PLC, theProperty division and the Hotel division benefit from closecommercial relationships with a number of key customers andsuppliers. The disruption of this can have negative consequences.Human Resource Risk• The Company’s Human Resources are the backbone of thebusiness, holding the Company together. The growth of theCompany is heavily dependent on the talents and efforts of thehighly skilled individuals that the Company is able to attract andretain. The recruitment and retention of employees is a constantchallenge.Control Measures and Action Plans to Mitigate Risks• The Company closely monitors competitor’s activities andstrategies. This process includes the reviewing of competitor’smarket share and performance. Where necessary new strategiesare formulated or existing strategies are revised to counter theactions of competitors.• Ongoing and timely investment to upgrade properties and facilities.• Exceeding customer expectations by careful analysis of guestfeedback and tailoring appropriate and prompt responses toidentified issues.• Constant creativity and innovation in products and services.• The Company devotes significant resources to carry out regulartraining programs to upgrade its levels of care in supporting theserelationships.• The Company undertakes regular surveys of customer satisfactionwhich are reviewed on a continuous basis.• As part of the performance appraisal process carried out in thecompany, a clear vision has been set out on career developmentand succession plans, enabling the Company to retain itsemployees.• Regular training in both locally and overseas are carried out inorder to infuse motivation, commitment and empowerment amongthe staff.• Recruitment of high calibre staff, effective induction to the Groups’corporate culture, transparency in Management actions andeffective communication lines are developed in the Company’sculture to foster good employee relationships.• Developing a spirit of unity by organising associate gathering tocelebrate staff birthdays, outings, sports activities, familyget-togethers and religious activities.

isk managementPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1332Risk Category and DescriptionBrand image and Reputation Risk• The Company’s success depends on the continued strength andrecognition of the brand on a local and regional basis.• The “Cinnamon” name is primary to its business as well as to theimplementation of its strategy for expanding its businesses. Thiswill depend largely on the success of its ability to provide highqualityproducts and services to all its clients.Liquidity and Credit Risk• The economic instability, high inflation rates, adverse foreigncurrency fluctuations and the global monetary crisis could affectthe Company in recovering the cash from the clients of the hoteland tenants of the Mall.• Exposure and losses due to default of settlement by debtors.Interest Rate Risk• Drop in interest rates will lead to a lower interest income as a resultof which, the Company would have an impact on its other Income.Technology and Data Protection Risk• Failure to keep pace with developments in the technology spherecould impair our competitive position and operation.Control Measures and Action Plans to Mitigate Risks• Regular brand Audits of the “Cinnamon” brand is carried out.• Both the Hotel division and the Property division ensuresthat they secure the most sought after and qualified staff tohold high Managerial positions (in the different hierarchies).Continuous attention is focused on the environment and health& safety concerns by complying with HACCP and other qualitycertifications.• The brand of “Cinnamon” with emphasis on maintaining MinimumQuality Standards and Standards of Performance carries outongoing reviews of guest comments in order to exceed customerexpectations.• Encouraging and nurturing responsible corporate citizenshipthrough CSR initiatives.• Continuous monitoring and reviewing of on-line customer reviewsand rating.• Regular review mechanisms are in place to monitor theperformance of the Company against approved budget targets toachieve a balance between liquidity and profitability.• The Company actively carries out trade debtor balance reviewswith review meetings held on a consistent and continuous basis.• Credit policy and stringent controls are in place to mitigate theimpact of default.• The Company has taken measures to maximise the interestincome with the assistance and guidance of the JKH GroupTreasury Department.• The IT division of the sector and the John Keells Group haveimplemented procedures to safeguard the computer installations ofthe Company to ensure continuity of operations.• While the group’s operations are reliant on information technology,stringent security measures, disaster recovery procedures andbusiness continuity plans implemented, there are group-widemeasures to ensure the mitigation of significant informationtechnology risks.• A clearly defined IT policy is communicated to all associates.

PASSION risk management33 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Risk Category and DescriptionFraud Risk• The risk posed by corruption and employees abusing entrustedpower for private gain, as well as misappropriation of assets, whichwill also negatively impact the Company’s reputation.Control Measures and Action Plans to Mitigate Risks• All major procurement decisions are taken on a collective basisinclusive of Consultants/ Project Managers and the Management.• Internal auditors are appointed to conduct regular reviews of theareas which are susceptible to misappropriation and fraud.• Authority limits and segregation of responsibilities and duties havebeen implemented for the critical functions of the Company.• The Company has taken insurance covers in order to mitigate thisrisk factor.

corporate governancePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1334Asian Hotels and Properties PLC, remainscommitted to the Corporate Values andwritten Code of Conduct prevalent withinthe John Keells Group, wherein the Boardof Directors, Senior Management andemployees are expected to strictly adhereand follow in performing official duties, withthe principle of ensuring that the group imageremains positive and pragmatic.The Company holds itself accountable to thehighest standards of Corporate Governanceand transparency which makes informationabout our Enterprise accessible to thepublic. Effective Corporate Governance inline with the highest international standardsis an important part of our identity. Oursystem of Corporate Governance lays thebasis for responsible performance-orientedmanagement and control which is gearedtowards sustainable value creation. Mostimportantly, our efforts go hand in hand withan unwavering commitment to the accurateand clear communication of our performanceand the facts of our business.We are pleased to present this report whichsets out the corporate governance philosophythat is practiced by the Company. We confirmcompliance with the following statutes rulesand regulations and where necessary, anydeviations permitted by same, have beenexplained.• Companies Act, No 7 of 2007 -Mandatory compliance• The Listing Rules of the ColomboStock Exchange (CSE) - Mandatorycompliance• The Code of Best Practice on Governanceissued jointly by the Securities andExchange Commission of Sri Lanka andthe Institute of Chartered Accountantsof Sri Lanka to the extent that they arepracticable - Voluntary ComplianceCorporate Governance FrameworkThe Corporate Governance framework isfounded on the following principles:(i) Allegiance to John Keells Holdings PLC(JKH) and the John Keells Group, andupholding of Group Values.(ii) Compliance with the laws and CompanyRules and Regulations applying to theterritories that the John Keells Groupoperates in.(iii) Conduct of business in an ethical mannerat all times, in line with acceptablebusiness practices.(iv) Exercise of professionalism and integrityin all business and “public” personaltransactions.(v) Ensure that no one person has unfetteredpowers of decision making.(vi) Opting for the early adoption ofaccounting standards and best practicesin governance regulation, when practical.(vii) Encourage proactive discussions with therelevant regulatory bodies to facilitate theimplementation of matters of governanceand other business reforms in Sri Lanka.(viii) Make business decisions and resourceallocations, in an efficient and timelymanner, within a framework that ensurestransparent and ethical dealings whichadhere to the laws of the country andthe standards of governance thatstakeholders expect from the Company.The key components of the corporategovernance framework of the Companycomprising of the internal Governancestructure, the external regulatory framework,accountability and assurance of compliance,are discussed in detail in this report.Internal Governance StructureChairman and his roleThe Chairman conducts Board Meetings andensures that the participation and contributionof Executive and Non-Executive Directors areencouraged and their views on matters underconsideration are determined. The Chairmanmaintains contact with all Directors and hasinformal discussions with the Non- ExecutiveDirectors as necessary.As Chairman, he is responsible for:• ensuring that the principles and processesof the Board are maintained, includingthe provision of accurate, timely and clearinformation.• encouraging debate and constructivecriticism.• setting agendas for meetings of theBoard, in conjunction with the SeniorManagers and Group Company Secretary,that focus on the strategic direction andperformance of our business.• leading the Board and individual DirectorPerformance assessments.• speaking and acting for the Board andrepresenting the Board to shareholders.• presenting shareholders’ views to theBoard.• facilitating the relationship between theBoard and the Management.The Board considers that none of his othercommitments interfere with the discharge of

PASSION corporate governance35 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13his responsibilities to the Group. The Boardis satisfied that he makes sufficient timeavailable to serve the Company effectively.Board of DirectorsThe Board of Directors is the ultimategoverning body of the Company. It isresponsible for the ultimate supervision of theCompany. In all actions taken by the Board,the Directors are expected to exercise theirbusiness judgment in what they reasonablybelieve to be the best interests of theCompany. In discharging that obligation,Directors may rely on the honesty andintegrity of the Company’s senior executivesand its outside advisors and auditors.Composition of the Board andDirectors’ IndependenceAs at 31 March 2013, the Board consisted of8 Directors comprising of:• 2 Executive Directors (ED)• 3 Non-Executive Non-IndependentDirectors (NED/NID)• 3 Non-Executive Independent Directors(NED/ID)Independence of the Directors have beendetermined in accordance with the ContinuingListing Rules of the Colombo Stock Exchangeand all three Independent, Non-ExecutiveBoard members have submitted signedconfirmations of their independence.The Board members have a wide range ofexpertise as well as significant experience indiverse fields enabling them to discharge theirgovernance duties in an effective manner.Name of Director/CapacityShareHolding (1)Material BusinessRelationship (2)Employee ofCompany (3)Family Member aDirector or CEO(4)Continuousservice for nineyears (5)Non-Executive, Non-Independent Directors (NED/NID)Mr. S.C. Ratnayake Yes No No No YesMr. A.D. Gunewardene No No No No YesMr. J.R.F. Peiris No No No No YesExecutive, Non-Independent Directors (ED/NID)Mr. R.J. Karunarajah Yes No No No NoMr. S. Rajendra No No No No NoNon-Executive, Independent Directors (NED/ID)Mr. C.J.L. Pinto Yes No No No NoMr. S.K.G. Senanayake No No No No NoMrs. S.A. Jayasekara No No No No NoDefinitions1. Have shares in the Company.2. Income/Non cash benefits derived from the Company equivalent to 20% of the directors annual income.3. Director was employed by the company two years immediately preceding appointment.4. Close family member who is a director or CEO.5. Has served on the Board for a continuously for a period exceeding nine years .

corporate governancePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1336The Board is of the view that its presentcomposition ensures a right balance betweenexecutive expediency and independentjudgment.Directors that made up the Company Boardparticipate in defining goals, vision, strategiesand business targets. All Directors are ableto and willingly add value and independentopinion on the decision making process,which is of immense benefit to the effectivefunctioning of the Board. The Details of thecurrent Board of Directors along with a briefresume of each Director is found on pages 22and 23 of the Report.Transactions or events that have a materialbearing on the Company are disclosedby way of circulars to shareholders,announcements to the Colombo StockExchange and media/press releases. TheBoard is ready to answer questions raisedby shareholders at general meetings andmaintains an appropriate dialogue with them.The Independent Directors shall be able toensure the equal benefits of all shareholderswith independent views and opinions.Directors will update the Board with anynew information in relation to interests orrelationships relevant to independence.The Board has developed a policy that ituses to determine the independence ofits Directors. This determination is carriedout annually or at any other time where thecircumstances of a Director change such asto warrant reconsideration.The Board is aware of the other commitmentsof its Directors and is satisfied that these donot conflict with their duties as Directors ofthe Company.All Non-Executive Directors are requiredto notify the Chairman of changes in theiroutside Board appointments, and theChairman carries out a review of all suchappointments in consultation with the otherDirectors where necessary to ascertain anypossible conflicts of interest.Board responsibilities and decisionrightsAt Asian Hotels and Properties PLC, thebusinesses are conducted by its employees,managers and officers, under the directionof the Executive Directors and the oversightof the Board, to enhance the long-termvalue of the Company for its shareholders.The Board aims to fulfill its responsibilitiesby creating value for all stakeholders thatis sustainable and beneficial. Stakeholdersinclude shareholders, employees, customers,the community and the environment. Withoutlimiting the Board’s function, its specificresponsibilities include:• Approving objectives, strategies andfinancial plans and monitoring theCompany’s performance against theseplans;• Monitoring compliance with the regulatoryrequirements and ensuring all Companyemployees act with integrity and diligencein the interests of the Company andstakeholders;• Reviewing and approving all significantpolicies and procedures across the group;• Exercise objective judgment on allcorporate matters independent fromExecutive Management;• Formulating short and long termstrategies as a basis for the operationalplans of the company;• Determining and recommending interimand final dividends for the approval ofshareholders;• Identifying the principal risks of thebusiness and periodically reviewing therisk management systems in place;• Preparation and presentation of financialstatements, together with a statement bythe Auditors pertaining to their reportingresponsibilities;Delegation of authorityThe Board has delegated some of itsfunctions to the Audit Committee whileretaining the final right to accept therecommendations made by this Committee.The Audit Committee is chaired by anindependent Director appointed by the Board.Conflicts of interest and independenceEach Director holds continuous responsibilityto determine whether he or she has apotential or actual conflict of interest arisingfrom external associations, interests orpersonal relationships in material matterswhich are considered by the Board from timeto time.In order to mitigate any potential or actualconflict of interest or independence ofDirectors throughout the term of theirmembership on the Board, the Company hasadopted the following processes.

PASSION37 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13corporate governancePrior toAppointmentOnceAppointedDuring BoardMeetingsNominees are requested to disclose their various interests that could potentially conflictwith the interest of the Company.Directors who are appointed are expected to inform the Board and obtain Boardclearance prior to accepting any position or engaging in any transaction that couldcreate a potential conflict of interest.All NEDs are required to notify the Chairman of changes in their current Boardrepresentations.Directors who have disclosed an interest in a matter under discussion have• Excused themselves from deliberations on the subject matter• Refrained from voting on the subject matter (Such abstentions from Boarddecisions are duly recorded).Details of companies in which Boardmembers hold Board or Board committeemembership is available with the company forinspection by shareholders on request.Board meetings, Agenda andAttendanceFor the financial year 2012/2013 there wasa total of four (4) Board meetings. Duringthe meetings, the Chairman of the Boardappropriately allocated time for Directorsto carefully review and discuss all relativeinformation. There were also written minutesthat were made available for verification andapproved by the Board. All Directors haveaccess to Keells Consultants [Private] Limitedwho acts as Company Secretaries for adviceon relevant matters.The Board met on key matters of importance to the Company, including the approval of strategic and operating plans, capital expenditure,approving major investments and divestments, annual budgets, and financial statements by giving due attention to accounting standards andpolicies, ensuring compliance with legal and ethical standards, ensuring effective risk management and audit systems and performance monitoringand other matters having a material effect on the Company and the Group.The Board of Asian Hotels and Properties PLC met once every quarter and the Directors’ attendance is shown in the table given below:Attendance at Board MeetingsName of Director 25-04-2012 31-07-2012 31-10-2012 28-01-2013 Meetings AttendedMr. S.C. Ratnayake √ √ √ √ 4/4Mr. A.D. Gunewardene √ √ √ √ 4/4Mr. J.R.F. Peiris √ - √ √ 3/4Mr. R.J. Karunarajah √ √ √ √ 4/4Mr. S. Rajendra √ √ √ √ 4/4Mr. C.J.L. Pinto √ - √ √ 3/4Mr. S.K.G. Senanayake √ - - √ 2/4Mrs. S.A. Jayasekara √ √ √ √ 4/4

corporate governancePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1338Financial GuidanceThe Board of Directors consists of foursenior qualified Accountants with significantexperience in the Corporate Sector, whoposses the necessary knowledge to offerthe Board guidance on matters of finance.These Directors add substantial value andindependent judgment on the decisionmaking of the Board on matters concerningfinance and investments.InformationAll Directors are fully briefed on importantdevelopments in the various businessactivities of the group. The Directors haveaccess to• external and internal auditors• experts and other external professionaladvisory services• senior managers under a structuredarrangement• information as is necessary to carry outtheir duties and responsibilities effectivelyand efficiently• periodic performance reports• information updates from managementon topical matters, new regulations andbest practices as relevant to the group’sbusinesses• the services of the company secretarieswhose appointment and/or removal is theresponsibility of the BoardRe-Election of DirectorsAs prescribed by the Company’s Articlesone third of the Directors of the Companyexcept the Chairman and Managing Directorretire by rotation on the basis prescribed inthe Articles. A Director retiring by rotation iseligible for re-election.The tenure of office for Non-IndependentDirectors is limited by their prescribedCompany retirement age.Independent Directors, on the otherhand, can be appointed to office for threeconsecutive terms of three years, whichhowever, is subject to the age limit set bystatute at the time of re-appointment followingthe end of a term.The proposal for the re-appointment ofDirectors is set out in the Directors Report aswell as the Notice of Meeting on page 173 ofthis Report.Nominations Committee and BoardappointmentsThe Nomination Committee of the ParentCompany, John Keells Holding PLCfunctions as the nomination committee of theCompany and its Subsidiary. The NominationCommittee holds responsibility to identify andpropose suitable candidates for appointmentas Non-Executive Directors to the Boardof the Company, in keeping with the targetboard composition and skill requirements.The Board of the Company after dueconsideration of such recommendations,determines and appoints the new Director.All newly appointed Directors shall holdoffice until the next Annual General Meetingand shall be eligible for re-election by theShareholders of the Company, as provided byArticle 91 of the Articles of Association of theCompany.The Nominations Committee of John KeellsHolding PLC comprises three IndependentDirectors and one Non-Independent Directornamely as at 7th March 2013:Mr. T. Das – ChairmanMr. S. Enderby*Mrs. S. TiruchelvamMr. S.C. Ratnayake (Non Independent)*resigned from 8th March 2013Human Resources & CompensationCommitteeAs permitted by the Listing Rules of theColombo Stock Exchange, the HumanResources & Compensation Committeeof John Keells Holdings PLC the ParentCompany of Asian Hotels and PropertiesPLC function as the Human Resources &Compensation Committee of the Companyand its Subsidiary. The Human Resources& Compensation Committee of the JohnKeells Holdings PLC comprise of Four Non-Executive Independent Directors.• Mr. E.F.G. Amerasinghe - Chairman• Mrs. S. Tiruchelvam• Dr. I. Coomaraswamy• Mr. A.R. GunasekaraThe remuneration policy adopted by theCompany as recommended by the HumanResources & Compensation Committee ofits Parent Company, John Keells HoldingsPLC is formulated to attract and retain highcaliber executives and motivate them todevelop and implement the business strategyin order to optimise long term shareholdervalue creation. The customised “pay forperformance scheme” continues to apply forall group employees based on the pillars ofindividual performance and organisationalperformance. The remuneration packagefor all employees at Assistant ManagerLevel and above is based on organisationalperformance and individual performance.

PASSION corporate governance39 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13However for Executive level and belowemployees the scheme operates purely onindividual performance basis.Board RemunerationRemuneration for Non-Executive, Non-Independent DirectorsCompensation for Non-Executive Directors,Non-Independent Directors [NED/NID’s]is determined by reference to fees paid toother NED/NID’s of comparable companies.Director fees applicable to Non-ExecutiveDirectors nominated by John Keells HoldingsPLC are paid directly to the Company and notto individuals.Remuneration for Executive, Non-Independent DirectorsThe remuneration of the Executive Directors isdetermined as per the remuneration principlesof the Group. At this higher level, thebenchmark weightage between individual andorganisational performance in establishingcompensation is as high as 20:80.The Human Resources & CompensationCommittee conducted a market surveyof Executive Director remuneration with aview to assessing the appropriateness ofcompensation with market benchmarks.Having taken into account the complexitiesassociated with the Group, it was establishedthat the compensation is in-line with themarket.The Executive Directors, like other eligibleemployees, have received employee shareoption based on role responsibility and actualperformance. Accordingly the number ofoptions so awarded was recommendedto the Board by Human Resources &Compensation Committee.Remuneration for Non-Executive,Independent DirectorsCompensation for Non-Executive,Independent Directors (NED/IDs) isdetermined by reference to fees paid to otherNED/ID’s of comparable companies. NED/ID’sreceive a fee for devoting time and expertisefor the benefit of the Company. Nevertheless,NED/ID’s fees are not time bound or definedby a maximum/minimum number of hourscommitted to the group per annum andhence is not subject to additional/lower feesfor additional/lower time devoted. NED/ID’sdo not receive any performance/incentivepayments.The Company does not have an employeeshare option scheme.The aggregate remuneration paid to Directorsis disclosed on page 140 of this report.Accountability and AssuranceInternal ControlsThe Board has overall responsibility for thesystem of internal control. A sound systemof internal control is designed to managerather than eliminate the risk of failure toachieve business objectives. The Companystresses the importance of strong internalcontrol throughout the organisation. Writtenresponsibilities, authority delegation andmanagement controls have been adoptedto create transparency for utilisation of theCompany’s resources and to distinguishthe duties of staff and controllers in order toensure that proper verification and monitoringprocesses are in place.The Company further maintains a systemof Internal Controls, which is designed tosafeguard its assets from identified risks,while ensuring that all transactions are dulyauthorised, recorded and reported. Keysystems and rules relating to delegation ofauthority are formalised and documented.As a member of the John Keells Group, theCompany is now part of a comprehensiveplanning and monitoring process. The AnnualPlans and Budgets are developed by theCompany along with a reforecast after sixmonths. Strategic priorities and key driversare pre-identified and tracked on a monthlybasis.Risk ReviewThe Board is responsible for the formulationof the appropriate systems of internal controlsfor the Group and ensuring its effectiveness.The Board is fully conscious that any internalcontrol system contains inherent limitationsand no system of internal control couldprovide absolute assurance against theoccurrence of material errors, poor judgmentin decision making, human errors, losses,frauds or other irregularities. The Board hastherefore taken appropriate action to minimisesuch situations.There is a continuous process for identifying,evaluating and managing the significant risksfaced by the Company which has been inplace during the financial year and up to thedate of approval of the Annual Report andAccounts. The Board regularly reviews thisprocess.Certain aspects of its business operationmay expose the Company to both internaland external risks. The Company recognisesthe importance of controlling these risks andminimising the possibility of any negativeimpact to the Company. The Company isusing the Business Risk Management [BRM]

corporate governancePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1340process which is established by JKH toidentify both financial and operational risks.It endeavors to ensure the control systemsdesigned to safeguard the Company’s assetsand maintain proper accounting recordsthat facilitate the production and availabilityof reliable information are in place and arefunctioning as planned.Investment appraisal process andinvestment decisionsOver the years, the Company has refinedthe process of investment appraisal whichensures the involvement of the relevantpersons when investment decisions aremade. In this manner, several views,opinions and advice are obtained prior to theinvestment decision. Experience has proventhat a holistic and well debated view of thecommercial viability and potential of proposedprojects including operational, financial,funding, risk and tax implications has mostof the time culminated a good result. Allinvestment decisions are routed through acommittee structure which safeguards againstone individual having unfettered decisionmaking powers in such decisions.Audit CommitteeThe Audit Committee comprises of threeIndependent, Non-Executive Directors. Asprescribed in the Listing Rules of ColomboStock Exchange, the Chairman of the AuditCommittee is a member of a professionalaccounting body - a Fellow member of theInstitute of Chartered Accountants of SriLanka with several years of experience infinancial auditing and accounting.Four (4) meetings were held during theyear. The Executive Directors and SeniorManagement of Cinnamon Grand Colomboand Crescat Property Division attend theAudit Committee meetings by invitation.Further the representatives of the InternalAuditors (Messrs. Pricewaterhouse Coopers(Private) Limited), John Keells Group BusinessProcess Review Division and the ExternalAuditors KPMG attend by invitation. The AuditCommittee performs an important monitoringfunction in the overall governance of theCompany.The Committee reviews the following;• Procedures for identifying business risksand controlling their financial impacton the Group and the operationaleffectiveness of the policies andprocedures related to risk and control• The appointment, remuneration,qualifications, independence andperformance of the External Auditor andthe integrity of the audit process as awhole• Budgeting and forecasting systems,financial reporting systems and controls• Procedures for ensuring compliance withrelevant regulatory and legal requirements• Arrangements for protecting intellectualproperty and other non-physical assets• Overseeing the adequacy of the internalcontrols and allocation of responsibilitiesfor monitoring internal financial controls• Policies, information systems andprocedures for preparation anddissemination of information toshareholders, stock exchanges and thefinancial community.Audit Committee attendance during the subject period was:Attendance at Board Audit Committee MeetingsName of Director 24-05-2012 25-07-2012 26-10-2012 24-01-2013 Meetings AttendedMr. C.J.L Pinto √ √ √ √ 4/4Mr. S.K.G. Senanayake √ √ √ √ 4/4Mrs. S.A. Jayasekara √ - √ √ 3/4

PASSION corporate governance41 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Management CommitteeThe Hotel and Property divisions of AsianHotels and Properties PLC have two separateManagement Committees consisting of GMof the Hotel/CEO of the Property Division andother key managers of divisions in order todiscuss matters pertaining to strategy andoperations.Strategic risks and opportunities arisingfrom changes in our business environmentare regularly reviewed by the GroupManagement Committee (GMC) of the Hoteland Property divisions at the meetings heldmonthly. The role of the GMC is to providethe necessary guidance and direction to theCompany on matters that are strategic andlong-term in nature or have the potential tosignificantly impact the division’s performanceand reputation, and to make decisionson key business-wide policies, includingoperational policies, internal controls, theHuman Resources Strategy and the RiskManagement Policy.Internal AuditorsQuarterly Audits are conducted by theCompany’s Internal Auditors, Messrs.Pricewaterhouse Coopers (Private) Limited, afirm of Chartered Accountants. The role of theinternal audit team is to determine whetherrisk management, control and governanceprocesses are adequate and functioning. TheInternal Audit function is independent of theExternal Auditor.The reports arising out of such audits are, inthe first instance, considered and discussedat the business / functional unit levels andafter review by the respective President/CEO of the Company and the Subsidiaryare forwarded to the Audit Committee on aregular basis. Further, the audit committeesalso assess the effectiveness of the riskreview process and systems of internal controlon a regular basis. Follow-ups on internalaudits are done on a structured basis.Relevant risks and vulnerabilities of theCompany are identified and promptly broughtto the attention of Management, facilitatingcorrective and preventive measures to betaken in a timely manner.Additionally, a technically strong ManagementAudit function aligned with the Company’sstrategies adds value in a variety of ways,including –• Providing an independent opinion onthe integrity, reliability and relevance ofmanagement information• Assessing the adequacy of controls overthe protection of assets and managementof liabilities• Reviewing compliance with corporatepolicies and external regulations• Reducing the risk of fraudGoing Concern and Financial ReportingThe Directors are satisfied that the Companyhas sufficient resources to continue inoperation for the foreseeable future. In theunlikely event that the net assets of theCompany fall below a half of shareholdersfunds, shareholders would be notified andan extraordinary resolution passed on theproposed way forward.The going concern principle has beenadopted in preparing the FinancialStatements. All statutory and materialdeclarations are highlighted in the AnnualReport of the Board of Directors. FinancialStatements are prepared in accordance withthe Sri Lanka Accounting Standards (SLAS),including all the new standards introducedduring the subject year and comply with therequirements of the Companies Act 07 of2007.Information in the financial statements ofthe Annual Report are supplemented bya detailed ‘Management Discussion andAnalysis’ on pages 14 to 19 which explainsto shareholders the strategic, operational,investment and risk related aspects of theCompany that have translated into thereported financial performance and are likelyto influence future results.The Statement of Directors’ Responsibilitiesin relation to financial reporting is given onpage 124 of the Annual Report. The Directors’interests in contracts of the Company areaddressed on page 27 of the Annual Report.The Directors have taken all reasonable stepsin ensuring the accuracy and timeliness ofpublished information and in presenting anhonest and balanced assessment of results inthe quarterly and annual financial statements.Price sensitive information has beendisclosed to the Colombo Stock Exchange,shareholders and the press in a timely mannerand in keeping with the regulations.Compliance with Legal requirementsCompliance with legal requirements andGroup-internal rules is a significant element ofCorporate Governance for the managementof Asian Hotels and Properties PLC. TheBoard of Directors, to the best of theirknowledge and belief are satisfied that the

corporate governancePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1342Company has not engaged in any activitywhich contravenes laws and regulations andall financial obligations due to the Governmentand to the employees have been eitherduly paid or adequately provided for in theFinancial Statements.Securities Trading PolicyThe JKH securities trading policy prohibitsall employees and agents engaged by AsianHotels and Properties PLC who are aware ofunpublished price sensitive information fromtrading in Asian Hotels and Properties PLCshares or the shares of other companies inwhich the Company presently has businessinterests.External AuditKPMG serve as the external auditors of theCompany.The audit fees paid by the Company andGroup to KPMG are separately classifiedon page 140 in the Notes to the FinancialStatements of the Annual Report.The Auditors’ report on the FinancialStatements of the Company for the yearunder review is found on page 125 of theAnnual Report.The Company has attempted always toseparate the internal auditors from theexternal auditors in order to maintain externalauditor independence.Employee Participation in AssuranceWhistle blower PolicyThrough a communication link named‘Chairman Direct’, concerns about unethicalbehaviour and any violation of Group valuescould be reported by any employee to theChairman of JKH. Employees reportingsuch incidents are guaranteed completeconfidentiality and such complaints areinvestigated and addressed via a selectcommittee under the direction of theChairman.OmbudspersonIn order to deal with a situation in whichan employee or group of employees feelthat an alleged violation has not beenaddressed satisfactorily using the available/existing procedures and processes, anOmbudsperson has been appointed byJKH being the ultimate Parent Company toentertain such concerns.The Ombudsperson’s duty ceases uponthe confidential written communication ofthe findings of the Ombudsperson andrecommendations to the Chairman or theSenior Independent Director as the case maybe.The Chairman or the Senior IndependentDirector, as the case may be, will place beforethe Board• the decision and the recommendations ofthe Ombudsperson• the action taken based on therecommendations• the areas of disagreement and thereasons adduced in instances wherethe Chairman or the Senior IndependentDirector disagrees with any or all of thefindings and/or recommendations. In suchcases, the Board shall consider the areasof disagreement and determine the wayforward.The Chairman or the Senior IndependentDirector is expected to take such steps as arenecessary to ensure that the complainant isnot victimised for having invoked this process.These open door policies facilitate constantdialogue, communication, transparency andultimately employee confidence, which wouldhelp retain existing talent whilst attractingnew.Shareholder RelationsThe Company shareholders exercise theirrights at the Annual General Meeting. Eachresolution brought before the shareholdersat the Annual General Meeting is voted onseparately by the shareholders.The notice of the Annual General Meetingand the relevant documents required arepublished and sent to the shareholders withinthe statutory periods. The Company circulatesthe agenda for the meeting and shareholdersvote on each issue separately.All shareholders are invited and encouragedto be present, actively participate and voteat the Annual General Meeting. The AnnualGeneral Meeting provides an opportunity forShareholders to seek and obtain clarificationsand information on the performance of theCompany and to informally meet the Directorsafter the Annual General Meeting. TheExternal Auditors and the Company’s lawyersare invited too and are present at the AnnualGeneral Meeting to render any professionalassistance that may be requested.Shareholders who are not in a positionto attend the Annual General Meeting inperson are entitled to have their voting rightsexercised by a proxy of their own choice.

PASSION43 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13corporate governanceFour times each year, the Company reportsto its shareholders regarding its businessdevelopment, financial position and earnings.An ordinary Annual Shareholders’ Meetingnormally takes place within the first fourmonths of each financial year. The AGMis the main forum where the Companycommunicates with its shareholders theobjectives, strategies and the way forward forthe Company, for the new Financial year.Roles of StakeholdersThe Company realises the importance ofensuring that all stakeholders’ rights areproperly observed. Pertinent proceduresare carried out in line with the rules andregulations of the Stock Exchange of SriLanka, as well as the related laws.Shareholders: The Company is committed tocreate long-term growth and returns to theshareholders and to conduct its business in atransparent manner.Customers: The Company is committed tocontinuously develop better quality of goodsand services for the benefit and satisfaction ofits customers.Partners: the Company treats all partners fairlyin order to achieve mutual benefits.Creditors: The Company observes all of itsobligations to creditors.Competitors: The Company abides by theframework of fair competition and will notdestroy the reputation of competitors throughfalse accusations.Employees: The Company considers itsemployees a valuable asset and treatsthem fairly in regard to work opportunities,remuneration, and quality of workingenvironment. The Company also providesall its employees professional and careerdevelopment training.Society and environment: The Companyis committed to conduct businesses thatbenefit the economy, society and quality ofenvironment. The Parent Company of AsianHotels and Properties PLC has establishedthe Corporate Social Responsibility (CSR)Department to promote to the Company’sstaff the importance of the CSR objectives toachieve balanced benefits relating to society,the environment, and all stakeholders inharmony with the Company’s sustainablegrowth objectives.Major transactionsThe Directors ensure that any corporatetransaction that would materially affectthe net assets base of the Company arecommunicated to shareholders. There wereno major transactions as defined underSection 185 by the Companies Act 07 of2007 during the year under review.Going ForwardThe Board is committed to the higheststandards of corporate governance in orderthat the Company shall achieve its long termsustainable growth objectives. The Board isaccountable to the Company’s shareholdersfor good governance in its management of theaffairs of the Company. The Board confirmsthat the Company was fully compliantthroughout the year ended 31st March 2013with all the principles and provisions of thegood Corporate Governance and the Code ofBusiness Conduct and Ethics.The Company’s approach to CorporateGovernance enables it to understand theexpectations of stakeholders, forecasttrends in social, environmental and ethicalrequirements and to manage the Company’sperformance in an appropriate manner.While the Board is satisfied with its levelof compliances with the governancerequirements it recognises that practices andprocedures can always be improved, andthere is merit in continuously reviewing its ownstandards. The Board’s program of review willcontinue throughout the year ahead.

corporate governancePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1344Statement of Compliance under Section 7.10 of the Rules of the Colombo Stock Exchange (CSE) on Corporate GovernanceCSERule No.Subject Compliance requirement Compliancestatus7.10.1(a) Non-Executive Directors Two or at least one third of the total number ofDirectors should be Non-Executive Directors,whichever is higher.7.10.2(a) Independent Directors Two or one third of Non-Executive Directors,whichever is higher, should be independent.7.10.2(b) Independent Directors Each Non-Executive Director should submit adeclaration of independence / non-independence inthe prescribed format.7.10.3(a) Disclosure relating to Directors The Board shall annually determine the independenceor otherwise of the Non-Executive Directors.Names of the Independent Directors should bedisclosed in the Annual Report.7.10.3(b) Disclosure relating to Directors The basis for the Board to determine a Director isIndependent, if criteria specified for Independence isnot met.7.10.3(c) Disclosure relating to Directors A brief resume of each Director should be included inthe Annual Report and should include the Directorsareas of expertise.7.10.3(d) Disclosure relating to Directors Forthwith provide a brief resume of new Directorsappointed to the Board with details specified in7.10.3(a), (b) and (c) to the Colombo Stock Exchange.7.10.4(a-h)Criteria for definingIndependence7.10.5 Human Resources &Compensation Committee7.10.5(a)7.10.5.(b)Composition of HumanResources & CompensationCommitteeFunctions of Human Resources& Compensation CommitteeCompliedCompliedCompliedCompliedCompliedCompliedCompliedApplicable Section inthe Annual ReportCorporate GovernanceCorporate GovernanceAvailable with theSecretaries for reviewCorporate GovernanceCorporate GovernanceBoard of Directors(profile) section in theAnnual ReportCorporate GovernanceRequirements for meeting criteria to be Independent. Complied Corporate GovernanceA listed Company shall have a RemunerationCommittee. The Remuneration Committee ofthe listed Parent Company may function as theRemuneration Committee.Shall comprise of Non-Executive Directors, a majorityof whom will be Independent.The Human Resources & Compensation Committeeshall recommend the remuneration of the ChiefExecutive Officer and Executive Directors.CompliedCompliedCompliedCorporate GovernanceCorporate GovernanceCorporate Governance

PASSION45 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13corporate governanceCSERule No.7.10.5.(c)Subject Compliance requirement CompliancestatusDisclosure in the Annual Reportrelating to Human Resources &Compensation Committee(a) Names of Directors comprising the HumanResources & Compensation Committee(b) Statement of Remuneration PolicyAggregated remuneration paid to Executive andNon - Executive DirectorsCompliedApplicable Section inthe Annual ReportCorporate Governanceand the Board ofDirectors Reports7.10.6 Audit Committee The Company shall have an Audit Committee. Complied Corporate Governance7.10.6(a) Composition of AuditCommitteeShall comprise of Non - Executive Directors a majorityof whom will be Independent.Complied Corporate Governanceand the Board ofDirectors ReportsA Non - Executive Director shall be appointed as theChairman of the Committee.CompliedChief Executive Officer and Chief Financial Officershould attend Audit Committee Meetings.CompliedThe Chairman of the Audit Committee or one membershould be a member of a professional accountingbody.7.10.6(b) Audit Committee Functions Overseeing of the• Preparation, presentation and adequacyof disclosures in the financial statements inaccordance with Sri Lanka Accounting Standards• Compliance with financial reporting requirements,information requirements of the Companies Actand other relevant financial reporting relatedregulations and requirements• Processes to ensure that the internal controlsand risk management are adequate to meet therequirements of the Sri Lanka Auditing Standards• Assessment of the independence andperformance of the external auditors• Make recommendations to the Board pertainingto appointment, re-appointment and removal ofexternal auditors, and approve the remunerationand terms of engagement of the external auditorCompliedCompliedCorporate Governanceand the Board ofDirectors Reports

corporate governancePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1346CSERule No.7.10.6(c)Subject Compliance requirement CompliancestatusDisclosure in Annual Reportrelating to Audit Committee• Names of Directors comprising the AuditCommittee.• The Audit Committee shall make a determinationof the independence of the Auditors and disclosethe basis for such determination.• The Annual Report shall contain a Report ofthe Audit Committee setting out the manner ofcompliance with their functions.CompliedApplicable Section inthe Annual ReportCorporate Governanceand the Audit CommitteeReportCode of Best practice of Corporate Governance jointly issued by the Securities and Exchange Commission of Sri Lanka (SEC)and the Institute of Chartered Accountants of Sri Lanka (ICSL)Code Ref. Subject Applicable requirement Status Compliance Applicable Section in theAnnual ReportA. DirectorsA.1 The BoardA.1.1 Frequency of Board Meetings • Board should meet regularly, atleast once every quarterA.1.2 Responsibilities of the Board • Formulation andimplementation of strategy• Skill adequacy of managementand succession• Integrity of information, internalcontrols and risk management• Compliance with laws,regulations and ethicalstandards• Code of conduct• Adoption of appropriateaccounting policiesA.1.3 Access to professional advice • Procedures to obtainIndependent professionaladvice when deemednecessary.CompliedCompliedCompliedCorporate Governance/Annual Report of the Board ofDirectorsCorporate GovernanceCorporate Governance

PASSION corporate governance47 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Code Ref. Subject Applicable requirement Status Compliance Applicable Section in theAnnual ReportA.1.4 Company Secretary • Ensure adherence to Board Complied Corporate Governanceprocedures and applicablerules and regulations• Procedure for Directors toaccess services of CompanySecretaryA.1.5 Independent Judgment • Directors should exerciseindependent judgment onissues of strategy, resources,performance and standards ofbusiness judgmentComplied Corporate GovernanceA.1.6Dedication of adequate time andeffort by Directors• Directors should devoteadequate time and effort todischarge their responsibilitiesto the Company satisfactorilyA.1.7 Board induction & training • Directors should receiveappropriate training, hone skillsand expand knowledge tomore effectively perform dutiesA.2 Chairman & Chief Executive OfficerA.2.1Justification for combining the rolesof the Chairman and the CEO• A balance of power andauthority to be maintained byseparating responsibilities forconducting Board businessfrom that of executive decisionmakingA.3 Chairman’s RoleA.3.1 Ensure good corporate governance • Chairman to preserveorder and facilitate effectivedischarge of Board functionsby proper conduct of BoardMeetingsCompliedCompliedCompliedCompliedCorporate GovernanceCorporate GovernanceCorporate GovernanceCorporate Governance

corporate governancePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1348Code Ref. Subject Applicable requirement Status Compliance Applicable Section in theAnnual ReportA.4 Financial AcumenA.4.1Possession of adequate financialacumen• Board to ensure adequacyof financial acumen andknowledge within the BoardA.5 Board BalanceA.5.1 Composition of Board • The Board should includea sufficient number of Non-Executive IndependentDirectorsA.5.2 Proportion of Independent Directors • Two or one third of the Non-Executive Directors should beindependentA.5.3 Test of Independence • Independent Directorsshould be independent ofmanagement and free of anybusiness or other relationshipthat could materially interferewith the exercise of unfetteredand independent judgmentA.5.4 Declaration of Independence • Non-Executive Directorsshould submit a signedand dated declaration oftheir independence / nonindependenceA.5.5 Annual determination of criteria of • The Board should annuallyindependence / non-independence determine and disclose theand declaration of same by Board names of Directors deemed tobe IndependentA.5.6Appointment of Senior IndependentDirector (SID)• If the roles of Chairman / CEOare combines, a Non-ExecutiveDirector should be appointedas a Senior IndependentDirectorCompliedCompliedCompliedCompliedCorporate GovernanceCorporate GovernanceCorporate GovernanceCorporate GovernanceComplied Corporate Governance /Annual Report of the Board ofDirectorsCompliedN/ACorporate Governance

PASSION49 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13corporate governanceCode Ref. Subject Applicable requirement Status Compliance Applicable Section in theAnnual ReportA.5.7A.5.8Availability of Senior IndependentDirector to other DirectorsInteraction between Chairmanand Non-Executive, IndependentDirectors• If warranted, the SID should beavailable to the other Directorsfor confidential discussions• The Chairman should meet theNon-Executive IndependentDirectors at least once a yearA.5.9 Directors concerns to be recorded • When matters are notunanimously resolved, Directorsto ensure their concerns arerecorded in Board minutesA.6 Supply of InformationA.6.1A.6.2Provision of adequate information toBoardAdequacy of notice and formalagenda to be discussed at Boardmeetings• Management to ensure theBoard is provided with timelyand appropriate information• Board minutes, agenda andpapers should be circulatedat least seven days before theBoard meetingA.7 Appointment to the BoardA.7.1 Nomination Committee • Nomination Committee ofparent may function as suchfor the Company and makerecommendations to the Boardon new Board appointmentsA.7.2 Annual assessment of Board • Nomination committee ofcompositionBoard should annually assessthe composition of BoardA.7.3Disclosure of new BoardappointmentsA.8 Re-electionA.8.1 Appointment of Non-ExecutiveDirectors• Profiles of new Boardappointments to becommunicated to Shareholders• Appointment of Non-ExecutiveDirectors should be forspecified terms and re-electionshould not be automaticN/ACompliedN/ACompliedCompliedCompliedCompliedCompliedCorporate GovernanceCorporate GovernanceCorporate GovernanceCorporate GovernanceCorporate GovernanceCorporate Governance/Notice of MeetingComplied Corporate Governance /Annual Report of the Board ofDirectors

corporate governancePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1350Code Ref. Subject Applicable requirement Status Compliance Applicable Section in theAnnual ReportA.8.2Shareholders approval ofappointment of all DirectorsA.9 Appraisal of Board PerformanceA.9.1 Annual appraisal of BoardperformanceA.9.2A.9.3Self evaluation of Board and BoardCommitteeDeclaration of basis of performanceevaluation• The appointment of allDirectors should be subject toelection by shareholders at thefirst opportunity• The Board should annuallyappraise how effectivelyit has discharged its keyresponsibilities• The Board should evaluate itsperformance and that of itscommittees annually• The Board should disclose howperformance evaluations havebeen carried outA.10 Disclosure of Information in respect of DirectorsA.10.1 Profiles of the Board of Directors • Annual Report should disclosethe biographical details ofDirectorsA.11 Appraisal of Chief Executive OfficerA.11.1 Short, medium and long term, • The Board should set outfinancial and non-financial objectives the short, medium andto be setlong-term financial and nonfinancialobjectives at thecommencement of each yearA.11.2 Evaluation of CEO performance • The performance of the CEOshould be evaluated by theBoard at the end of the yearB. Directors RemunerationB.1 Remuneration ProcedureB.1.1Appointment of RemunerationCommittee• Remuneration Committee ofParent may function as suchfor the Company to makerecommendations on DirectorsremunerationComplied Corporate Governance /Annual Report of the Board ofDirectors/ Notice of MeetingCompliedCompliedCompliedCompliedCompliedCompliedCompliedCorporate GovernanceCorporate Governance/AuditCommittee ReportCorporate GovernanceBoard of Directors profilessectionCorporate GovernanceCorporate GovernanceCorporate Governance

PASSION51 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13corporate governanceCode Ref. Subject Applicable requirement Status Compliance Applicable Section in theAnnual ReportB.1.2B.1.3B.1.4Composition of RemunerationCommitteeDisclosure of members ofRemuneration CommitteeRemuneration of Non-ExecutiveDirectors• Remuneration Committeeshould consist exclusively ofNon-Executive Directors• The Annual Report shoulddisclose the Chairman andDirectors who serve on theRemuneration Committee• Board to determine the level ofremuneration of Non-ExecutiveDirectorsB.1.5 Access to professional advice • Remuneration Committeeshould have access toprofessional advice in orderto determine appropriateremuneration for ExecutiveDirectorsB.2 Level and Make up of RemunerationB.2.1 toB.2.4Performance related elements in paystructure and alignment to industrypractices• Packages should be structuredto attract, retain and motivateExecutive Directors• Packages should becomparable and relative to thatof other companies as well asthe relative performance of theCompany• When determining annualincreases remunerationcommittee should be sensitiveto that of other Groupcompanies• Performance related elementsof remuneration should bealigned with interests ofCompanyB.2.5 Share options • Executive share options shouldnot be offered at a discountCompliedCompliedCompliedCompliedCompliedCompliedCorporate GovernanceCorporate GovernanceCorporate GovernanceCorporate GovernanceCorporate GovernanceCorporate Governance

corporate governancePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1352Code Ref. Subject Applicable requirement Status Compliance Applicable Section in theAnnual ReportB.2.9Remuneration packages for Non-Executive Directors• Should reflect timecommitment andresponsibilities of role andin line with existing marketpracticeB.3 Disclosure of RemunerationB.3.1 Disclosure of details of remuneration • The Annual Report shoulddisclose the remuneration paidto DirectorsC. Relations with ShareholdersC.1 Constructive use and conduct of Annual General MeetingC.1.1 Proxy votes to be counted • The company should countand indicate the level of proxieslodged for and against inrespect of each resolutionC.1.2 Separate resolutions • Separate resolutions shouldbe proposed for substantiallyseparate issuesC.1.3 Availability of Committee Chairman • The Chairman of Boardat AGMCommittee should be availableto answer any queries at AGMC.1.4 Notice of AGM • 15 working days notice to begiven to shareholdersC.1.5 Procedure for voting at meetings • Company to circulate theprocedure for voting withNotice of MeetingC.2 Major TransactionsC.2.1 Disclosure of Major Transactions • Transactions that have a valuewhich are greater than half ofthe net assets of the Companyshould be disclosedCompliedCompliedCompliedCompliedCompliedCompliedCompliedCompliedCorporate GovernanceFinancial StatementsCorporate GovernanceCorporate Governance/Notice of MeetingCorporate GovernanceNotice of MeetingNotice of MeetingCorporate Governance

PASSION53 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13corporate governanceCode Ref. Subject Applicable requirement Status Compliance Applicable Section in theAnnual ReportD. Accountability and AuditD.1 Financial ReportingD.1.1 Presentation of Public Reports • Should be balanced,understandable and complywith statutory and regulatoryrequirementsD.1.2 Directors Report The Director’s Report should beincluded in the Annual Report andconfirm that :• The Company has notcontravened laws orregulations in conducting itsactivities• Material interests in contractshave been declared byDirectors• The Company hasendeavoured to ensureequitable treatment ofshareholders• That the business is a “goingconcern”• That there is reasonableassurance of the effectivenessof the existing businesssystems following a review ofthe internal controls coveringfinancial, operational andcomplianceCompliedCompliedCorporate Governance/ RiskManagement/Financial StatementsAnnual Report of the Board ofDirectorsCorporate GovernanceAudit Committee Report/RiskManagement

corporate governancePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1354Code Ref. Subject Applicable requirement Status Compliance Applicable Section in theAnnual ReportD.1.3D.1.4Respective responsibilities ofDirectors and AuditorsManagement Discussion andAnalysis• The Annual Report shouldcontain separate statementssetting out the responsibilitiesof the Directors for thepreparation and presentation ofthe Financial Statements andthe reporting responsibilities ofthe Auditors• Annual report to include sectionon Management Discussionand AnalysisD.1.5 Going Concern • Directors to substantiate andreport that the business isa going concern or qualifyaccordinglyD.1.6 Serious Loss of Capital • Directors to summon anExtraordinary General Meetingin the event that the netassets of the Company fallsbelow 50% of the value ofShareholders FundsD.2 Internal ControlD.2.1Effectiveness of system of internalcontrols• Directors to annually conducta review of the effectivenessof the system of internalcontrols. This responsibilitymay be delegated to the AuditCommitteeD.2.2 Internal Audit Function • The internal audit functionin Group companies is notoutsourced to the ExternalAuditor of that Company ina further attempt to ensureExternal Auditor IndependenceCompliedCompliedCompliedN/ACompliedCompliedRespective responsibilities ofthe Directors and AuditorsManagement DiscussionAnnual Report of the Board ofDirectorsAudit Committee Report/ RiskManagementCorporate Governance

PASSION55 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13corporate governanceCode Ref. Subject Applicable requirement Status Compliance Applicable Section in theAnnual ReportD.3 Audit CommitteeD.3.1Chairman and Composition of AuditCommittee• Should comprise of a minimumof two Independent, Non-Executive Directors AuditCommittee Chairman shouldbe appointed by the BoardD.3.2 Duties of Audit Committee Should include• Review of scope and results ofaudit and its effectivenessIndependence and objectivityof the AuditorsD.3.3 Terms of Reference / Charter • The Audit Committee shouldhave a written Terms ofReference which define thepurpose of the Committee andits duties and responsibilitiesD.3.4 Disclosure • The Annual Report shoulddisclose the names of Directorsserving on the Audit Committee• The Audit Committee shoulddetermine the Independence ofthe Auditors and disclose thebasis of such determination• The Annual Report shouldcontain a report by the AuditCommittee setting out themanner of the compliance ofthe Company during the periodto which the Report relatesCompliedCompliedCompliedCompliedAudit Committee ReportCorporate GovernanceCorporate GovernanceCorporate Governance/ AuditCommittee Report

corporate governancePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1356Code Ref. Subject Applicable requirement Status Compliance Applicable Section in theAnnual ReportD.4 Code of Business Conduct and EthicsD.4.1Adoption of Code of BusinessConduct and Ethics• The Company must adopt aCode of Business Conductand Ethics for Directorsand members of the seniormanagement team andpromptly disclose any violationof the CodeD.4.2 Chairman’s affirmation • The Annual Report mustinclude an affirmation by theChairman that he is not awareof any violation of the provisionof the Code ConductD.5 Corporate Governance DisclosuresD.5.1 Corporate Governance Report • The Annual Report shouldinclude a report setting out themanner and extent to whichthe Company has adopted theprincipals and provisions ofthe Code of Best Practice onCorporate GovernanceE. Institutional InvestorsE.1 Structured DialogueE.1.1 Structured Dialogue withShareholdersE.2 Evaluation of Governance Disclosureby Institutional Investors• A regular and structureddialogue should be conductedwith shareholders and theoutcome of such dialogueshould be communicated tothe Board by the Chairman• Institutional investors shouldbe encouraged to consider therelevant factors drawn to theirattention with regard to boardstructure and compositionCompliedCompliedCompliedCompliedCompliedCorporate GovernanceChairman’s Statement/Directors ReportCorporate GovernanceCorporate GovernanceCorporate Governance

PASSION57 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13corporate governanceCode Ref. Subject Applicable requirement Status Compliance Applicable Section in theAnnual ReportF. Other InvestorsF.1 Individual Investors • Individual shareholders shouldbe encouraged to carry outadequate analysis and seekprofessional advice whenmaking their investment/divestment decisionsComplied Corporate GovernanceF.2 Shareholder Voting • Individual shareholders shouldbe encouraged to participatein General Meetings ofcompanies and exercise theirvoting rights.CompliedCorporate Governance/Form of Proxy

PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1358We believe that passion is something that should be instilled in the next generation, creatingand encouraging responsible citizens who understand their impact on the surroundingsthrough awareness and a greater appreciation of our limited resources.

PASSION59 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13“ Being environmentallyconscious and sociallyresponsible is an integralpart of our company’sDNA.”- Tharika -

PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1360

PASSION61 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Sustainabilityreport“With an increasing number ofenvironmentally conscious global travellersseeking to minimise their travel carbonfootprint, the tourism industry has anopportunity to make a significant contributiontowards the reduction of worldwidegreenhouse gas emissions.”

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1362Report ContentAsian Hotels and Properties PLC’ssustainability report provides comprehensiveinformation on the Group’s sustainabilityperformance for the period beginning 1st April2012 to 31st March 2013. This sustainabilityreport is prepared according to the GlobalReporting Initiative (GRI) standards. Ourpassion for sustainability in all areas isindicated by our achievements in economic,environmental and social performance.Report Scope and BoundaryMost of the sustainability initiatives in thisreport have been led by Cinnamon GrandColombo due to the fact that the PropertyDevelopment Sector has been completed andhanded over and the intervention of the Groupceases at this point. Cinnamon Lakeside, oursubsidiary, while aligning itself to the conceptsof the JKH sustainability strategy does notfully report in this section as it has its ownindependent sustainability report.Precautionary Principle AddressedAsian Hotels and Properties PLC is influencedby the precautionary principle in its endeavourof preserving the environment and the impactof its operation on the local communities.The precautionary principle is highlightedby the continuous success of our initiativesof improving our environment; reducing ourenergy consumption and carbon footprintand embedding our social responsibility in allassociates. Through our risk managementprocesses and internal control systems, wehave adhered to the precautionary principle.We have incorporated the triple bottom lineprinciples in our practices and performance.We have also obtained ISO 14001, ISO22000, OHSAS 18001, and Green Globeand Carbon Neutral certifications. From acorporate governance perspective, we ensurethat we meet the regulatory requirementsand are compliant with external rules andcodes that include the listing rules of theColombo Stock Exchange and all provisionsof the Code of Governance of the Institute ofChartered Accountants of Sri Lanka.Any comments and suggestions regardingthe sustainability report of Asian Hotels andProperties PLC may be directed to:Tharika GoonathilakeManager Marketing Communications &SustainabilityCinnamon Grand Colombo77, Galle Road, Colombo 3.communications@cinnamonhotels.comCompany ProfileAsian Hotels and Properties PLC (AHPPLC)is a Public Limited Liability Companyincorporated in Sri Lanka in 1993 andregistered with the Board of Investment ofSri Lanka under Section 17 of the Board ofInvestment Law No. 4 of 1978. AHPPLCcomes under the umbrella of John KeellsHoldings and has been in operation sinceSeptember 2003. The holding company (JohnKeells PLC) has a history that dates back to1870. It is the largest listed conglomeratein Sri Lanka with its shares listed on theColombo Stock Exchange and the first SriLankan Company to be listed internationallywith the Global Depository Receipt (GDR)issued on the Luxemburg Stock Exchange.AHPPLC operates primarily in the areas ofleisure, real estate development, retail andcondominium development in Sri Lanka.The Group is sub divided into the PropertyDevelopment Division which comprises TheCrescat Boulevard and maintenance activitiesof The Monarch, The Emperor and Crescatresidencies and the Hotel Division comprisingCinnamon Grand Colombo and CinnamonLakeside Colombo. The registered officeand the principal place of business of theCompany is No. 77, Galle Road, Colombo 03.

PASSION sustainability report63 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Operating Structure of The OrganisationGeneral ManagerOperationsManagerDirectorRoomsDivisionDirectorHumanResourcesManagerMarketingCommunications& SustainabilityManagerRestaurants &BarsExecutiveChefChief EngineerHumanResourcesManagerDirectorFinanceManagerF & B(Banquets)DirectorSalesExecutiveHousekeeperFront OfficeManagerChiefAccountantPurchasingManagerDirectorSecurityAssistantDirectorSalesDeputyExecutiveHousekeeperAssistantFront OfficeManager

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1364Awards and AccoladesAHPPLCAnnual Report AwardsThe AHPPLC annual report won Bronze atthe Annual Report Awards 2012 organised bythe Institute of Chartered Accountants of SriLanka (ICASL) for Diversified Holdings with upto Five Subsidiaries.Cinnamon Grand ColomboEnvironmental Awards & Certificates:• Merit Award at the Sri Lanka NationalEnergy Efficiency Awards 2012 by theMinistry of Power and Energy, Sri Lanka.• Merit Award at the EU-SWITCH- AsiaGreening Hotels Awards 2012 (by EU-SWITCH-Asia Greening Sri Lanka HotelsProject implemented by the CeylonChamber of Commerce).• Bronze Award at the National GreenAwards 2012 by the Central EnvironmentAuthority and the Ministry of Environment,Sri Lanka (Cinnamon Grand was the onlycity hotel to receive this accolade).• Cinnamon Grand is the first hotel andvenue in Sri Lanka to receive a CarbonNeutral Certification for Nuga Gamaissued by Carbon Consulting Company.(This makes Nuga Gama the 1st venuein South Asia to receive Carbon NeutralCertification by the Carbon ConsultingCompany).• Green Globe Certification by the GreenGlobe Certification, Los Angeles• EarthCheck Bronze Benchmark in2013, by the EarthCheck benchmarkingcompany Limited, Australia.ISO CertificationsCinnamon Grand is the first 5 star city hotelin Sri Lanka and in South East Asia to receiveand maintain uninterrupted ISO certificationsin the following areas since 2007:ISO 14001 for Environmental ManagementISO 22000 for Food SafetyOHSAS 18001 for Health and SafetyAudits• IFC audit for Price Waterhouse Coopers(PWC) Cinnamon Grand was selected fora sustainability case study.• Waste audit by National CleanerProduction Centre.General Awards• Emirates Holidays bestowed CinnamonGrand Colombo the accolade of BestFive Star City Hotel in Sri Lanka for anunprecedented second year. EmiratesHolidays, in their annual holiday guide,‘A World of choice 2012-2013’ ratedthe hotel as a ‘First class standard ofaccommodation, providing an excellentrange of facilities and an exceptional highservice level’ (Cinnamon Grand was theonly hotel to be rated as five star categoryin the guide).Culinary Awards• Gold Medal at the annual Mystery BoxCompetition awards (by the Chefs’ Guildof Sri Lanka).• 2 Gold Medals and 1 Silver Medal atthe International Culinary Olympics inGermany awarded by the InternationalChefs Guild.• Gold Medal at the Prawn Curry Challenge(World Spice Festival, Sri Lanka,organised by the Sri Lanka TourismDevelopment Authority).• 2nd Runner Up at the Cocktail andMocktail challenges (World Spice Festival,Sri Lanka, organised by the Sri LankaTourism Development Authority).Sports Awards• 3rd place at Travel Trade SwimmingChampionships.• Champions at the JKH inter-companycricket sixes.• Bowl Runner Up at the JKH Rugby 7s.• 2 Bronze Medals at the Mercantile AthleticChampionships.Cinnamon Lakeside Colombo• The Best Five Star City Hotel – Sri LankaTourism Award 2011.• The Best Luxury Hotel, Sri Lanka –Business Destinations Travel Awards2012.• First Hotel in Sri Lanka to be recertified forGreen Globe standards.• Certificate of Compliance – Hotel Sectorat the Annual Report Awards 2012conducted by the Institute of CharteredAccountants of Sri Lanka.• All island First Runner Up in the Flaringcategory 21st National Bartender’sCocktail and Flaring competition.• Second Runner Up in the Classiccategory – 21st National Bartender’sCocktail and Flaring competition.• Best EGB Mocktail at the World SpiceFood Festival 2012 (organised by the SriLanka Tourism Development Authority).• Best Stall at the World Spice FoodFestival 2012 (World Spice Festival,Sri Lanka, organized by the Sri LankaTourism Development Authority).• Best Prawn Dish at the World Spice FoodFestival 2012 (organised by the Sri LankaTourism Development Authority).

PASSION sustainability report65 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13• Awarded “A” grade at the Hotel HygieneClassification Audit conducted by theColombo Municipal Council.Cinnamon Grand Membership inIndustry Associations• Sri Lanka Conventions Bureau• La Chaine des Rotisseur: Echo, the Italianrestaurant and The London Grill, thehotels Fine Dining restaurant are certifiedmembers.• Tourist Hotel Association of Sri Lanka• Ceylon Chamber of Commerce• Pacific Asia Travel Association (PATA)• Indo-Lanka Chamber of Commerce• AMCHAM• SKAL International (InternationalAssociation of Travel and TourismProfessionals)• Sri Lanka - British Business Council• Sri Lanka - Japan Business Council• Sri Lanka - New Zealand BusinessCouncil• Sri Lanka - Malaysia Business Council• Field Ornithology Group of Sri LankaAwards and AccoladesCinnamon Grand Director Finance Shanaka Silvareceiving the Annual Report Bronze Award from theInstitute of Chartered Accountants of Sri LankaThe President- Property Group John Keells Holdings,Suresh Rajendra receiving the OHSAS 18001:2007certificate for maintaining, Housekeeping and Security ofthe Crescat Boulevard shopping mallCinnamon Grand’s Assistant Manager RajithaAmarasinghe, Marketing Communications andSustainability Manager Tharika Goonathilake andChief Engineer Panduka Wijewardhane at theNational Green Awards 2012The Chief Engineer of Cinnamon Grand PandukaWijeyawardena accepting the Merit Award at theSri Lanka National Energy Award ceremonyCinnamon Grand’s senior kitchen artistChef Weeraman with his two Gold Medals (won at theInternational Culinary Olympics in Germany)Prof. Mohan Munasinghe, advisor to the CarbonConsulting Company presenting the Carbon NaturalCertification to Cinnamon Grand’s General ManagerRohan Karr for Nuga Gama, in the presence of ChiefOperating Officer of the Carbon Consulting CompanySanith De Silva Wijeyeratne and Cinnamon Grand’sMarketing Communications andSustainability Manager Tharika Goonathilake.

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1366Certificates

PASSION67 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13sustainability reportSustainability ResponsibilityJK Leisure Sector Vision: We will always be the Hospitality TrendsetterJK Leisure Sector’s Five Pledges:• I will Get it Right the First Time – all the Time.• I will Care.• I will Stand Out wherever I am.• I will Empower.• I will be Green.Sustainability Responsibility TeamGroupSustainabilityCinnamon GrandColomboBased on the five pledges and the visionof the JK Leisure Sector, Cinnamon GrandColombo has established a dedicatedsustainability team, headed by the ManagerSustainability to be responsible forSustainability initiatives, meeting targets andmapping shortfalls. The General Managerdelivers the Vision to the sustainabilitydivision that looks at the key areas in thevision and strategies to create mindsetchanges, with rewards and recognitionfor those that align with this larger growth.The Green Team comprises of membersfrom different departments championingdifferent causes, namely the Electricity andWater Team (targeting electricity and waterreduction), Recycling Team (increasingrecycling initiatives), Food Waste ReductionTeam (food waste reduction), AwarenessCommunications Team (creating a greenermind set) and Community Team (communityrelated development projects). Teamsare headed by a leader possessing coreknowledge of the respective areas andcommunity projects involve all associates.RecyclingTeamElectricitySavingsTeamSpecialCommunityProjectsTeamAwarenessTeamFood WasteReductionTeamWaterSavingsTeamFrontOfficeKitchenDepartmentEngineeringDepartmentAdminDepartmentHousekeepingDepartmentFood &BeveragesDepartmentResearchBenchmarkingSustainability DepartmentReportingConceptDevelopmentData Measurement TechniquesIn all areas of operation, data measurementand data collation is a daily process, and thepoint of data entry is in the form of logbooksand log sheets while recordings are carriedout on a daily basis. Data is collated on amonthly basis for reporting purposes, whichare analysed monthly, after which a quarterlyreport is prepared.

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1368Key Impacts, Risks and OpportunitiesTriple Bottom Line Challenges(Potential Impact)Social Social Development Risk: Under-developedhuman capitalOpportunity: Empoweredhuman capital through skillsdevelopmentRisk: Social alienationOpportunity: Socialengagement for wealthcreationEconomic • CommunityEmpowerment• National Wealthcreation• Changingbehaviour andinstilling valuesRisk/Opportunities Engagement Approach Process UndertakenRisk: City-centricemploymentOpportunity: Integrationof rural economy throughemploymentRisk: Inward lookingbusiness modelOpportunity: CustomerdevelopmentOpportunity: Act as acatalyst in changing valuesand behaviourOpportunity: Growmicro and SME supplierscapacities as future focus• Training and developmentfor skill enhancement• Social inclusivenessthrough the hotel’sproduct and serviceoffering as well assustainability initiatives• A policy of employmentfrom every point of theHotel’s presence thusdeveloping the skill basefor the preservationand development ofthe hospitality/tourismindustry• Business strategy that hasthe bandwidth to evolvewith national tourismdevelopment• Specific customerdevelopment programmesaround the year, aimedat building capacity andmarket linkages• Product developmentnew and existing• Programmes aimedat instilling values thatare vital for sustainableproduction of goods andservices• Youth empowerment andwomen empowerment• Industrial training for chefsthrough tourism hospitalitymanagement• Donation to social groups• Community developmentprojects• Enhancing creativity andskills amongst childrenthrough workshops.• Island-wide recruitment• Products and servicesthat meet the tourismindustry priorities• SME focused productdevelopment workshopsaccording the NationalCleaner Production Centreguidelines.

PASSION sustainability report69 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Triple Bottom Line Challenges(Potential Impact)Environmental • Global Warming• Bio-diversity andEco Systems• EnvironmentalDegradationRisk/Opportunities Engagement Approach Process UndertakenRisk: Changes in weatherpatterns, threatenslivelihoodsRisk: Depletion in biodiversityand loss of ecosystems pose danger tonational and global welfareOpportunity: The growingneed for green hotelsOpportunity: Loweredcarbon footprint to become a‘green hospitality institution’Opportunity: Lower longtermenergy and overheadcosts through greenpractices.• Alternative energy usageand reduction• Protection of bio-diversityin partnership with theField Ornithology Group ofSri Lanka• Construction of ‘ GreenBuildings’ to minimiseimpact of the operationsto environment• Green procurement policy• Implementation of Greenpolicies• Implementation of auditsto minimise the hotelwaste• Adoption of anenvironmental policy• Construction andoperations of a fullysustainable and carbonneutral village-NugaGama• Suppliers educated andmotivated to adopt greenpractices• Collaboration with theField Ornithology Groupof Sri Lanka to protectbio-diversity• Awareness and educationto hotel associatesthrough seminars,posters, social media,environmental videos andthe green corridor in thehotel• Awareness and educationthrough print and socialmedia to customers• Children: cultural toursat Nuga Gama andworkshops according toan environmental calendar• Alternative energy usein the preliminary testingstage• Energy, water and wastesaving and recyclinginitiatives

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1370Stakeholder Engagement processCinnamon Grand Colombo utilises internaland external processes to prioritisestakeholder groups as well as stakeholderinterests and concerns. The stakeholderengagement and analysis has enabled usto determine our significant stakeholders,our operational impact on them, materialissues arising from it and our response tothe issues. Material issues and stakeholdergroups are linked to 30 sustainabilityperformance indicators of GRI. Materialitywas assessed as being high, medium or lowalong two dimensions namely impact on theshareholder and impact on the Company.Indicators that have a high impact on boththe shareholder and the Company are EN3,EN4, EN5, EN11,EN12,EN28, EN16, EN22,PR3, PR6 PR9, SO2, EC1, EC3, EC6, LA7,LA8, LA1 and LA2. Indicators that have amedium impact are LA10, EN8, SO1, HR6,LA12, LA13, EN23, EC8 and collectivebargaining. Indicators that have a low impactare investment and procurement practices,non-discrimination, reclaim of products andremuneration. The following diagram depictsthe stakeholder engagement process.Q 13 – Basis for identification and selection of stakeholders withwhom to engageStakeholderEngagementIdentification ofIssuesCategorisation ofIssuesCustomers Associates Community Suppliers GovernmentAddressing of Material Issues(By the Sustainability Division and Green Team)SocietyPressureGroups/MediaShareholdersSetting goals and objectives to redress identified issues(By the General Manager)Implementation and Monitoring(By the Head of Sustainability and Green Team ProjectChampions)Reporting to JKH Sustainability Division and regulatory/certification bodies

PASSION sustainability report71 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Cinnamon Grand Colombo identifies its stakeholders as customers, associates, shareholders, business partners, the community, suppliers,government and society pressure groups/media. The current level of engagement frequency, with the key stakeholder groups and materiality ofstakeholder issues is demonstrated in the following table.Stakeholder Stakeholdersub-categoryCurrent Level of Engagement and FrequencyCustomers Adults Level of engagement:Awareness campaigns through press releases, posters, social media,fundraising for the Field Ornithology Group and Cancer Hospital, donations forsocial groups, participation of international environmental/tourism events, endusersurveys, booker surveys.ChildrenFrequency of engagement:• Face to face feedback• Guest Comment Cards on a daily basis in rooms and restaurants• Feedback and reviews on Trip Advisor• Duty Managers’ Log• Restaurant log books• Bi-annual personal meetings• Weekly awareness through press releases, posters, social media• Annually – Fundraising for Cancer Hospital, participation in internationalenvironmental events• Annual Secretaries’ party• Media nights• Daily sales visits• Entertainment of clients & patronsLevel of engagement:Awareness and education through print and social media, cultural educationthrough site visits, children’s workshops according to environmental calendar,road shows and trade fairs for kids.Materiality ofstakeholder issues1. Rate Fixing2. Ethical Products3. Carbon Footprint4. Ethical Marketing5. Corporate CommunityEngagement6. Health and SafetyFrequency of engagement:• Weekly awareness and education through print and social media• Monthly cultural and educational visits to Nuga Gama• Monthly children’s workshops according to an environmental calendar• Annual road shows and trade fairs for kids• Kiddies events feedback form• Weekly newsletter

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1372StakeholderStakeholdersub-categoryManagers,Executivesand Non-ExecutivesCurrent Level of Engagement and FrequencyMateriality ofstakeholder issues7. Accommodation8. Basic Salary9. Employee awarenessand training10. Employee rewardsand remuneration11. Occupational healthand safety12. Emissions, effluencesand waste13. Mutually beneficialrelationship withsupplier14. Gender related societydiscriminationsAssociatesLevel of engagement:Green corridor, direct reporting, open door policy, annual events, training anddevelopment activities, sustainability awareness seminars, celebrations ofinternational environmental calendar dates, employee satisfactions surveys,intranet communication, green raffle draw.• Frequency of engagement• Weekly meetings, updates on intranet and green corridor• Monthly poster campaigns and awareness and educational sessions• Monthly management meetings• Staff quarterly meetings• Mid-year review• Annual performance review• Annual gatherings, parties and sports events• Annual green raffle draw• Custom made training programmes and development activities accordingto sustainability guidelines• Voice of Employee survey• Great Place To Work survey - GPTW• ‘Tell GM’ box where associates can directly communicate with the GeneralManager on issues that they face while working at the GrandLevel of engagement:Questionnaires and surveys, one on one meetings, e-mail correspondence,circulars, membership in industry associations.BusinesspartnersHotel School,Inbound /Destinationtravels agentsFrequency of engagement:• Annually contract renegotiations• On-going through conference calls, e-mails and circulars• Business travels• Trade shows• Experiential tours• Daily sales visitsLevel of engagement:Awareness through print, electronic, social media, annual reports andquarterly reports.15. Health and safety16. Product diversity17. Adhering tointernational standards18. Best practices19. Communityengagement andCarbon Footprint20. ConfidentialityShareholders21. Market issues22. Share priceFrequency of engagement:• Weekly and monthly promotional initiatives on going through emails andcirculations.

PASSION sustainability report73 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13StakeholderStakeholdersub-categoryLocalCommunities(Schools,monasteries,pre-schoolshome forelders,conservationgroups)Current Level of Engagement and FrequencyMateriality ofstakeholder issues23. Infrastructuredevelopment24. Creating awarenessfor youthCommunityLevel of engagement:Awareness through posters, paintings, environmental videos and educationprogrammes, donations and community development projects.Frequency of engagement:Engagement with the community is done prior to initiating projects in therespective areas of focus.• Monthly awareness and education sessions for schools• Bi-annual discussions for community development projects• Special on-going school projects with weekly engagements.• Annual supplier sustainability awareness sessions• Awareness campaigns in key areas where suppliers congregate• Annual donations to the Field Ornithology Group• Sponsorships• Arts and cultural activitiesLevel of engagement:One on one meetings, group meetings, awareness sessions and collateral,environmental videos and education programmes, donations and communitydevelopment projects, ethical purchasing policy, flexibility of credit period,review of pricing, child labour remediation policy and membership in industryassociation.SuppliersFrequency of engagement:• Promoting responsible tourism/products through community relatedawareness activities that we organize and participate• Monthly review meetings• Awareness session on quality• Monthly price review meeting• Annually through contract renegotiations25. Environmental friendlypackaging26. Resources scarcity27. Awareness onenvironmental issues28. Ethical production29. Child labourremediation policy

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1374StakeholderGovernmentSocietyPressureGroups/MediaStakeholdersub-categorySri LankaTourist Board,Sri LankaInstitute ofTourismand HotelManagement,CentralEnvironmentalAuthority,NationalCleanerProductionCentre, CeylonElectricityBoard, NationalWater Supply& DrainageBoard, NationalOzone Unit,NationalInstitute forOccupationalSafety andHealth, NationalCancer Hospitaland NationalCancer ControlProgrammeNGO, Media,OpinionLeaders,ConservationOrganisations,TradeAssociation,TourismAssociations.Current Level of Engagement and FrequencyLevel of engagement:Meetings, discussions, phone calls, presentations and briefings, advisorymeetings, membership on the Sri Lanka Tourist Board, membership in the SriLanka Hotel school training programme, awareness workshops on tourism/sustainability related issues is an on-going process with tourism relatedgovernment agencies.Frequency of engagement:• Engagement with these government bodies is an on-going processthrough monthly newsletters, e-mails, circulars, quarterly briefings,websites etc.• Senior Management is on the advisory board of the Sri Lanka Institute ofTourism and Hotel Management and visiting lecturers on a quarterly basis.Level of engagement:Websites, press releases, media briefings, correspondence, discussions,participation at NGO forums.Frequency of engagement:Engagement with these stakeholders is carried out on an on-going basisthrough correspondence, websites, media briefings and press releases (atleast monthly).Materiality ofstakeholder issues30. Compliances/Regulatory restrictions31. Ethical businesspractices

PASSION sustainability report75 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13EconomicManagement ApproachEconomic growth and development isparamount to Cinnamon Grand Colomboas a key player in Sri Lanka’s hospitalityindustry as well as being the largest 5 starcity property. Focusing on the fundamentaltenets of profit, people and environment,the ultimate objective is to makesignificant profits without compromisingon people and the environment. Therefore,we consciously make an effort to reduceour carbon footprint, which we believe willhave a positive impact on our economicgrowth. Our growth strategy focuseson creating employment opportunities,providing competitive salaries and benefitsand ensuring the development of ourassociates, which in turn has an impacton our productivity and revenue. Ourinternal economic policies are contingentwith the greater policies of Sri Lanka.Pricing decisions and financial/economicstrategies are decided on and based onin-depth analysis on industry, externalrisks and impacts, at all times keeping anROI in mind.Economic PolicyAHPPLC aligns itself to the policy of JohnKeells Holdings PLC.Hotel’s impact on the industry andeconomyCinnamon Grand Colombo is one of thebest performing five star hotels in Sri Lankawith a number of awards and accoladesbestowed on us. Our outstanding standardsare testimony to our healthy appetite forcontinuous benchmarking in all areas ofoperation. Asian Hotels and Properties PLC isthe principal employer among the city hotelswith the largest room capacity, wide range ofrestaurants, an adjoining shopping complex,state of the art gym, high-end spa andapartments to name a few, creating a unique‘contained city concept’ in Sri Lanka.Cinnamon Grand has a total room nightmarket share of 32%; corporate share of34%, leisure 34% and MICE 28%. We havea significant total revenue market share of33% amongst city hotels. The Companycontributes a considerable amount in termsof Taxation of Rs. 680 Mn assisting towardsthe development strategy of the country.Total taxation consists of VAT of Rs. 463 Mnand income tax of Rs. 67 Mn and NBT ofRs. 104 Mn. Cinnamon Grand contributesa sizable amount towards the NationalTourism Development Strategy, which ischannelled towards the development of theleisure and hospitality industry with a TourismDevelopment Levy of Rs. 46 Mn.EmploymentAHPPLC Group employs a total of 2,067associates, the details of which demonstratesour expansion strategy as well as ourfocus on promoting employment for youth.Cinnamon Grand Colombo employs 1,224associates. Cinnamon Lakeside employs 842associates.In terms of the experience and traininggained at Cinnamon Grand, our staff is wellrecognised as one of the best in the industrywith associates gaining exposure thatenhances their qualifications.Education and trainingCinnamon Grand Colombo has a sense ofduty to develop and impart its vast knowledgebase not only among its associates butalso among the youth of the country. Wehave provided numerous educationaland experiential opportunities for internsand students nationwide. For example,architecture students come to Nuga Gama ona regular basis to study its unique concept.School students from all over the island alsovisit the village to gain insight into our culturalheritage. We have provided studies on ourhousekeeping, F&B and Kitchen departmentsto batches of Officers from the NavalAcademy on a regular basis. We also impartour knowledge and expertise to the Sri LankaInstitute of Tourism and Hotel Management(SLITHM) as they are in the process of revisingand developing their syllabus according tocontemporary industry needs.We actively take part in industry relateddiscussions and are represented as eitherCinnamon Grand Colombo or as a Group atthe Tourist Hotels Association, City HotelsAssociation and the Hotel sector of theChamber of Commerce, Sri Lanka in order toimpart our knowledge and expertise.RecognitionCinnamon Grand Colombo takes pridein being chosen as the preferred partnerin many national events including statebanquets Gemunu Regiment Dinner,Common wealth Parliamentary meeting),ICC T20 ground catering (Official Caterersfor Players, VIP’s and ICC invitees inColombo and Conferences CommonwealthParliamentarians Dinner (hosted by Prof. G.LPeiris, Minister of External Affairs, Sri Lanka),SAARC Future Government Congress hostedby ICTA). We are also instrumental in settingstandards for five star hospitality with ourminimum quality standards, Cinnamon Hotelsand Resorts branding standards and ourcustomer profiling of the hotel. As a city hotel,

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1376we have the highest service charge in the city,which is equally distributed to all associates.Cinnamon Grand still prevails as the only cityhotel to be in the Sri Lanka Tourism Hall offame since 2009.Cinnamon Grand has thirteen uniquerestaurants, which is the largest numberof F&B options under one roof in thecountry, which caters to different palates.Our signature restaurants include Tao forfusion fare, Lagoon for seafood, Echo forItalian cuisine, Chutneys for South Indianand London Grill for fine dining. We haveset a high standard in the industry with ourinnovative F&B features encouraging others inthe industry to raise their standards.Our ethos of affordable indulgence for allages caters to a wide range of customerswithout compromising quality. While offeringthe highest number of buffet options, ourmost noteworthy, Taprobane is famous for itsinternational buffets and Sunday brunches,which are the best in the city.Nuga Gama, Sri Lanka’s only “village in thecity”, won a culture award from the TourismBoard and is being used as a case studyhighlighting a growing indigenous brand. Weare the only city hotel that holds an entire ruralvillage within its premises. It has also beena case study for tourism related researchin the city. The typical local rural ambianceat Nuga Gama is used for case studies,thesis and research work by undergraduatestudents at different universities, departmentof Archaeology and the Architect Association.Another key achievement for us is thatCinnamon Grand was chosen as one of thebusiness units for a sustainability case studyin the city. The case study is being done byPricewaterhouse Coopers on behalf of theInternational Financial Corporation (IFC).Defined contribution plan obligationsAssociates are eligible for Employee’Provident Fund (EPF) contribution, accordingto the terms of the Employee’ ProvidentFund Act No. 15 of 1958 and its subsequentamendments, and for Employees’ Trust Fund(ETF) Act No. 46 of 1980 and its subsequentamendments. The Company contributes therelevant percentages of the eligible grossemoluments of employees to the respectiveEPF and ETF.Defined contribution plan obligation (EPF & ETF) in Rs. ’0002013 2012 2011 2010CinnamonGrandCinnamonLakesideProperty Total CinnamonGrandCinnamonLakesideProperty Total CinnamonGrandCinnamonLakesideProperty Total CinnamonGrandCinnamonLakesidePropertyTotalEPF 52,983 51,710 2,193 106,886 46,000 42,203 10,603 98,806 37,749 39,379 8,602 85,730 33,354 33,931 6,554 73,839ETF 10,601 7,813 330 18,744 9,233 6,665 2,195 18,093 8,037 6,302 1,747 16,086 7,141 5,348 1,344 13,833Defined benefit plan obligations (payment of gratuity) in Rs. ’0002013 2012 2011 2010CinnamonGrandCinnamonLakesideProperty Total CinnamonGrandCinnamonLakesideProperty Total CinnamonGrandCinnamonLakesideProperty Total CinnamonGrandCinnamonLakesidePropertyTotalEmployeebenefit liabilityas at 31MarchPaymentsduring thefinancial year92,284 17,003 3,787 113,074 86,926 17,576 22,625 127,127 67,441 22,596 18,708 108,745 62,021 13,818 15,991 91,83013,660 11,137 175 24,972 4,145 7,730 347 12,221 7,525 6,189 745 14,459 8,775 6,459 1,433 16,666

PASSION sustainability report77 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13EnvironmentManagement ApproachEvery day, Cinnamon Grand makeshundreds of choices that in someway impact the environment and thecommunities within which we operate.Our environmental strategies revolvearound an in-depth understanding ofthese choices and ensuring that weconsider a range of options and theresultant impact in order to make moreresponsible environmental choices andcontribute to the safety and sustainabilityof the resources of our planet.We strive to adopt an environmentallysustainable approach that is integrated inthe heart of our organisation through ourassociates, business partners and ourentire supply chain. We are committedto continuous improvement in ourenvironmental performance by reducingour ecological footprint through ourGreen Agenda.The hotel’s Green Agenda, embracesfour key areas: waste managementand recycling, energy and watermanagement, conservation andcommunity awareness. Specificmeasurable strategies are identifiedwithin each of these areas to help reducethe impact of the Company’s activitiesupon the environment.Environment PolicyAt Cinnamon Grand Colombo - sustainabilityis at the heart of everything we do, therebyproviding the luxury of a guilt free grandindulgence. Our ultimate goal is to enhancethe ‘ Grand Guest Experience’ throughcomfort and luxury that has a minimum tollon the world around us.CommunityAwarenessEnergy &WaterManagementCinnamonGrand’s GreenAgendaWasteManagement&RecyclingConservationCinnamon Grand endeavours to embedand inculcate a culture of environmentalawareness within our organisation throughour earth-friendly initiatives. These initiativesserve to create a sense of responsibility andcooperation throughout the organisation andamongst our guests, and stress the need forgreater environmental stewardship and truecommitment towards caring for our planet.We encourage customers and associates toactively engage in the “We Dream in Green”campaign designed to communicate greenerinitiatives, create a greener mind set andencourage activities that support sustainablelifestyles and decision making.The hotel’s management, the Green Team andstaff participate in defining the Company’sEnvironment Policy and the creation of theEnvironmental Action Plan for the entireproperty. Quarterly and annual reviews areconducted, which are presented to thestaff and all our stakeholders with an aimof securing consistency and continuousimprovement of our sustainable performance.We comply with all legal and environmentalprocedures in our commitment to operate ourbusiness responsibly.In keeping with this vision we have beenawarded the following certifications innumerous areas of sustainability and greeninitiatives.Cinnamon Grand’s Green VisionTo be ranked as the Best Five Star SustainableCity Hotel in Sri Lanka by 2015Cinnamon Grand’s Green GoalReduce Carbon Footprint of the Hotel by 10%by March 2013Green Globe CertificationThe hotel was audited and measured in2011 on 245 compliance indicators for theGreen Globe Certification. Green Globeis the premier global tourism certificationprogramme for sustainable tourism. TheGreen Globe Standards has a collectionof 337 compliance indicators applied to41 individual sustainability criteria. Keyindicators were energy usage, water andwaste management, employee training,implementation of customer satisfactionmeasures, community support andawareness initiatives for which the hotelachieved 65%. In August 2012, the hotelobtained recertification on 336 complianceindicators where the hotel had achieved aminimum of 50% of each core criteria andachieved an overall 68%.

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1378EarthCheck CertificationCinnamon Grand Colombo met therequirements to be recognised as anEarthCheck Benchmarking accommodation.We scored in four areas as “AboveInternational Best Practice Levels” undersustainability policy, community contributionrating, cleaning products rating and pesticidesrating. In addition, we scored in three areasas “Above the acceptable baseline” undercategories of Energy Consumption, GreenHouse Gas Emission, Waste Sent To Land Fill,Portable Water Consumption and CommunityCommitment. This has led Cinnamon Grandto achieve bronze level certification.EarthCheck benchmarking provides anorganisation a framework for sustainabilityreporting and is based on the premise ofcontinuous improvement. By undertaking aBenchmarking Assessment, an organisationcan meet the requirements for thiscertification, which includes the collectionand submission of benchmarking data toEarthCheck for review and completion of theBenchmarking Assessment Report.Our carbon footprint benchmark was set at41.10% for 501 rooms and 13-restaurantsof the hotel. During the last financial year, wereported 68.21Co2 (Kg) per guest and as of31st March 2013 we have achieved 61.79Co2 (Kg) per guest, per night. The followingdiagram depicts the objectives set for theareas of electricity, water, food waste andrecycling and the corresponding reductionachieved.Cinnamon Grand’s Green TeamIn our efforts to deliver on our green targets,Cinnamon Grand Colombo places specialfocus on its sustainability practices andinitiatives in line with our pledge “I will beGreen”. The task of the Green Team, whichcomprises of representatives from differentdepartments, was to identify processesand methodologies that will reduce theconsumption of electricity and water, whilemanaging waste more efficiently to reduce ourcarbon footprint by 10%.ElectricityWaterFood WasteRecyclingCinnamon Grand’s targets and achievementsReduce usage by 5% incomparison withprevious yearReduce usage by 10% incomparison withprevious yearReduce wastage by 20% incomparison withprevious yearIncrease recyclingitems & weightage by20% and reduce landfillAchieved 8% reductionthis yearAchieved 15% reductionthis yearAchieved 24% reductioncompared toprevious yearRecycled items increasedby 50% &weightage by20% this yearTargets are given for each quarter to theGreen Team, which focus on reducingconsumption of water, electricity and wastageof food. To this end, the introduction of the3R concept of Reduce, Reuse and Recyclehas gained momentum. Team membersare encouraged to come up with innovativeideas on how daily operations and actionscan reduce the negative impact on theenvironment and lessen the overall carbonfootprint of the hotel. A concerted effort wasmade to involve other stakeholders in theseinitiatives, while encouraging them to innovatenew ideas in promoting environmentalconsciousness.The 3R ConceptOur Green Team members have passionatelytaken on the responsibility and focused on the3R concept of Reduce, Recycle and Reuse ofthe hotels tangible resources. Each memberwas entrusted with specific goals and targetsin the reduction of consumption of electricity,

PASSION sustainability report79 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13water and wastage of food. Our passion toexcel has created innovative ideas to reducethe negative impact on the environment notonly through us but through our stakeholdersas well.Case StudyBanners to Bags (B2B)Cinnamon Grand Colombo is the pioneer in Asia and the fourth organisation in the world toembark on this unique recycling initiative of converting used promotional flex banners of thehotel and suppliers into practical, durable and waterproof bags. Flex material is a petroleum byproductand discarding these banners without a sustainable recycling plan was not an option.The hotel collected these banners for three years to avoid health and environmental hazards untilan environmental friendly plan was formulated which resulted in B2B (Banners to Bags).B2B emphasises the importance of infusing the triple bottom line concept into the hotel’s dailyoperations and is inspired by the 3R initiative of Reduce, Reuse and Recycle. Cinnamon GrandColombo worked on reducing waste that could arise from discarding the banners and reusingthe discarded product by recycling it for more productive use in the form of trendy, useful andlong-lasting bags.The B2B process was researched through the Sustainable Development Triangle Modeldeveloped by MIND (Munasinghe Institute for Development) and was studied thoroughly byNobel Peace Prize 2007 Co-Laureate Professor Mohan Munasinghe who heads the institution,prior to being endorsed as a sustainable corporate initiative.The B2B project has led to remarkable benefits and advantages in the areas of environment,economy and society as indicated below.Environmental Advantages• A sustainable, environmentally friendly recycling initiative of a product that causes immenseland degradation and air pollution.• Landfills will no longer have the non-bio degradable flex banners disposed into it.• The need for incineration of the flex banners as yet another method of disposal and theensuing toxic fumes will no longer be a cause for environmental concern.Economic Advantages• The production of the bags creates a sustainable income generating avenue for unemployedtailors, with the dual advantage of adding to family incomes and giving them a sense of self-worth and dignity.Social Benefits• Proceeds from the sales being channelled towards the hotel’s primary CSR initiative - thechildren’s ward of the Maharagama Cancer Hospital - enables maintaining a sustainablefund for the continuing work of this project.• The fashionable, hip and trendy bags create added hype and awareness among society, notonly for its environmentally friendly features but also for the dual social commitment. Thisfurther leads to a ‘feel good’ factor permeating through to the owners of the B2B bags.

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1380134

PASSION81 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13sustainability reportB2B1. A retired tailor of Cinnamon Grandprepares to recreate a used banner to atrendy bag2. Hoteliers to Models - The hotel’s associatemodels with the fashionable B2b bagsshowcased at the annual B2b Store3. Discarded banners being cleaned beforebeing sent to the tailors4. A Green Team member presenting aCinnamon Grand’s B2b bag to a studentduring the ‘No Time To Waste’ E - Wasteseminar at the British School, Colombo5. A Cinnamon Grand associate MithilaPerera (Sales Manager) models a B2b bag6. Once used as a banner, now transformedto a fashionable bag256

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1382Cinnamon Grand Energy UsageCinnamon Grand energy consumption for theyear 2012/13 and comparative figures for theyear 2011/12 are shown in the following table.DescriptionDirect EnergyUnit ofmeasureEnergyUsage2011/12 2012/13- Electricity Kwh 15,008,133 13,866,088Fossil Fuel- Furnace Oil L 592,142 568,463- LPG Kg 137,900 132,410- Diesel L 20,174 9,863- Petrol L 7,160 4,543DirectEnergy MT 1,905 1,803IndirectEnergy MT 10,229 9,451Total Energy MT 12,134 11,254Awareness poster on saving electricityAwareness poster on saving waterThe table above presents Cinnamon GrandColombo’s total energy consumption whichhas decreased by 6% during the financialyear. This is attributed to the tremendousefforts made by the hotel on energy savinginitiatives.Energy and Water Saving Initiatives:The savings achieved across CinnamonGrand Colombo are listed below:Conservation of water from the Municipalityis carried out by installing a sub-meteringsystem with 28 sub meters located in differentareas of the hotel which monitor the dailyconsumption of water in each area.Installation of a 50W Capacity Solar Panelat Nuga GamaCollecting of remaining drinking water fromrestaurants, kitchen and divertingthe collected water to the Lagoon fish pond

PASSION83 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13sustainability reportEnergy and Water Saving InitiativesEnergy saving modification for the hotel swimming pool: Initially, the swimming pool operated with two circulation pumps, eachwith a capacity of 4 kilowatts, which was replaced with a high-energy efficient 4 kilowatts single pump.Self-closing taps installed for all six staff locker areas: In our effort to reduce wastage of water, all 24 taps in the staff locker areaswere replaced with self-closing taps.System for porch water fountain(energy/water) efficiency: An efficient filtration system was installed, as in the absence of afiltration system, approximately 20 cubic meters of water is continuously fed into the fountain to prevent bad odor and sustain ahealthy environment for the hotel.Installation of sensor taps: Existing manual operated taps were replaced with new sensor taps in the ladies and gents wash roomslocated at the Taprobane restaurant, the Oak Room and the gents wash room in the lobby.Condensed water from AC trays are connected to a tank and fed to the Lagoon fish pond.Remaining drinking water and ice from restaurants are collected and diverted to the Lagoon fish pond. A total of 72,528.1 litres ofwater collected.Installation of LED lights in areas with more than 12 hrs of operation eg: Premium Wing, lift landing, Breeze Bar, Taprobane, mainentrance signage, lobby fountain, Tao gardens, front & back of house and lobby walls.Sensor light system installed in the Premium Wing basement and ground floor corridors.Premium Wing & Basement area cold water system: Initially two 15 kilowatt cold water pumps were used to maintain 3 bar pressurewhich was replaced with one 15 kilowatt pump to get the same pressure.Installation of outdoor LED lights for the Breeze Bar, Lagoon garden, guest corridors, reception & entrance pond areas.Installation of new fan coil units in Accounts, Cost Control & Credit Departments. Existing over capacity 48 ton and 10 kw motor airhandling unit & split type AC units were replaced. Thus temperatures & switches can be controlled & switched off, when not in use.Installation of new fan coil units in Sales & F&B offices. Existing over capacity 30 ton and 5.5 kw AC unit was replaced. Thustemperatures & switches can be controlled & switched off, when not in use.Installation of a Rain Water Recovery Tank. The water tank installed at the boiler area is used to balance the evaporation in coolingtowers and for the garden, which would otherwise use Municipal water.50 W capacity Solar Panel installed for the conference room at Nuga Gama.Installation of four 11kw variable speed drives with temperature sensors for the Cooling Towers.Earth Hour Energy Saving.(23rd March 2013, 8.30pm-9.30pm)SavingsSaving of 2,000 kWh permonth.Saving of 60 cubic metersper month.Saving 18 cubic meters ofwater a day and a monthlysaving of 540 m3.Saving 696 cubic meters ofwater.Saving 10 m3 (10,000 Lts.)per annum.Saving 108m3 of water perannum.Saving of 10,263 kWh permonth.Saving of 1,872 kWh permonth.Saving of 4,500 kWh permonth.Saving of Rs. 380,000 perannum.Saving of Rs. 1,575,579(116, 709 kWh) per annum.Saving of Rs. 847,778(62,799 kWh) per annum.Capacity of water tank175m3 (175,000 Litres).Capacity of using six bulbs.Saving of 262,800 kWh perannum.Saving of -1,080 kWh(Rs. 15,908).

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1384Carbon FootprintCinnamon Grand Colombo carbon emission is measured using Greenhouse Gas Protocolgoverned by the World Resource Institute (WRI) and the World Business Council for SustainableDevelopment (WBCSD). The hotel’s boundary for the emission measurement has beengoverned by scope 1 and scope 2. GHG emissions occurring directly from the source thatare owned or controlled by the organisation is Scope 1 and indirect emission generated in theproduction of electricity consumed being Scope 2.Emission Factor 2011/12 2012/13Co2 Footprint - Direct energyMT 1,905 1,803through primary Sources (Scope 1)Co2 Footprint - Indirect energyMT 10,229 9,451through primary Sources (Scope 2)Total CO2 Footprint MT 12,134 11,254The Carbon Footprint total Co2 (MT) is gradually on a decreasing trend with a total decrease of7% compared to last year’s 12,134 Co2 (MT) due to the energy initiatives incorporated and themonitoring of continuous improvements.In the financial year under review, our Carbon Footprint has been measured at 11,254 MT Co2.This is further sub categorised into 1,803 MT of Scope 1 direct emissions and 9,451 MT ofScope 2 indirect emissions. The Carbon Footprint has decreased from 12,134 MT in 2011/12to 11,254 MT in 2012/13, a decrease of 7%. Cinnamon Grand Colombo with its numerousinitiatives and constant monitoring of its processes has achieved the decrease of emissionsgenerated from operations.The main component of carbon emission is electricity, from the main grid contributing to 84% ofthe Carbon Footprint, which is a decrease of 7% compared to last year. This is mainly attributedto the efficient use of energy in all areas of the hotel.Solid Waste ManagementCinnamon Grand has a well-established solid waste management system that is monitoreddaily. Solid waste is categorised, measured, disposed of and recycled. Glass / plastic bottlesand waste paper are all recycled. Used oil is reused, a total of 100% of food waste is sent to thepiggeries.The following initiatives were carried outfor reducing and recycling solid waste:• Used cooking oil from the kitchen isutilised in place of furnace oil neededfor the boilers. The boilers were fedwith 6981 litres of used cooking oil thisfinancial year, which would otherwise haveto be purchased, aiding the reduction ofcarbon emission by 30%.• Each month we monitor A4 paperbundles (500 sheets = 01bundle) fromthe stores to each department againstthe previous year. Each department isgiven a target of a 5% reduction from lastyear and we have achieved a remarkablereduction of 6%. Total usage in 2012/13was 2,236 bundles and 2,401 bundles in2011/12. Thus a saving of 165 bundlesthis financial year.• E -waste, which includes computerequipment and mobile phones arecollected and given to the “Think Green”company for recycling. CFL and tubelights are given to the “Orange” companyfor recycling. In the financial year underreview 177.65 kg were given for recycling.• All waste water is monitored and sent tothe municipal drainage system. A wastewater treatment plant is in the pipeline forthe next financial year.• All cleaning chemicals used arebiodegradable products from certifiedcompanies.• The Company only uses paint with noadded lead and mercury.• SGS Lanka carries out an annualboundary noise testing during the day aswell as in the night for all four boundariesof the properties and we have alwaysbeen within the stipulated amount.• Garden refuse, left over fruit cuts, vegetableand flower cuts are collected in a separatearea for compost which is sufficient forreuse as compost in the gardens.

PASSION sustainability report85 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13• Green cards are placed in guest rooms stating that linen will only be changed at the request of the guest. “Save the Planet” cards are alsoplaced in the rooms depicting 50 ways of saving the planet for awareness of the guests.• All executives are entitled to laundry facilities and clothes will only be accepted when brought in the cloth bags provided by the hotel, therebyencouraging the use of environmental friendly products.• The plastic containers for shampoo, shower gel, conditioner and lotion are given for recycling.• The Hotel only deals with waste collectors that are registered with the Central Environmental Authority.• Paper-based TV guides were replaced with digital guides in order to save paper and unnecessary wastage.• Regular seminars and campaigns are held for our suppliers, with emphasis on water, waste, energy management, environmentally friendlysourcing and packaging.• Newspapers are provided to guests only on request to reduce paper waste.The table below highlights some of the results of the initiatives listed above:Item Description Quarter Quarter Quarter Quarter Total12 3 4Wet Garbage(KGs)Collected by three piggery farms to feed the pigs 152,871 229,604 243,817 199,155 825,447Kitchen Used Oil(KGs)Plastic andPolythene (KGs)Used for the hotel’s boilers 1,089 1,451 1,721 2,022 6,283Given to Central Environmental Authority listed collectors forrecycling3,558 6,448 5,435 5,080 20,521Paper (KGs)Given to Central Environmental Authority listed collectors forrecycling4,481 6,339 6,263 5,876 22,959Glass bottles(KGs)Given to Piramal Glass Company for recycling 1,626 5,720 9,984 5,216 22,546HazardousWaste (KGs)(E-Waste and CFLand Tube Bulbs)All E-Waste is collected by "ThinkGreen" and all CFL andTube Bulbs are collected by "Orange". Both Companies areregistered with the Central Environmental Authority65 27 66 101 259Metal Tins andCans (KGs)Given for recycling to the same collector as Plastic andPolythene179 872 383 415 1,849Composting (KGs) Composting is processed in the hotel and used for the gardenareas815 8,529 9,389 10,836 29,569Landfill Waste(KGs)Given to the Colombo Municipal Council for dumping 32,400 32,400 32,400 32,400 129,600Total Waste 1,059,033Total Waste Recycled and Reused: 88% 929,658Total Waste sent for landfill: 12% 129,375

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1386Conservation of BiodiversityCinnamon Grand stands in the concrete jungle of Colombo, thus the hotel has created a site for enhancing biodiversity in the form of a village inthe city namely the ‘Nuga Gama’. Throughout the hotel premises, we have created areas for small animal species, for example, the artificial pondat the Lagoon restaurant has a variety of fish and around the Lagoon garden we have natural species of animals and small habitats being formed.Case StudyThe village in the city“The Certification of NUGA GAMA as South Asia’s First Carbon Neutral® venue, by the Carbon Consultancy Company is a landmarkachievement for the Sri Lankan tourism industry. The Carbon Consulting Company is proud to partner the Cinnamon Grand in thisgreat undertaking. The achievement of this significant Green Milestone is yet another indication of the Cinnamon Grand’s continuouscommitment to push the boundaries of sustainability practices in the local hospitality industry. It is great to see a Sri Lankan Hoteltaking the lead in creating a carbon neutral facility” (Scientist and Nobel Co-Laureate Prof. Mohan Munasinghe).Cinnamon Grand Colombo believes and supports the conservation of biodiversity. The 200-year-old Nuga Tree which has beengrowing in the hotel premises stands as a testament to our commitment to nature. Our aim was to provide visitors an experiencebased on the ambience of rural life without leaving the city and hence the ‘village in the city’ emerged. The very fact that Nuga Gamahas infused the true village concept into its entirety demonstrates our commitment to environmental sustainability. The rural village ofCinnamon Grand was built on an environmentally sustainable platform, where eco-friendly practices were inculcated throughout theentire village.The lifestyle restaurant is set within the picturesque location of farmland, thatched mud huts, free roaming poultry and other paddyharvesting features. The environmentally friendly concepts practiced within the village are manifested in all aspects of the milieu. Thefloors, roofs and walls of the huts, community hall and the kade (shop) are built with eco-friendly substances such as mud, iluk andcoir rope.The farming practices established are organic and devoid of artificial fertilizers which are harmful to the environment. Drinks servedare from local seasonal fruits, hence no preservatives, while the cuisine, cooked on a firewood hearth in earthenware pots, isprimarily organic, using local spices, fruit, vegetables, meat, fish sourced from village suppliers or from the Nuga garden. The Nugagarden is enriched with about 45 varieties of plants species including indigenous medicinal herbs, leafy greens, fruit trees andspices. We also have a number of endemic floras such as the Honey Tree or Mee, of which bark and seed-oil are used to treatvarious ailments. We have created habitats for small birds and insects and all plants in the Nuga garden have been categorised andrecorded and plans are under way to categorise birds and butterflies.We do believe that having infused the best practices prevalent in a true Sri Lankan rural village, environmental sustainability becomesa natural phenomenon rather than one that has to be consciously put in place.Carbon Neutral Venue at Nuga Gama: One of our objectives was to create a Carbon Neutral Venue to encourage Carbon Neutralevents, meetings and conferences. Nuga Gama has now been certified as South Asia’s first Carbon Neutral Venue by the CarbonConsulting Company and endorsed by Professor Mohan Munasinghe. Cinnamon Grand Colombo with its passion to excel hopesto take it one step further with plans under way with our innovative Nuga Gama chef creating a typical village style menu wheresourcing, transport and preparation has a minimal impact on the environment.

PASSION sustainability report87 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Nuga Gama flora and faunaNuga Gama contains an intricate ecosystem,not often found within the constraints of theurban jungle. Over 46 indigenous species ofvegetation, evocative of Sri Lanka’s naturalflora, flourish at Nuga Gama under the careof Cinnamon Grand’s gardening team. SriLanka’s national flower, the blue water lily,blooms in abundance upon the serenesurface of the pond with the national tree, theIron Wood tree situated nearby.The profusion of medicinal herbs has thepotential to alleviate human ailments whilethe variety of spices infuses dishes witha taste of Sri Lanka. Lemongrass (sera),pandanus (rampe), curry leaves (karapincha),cabbage, red onion, spinach (nivithi), Indianpennywort (gotukola) and dwarf copper leaf(mukunuwenna) are some of the produceused in the daily recipes for breakfast, lunchand dinner.The concept also called for the planting ofendemic flora like the Honey Tree or Mee(Madhuca longifolia) of which bark and seedoilare used to treat various ailments, and theFish Tail Palm or Kitul (Caryota urens), whichproduces unrefined sugar called Jaggery andToddy, the alcoholic brew produced from itsfermented sap, a very popular evening drinkwith the villagers.Common Kingfisher with its daily catch at Nuga GamaLocal pomegranate fruit in the garden of Nuga GamaThe monitor lizard resting upon a barkin the Nuga Gama PokunaCommon Mormon, a member of theswallowtail butterfly familyThe blue Lotus pond at Nuga Gama PokunaNuga Gama’s starlet “Nugaa” the cowroams in the village

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1388134

PASSION89 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13sustainability reportNuga Gama1. Sri Lanka’s leading children’sauthor and illustrator Mrs. SybilWetthasinghe at the launch of her‘Friendly Banyan Tree’ book whichwas inspired by the 200 year oldNuga Tree at Nuga Gama. She alsodeveloped a special bookmark to begiven to children visiting Nuga Gama2. Cinnamon Grand’s ‘Village in theCity’3. The Nuga Gama ‘Ammes’, pluckinggreen leaves from the Nuga Gamagarden for the daily menu4. Sri Lanka’s leading puppeteerSulochana Dissanayake sharing afolk tale with students during a NugaGama visit5. The village headman at Nuga Gamademonstrates the traditional methodof washing hands26. Students exploring the flora at theVillage in the City - Nuga Gama,during the ‘Nature Note Plant Tour’56

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1390Creating Green Awareness amongStakeholdersCinnamon Grand celebrates WorldEnvironment Day 2012 with treeplanting projectsThe Cinnamon Grand Colombo team headedby General Manager Rohan Karr plantedbamboo saplings as part of the hotel’s WorldEnvironment Day 2012 celebrations. Thehotel’s Heads of Departments, Green Teammembers and associates participated in thecampaign.Cinnamon Grand lights up for EarthHourThe hotel observed Earth Hour on the 23rdof March 2013, in support of the internationalefforts to create awareness and encourage acall to action on climate change. CinnamonGrand Colombo’s non-essential lights were allswitched off from 8:30 PM to 9:30 PM, whileguests gathered in the lobby to light a candleand enjoy drinks to the sounds of an acousticmusician. The Village in The City, Nuga Gamahad a candle lit cultural show in honour of theevent.World Environment Day 2012 – Greenawareness for the hotel’s suppliersAs part of Cinnamon Grand Colombo’scommitment to create a green mind setamongst all its stakeholders, the hotelcreated an awareness-wall focusing onfood, water and electricity waste. The areaconcerned was a focal point frequently usedby the hotel’s suppliers (approximately 200suppliers), staff and patrons.O-zone Day children’s workshopCinnamon Grand Colombo hosted aneducational workshop for 35 children inrecognition of ‘International Day for thePreservation of the O-zone Layer’. Speakersfrom the National O-zone Unit educated thechildren on detrimental trends of O-zonedepletion and the importance of sustaininggreen habits. They were also treated to a‘Grand Tour’ of the hotel. The workshop waspart of the EarthWatch initiative organisedby the hotel for the Funday Times Magazine(Sunday Times Kids supplement) and washeld on the 8th of September.For the Love of the Planet – Children’sworkshopA total of 40 children were treated to amorning at Nuga Gama for a fun filledawareness session on caring for theenvironment. Under the theme ‘For the Loveof the Planet’, the session focused on instillingin children the importance of making dailychoices that impact the earth positively, in afun and interactive manner. After being offereda welcome drink, the children were taken ona nature tour of Nuga Gama with in-depthexplanations on the diverse fauna and flora. Inaddition, an educative and entertaining videowas presented elaborating the importanceof being sensitive to the environment andimparting small measures they can take topreserve an eco-balance. The children alsoengaged in a ‘paint your pottery’ sessionby painting a till, which emphasised thesignificance of ‘saving’, with reference tonature and participated in an ‘eco-shopping’,game intended at enhancing environmentalawareness. An interactive session followed,after which snacks were served. CinnamonGrand Colombo hosted the session inassociation with the Earth Watch clubmembers of the Funday Times (Sunday TimesKids supplement) as part of the hotel’s effortstowards making knowledge and learning funand accessible to children. The page, whichhas environmental topics and tips for children,has a membership of 16,500 children andis developed by the Cinnamon Grand’sSustainability Division.Eco-Friendly Holiday workshop forchildren: Earth Watch initiativeCinnamon Grand Colombo hosted a HolidayWorkshop for 45 kids together with theFunday Times Magazine. The cultural andeducational workshop was based on localhandicrafts and art. A pottery and claydemonstration was conducted by AnuradhaCeramics giving children the opportunity ofmaking their own creations. The second partof the workshop was a tie -dye demonstrationconducted by a proficient artist, followed by asession on environment and children.World Water Day workshop for childrenCinnamon Grand Colombo treated 30children aged 12 to 14, to a morning atNuga Gama for a fun filled water awarenesssession, in honour of World Water Day. Thesession focused on educating children on theimportance of making daily choices regardingwater preservation and management. Aspeaker from the National Water Supply &Drainage Board addressed the kids on waterrelated facts and their contribution to carefulconsumption. The day also included aneducative video, an interactive session and agame that involved creating slogans for waterconservation. Snacks and fellowship followedin a truly educational day out. The sessionwas hosted by the hotel in association withthe EarthWatch page on the Funday Times(Sunday Times Kids supplement).

PASSION sustainability report91 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Nature Notes Plant Tour For Studentsat Nuga GamaThe Nature Notes Plant Tour is conductedperiodically for school children, educatingthem on the extensive array of indigenousplants within an intricate eco-system createdat Cinnamon Grand’s Nuga Gama. Thechildren have the opportunity to see over 56species of plants, indigenous medicinal herbs,vegetables and fruits, which are categorisedwith medicinal and other propertieshighlighted in simple sketches.World Environment Day Children’sWorkshop: (Power of Art awardceremony).Cinnamon Grand Colombo held the NugaGama ‘Power of Art’ award ceremony for 30children from various parts of the country. Thecompetition encouraged children to capture,through art, the unique rural village concept,right in the heart of the city, whilst providing aplatform to showcase their talent. Cash prizesand trophies were presented to the winners.Launch of the Friendly Banyan Treebook for childrenSri Lanka’s leading author and illustrator ofchildren’s stories, Sybil Wettasinghe, launchedher book “Friendly Banyan Tree” to encouragechildren to do their part in conserving trees.The book, inspired by the 200 year oldBanyan tree at Nuga Gama, is an enticingtale on the need for conservation. The book isavailable at Nuga Gama.Implementation of the eco-friendlytravel poster campaign promoting ecotravelfor in-house guestsCinnamon Grand Colombo launched the‘Eco Travel’ poster campaign on the 12th ofSeptember at the Travel Desk and BusinessCentre of the hotel. This highlighted theintroduction of the availability of eco- friendlyhybrid cars for guests to hire.‘No Time To-Waste’ campaign forschools:Cinnamon Grand Colombo launched“No Time To Waste,” an environmentalcampaign for Colombo schools, as part ofour commitment to share knowledge andenvironmentally friendly practices, with theyounger generation. This campaign was thefirst of its kind for a city hotel in Sri Lanka.The initiative began at Ladies’ College with100 students participating in the interactiveand educational E-Waste awarenesssession, which was conducted by the hotel’sGreen Team members in collaboration withThink Green (Pvt) Ltd. The objective ofthe campaign was to encourage E-Wasterecycling amongst schools. This programmewas extended to numerous schools with thesuccess of the initial campaign as depictedbelow.- British School of Colombo - 258 students- St. Bridget’s Convent - 500 students- Asian International School - 100 studentsSanta’s Workshop:The hotel hosted Santa’s Workshop for the4th consecutive year during the Christmasseason which saw the participation of 230kids with a line-up of educational, creative,festive and fun experiences tailored speciallyfor kids between the ages of 6 and 12. Theworkshop focused on unique Christmastraditions in Sweden, Switzerland, Germanyand Italy with the various Christmas myths,legends, characters, decorations and fooditems pertaining to each country. Activitiessuch as creating decorations out of recycledmaterial and narratives engaged the childrenin the theme of sustainability and recycling.

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1392134

PASSION93 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13sustainability reporte-wASTE1. Head of Marketing -Think Green (pvt)Ltd. Mr. Shivaha Muthuramalingamhanding over the E-Waste disposalbox to Cinnamon Grand’s GeneralManager Rohan Karr at theE-Waste management and recyclingawareness seminar. This is a first ofits kind initiative in a city hotel2. Media coverage on the ‘No time towaste’ campaign3. Heads of Departments collectingE-Waste from their respectivedepartments for proper disposal4. Cinnamon Grand’s Green Teamhanding over an awareness posteron E- Waste to a student duringthe ‘No Time To Waste’ E- Wasteseminar at Ladies College25. Cinnamon Grand’s AssistantManager, Rajitha Amarasinghehanding over the hotel’s firstE-Waste collection to Think Green(pvt) Ltd.6. Grand’s Green team memberShashi Jayawardena addressingthe students of Asian InternationalSchool, during the E-WasteAwareness Programme56

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1394Our PeopleThe team at Cinnamon Grand Colombo is thecornerstone of the hotel and our passion todeliver top quality service to guests requiresthe commitment, enthusiasm and dedicationof every member of our work force. Withchanges in the business environment and theentry of new international hotels, CinnamonGrand Colombo are one step ahead andready to embrace the competition, challenges,opportunities and new trends that are sure toensue. In addition to the core processes thatunderpin our daily work, we provide a rangeof employee benefits that assist them in otheraspects of their lives including their health,finances, recreation and their life outside theworkplace. With increased competition, wehave the advantage of being ahead, by beinga profitable company and therefore beingable to provide competitive salaries that arealways above minimum wage. We have alsoreached the impressive figure of Rs. 42,037service charge in December 2012 and -haveset a target of Rs. 50,000 in the followingfinancial year. We are passionately driven bya culture of continuous improvement withhigher benchmarks, quality standards andproductivity.Cinnamon Grand Colombo is driven andguided by the five pledges cascaded bythe John Keells leisure Group, of caring forour people and community, empoweringour subordinates and colleagues, alwaysgetting things right the first time, standing outwherever we go and striving to be green. Thehotel continues to instil the five pledges inassociates through the induction programmeand continuous awareness programmesthereafter.Management ApproachCinnamon Grand Colombo’s greateststrength is in its associates who functionwithin a people centric hospitality industry.We believe that it is the attitude, dynamismand motivation of our dedicated 1,200 strongemployee force that makes them one of thefinest in the industry.Associates are carefully hand picked,encouraged and inspired so as to kindleinnovation, distinction and create benchmarksfor others to aspire to. We strive to secure aknowledge driven culture, where associatesare constantly exposed to world-classstandards, developing their knowledge,skills and talents. Training and developmenttherefore, is a key element of our hotel’s tenet.We embrace a non-discrimination policyand are an equal opportunity employer thatthrives in the multi-cultural and multi-ethnicenvironment that our team infuses into ourdaily work. We also have within our team,differently abled individuals that work alongside their colleagues, integrating themselvesinto regular society and enabling them alivelihood.We place importance in nurturing a healthywork/life balance and make constant effortsto introduce palpable measures to ensure thatboth personal and career goals are met. Westrive to maintain our human capital that hasbeen and will continue to be the crux of oursuccess, thereby motivating us to prioritisetheir safety, security and wellbeing.Age Wise Analysis of EmployeesGender Wise Analysis of EmployeesBelow 30 - 37%Between 30 & 50 - 57%Above 50 - 6%Male 90%Female 10%Competitive salaries, incentives and benefitsattract the crème de la crème of industryprofessionals as well as aspirant youth toour team but ultimately, it is the CinnamonGrand’s sense of family, caring andcamaraderie that ensure their stay.We conduct annual employee satisfactionsurveys, namely the ‘Voice of EmployeeSurveys’ so as to better gauge the pulse ofour associates and address their concerns.Cinnamon Grand Colombo has a total staffstrength of 1,224 as at 31st March 2013.

PASSION sustainability report95 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Age Wise Attrition AnalysisGender Wise Attrition AnalysisBelow 30 - 67%30 to 50 - 30%Above 50 - 3%Male 90%Female 10%Category Male Female TotalHeadCountAVP &4 0 4AboveManager 7 1 8Assistant 5 2 7ManagerExecutive 93 27 120Non-998 87 1,085Executive1,107 117 1,224Employee Population AnalysisCinnamon Grand Colombo’s age analysisdepicts employees below the age of 30 at37% whilst 57% comprises the 30 to 50category. The hotel focuses on creatingemployment opportunities for youth byencouraging school leavers to join theindustry. We have embarked on a number ofprojects giving preferences in employmentopportunities to youth below the age of 30years and hence building our capacity. Wealso encourage more female associates in amale dominated cadre.Employee Attrition AnalysisThere is a decrease in the employee attritionof Cinnamon Grand Colombo from 19.5%in 2011/12 to 17.5 % during the year. Anincreasing number of associates considertheir occupation at the Grand to be a careerrather than a mere job. Associates aresteered towards career development with ablysupported through training and developmentprogrammes. Exposure to overseas trainingwith the Emirates Academy and the prestigeof working in the Best Five Star City Hotelmotivates associates, thus improving ourretention.Employee Survey‘The Great Place To Work’ (GPTW) is aninternational brand, which conducts surveyswith intermittent internal surveys, such asthe’ Voice of Employees’ (VOE) carried outby the hotel. The target for the GPTW surveyis 80%, which we surpassed, where as inthe VOE survey we achieved 80%. The VOEsurvey results are sent to the head of eachdepartment and focused group discussionsare conducted addressing areas of concernthat require immediate attention and action,after which action plans are drawn up andfollowed. A 360-degree feedback processis used as a development tool coveringmanager and assistant manager levelsconsisting of direct reports, peers andsupervisor feedback, which is conductedannually and is instrumental to the appraisal.Training and DevelopmentCinnamon Grand Colombo, beingtrendsetters in the hospitality industryis a passionately driven and focusedexceptional team working on the ethos of“Service beyond expectation”. Training anddevelopment covers all areas of focusedtraining, capacity building, induction anddevelopment, enhancing their present andpotential roles. AHPPLC have spent a total of136,507 hours of training of which CinnamonGrand Colombo spent a total of 77,964 hoursand Cinnamon Lakeside 58,543 hours.The table below depicts the total traininghours for Cinnamon Grand Colombo. Thetotal training hours for the financial year underreview is 77,964 hours, which is an increaseof 58% in comparison to the previous year.Category 2011/12(Hours)2012/13(Hours)Senior Executive 2,471 3,815Junior Executive 2,956 14,728Non-Executive 23,284 31,568Casual 20,250 27,853Total 48,961 77,964Training and Development Initiatives• Revamp of Minimum QualityStandards (MQS) and StandardOperating Procedures (SOP)We developed trainers to train the MQS

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1396and SOPs covering all departments,thereby having instructors for eachdepartment. During the past oneand a half years, we conducted aTAD trainer programme (Training,Assessment & Development) whereheads of departments selected potentialcandidates from each department andtrained them on a two-day programmeand upon completion, they becamecertified trainers. TAD trainers in turntrain their departments on SOPs whichare monitored. The MQS & SOPs wererevamped about one and a half years agoto be user friendly with unnecessary SOPstaken out and revised to meet the newstandards. This was carried out with theassistance from the Emirates Academy ofHospitality Management.• Individual Training: This is carried outon a departmental basis, depending onthe requirements of individual associates.• Training Calendar: The TrainingCalendar is prepared a month ahead withall the training programmes organisedaccordingly. Training programmes areprepared and developed depending onthe training needs analysis from appraisalsand requests from individual departmentsand spot audits. The training calendaris sent to the Heads of Departmentswith the training schedule available forallocation of staff. In some instancesthe training department allocates theassociates.• Soft Skills: In general, there seemsto be a deficiency of soft skills in thehospitality industry. Most associates havethe knowledge of products and serviceswith years of experience, but possesspoor communication skills in terms ofbody language, eye contact, posture andways of presenting oneself to guests. Acouple of soft skills programmes weredeveloped to overcome and educateassociates. One such programme-is“Cinnamon Magic”, a 10 module sessionaimed at team building with a focus oncustomer service. Departmental softskills programmes are also conducteddepending on necessary requirements.• Induction and OrientationProgramme: A three-day comprehensiveprogramme is conducted for all newrecruits where we instil in them their valueto the hotel including a focus on attitudeand perception. We also provide productsand services knowledge of the JohnKeells Group and the hotel, covering itshistory, F&B, rooms, additional servicesthat Cinnamon Grand has to offer, thedepartments and department heads aswell as a familiarisation of the hotel .• Chauffeur Training: The Walkers tourschauffeurs are given a basic knowledgeabout Cinnamon Grand. The inductionprogramme is tailor made to a one-daysession covering all chauffeurs thus,adding professionalism in their duties withplans for recurrent programmes in thefuture.• Competency Framework: Twoappraisals are conducted for ourassociates; annually and mid-year. Inthe latter, the associate’s competenciesand objectives, which are in line with theJohn Keells Leisure Group’s Vision andPledges, are fed into the system. At theannual appraisal, all associates conductself-appraisals that depict whether theassociate has met, exceeded or fallenbelow expectations in competencies. Theannual appraisal is used to determinepromotions, salary increments, andtraining development.• E-Learning Platform: The E- learningplatform was launched six months agoand is handled by the Group’s HR. Alltraining and development requirementsand requests are hosted online inthe system. The E- learning platformallows associates to request for trainingprogrammes as well as being nominatedfor training programmes by the head ofdepartments.• Partnering with Emirates: The EmiratesAcademy of Hospitality Management(EAHM) is one of the leading providersin hospitality education in the MiddleEast with a full licence accorded by theMinistry of Higher Education and ScientificResearch of the UAE and accredited bythe Institute of Hospitality UK and THEICE, Australia. A team of 71 associatesfrom Cinnamon Grand and 20 fromCinnamon Lakeside were selected fortraining at the Academy. The selectedteams had the opportunity to experienceinternational exposure and training atthe world’s only seven star Burj Al ArabHotel, a member of the Jumeriah luxuryhotel chain. The team participated incomprehensive and intense trainingprogrammes at the state of the artlearning facility and practical training inthe high end properties within the JumeiraGroup. This gave them much-insight intocultures, practices and attitudes prevalentwithin international hotel chains.• Development Centres: This is part ofan ongoing people development initiativeby John Keells in conjunction with EAHMfor managers, assistant managers andexecutives. Tests are applied to gauge thestrengths and weaknesses of associatesand development programmes areassigned based on the results. A personal

PASSION sustainability report97 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13development plan is drafted through thisassessment, which assists the associateswith the necessary skills required to moveto the next level.• English Classes for Associates: Thehospitality industry has a major gap inspoken English. Therefore, we conductEnglish classes on a practical andongoing basis. In addition to departmentalprogrammes, the hotel’s main focus ison operational areas such as front office,housekeeping and F&B. The level ofEnglish of associates is evaluated duringa one - on - one interview and ratings areestablished in order to tailor make Englishclasses for different levels.A Standard Operating Procedures training sessionfor associatesMr. Kamal Elleperuma the Chief Engineering Officerof Ceylon Electricity Board, Colombo addressingassociates on energy usageA session on first aid training for front office staffFood & Beverages training for associatesCinnamon Magic - Cinnamon Grand’smind set training programmeAn interactive session at themonthly Green Forum for associates

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1398134

PASSION sustainability report99 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Our People1. The Cinnamon Grand puts together aninimitable show for the John Keells InterCompany Rugby 7s, as the Moulin Rougewas brought to life2. Cinnamon Grand’s General ManagerRohan Karr together with the associatescheering on the Grand’s Cricket Teamat the annual Battle of the Spices playedagainst Cinnamon Lakeside3. Cinnamon Grand’s associates cometogether in a chorus of religious praise witha session of Bhakthi Gee during the vesakfestivals held at Nuga Gama4. A fancy dress parade at the Inter-Departmental Cricket Sixes5. General Manager Rohan Karr presentingcash prizes to associates at the GreenRaffle Draw held in celebration of theGrand’s seventh birthday26. The Engineering Mascots at the Inter-Departmental Cricket Sixes of CinnamonGrand performing to the theme of‘sustainable entertainment’56

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13100Internal awards and recognition ofassociatesAssociate quarterly Awards: Associatesare recognised on a quarterly basis foroutstanding achievements in terms ofcommitment, productivity and contribution tothe common goal of making Cinnamon GrandColombo the Best Hotel in the City and arenominated by their respective departments.They are rewarded at the staff meeting heldevery quarter. Categories of award winnersinclude: Associate of the Quarter, Associateof the Year and GM’s Special Award. Thenominees as well as the winners are awardedwith a cash reward.Service Awards: The Service AwardsCeremony is held every year to rewardassociates that have served the hotel for along period of time. Associates are givengold sovereigns in proportion to their yearsof service (up to 35 years). This AwardsCeremony is held in a grand manner inrecognition and appreciation of their longservice and dedication.Staff Facilities and Benefits• Staff uniforms: All associates areprovided with uniforms laundered by thehotel laundry.• Duty meals for staff: All associatesare provided with duty meals duringtheir shifts including breakfast, morningtea, lunch, evening tea, dinner and amidnight snack. Lunch and dinner areserved in buffet style with special menusperiodically.• Pastry & bakery items for associates:Senior and Junior Executives are entitledto purchase cakes at a discounted rateincluding selected pastry items.• Funerals of associates and theirimmediate family members: Associatesare given transport for the funeral, a cashdonation, dry rations and a flower wreath.• Wedding gifts: A wedding gift ispresented to newly-weds.• Staff bonus: Bonus is paid annually inDecember for permanent and contractassociates who have completed one yearof service.• Night transport for staff: Transport isprovided daily for associates who worklate shifts.• Christmas gifts for associate’schildren: Christmas gifts are givenannually to associate’s children that arebelow the age of 12.• Medical checkups for associates:The following medical Examinations areconducted annually for our associates:Food Handler’s Medical Examination,Executive Health Check and MedicalExamination for staff over 40 years.• Dormitory facilities for associates:The Hotel provides dormitory facilitiesfor associates when they are unable togo home, or boarding, due to transportissues or time limitations.• Staff Birthdays: A birthday treat isoffered to all permanent and fixed termcontract staff that have completed 5years of service. The associate alongwith immediate family members areentitled to dinner at one of the restaurantsas identified by the Management. Inaddition, they are entitled to an overnightstay in one guest room allocated by theManagement, with a buffet breakfast.Non-Executive, Junior Executive andSenior Executive level associates aregiven a free 1 kg cake with complimentsfrom the hotel. Senior Executive levelassociates are given a box of chocolateswith compliments from the hotel. They arealso given a card signed by all the Headsof Departments.Employee WellnessCinnamon Grand’s relentless efforts tomaintain a healthy work life balance isdemonstrated by the fun filled activities andget-togethers organized for -associates.Grand CarnivalThe annual staff get–together for theCinnamon Grand associates and their familieswas held at the Sathutu Uyana. This is oneof the events that the associates and theirfamilies get the chance to socialize with theircolleagues and families. Approximately 2400participants including associates, spousesand children attended the event, with plentyof fun, game stalls and prizes to ensure amemorable day for associates and theirfamilies.Inter Department Cricket 6’sThe Annual Inter Department Cricket 6’sa sporting battle among the departmentsat Cinnamon Grand was successfullyconcluded at the Burgher Recreation Club(BRC) Grounds. Team Angsana emerged aschampions in the Male category, whilst TeamHousekeeping (Female) emerged as winnersin the Female category. This event was oneof the several entertainment activities plannedfor the associates of the hotel.

PASSION sustainability report101 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Annual Cricket CarnivalThe Battle of the Spices, an annual crickettournament was organised betweenCinnamon Grand Colombo and CinnamonLakeside Colombo. The match, this year,was sponsored by Cinnamon Grand andheld at the Moors Grounds during which theCinnamon Grand Team emerged champions.Open dialogueWe have a good relationship with the staff andmaintain an open door policy enabling themto communicate directly with the GeneralManager, should they wish. A box named“Tell GM” serves to deliver written grievances,opinions and suggestions of associates.These are collected and addressed by theGeneral Manager, with ratifications beingposted on a board next to the box.Sustainability Awarenessprogrammes for Associates• E- Waste poster campaign: A specialposter awareness campaign waslaunched by the sustainability division,emphasising the prudent management ofe-waste to commemorate Earth Day, forassociates and also for other stakeholdersvia social media. A special E-Waste boxis kept at the staff entrance to encourageassociates to dispose e-waste.• E-Waste awareness campaign forGreen Team members: An awarenesscampaign on the importance of E-Wasteas a part of the hotel’s ongoing awarenesscampaign was conducted for 20 GreenTeam members by Think Green (Pvt) Ltd• E-Waste awareness seminar forassociates: Cinnamon Grand’s pledgeto ‘ Be a Greener Corporate Entity’,launched an E-Waste campaign for222 Senior Executives in collaborationwith Think Green (Pvtf) Ltd tocommemorate World Environment Day2012. The hotel was provided withe-waste disposal boxes, which enabledassociates to dispose their E-Waste inan environmentally responsible manner.Cinnamon Grand is proud to be a pioneerin E-Waste recycling amongst the cityhotels.• Water wastage reduction seminar forassociates: The hotel’s SustainabilityDivision invited a team of personnelfrom the National Water & DrainageBoard (NWSDB) to educate staff on theimportance of reducing water wastagewith an apt title ‘ How to reduce yourwater bill at home and office’ with theparticipation of 100 associates.• Energy efficient seminar forassociates: An energy saving seminarwas conducted for 108 associatesfrom departments that deal with heavyelectricity usage. The guest speaker wasthe Chief Engineering Officer of the CeylonElectricity Board, Mr. Kamal Elleperumawho conducted an interactive seminareducating associates on the importanceof energy conservation and its impact onthem on a personal and domestic level.• Breast Cancer awareness seminar:A breast cancer awareness seminarwas held for the benefit of 35 femaleassociates with the aim of creatingawareness on this ever prevalent threatto all women. Focused on a messageof hope and inspiration rather thanone of despair and fear, the associateswere educated by speakers from theNational Cancer Institute, Cancer ControlProgramme and Mithuruwela (a voluntaryorganisation). A special informationbooklet developed by Cinnamon Grandin association with the National CancerControl Programme was also distributedto all female associates at the hotel.• Work safety awareness seminar:Over 200 associates including all Headsof Departments attended a seminar on‘Safety Procedures at Work’. The Headof the National Institute for OccupationalSafety and Health, Dr. ChampikaAmarasingha emphasized the importanceof safety as an occupational discipline,creating awareness and caution. Shespecified occupational hazards, citingemployee’s and employer’s responsibilitiesin ensuring safe working conditions, whileadvising practices to minimize accidentrisk.• Food waste reduction seminar:The Assistant Director of the CentralEnvironmental Authority highlighted theimportance of food waste managementand its implications in the hospitalityindustry. The seminar was attended by allstaff members including chefs.• Grand opening of Green Corridor: TheCinnamon Grand Green Team launched aunique sustainability awareness campaignfor associates with the opening of the‘Green Corridor’. The information wallin the corridor highlights the state of theplanet, the importance of sustaining greenhabits and the goals of the Green Teamin reducing the hotel’s carbon footprint,thereby creating a learning platformthrough an on-going sustainabilityawareness campaign.• Monthly green forum: A platform oflearning and awareness supported byleading scientists and experts in the fieldof environmental conservation is held forthe staff.

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13102• John Keells sustainabilitypresentation: John Keells Head ofSustainability & Environmental Resourceand Management Mr. Chulendra DeSilva presented a strategy of corporativesustainability practices within the Groupfor Cinnamon Grand’s Heads of theDepartments and Green Team members.• Green Raffle draw: The CinnamonGrand’s Green Team launched aunique, first of its kind raffle draw forits associates, in celebration of theGrand’s seventh birthday. Aptly titled the‘Haritha draw’, this initiative, intendedat creating awareness, engagementand hype on being green, saw 1 in 20people walk away with prizes. The draw,conceptualised and implemented by theGreen Team, saw the sale of 4,086 ticketsto associates, raising an impressive totalof Rs.430,000. This sum entitled 204lucky associates to win Rs.2,000/- eachat the draw finals, held on the 26thof November 2012, coinciding withCinnamon Grand’s birthday.• Sustainability safety awarenessposter campaign: Cinnamon Grand’sSustainability Department launched aposter campaign on work safety, to createstaff awareness. The initiative targeteddepartments that had high work relatedaccidents/injury rates.Work Safety awareness poster campaign launched for associates

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13104134

PASSION105 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13sustainability reportgREEN CORRIDOR1. Inauguration of the Green Corridor byCinnamon Grand’s General ManagerRohan Karr and Heads of Departments2. Green awareness communicated to theassociates through the Green Corridor3. Cinnamon Grand’s Green Corridorcampaign ‘We Dream in Green’4. Hotel’s Green Team5. Cinnamon Grand’s General ManagerRohan Karr, President- Property GroupJohn Keells Holdings Suresh Rajendraunveiling the Green Corridor6. The water saving champions in the GreenTeam256

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13106Product ResponsibilityManagement ApproachWe strive to continually increase thesustainability of our product offering, keepingin mind its toll on the ecology and economy,while continuously creating products andservices that deliver on our brand promise ofaffordable indulgence for all ages.As Sri Lanka’s largest hotel property offeringa diversity of luxurious products and services,we understand the need to assess thesustainability of our processes and productsacross their entire life cycles, to ensure thehighest health and safety standards, resourceefficiency and cleaner production strategies.Our purchasing policies underpin theimportance of eco-friendly products that takeinto consideration the complete product lifecycle from production, to product use, todisposal and reuse. We work in collaborationwith our wide network of suppliers to developnew sustainable products with valuesascertained on the basis of environmental,business and social sustainable indicators.This extends to our attitude towardscustomercare and focus, which is of thehighest quality.Products and services are the lifeline ofthe hotel having an influence on economicperformance as well as an impact on thecommunity and the environment. CinnamonGrand Colombo adheres to the policy ofthe John Keels Group of striving to maintainproducts and services at the higheststandards through embracing industry/corporate best practices and compliance withall relevant local and international statutoryand regulatory requirements.Our product is about diversity and reasonablepricing, thereby we are able to deliver highend as well as average facilities catering for awide variety of people without compromisingthe quality of our products and services.Product and service responsibility initiativesundertaken by Cinnamon Grand Colombo areas follows.• The hotel purchases all meat productsfrom Halal certified suppliers to meet therequirements of our guests which includesspecial care in the preparation of food.• We adhere to the supply chain policy ofJohn Keells as well as one developed forCinnamon Grand Colombo for additionalsuppliers. This includes how we sourceour suppliers, which ensures that childlabour is not utilised in the process.Further we adhere to the AIS standards ofadvertising and have a high percentage ofsuppliers from the SME sector.• In keeping with our promise of guilt-freeindulgence, we launched the DiabeticMenu in response to a growing demand,as a result of escalating health threatsposed by diabetes. The menu is availableat the hotel’s restaurants and consistsof 30 dishes, including everything fromstarters to desserts. We are the first in SriLanka to develop the Diabetic Friendlymenu and are now in the process ofdeveloping an organic menu for NugaGama, which is Carbon Neutral Certified.In addition, we also offer vegetarianoptions in all our restaurants and a specialhealthy menu option for kids.• Cinnamon Grand endeavours to improveits services and innovations, thusproviding guests with an unforgettableexperience. Customer feedback isfrequently gathered to gauge satisfactionlevels and identify ways to enhance ourproducts and services. Guest commentcards in rooms and restaurants arecollected and analysed daily. TheRooms Division, which comprises ofhousekeeping, laundry, recreation,reception and front office, interactswith at least 30 guests daily and theirfeedback is passed onto to the Headof the Department, who shares it at themorning meeting. Customer feedback isalso monitored through tripadvisor andfacebook.• Customer complaints are receivedthrough guest comment cards. Allcomplaints are logged into the systemand categorised broadly as F&B and frontoffice. Complaints are dealt with at theHead of Department morning meetingsand a response to the customer isprovided within 24 hours.• Nuga Gama’s organic garden produceis used daily in at least one dish, thusproviding guests with alternative organicoptions for food.• Food safety is paramount in ourorganisation and we have been certifiedwith ISO 22000 for Food SafetyManagement system as well as the FiveCrowns.• Cinnamon Grand Colombo monitors it’sranking on www.tripadvisor.com and weare leading in rankings among the cityhotels in Colombo.• Bi-annual brand audits are carried outwith the audit team experiencing andobserving the services at the hotel. F&Bconducts self-audits monthly as well asreviews by ‘Mystery Guests’ sourced bythe General Manager.

PASSION sustainability report107 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13• Standards are maintained withbenchmarking against internationalcounterparts such as Shangri-La.Our F&B managers have internationalexposure and with the training contractwith the Emirates Academy of HospitalityManagement, teams are sent to Dubaifor training and site visits to various hotelsand some of our members were selectedto visit the vineyards of France. We havediverse internationally recognized chefs,namely Italian, Indian, Thai, Japanese andKorean that impart their knowledge andexpertise.• We sent our housekeeping staff tothe Emirates Academy of HospitalityManagement for intensive training.• The hotel has comprehensive trainingfor all associates in all Minimum QualityStandards (MQS) and Standard OperatingProcedures (SOP). SOPs are reviewedperiodically based on feedback researchand market needs.• Cinnamon Grand Colombo maintains aMinimum Room Rate Policy.• The organisation has extensive socialmedia channels including a fully-fledgedweb presence with the ‘Grand goesDigital’ launch, listing the hotel on foursocial media platforms; Facebook (365day presence), Twitter, Google+ andLinkedIn. We have an aggregate followingof 13,130 followers on the above mediachannels. We review the content onthe social media channels. We recentlylaunched a research strategy to segmentour markets on how we communicateand if fans wish to engage with the hotel.We also actively maintain the CinnamonGrand Blog, including channels for onlinesales Hotel website, Agoda and Booking.com. Our presence is also maintainedin new channels namely B2B corporatetravel platforms via the consortiaprogramme through GDS, Expedia,Hotels.com, Egencia, Venre, Hotwire,eLong.com, Make my trip and HotelTravel.• Cinnamon Grand has regular relationshipbuilding activities with customers. Wehost various events; Secretaries’ party forthe year, GM’s cocktail held annually fortop-level clients and sales teams entertaincustomers on a weekly basis including atour of the hotel.• Strengthening existing partnerships withtour operators is done on personal salesvisits, locally as well as overseas.• The hotel hosted a number of VIPsincluding ministers of state, governmentand NGO VIPs, top business executives,religious leaders and sports personalities.VIP banquet events held for VIPs are alsocommon at the hotel. For example, theAustralian Minister of Foreign Affairs, theSingaporean Foreign Minister, the Asst.Secretary General of United NationsAjay Chhibber, the President & CEO ofMovenpick Jean Gabriel, the Archbishopof Western Australia, Roger Koelmeyerand Cricket commentator, the Late TonyGreig.• Cinnamon Grand Colombo introducednew menus for Tao and Room Service.Each restaurant offers a weeklyindulgence, such as the Epicurean Menuat Tao, the Vegetarian buffet at Chutneyand the popular Sunday brunches, toname a few. The hotel has its signatureSeven Days of Indulgence where all thesignature restaurants have promotionalmenus, which is different to the dailymenu. Notably, we have the highestnumber of buffets in the city.• The Company has a variety of qualityfood promotions affordable for allages enticing our customers to enjoythe special themed food on offer. Thefood promotions held over the yearincluded the Jumbo Junk Promotion, theInternational snack menu for T20, theGerman Promotion, the Pie Promotion,the Pakistan Promotion and the ChinesePromotion.• Cinnamon Grand has specialised trainingfor associates, on how to deal withphysically challenged guests. All publicareas are accessible by wheelchair andwe have two state of the art bedroomsequipped specifically for differently abledguests, as well as a dedicated car parkspace.• The Cheers Kids Club is a designatedplay area for children with dedicated childminders for supervision. The objective ofhaving the playroom is to deliver on ourbrand promise of delivering indulgencefor kids and providing parents a relaxingexperience with their kids.• Cinnamon Grand has a doctor on call24/7 with two daily clinic visits to thehotel. The nurse is on call 24/7 and isbased at the hotel for any consultation oremergencies.• We have multilingual staff to handle anylanguage requirement of the guestsincluding speakers of Japanese, German,Italian, Thai, Hindi and Tamil.• Cinnamon Grand Colombo has beenaudited by several foreign travelcompanies including, Emirates Holidays,Kouni, Thomas Cook, Meirs, Dertour,Rewe and TUI.

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13108CommunityManagement ApproachTrainingAt Cinnamon Grand, we place importance onsharing knowledge and nurturing individualswho wish to excel in a career in hospitality. AsColombo’s largest 5 star property, there is asignificant demand from industry newcomersto gain exposure and training at the hotel.As part of Cinnamon Grand’s communitysupport:• We provide training opportunities to hotelschool students for the intern phase oftheir learning programme, which providespractical, on-the-job training.• In association with NAITA (NationalApprentice and Industrial TrainingAuthority), we provide trainingopportunities for up to three years, tothose who aspire to enter a career inhospitality.• We provide training for Food andBeverage staff of certain organisationsand add value to their performance byproviding 5 star hotel exposure (e.g.The Cafeteria workers of the Sri LankaNavy and the Police Presidential SecurityDivision)• We also provide school children/studentsa chance to visit and see our chefs inaction and on certain occasions to have‘hands on experience’ on certain areas ofcooking.Corporate Social Responsibility (CSR)Corporate social responsibility is ensuringthe co-existence and the true balance ofour responsibilities to the environment,society and the economy. Cinnamon Grandis committed to operating responsibly inlocal communities and for us, this meansbeing a responsible and active member ofthe communities in which we operate whilelooking for opportunities to make a positivedifference.Cinnamon Grand Colombo launched‘Spread A Little Sunshine’, its own uniqueCSR initiative in 2007. The objective of thisinitiative is to consolidate the concept ofsocial responsibility within the organisationand elevate it to a higher platform. A specialcharity committee was established to launchthe new vision of spreading a little sunshinewith voluntary contributions from associates.The team is made up of associates fromvarious departments of the hotel dedicatingtheir time to working on projects such asNature Watch (Environment), Skills for Life(Education, Training & Development) and Coinfor Cure (Health & Sanitation).Cinnamon Grand’s extensive work in ourcommunities involves volunteers from acrossour business and spans a multitude ofcommunity projects to include:• Uplifting Destitute Senior Citizens:The hotel provides monthly dry rationsand medicines to destitute senior citizensof the Dias Elders Home.• Citizens for a Secure Sri Lanka: Thehotel sponsored “Walk for Children” andprovided refreshments for the Secure SriLanka seminar held in the hotel, whichcreated awareness on the need for aSecure Sri Lanka for our children.• Rainbow Children’s Home, Kelaniya:The hotel donated used bed linen, towels,pillows, pillow covers and other linenitems to this home, which was establishedby Dr. Lalith and Hirantha Mendis fororphaned and abandoned children.• Don Bosco Boy’s Home: The annualChristmas celebration for 61 boys fromthe Don Bosco Boy’s Home in Maggonawas held for the seventh consecutive yearat the hotel with fun filled activities whichwere enjoyed by all participants. The boyswere gifted with sports and swimwearwith an invitation to take a dip in the pool.The associates conducted a fun andgames session at Nuga Gama, followedby a buffet lunch and a trip to Excelworld accompanied by the Green Team.In addition, the boys were treated to aChristmas party where they were giftedwith recreational gifts, books, stationary,school uniforms and shoes for the entireyear. Our staff, across all departments,are credited with taking time out of theirbusy seasonal schedules to create thismemorable experience for the kids.• Christmas party for under privilegedkids: Cinnamon Grand, in collaborationwith the Interact Club of AsianInternational School, hosted a Christmasparty for 25 under privileged children. Theparty was held in the hotel with a specialsnack buffet, music and Christmas carolsas well as a tour of the hotel’s seasonallights and decorations.• Mullaitivu kids visit: The hotel hosteda dinner at Nuga Gama for 30 studentsfrom Mullaitivu visiting Colombo, facilitatedby the Foundation of Goodness and theSri Lanka Symphony Orchestra. It wasa magical first time experience for thestudents to visit a five star hotel. The

PASSION sustainability report109 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13support crew that provided logisticalassistance for the trip included teachersand a couple of staff members from theSri Lankan Army.• Peter Weerasekara Children’s Home:The hotel donated Rs. 952,694 worthof discarded linen including bed sheets,blankets, pillow covers and towels as wellas Rs. 428,550 worth of new uniforms tothe Peter Weerasekera Children’s Home inButhpitiya. The home provides shelter to82 orphaned and/or abandoned children.• Donation to Nest in Wattala: Nestis a community based mental healthhumanitarian organisation, which is agovernment approved Charity in Wattala.The hotel donated Rs. 241,355 worthof discarded linen including bed sheets,blankets, pillow covers and towels to theorganisation.• The Ceylon Bible Society: The CeylonBible Society held its annual charityfair at the Christian Reformed Churchin Wellawatte with the objective ofraising funds to aid under privilegedcommunities. Cinnamon Grand Colombosponsored the event with cake for therefreshment stall.• St. Ann’s Shrine, Welimada: CinnamonGrand Colombo donated Rs. 320,843worth of discarded linen including bedsheets, blankets, pillow covers andtowels, to the Parish Priest of the St.Anne’s Shrine, in Welimada. The shrinehas nine sub stations and four chapels,consisting of 150 families to whom thelinen was distributed.• Wikramashila Pirivena: CinnamonGrand Colombo supported theeducational needs of the WikramashilaPirivena in Bandaragama which houses50 monks. The student monks werepresented with educational material andfunds to upgrade the facilities in thePirivena. This support continues on amonthly basis, including almsgiving onPoya days.• La- Salian Montessori Project atModara: La- Salian Montessori has 145under privileged students between theages of 3-5 years and six teachers. Theobjective of the La-Salian foundation isto give these underprivileged pre-schoolchildren an opportunity to learn andshine. Most often, the children’s personalprogress is hindered as a result of a lackof financial support and a communitythreatened by drug addiction. CinnamonGrand Colombo donated equipment, asink and a cupboard to the Montessori inan attempt to uplift the children’s learningenvironment. The hotel will undertakerenovation work in the next financial year.• Refurbishment of St. Anthony’sParish Montessori at Mattakale,Thalawakale: Cinnamon Grand’sengineering team, having recognized theneeds of this Montessori, carried out avoluntary renovation project during whichthey cleaned and painted the classroomsand play areas and renovated the ceiling.• Launch of the inaugural Kids ArtCorner at Kala Pola: This year’s KalaPola, Sri Lanka’s largest open art fairheld on the 26th and 27th of January,saw the introduction of a novel initiative;the first ever ‘Kids Art Corner.’ Createdand executed by Cinnamon Grand,in conjunction with the John KeellsCSR Foundation and the George KeytFoundation, the initiative was a tribute tothe talents of budding young artists (aged6-14 years) in Sri Lanka, giving themthe opportunity to exhibit their artisticmasterpieces. The Kids Art Corner hostedthree segments this year, specifically,the Kids Art Exhibition and Sale, Art witha Heart and Paint your Pottery. WithCinnamon Grand Associates volunteeringto coordinate the events for the cause,the Kids Art Corner saw more than 113paintings exhibited and the participationof more than 95 kids at the Potteryworkshop, with all revenue generatedfrom the sales given directly to the artists.The total amount raised for the kids wasRs. 51,500.• Promoting Local Craft: The traditional‘kade’ or village shop based within NugaGama displays and sells Sri Lankan artsand crafts produced by talented andskilled rural craftsmen. Nuga Gama givesthem the opportunity to market theirproduce and gain a sustainable income.Customers are encouraged to purchasethe wares to assist a skilled individualand improve his livelihood. The suppliernetwork for the Nuga Gama kade spansdifferent parts of Sri Lanka includingMatara, Habaraduwa, Ambalangoda,Dankotuwa, Galle, Kandy, Balapitiya,Jaffna and Panadura.• Promoting Sri Lanka’s DanceHeritage: Nuga Gama has informativeand entertaining dances that depict everydayvillage life. The highly accomplishedShilpa Ranga Cultural Dance Troupe, ledby generations of professional dancers,performs dances based on folk tales,myths and beliefs.• Developing Rural Women: Thetraditional ‘Kussiya’ or kitchen at NugaGama, which employs village womento produce authentic Sri Lankan dishesare chosen from village localities that areoften under privileged. While giving these

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13110women appreciation for their skills in thekitchen. Nuga Gama also provides theman avenue of sustainable income whichassists them in adding to their familyincome.• Promoting Sri Lankan Crafts andProduce: The hotel also promotes batikitems, Cinnamon branded bookmarks,locally manufactured children’s slingpouches, recycled paper note pads andwooden handicrafts which help the SriLankan craft. We also promote an arrayof Sri Lankan confectionery and placecomplimentary baskets of Sri Lankanfruits in guest rooms.Occupational Health and Safety PolicyAsian Hotels & Properties PLC (AHPPLC) was awarded with the OHSAS 18001 Certification in May 2012 for maintenance, Housekeeping andSecurity of the Crescat Boulevard shopping mall, food outlets and premises.AHPPLC is committed to protecting the health and safety of all persons in the shopping mall, food court and other relevant areas and workplaceincluding employees, contractors, customers and other visitors.AHPPLC employees, contractors, customers and visitors have a duty of care including; the responsibility to work safely, to take all reasonable carefor their own health and safety, and to consider the health and safety of other people who may be affected by their actions.AHPPLC will take all reasonable and practical steps to improve work safety conditions and will strive to uphold its core values of safety,knowledge, integrity and leadership in order to achieve its goal of zero harm.Asian Hotels & Properties PLC is committed to:• Complying with all applicable health and safety laws, regulations and standards.• Providing safe plant and equipment, for controlled work.• Implementing risk and hazard management systems which are relevant and suitable for the organisations risk exposure as well as identify,promote and continuously improve health and safety performance.• Ensuring all managers remain directly responsible and accountable for the health, safety and welfare of their employees and provide adequateresources to assist managers in this cause.• Provision of appropriate Health and Safety Training to all relevant persons.• Maintaining relevant policies, procedures, systems, information, training, recognition programs, and organisational structures to support andcommunicate effective health and safety practices throughout the organisation.• Utilizing appropriate internal and/or external expertise when required in all related activities.• Establishing clear targets and objectives to continuously improve health and safety in the workplace.• Maintaining a positive safety culture through encouraging active participation, consultation and cooperation of all employees, contractors,customers and visitors in promoting and developing measures to improve health and safety at work.AHPPLC will implement and maintain these systems, inclusive of standards, policies and procedures. These standards will be monitored regularlyto ensure their integrity and effectiveness to facilitate continuous improvement.

PASSION sustainability report111 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Work Safety awareness poster campaign launched for associatesA differently abled inspiring artist at the inaugural Kid’sArt Corner at Kala Pola orgainzed by Cinnamon Grandin association with the John keels FoundationThe ‘ Grand Experience’ for the war affected studentsfrom Mullativu, visiting Colombo for the first timeNuga Gama Staff attending the monthly alms giving atWikrama Shila Pirivena in Bandaragama in keepingwith village traditionsCinnamon Grand’s Green team members handingover a donation raised by the sale of pink ribbons incommemoration of Breast Cancer month toProf. Ryhana Raheem- Chairperson of MithuruwelaCancer support networkCinnamon Grand’s team at the newly constructed St.Anthony’s Parish Hall Montessori at ThalawakalleNuga Gama kade’s Bathik supplier Mrs. Irangani, fromGalle, shares her craft with kids at the Earth WatchHoliday workshopChildren from Don Bosco Boys Home, Maggona beingtaught to make recycled Christmas decorationsat Nuga Gama‘Smiles for the camera’ from the children at the La-SalianMontessori, Modara during the initial project visitby the green teamExecutive Housekeeper Vindya Rathnavibushana, andDeputy Executive Houeskeeper Wasantha Pallepitiya,handing over the hotels old linen to the Parish Priestof St. Anne’s Shrine in Welimada

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13112Together We GrowCinnamon Grand Colombo cultivates agricultural skills with an organic garden project together withD.S. Senanayake CollegeCinnamon Grand joined hands with the Agricultural Society of D. S. Senanayake College in cultivating an organic farm within the school premises.This is the first time that a corporate entity and a school have worked together to foster wellbeing and sustainability. The objective of this project is tosupport the agriculture unit of the college whilst contributing to nurture awareness and knowledge in the children.Cinnamon Grand Colombo believes this initiative provides numerous benefits to the youth of the country as well hotel guests and staff. Organicallygrown food offers immense health advantages as they are fresh, natural and free of chemicals with much emphasis placed on the preservation of theplanet.The Cinnamon Grand Green Team drew a site map to identify the landscape and the cultivation processes and the available land was measured withthe consent of the school agricultural head. The Cinnamon Grand Team sought the expertise of Sri Lanka’s leading organic farm, Three Star OrganicFarm (Pvt.) Ltd, which is the only 100% international organic control union certified farm in the country to be additionally certified by Organic EU-Control Union Certifications, Netherlands. Organic project Green Team members also visited the farm in Piliyandala for further research. The ThreeStar Organic Farm directed the project while the Green Team, together with members of the school Agricultural Society, tilted the land for harvestingand planted the saplings. This long term project will, in the future, lead to Cinnamon Grand Colombo introducing a fully organic menu, enabling themto offer guests healthy and sustainable indulgences. This unique concept is a long-term venture with the dedication of both parties towards making areal difference.

PASSION sustainability report113 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13The Key StagesStage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6June 2012• Identifying alocationfor the organicgarden• Seeking expertisefrom the Three StarOrganic Farm PvtLtdAugust 2012• Clearing theselected site• Building acompost pit• Installing a 2” TubewellOctober 2012• Introducingstudent organicproject rostersAugust 2013• Transportation ofproduce• Initiating a newschool agriculturaldevelopment fundJanuary 2014• Introduction ofthe organic gardenexperience to hotelguests- ‘FIELD TOFORK’ campaign2015.....• Developing careeropportunities foragricultural studentsDesigning a plan andcosting for theproject-{Composting andWatering System,Varieties of OrganicVegetables andgreens}• Appointment of a75 memberstudents team forthe project.• Appointment ofthe organic projectteam for CinnamonGrandMay 2013Discussion with theNuga GamaChef, SujithAriyaratna, for menudevelopmentSeptember 2013Introducing arange oforganic dishesat CinnamonGrandSeptember 2014Providingassistance forthe constructionof the agriculturalunitSeptember 2012Opening of theorganic gardenprojectJuly 2013Harvesting offirst sampleproduceDecember 2013Studentsrecognitionawards

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13114134

PASSION115 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13sustainability reportOrganic Garden Project1. Cinnamon Grand’s General ManagerRohan Karr hands over garden tools tothe principal D.S. Sennanayake College,Mr. D.M.D. Dissanayake and Mrs.Thamara Dissanayake Head of AgriculturalDepartment2. The students of the Organic GardenProject Team at the opening ceremony3. Cinnamon Grand team clearing the areafor cultivation4. Cinnamon Grand’s Green Team withthe project heads of D.S. SennanayakeCollege5. Student representative, Janith planting asapling at the opening ceremony6. Students of the Organic Garden ProjectTeam clearing the land256

sustainability reportPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13116Cinnamon LakesideEnergy, water and waste management initiativesEfficient energy usage and conversion to renewable energy is paramount in our sustainable energy management practices. In a continuous effortto improve technology in the hotel and follow best practices, the following initiatives have been carried out.• Implementation of energy saving bulbs. We are in the process of changing CFL lights to LED with installation in 45 guest rooms.• Design and construction to reduce heating, cooling, lighting and water consumption through both passive designs appropriate to localconditions and active technology.• Building with an emphasis on visual compatibility with the natural environment.• Motion sensor timer controls installed for outdoor and parking lot lighting.Initiative Description Category Saving achieved/monthCooking oil usageCooking oil is used for the boiler through the Furnace oil 2,880Lfurnace oil tank.LED for staff lockers Installation of LED bulbs for all staff lockers. Electricity 2,146kWhInduction Lamps for flood lightsMetal halide flood lights were replaced with Electricity19,179kWhinduction lamps.Long Feng air conditioning schedule Time scheduling of Long Feng air conditionerto match the operation of the restaurant.Electricity51,912kWhReducing the runtime of 8 DOTL bottlecoolersLoading and turning on the bottle coolers1hour prior to the function.Electricity4,024kWhCinnamon Lakeside Colombocommemorated World Environment Day bydedicating the month to sustainable initiatives.The hotel continued its efforts to be greenby educating associates on the importanceof caring for their surroundings. In this vein,a film on the ‘Preservation of our Planet’was shown at the staff cafeteria along with aquiz encouraging associates to get involvedand learn about the importance of caringfor the environment. Additionally, the hotelhad a seminar scheduled where an expertguest speaker addressed associates andanswered environment related questions.With the involvement of the entire hotel incommemorating World Environment Day,the staff created an eco-friendly banner thatwas displayed outside the hotel to highlightthe significance of the day and encouragingpassers by to join in the mission on theirFacebook page (www.facebook.com/cinnamonlakeside) to share tips on beinggreener.Cinnamon Lakeside uplifting thecommunityThe Cinnamon Lakeside hotel has embarkedon its own community projects to include:• Ayeshwariya Lakshmi Kovil cleaningproject in Wellawatta A hundredassociates volunteered their servicesfor the on going renovations. The teamworked tirelessly for many hours clearingand tidying the rubble at the four-storeystructure which revealed a true teamspirit, felt throughout the project.• Galloluwa Jumma Mosque cleaningproject in Minuwangoda A totalof 85 staff members from across alldepartments of the hotel made an hourlongjourney to the Golloluwa JummaMosque in Minuwangoda to carry out arenovation and restoration project. Forthe main structure of the Mosque, thevolunteers white washed the exterior ofthe building, cleaned the existing algaeand painted the front gate and side-wall.The team also cleared the overgrowngarden, which stretched over four acres.Cinnamon Lakeside Colombo is proud

PASSION117 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13sustainability reportof completing the full circle of restoringreligious institutions in a year. The hotelteam worked together representingall creeds to complete CSR projectsthroughout the year, strengthening theirteam spirit and unity.• Samadhi Buddha Statue cleaningproject: The hotel gathered a team of120 associates from various departmentsto carry out the cleaning task at theMonaragala Piriven Viharaya, Kurunegala.The largest crowd of volunteers gatheredthus far, the team travelled in threebuses for two and a half hours and 114kilometers to the Monaragala PirivenViharaya, on their journey towardsrestoring culture. The Samadhi Buddhastatue is estimated to be the country’slargest granite statue to date. Theassociates carried out their work aroundthe 67.5 foot granite Buddha statue,which is still under construction, clearingthe area of rubble, soil and cleaning thesurrounding areas of the temple.• Pitipana Village: In collaboration with theDepartment of Probation and Child CareServices, Cinnamon Lakeside Colombolent a helping hand to the Nena DiriyaEducation Aid Programme. The aimof this programme is to assist childrenwho are unable to attend school due tovarious domestic difficulties to continuetheir education. For the initial stage of thisproject, we are in the process of selecting25 children from different ethnic groupsand assisting them to continue theirprimary education. In the next financialyear, we plan to provide assistance inhigher education and recruit eligibleindividuals into our organisation as well asother business units within the Group.Cinnamon Lakeside associates helping in therestoration work of theSamadhi Buddha Statue, KurunegalaCinnamon Lakeside associates at the GalloluwaJummah Mosque cleaning project in MinuwangodaCinnamon Lakeside associates cleaning thesurrounding areas of the templeCinnamon Lakeside associateswhite washing the exterior of the Jummah Mosque

PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13118We have taken great measures in ensuring that we are leaders in the movement of beinga socially responsible business, and our passion in this regard extends to the smallestdetails which leaves no process untouched by initiatives that take the triple bottom line intoconsideration.

PASSION119 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13“The respect that we showguests, is the respect weget in return.”- Prasad -

PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13120

PASSION121 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13financialstatements

eport of the audit committeePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13122Role of the CommitteeThe role of the Audit Committee is toassist the Board in fulfilling its oversightresponsibilities for the integrity of thefinancial statements of the Company,the internal control and risk managementsystems of the Company and itscompliance with legal and regulatoryrequirements, the external auditors’performance, qualifications andindependence and the adequacy andperformance of the internal audit function,which at John Keells is termed GroupBusiness Process Review Division (GroupBPR). This is detailed in the terms ofreference of the Committee which has beenapproved by the Board.Composition of the Committee andMeetingsThe Audit Committee comprised of threeNon-Executive Independent Directors.The Chairman of the Audit Committee andanother member of the Committee areChartered Accountants while the othermember of the Committee has a specialistfinancial background. The Director Financeof the Hotel sector served as the Secretaryto the Audit Committee.The President of the Property Groupof John Keells Holdings, CEO of theCompany’s Property Division, The GeneralManager of Cinnamon Grand, SectorFinancial Controllers of Property and HotelsSectors together with the Head of GroupBusiness Process Review of John KeellsHoldings PLC, attend audit committeemeetings by invitation. Outsourced InternalAuditors, Pricewaterhouse Coopers (Pvt)Ltd., and Independent External AuditorsKPMG are required to attend meetings on aregular basis.The Audit Committee held four (4) meetingsduring the financial year. Information on theattendance at these meetings is given underCorporate Governance on page 40. Theeffectiveness of the Committee is evaluatedannually by each member of the Committeeand the results are communicated to theBoard.The activities and views of the Committeehave been communicated to the Boardof Directors quarterly through verbalbriefings and by tabling the minutes of theCommittee’s meeting.Financial ReportingThe Audit Committee has reviewed anddiscussed the Company’s quarterlyand annual financial statements prior topublication with the management andexternal auditors, including the extent ofcompliance with Sri Lanka AccountingStandards and the adequacy of disclosuresrequired by other applicable laws, rulesand guidelines. The Committee has alsoregularly discussed the operations ofthe Company and its future prospectswith management and is satisfied thatall relevant matters have been taken intoaccount in the preparation of the financialstatements.This is the first year for which the financialstatements have been presented incompliance with the new Sri LankaAccounting Standards (SLFRS/LKAS),which have materially converged with theInternational Financial Reporting Standards(IFRS). Considerable effort and planning hasgone into ensuring that this transition hastaken place efficiently.The External Auditors were engaged toperform a special purpose audit of theCompany interim financial statements forthe six months ended 30th September2012, with special focus on compliancewith the new accounting standards,including the reporting requirements forfirst time adoption. The results of the auditwere discussed with the management andauditors.Internal Audit, Risks and ControlsPricewaterhouse Coopers (Pvt) Ltdcontinued to serve as the OutsourcedInternal Auditors of the Company, andthe audit plans and scope of work wereformulated in consultation with the JohnKeells Group Business Process Review(Group BPR) Division and approved by theCommittee.The main focus of the Internal Audit wasto provide independent assurance onthe overall system of internal controls,risk management and governance, byevaluating the adequacy and effectivenessof internal controls, and compliance withlaws and regulations and establishedpolicies and procedures of the company.During the year, reports were receivedby the Committee from the OutsourcedInternal Auditors, which were reviewedand discussed with management, theOutsourced Internal Auditors and theJohn Keells Group BPR Division. Therecommendations of the Internal Auditorshave been followed up and are beingimplemented.The Audit Committee has also reviewedthe processes for the identification,evaluation and management of all significantoperational risks faced by the Company.The most significant operational risksand the remedial measures taken tomitigate them have been reviewed withthe management and the John KeellsGroup Sustainability and Enterprise RiskManagement division.Formal confirmations and assurances havebeen received from senior management ona quarterly basis regarding the efficacy and

PASSION123 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13status of the internal control systems andrisk management systems, and compliancewith applicable laws and regulations.The Committee reviewed the whistleblowingarrangements for the Company which is inline with the group arrangements.External AuditThe External Auditors’ letter of engagement,including the scope of the audit, wasreviewed and discussed by the Committeewith the External Auditors and managementprior to the commencement of the audit.The External Auditors kept the Committeeadvised on an on-going basis regarding anyunresolved matters of significance. Beforethe conclusion of the audit, the Committeemet with the External Auditors to discuss allaudit issues and agree on their treatment.The Committee also met the ExternalAuditors, without the managementpresent, prior to the finalisation of thefinancial statements. The External Auditors’management letter for the year 2011/12,together with the management’s responseswas discussed with the management andauditors.The Audit Committee is satisfied that theindependence of the External Auditors hasnot been impaired by any event or servicethat gives rise to a conflict of interest.Due consideration has been given to thelevel of audit and non-audit fees receivedby the External Auditors from the JohnKeells Group and confirmation has beenreceived from the External Auditors oftheir compliance with the independenceguidance given in the Code of Ethics of theInstitute of Chartered Accountants ofSri Lanka.the Board that KPMG be re-appointed asthe External Auditors of Asian Hotels andProperties PLC for the financial year ending31st March 2014, subject to approval bythe shareholders at the Annual GeneralMeeting.ConclusionBased on the reports submitted by theExternal Auditors and the OutsourcedInternal Auditors of the Company, theassurances and certifications providedby the senior management, and thediscussions with management and theauditors both at formal meetings andinformally, the Committee is of the view thatthe control environment within the Companyis satisfactory and provides reasonableassurance that the financial position of theCompany is adequately monitored and itsassets are safeguarded.C.J.L. PintoChairman of the Audit Committee23rd May, 2013report of the audit committeeThe performance of the External Auditorshas been evaluated and discussed withthe senior management of the Company,and the Committee has recommended to

statement of directors’ responsibilityDirectors’ Responsibilities forthe Preparation of the FinancialStatementsThis Statement of Directors’responsibilities is to be read inconjunction with the Report of theAuditors and is made to distinguish therespective responsibilities of the Directorsand of the Auditors in relation to theFinancial Statements contained in thisAnnual Report.The Directors of the Company arerequired by the provisions of theCompanies Act No. 7 of 2007 to prepareFinancial Statements which give a trueand fair view of the state of affairs of theCompany as at the end of the financialyear, and of the Profit and Loss and Cashflows of the Company for the financialyear.The Directors confirm that the FinancialStatements of the Company for the yearended 31st March 2013, presentedin the Report have been preparedin accordance with the Sri LankaAccounting Standards (SLFRS), whichcame into effect from 1st January 2012and the Companies Act No. 7 of 2007. Ithas provided the information required byand otherwise complied with the ListingRules of the Colombo Stock Exchange(CSE) and the Code of Best Practice onCorporate Governance, issued jointly bythe Institute of Chartered Accountantsof Sri Lanka (ICASL) and the Securitiesand Exchange Commission of Sri Lanka(SEC).In preparing the Financial Statements,the Directors have selected appropriateaccounting policies and have appliedthem consistently. Reasonable andprudent judgments and estimates havebeen made and applicable accountingstandards have been followed and theFinancial Statements have been preparedon a going concern basis.The Directors are of the view thatadequate funds and other resources areavailable within the Company for it tocontinue in operation for the foreseeablefuture.The Directors have taken all reasonablesteps expected of them to safeguard theassets of the Company and to establishappropriate systems of internal controlsin order to prevent, deter and detectany fraud, misappropriation or otherirregularities.The Directors have also taken allreasonable steps to ensure that theCompany maintains adequate andaccurate accounting books of recordswhich reflect the transparency oftransactions and provide an accuratedisclosure of the Company’s financialposition.The Directors are required to provide theAuditors with every opportunity to takewhatever steps and undertake whateverinspection they consider appropriate forthe purpose of enabling them to give theirindependent Audit Report. The Directorsare of the view that they have dischargedtheir responsibilities in this regard.Compliance ReportThe Directors confirm that, to the bestof their knowledge, all taxes, dutiesand levies payable by the Companyand all contributions, levies and taxespayable on behalf of and in respect ofPASSIONASIAN HOTELS AND PROPERTIES PLC 124Annual Report 2012 /13the employees of the Company, and allother known statutory dues as were dueand payable by the Company as at theBalance Sheet date have been paid orprovided for, except as specified in Note41 to the Financial Statements coveringContingent Liabilities.Further, as required by Section 56 (2) ofthe Companies Act No. 7 of 2007, theBoard of Directors have confirmed thatthe Company, satisfies the SolvencyTest immediately after the distribution,in accordance with Section 57 of theCompanies Act No. 7 of 2007, and haveobtained a certificate from the Auditors,prior to declaring the Interim dividend ofRs 1/- per share and the final dividend ofRs. 3/- per share for this financial year.By Order of the BoardKeells Consultants (Private) LimitedSecretaries23rd May, 2013

125PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13independent auditors’ reportTO THE SHAREHOLDERS OF ASIANHOTELS AND PROPERTIES PLCReport on the Financial StatementsWe have audited the accompanyingfinancial statements of Asian Hotels andProperties PLC (“the Company”) andthe consolidated financial statementsof the Company and its subsidiary (“theGroup”), which comprise the statement offinancial position as at March 31, 2013,the statements of income, comprehensiveincome, changes in equity and cashflows for the year then ended, and notes,comprising a summary of significantaccounting policies and other explanatorynotes set out on pages 131 to 166 of theannual report.Management’s Responsibility for theFinancial StatementsManagement is responsible for thepreparation and fair presentation ofthese financial statements in accordancewith Sri Lanka Accounting Standards.This responsibility includes: designing,implementing and maintaining internalcontrol relevant to the preparation andfair presentation of financial statementsthat are free from material misstatement,whether due to fraud or error; selecting andapplying appropriate accounting policies;and making accounting estimates that arereasonable in the circumstances.Scope of Audit and Basis of OpinionOur responsibility is to express an opinionon these financial statements basedon our audit. We conducted our auditin accordance with Sri Lanka AuditingStandards. Those standards requirethat we plan and perform the audit toobtain reasonable assurance whether thefinancial statements are free from materialmisstatement.An audit includes examining, on a testbasis, evidence supporting the amountsand disclosures in the financial statements.An audit also includes assessing theaccounting policies used and significantestimates made by management, as wellas evaluating the overall financial statementpresentation.We have obtained all the information andexplanations which to the best of ourknowledge and belief were necessary forthe purposes of our audit. We thereforebelieve that our audit provides a reasonablebasis for our opinion.OpinionIn our opinion, so far as appears from ourexamination, the Company maintainedproper accounting records for the yearended March 31, 2013, and the financialstatements give a true and fair view ofthe financial position of the Company asat March 31, 2013, and of its financialperformance and its cash flow for the yearthen ended in accordance with Sri LankaAccounting Standards.In our opinion, the consolidated financialstatements give a true and fair view of thefinancial position of the Company and itssubsidiary dealt with thereby as at March31, 2013, and of its financial performanceand its cash flows for the year then endedin accordance with Sri Lanka AccountingStandards.Report on Other Legal and RegulatoryRequirementsThese financial statements also complywith the requirements of Sections 153(2)to 153(7) of the Companies Act No. 07 of2007.Chartered AccountantsColombo23rd May, 2013

STATEMENT OF INCOMEPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13126GroupCompanyFor the year ended 31st March 2013 2012 2013 2012Page No. Note Rs.’000 Rs.’000 Rs.’000 Rs.’000Revenue 139 5 7,890,978 8,855,241 5,050,755 6,479,762Cost of Sales (3,067,561) (4,477,465) (1,986,177) (3,556,776)Gross Profit 4,823,417 4,377,776 3,064,578 2,922,986Dividend Income 139 6 - - 234,422 117,211Other Operating Income 139 7 71,308 99,468 59,074 89,242Administrative Expenses (1,644,638) (1,522,489) (1,042,943) (971,008)Distribution Expenses (176,620) (170,447) (96,826) (99,707)Other Operating Expenses (565,991) (511,633) (334,173) (297,159)Results from operating activities 2,507,476 2,272,675 1,884,132 1,761,565Finance Cost 139 8 (455) (12,738) (359) (12,715)Finance Income 139 9 312,020 87,755 247,187 72,918Change in Fair Value of Investment Property 517,210 306,819 228,500 206,971Profit Before Tax 140 10 3,336,251 2,654,511 2,359,460 2,028,739Income Tax Expenses 140 11 (238,865) (152,053) (67,323) (20,858)Profit for the Year 3,097,386 2,502,458 2,292,137 2,007,881Attributable to:Equity Holders of the Parent 2,494,296 2,148,877 2,292,137 2,007,881Non-controlling Interest 603,090 353,581 - -3,097,386 2,502,458 2,292,137 2,007,881Earnings Per Share 141 12 5.63 4.85 5.18 4.53Dividend Per Share 141 13 4.00 2.00 4.00 2.00Figures in brackets indicate deductions.The accounting policies and notes as set out in pages 131 to 166 form an integral part of these Financial Statements.

PASSION127 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13STATEMENT OF COMPREHENSIVE INCOMEGroupCompanyFor the year ended 31st March 2013 2012 2013 2012Rs.’000 Rs.’000 Rs.’000 Rs.’000Profit for the period 3,097,386 2,502,458 2,292,137 2,007,881Other comprehensive incomeRevaluation of Land and Buildings 6,242,265 - 5,842,595 -De-recognition of Refurbished Assets - (7,335) - -Deferred Tax effect on Revaluation (47,960) - - -Other comprehensive Income for the period 6,194,305 (7,335) 5,842,595 -Total comprehensive Income for the period 9,291,691 2,495,123 8,134,732 2,007,881Attributable to :Equity holders of the parent 8,489,568 2,145,693Non-controlling Interests 802,123 349,4309,291,691 2,495,123Note :As required by SLFRS/LKAS, the Statement of Other Comprehensive Income includes Revaluation of Land and Buildings, De-recognition ofRefurbished Assets and Differed tax effect on Revaluation. Transactions of similar nature were routed directly through the Equity Statementunder SLAS.Figures in brackets indicate deductions.The accounting policies and notes as set out in pages 131 to 166 form an integral part of these financial statements.

STATEMENT OF FINANCIAL POSITIONPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13128GroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Page No. Note Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000ASSETSNon Current AssetsProperty, Plant and Equipment 142 14 18,308,983 12,005,037 11,847,798 15,029,139 9,160,039 9,186,218Leasehold Property 143 15 831,068 843,472 855,876 - - -Investment Property 144 16 3,618,750 3,101,540 2,701,972 1,860,500 1,632,000 1,332,280Intangible Assets 144 17 8,517 12,190 16,683 1,062 1,373 1,819Investment in Subsidiary 145 18 - - - 660,045 660,045 660,045Long Term Investments 145 19 - - - - - -Other Non Current Financial Assets 146 20 22,571 49,058 65,659 15,291 13,258 23,865Total Non Current Assets 22,789,889 16,011,297 15,487,988 17,566,037 11,466,715 11,204,227Current AssetsInventories 146 21 135,186 115,852 122,746 102,154 73,571 79,460Work in Progress - Apartments 147 22 - 64,392 1,353,804 - 64,392 1,353,804Trade and Other Receivables 147 23 478,840 553,785 491,787 245,569 300,604 307,047Amounts due from Related Parties 148 24 34,659 46,629 47,893 20,136 28,227 30,029Other Current Assets 148 25 169,488 173,061 152,787 92,913 131,627 63,908Short Term Investments 148 26 2,715,796 2,779,490 317,921 2,155,923 2,427,490 42,921Cash In Hand and at Bank 407,409 305,164 176,350 307,568 181,014 115,712Total Current Assets 3,941,378 4,038,373 2,663,288 2,924,263 3,206,925 1,992,881Total Assets 26,731,267 20,049,670 18,151,276 20,490,300 14,673,640 13,197,108EQUITY & LIABILITIESEquityStated Capital 149 27 3,345,117 3,345,117 3,345,117 3,345,117 3,345,117 3,345,117Capital Reserves 149 28 11,110,290 5,143,193 5,179,592 10,602,127 4,772,950 4,791,408Revenue Reserves 149 29 7,242,061 6,490,690 5,194,148 5,782,448 5,247,994 4,107,205Equity attributable to Equity holders of the Parent 21,697,468 14,979,000 13,718,857 19,729,692 13,366,061 12,243,730Non-controlling Interest 3,425,691 2,963,109 2,783,449 - - -Total Equity 25,123,159 17,942,109 16,502,306 19,729,692 13,366,061 12,243,730Non Current LiabilitiesInterest Bearing Borrowings 150 30 1,416 2,852 4,288 - - -Employee Benefits 151 31 194,097 208,696 175,448 96,071 109,551 86,149Deferred Taxation 151 32 329,313 255,793 248,354 - - -Total Non-Current Liabilities 524,826 467,341 428,090 96,071 109,551 86,149Current LiabilitiesTrade and Other Payables 152 33 643,462 844,959 919,495 465,528 614,853 718,929Amounts due to Related Parties 148 24 87,643 84,314 82,417 58,377 56,692 64,275Current Taxation 65,254 69,398 79,155 - - -Dividends Payable - 442,775 - - 442,775 -Interest Bearing Borrowings 150 30 1,437 1,437 1,437 - - -Other Current Liabilities 152 34 122,803 88,347 53,848 17,527 10,624 2,762Bank Overdrafts 162,683 108,990 84,528 123,105 73,084 81,263Total Current Liabilities 1,083,282 1,640,220 1,220,880 664,537 1,198,028 867,229Total Liabilities 1,608,108 2,107,561 1,648,970 760,608 1,307,579 953,378Total Equity and Liabilities 26,731,267 20,049,670 18,151,276 20,490,300 14,673,640 13,197,108The accounting policies and notes as set out in pages 131 to 166 form an integral part of these Financial Statements.I certify that the Financial Statements have been prepared in compliance with the requirements of the Companies Act No. 7 of 2007.Sunil PeirisSector Financial ControllerThe Board of Directors is responsible for the preparation and presentation of these Financial StatementsSigned for and on behalf of the Board by ,A.D. GunewardeneDirectorJ.R.F. PeirisDirectorColombo.23rd May, 2013

PASSION129 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13GroupCompanyFor the year ended 31st March Note 2013 2012 2013 2012Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000CASH FLOWS FROM OPERATING ACTIVITIESOperating Profit before Working Capital Changes a 3,046,875 4,607,993 1,995,200 3,775,930(Increase) / Decrease Inventories (19,334) 6,894 (28,583) 5,889(Increase) / Decrease in Receivables and Prepayments 82,553 (87,406) 94,316 (87,406)Decrease in Creditors and Accruals (163,712) (38,083) (140,737) (38,083)Cash Generated from Operations 2,946,382 4,489,398 1,920,196 3,612,363Interest Received 312,020 87,755 247,187 72,918Finance Expenses paid (455) (12,738) (359) (12,715)Dividends Received - - 234,422 117,211Income Tax paid (217,449) (154,371) (67,323) (20,858)Gratuity paid/ Transfer (44,062) (11,966) (32,924) (4,236)Net Cash Flow from Operating Activities 2,996,436 4,398,078 2,301,199 3,764,683CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIESPurchase / Transfers and Construction of Property, Plant and Equipment (489,098) (579,310) (283,257) (213,890)Addition to Work-in-Progress (3,897) (576,720) (3,897) (576,720)Addition/ Transfers to Investment Property - (92,749) - (92,749)Addition to Intangible Assets (1,586) (1,218) (274) (721)Proceeds from Sale of Property, Plant & Equipment 15,294 21,408 7,104 9,615Proceeds from/ (Repayment of) Other Assets (Net) 22,561 10,413 (2,033) 10,607Net Cash Flow used in Investing Activities (456,726) (1,218,176) (282,357) (863,858)CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIESDividend Paid to Equity Holders of Parent (2,213,876) (442,775) (2,213,876) (442,775)Dividend Paid to Minority Shareholders (339,540) (169,770) - -Repayment of Long Term Borrowings (1,436) (1,436) - -Net Cash Flow used in Financing Activities (2,554,852) (613,981) (2,213,876) (442,775)NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (15,142) 2,565,921 (195,034) 2,458,050CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 2,975,664 409,743 2,535,420 77,370CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 2,960,522 2,975,664 2,340,386 2,535,420Analysis of Cash and Cash EquivalentsFavourable BalancesCash and Bank 407,409 305,164 307,568 181,014Short Term Investments 2,715,796 2,779,490 2,155,923 2,427,490Unfavourable BalancesBank Overdrafts (162,683) (108,990) (123,105) (73,084)Total Cash and Cash Equivalents 2,960,522 2,975,664 2,340,386 2,535,420A. Operating Profit Before Working Capital ChangesProfit before Tax 3,336,251 2,654,511 2,359,460 2,028,739Adjustment for:Interest Income (312,020) (87,755) (247,187) (72,918)Dividend Income - - (234,422) (117,211)Finance Expenses 455 12,738 359 12,715Change in Fair Value of Investment Property (517,210) (306,819) (228,500) (206,971)Depreciation of Property, Plant and Equipment 412,314 376,121 244,784 224,384Amortisation of Leasehold Properties 12,404 12,404 - -Amortisation of Intangible Assets 5,259 5,711 585 1,167(Profit) / Loss on Disposal of Property, Plant & Equipment (191) (943) 4,864 6,070De-recognition of Assets on Refurbishments (include under Other expenses) - 18,151 - -Impairment losses on Trade and other receivables 7,935 6,454 7,524 6,185Impairment losses on Insurance Claim Receivable 3,926 6,074 - -Gratuity Charge and Related Costs 29,463 45,214 19,444 27,638Project Costs 68,289 1,866,132 68,289 1,866,1323,046,875 4,607,993 1,995,200 3,775,930The accounting policies and notes as set out in pages 131 to 166 form an integral part of these Financial Statements.CASH FLOW STATEMENT

STATEMENT OF CHANGES IN EQUITYPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13130GroupStated Revaluation General Retained Total Minority TotalCapital Reserve Reserve Earnings Interest EquityRs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000As at 31st March, 2011 3,345,117 5,179,592 85,000 5,109,517 13,719,226 2,783,930 16,503,156Impact on application of new accounting standards - - - (369) (369) (481) (850)As at 01st April, 2011 3,345,117 5,179,592 85,000 5,109,148 13,718,857 2,783,449 16,502,306Profit for the year - - - 2,148,877 2,148,877 353,581 2,502,458Other Comprehensive Income - (3,184) - - (3,184) (4,151) (7,335)Total Comprehensive Income - (3,184) - 2,148,877 2,145,693 349,430 2,495,123Transferred to Revenue Reserve (Note a) - (18,458) - 18,458 - - -Transferred to Revenue Reserve (Note b) - (14,757) - 14,757 - - -Final Dividend Paid - 2010/2011 - - - (442,775) (442,775) - (442,775)Interim Dividend Paid - 2011/2012 - - - (442,775) (442,775) - (442,775)Subsidiary Dividend to Minority Shareholders - - - - - (169,770) (169,770)As at 31st March, 2012 3,345,117 5,143,193 85,000 6,405,690 14,979,000 2,963,109 17,942,109Profit for the year 2012/2013 - - - 2,494,296 2,494,296 603,090 3,097,386Other Comprehensive Income - 5,995,272 - - 5,995,272 199,033 6,194,305Total Comprehensive Income - 5,995,272 - 2,494,296 8,489,568 802,123 9,291,691Transferred to Revenue Reserve (Note a) - (13,418) - 13,418 - - -Transferred to Revenue Reserve (Note b) - (14,757) - 14,757 - - -Final Dividend Paid - 2011/2012 - - - (1,328,326) (1,328,326) - (1,328,326)Interim Dividend - 2012/2013 - - - (442,775) (442,775) - (442,775)Subsidiary Dividend to Minority Shareholders - 2011/2012 - - - - - (226,360) (226,360)Subsidiary Dividend to Minority Shareholders - 2012/2013 - - - - - (113,180) (113,180)As at 31st March, 2013 3,345,117 11,110,290 85,000 7,157,061 21,697,468 3,425,691 25,123,159Note (a) According to the Sri Lanka Accounting Standard - 16 “Property, Plant and Equipment”, the Revaluation Surplus included in the Equity can be transferred to RetainedEarnings when the surplus is realised. Accordingly, the surplus realised amounting to Rs.13.41 Mn (Rs.18.45 Mn in 2012) has been transferred directly to Retained Earningsas at the Balance Sheet date.Note (b) According to the Sri Lanka Accounting Standard - 16 “Property, Plant and Equipment”, when the revalued asset is used by an entity, the difference betweendepreciation based on the revalued carrying amount of the asset and depreciation based on the assets the original cost is transferred from revaluation surplus to retainedearnings amounting Rs.14.75Mn. (Rs.14.75 Mn in 2012).Company Stated Revaluation General Retained TotalCapital Reserve Reserve Earnings EquityRs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000As at 01st April, 2011 3,345,117 4,791,408 85,000 4,022,205 12,243,730Profit for the year 2,007,881 2,007,881Other Comprehensive IncomeTotal Comprehensive Income - - - 2,007,881 2,007,881Transferred to Revenue Reserve (Note a) - (18,458) - 18,458 -Final Dividend Paid - 2010/2011 - - - (442,775) (442,775)Interim Dividend - 2011/2012 - - - (442,775) (442,775)As at 31st March, 2012 3,345,117 4,772,950 85,000 5,162,994 13,366,061Profit for the year 2012/2013 2,292,137 2,292,137Other Comprehensive Income 5,842,595 5,842,595Total Comprehensive Income - 5,842,595 - 2,292,137 8,134,732Transferred to Revenue Reserve (Note a) - (13,418) - 13,418 -Final Dividend Paid - 2011/2012 - - - (1,328,326) (1,328,326)Interim Dividend - 2012/2013 - - - (442,775) (442,775)As at 31st March, 2013 3,345,117 10,602,127 85,000 5,697,448 19,729,692Note (a) According to the Sri Lanka Accounting Standard - 16 “Property, Plant and Equipment”, the Revaluation surplus included in the Equity can be transferred to RetainedEarnings when the Surplus is realised. Accordingly, the surplus realised amounting to Rs.13.41 Mn (Rs.18.45 Mn in 2012) has been transferred directly to Retained Earningsas at the Balance Sheet date. (Refer Note 28 on page 149 for details).The accounting policies and notes as set out in pages 131 to 166 form an integral part of these Financial Statements.

PASSION131 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /131. REPORTING ENTITYAsian Hotels and Properties PLC is a publiclimited liability Company incorporated anddomiciled in Sri Lanka and listed on theColombo Stock Exchange.The registered office and principal placeof business of the company is located atNo.77, Galle Road, Colombo 03.The consolidated financial statements ofthe Company as at and for the year ended31 March 2013 comprise the financialinformation of the Company and itssubsidiary; Trans Asia Hotels PLC (togetherreferred to as the ‘Group’ and individually as‘Group entities’).The principal activities of the Company andthe Group during the year were hotelieringand property development.There were no significant changes in thenature of the principal activities of theCompany and the Group during the financialyear under review.The Group had 2,067 (2012 - 2,103)employees and the Company had 1,225(2012- 1,265) employees as at the BalanceSheet date.2. BASIS OF PREPARATION(a) Statement of complianceThe financial statements of the Companyand the Group comprise the statements offinancial position, income, comprehensiveincome, changes in equity and cash flowstogether with the notes to the financialstatements.The consolidated financial statementshave been prepared in accordance withSri Lanka Accounting Standards (LKAS/SLFRS) laid down by the Institute ofChartered Accountants of Sri Lanka andthe requirements of Companies Act No. 7of 2007.For all periods up to and including the yearended March 31, 2012, the Companyand the Group prepared their financialstatements in accordance with Sri LankaAccounting Standards which were in effectup to that date. Following the convergenceof Sri Lanka Accounting Standards with theInternational Financial Reporting Standards(IFRSs), all existing/ new Sri LankaAccounting Standards were prefixed asSLFRS and LKAS (referred to as “SLFRS” inthese financial statements) to represent SriLanka Accounting Standards correspondingto International Financial ReportingStandards and Sri Lanka AccountingStandards corresponding to InternationalAccounting Standards (IASs), respectively.Accordingly, the Group and the Companyadopted these new Sri Lanka AccountingStandards (which are commonly knownas SLFRSs)applicable for financial periodscommencing from April1, 2012.These are the Company’s and the Group’sfirst consolidated financial statementsprepared in accordance with LKAS/SLFRSand SLFRS 1 First time adoption of SriLanka Accounting Standard has beenapplied.The explanation how the transition to LKAS/SLFRS has affected the reported financialposition, financial performance and cashflows of the Group is provided in Note 37.The consolidated financial statementswere authorised for issue by the Board ofDirectors on 23rd May, 2013.(b) Bases of MeasurementThe financial statements have beenprepared on an accrual basis and underthe historical cost convention except forfollowings.notes to the financial statements• Freehold Land and Buildings whichare measured at cost, at the timeof acquisition and subsequentlyrecognised at revalued amountswhich are the fair values at the dateof revaluation less accumulateddepreciation and impairment cost if any• Investment properties which are statedat fair values.• Defined benefit obligations aremeasured at its present value, basedon an actuarial valuation as explained inNote 31.• Staff loans which are stated atamortised cost.(c) Presentation and FunctionalCurrencyThe consolidated financial statementsare presented in Sri Lankan Rupees,the Group’s functional and presentationcurrency, which is the primary economicenvironment in which the Holding Companyoperates. Each entity in the Group usesthe currency of the primary economicenvironment in which they operate as theirfunctional currency.All values are rounded to the nearest rupeesthousand (Rs. ’000) except when otherwiseindicated.(d) Use of estimates and judgmentsThe preparation of the consolidated financialstatements in conformity with LKAS/SLFRSrequires management to make judgments,estimates and assumptions that affectthe application of accounting policies andthe reported amounts of assets, liabilities,income and expenses. Actual results maydiffer from these estimates.Estimates and underlying assumptions arereviewed on an ongoing basis. Revisions toaccounting estimates are recognised in theperiod in which the estimates are revisedand in any future periods affected.

notes to the financial statementsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13132Judgments made by management in theapplication of LKAS/SLFRs that have asignificant effect on the financial statementsare mentioned below.• Valuation of property, plant andequipment -Note (d)• Valuation of investment property- Note (f)• Deferred taxation - Note (t) ii• Defined Benefit Plans- Note (k) ii3. COMPARATIVE INFORMATIONThe presentation and classification of thefinancial statements of the previous yearshave been amended, where relevant forbetter presentation and to be comparablewith those of the current year.4. ACCOUNTING POLICIESThe Accounting Policies set out below havebeen applied consistently to all periodspresented in the financial statements ofthe Company and the Group in preparingthe opening SLFRS Statement of FinancialPosition at April 1, 2011 for the purposes ofthe transition to SLFRSs, unless otherwiseindicated.(a)Basis of consolidation(i) Business combinationsBusiness combinations are accountedfor using the acquisition method as atthe acquisition date - i.e. when control istransferred to the Group. Control is thepower to govern the financial and operatingpolicies of an entity so as to obtain benefitsfrom its activities. In assessing control, theGroup takes into consideration potentialvoting rights that are currently exercisable.(ii) Non-controlling interestsFor each business combination, the Groupelects to measure any non-controllinginterests in the acquiree either:• at fair value; or• at their proportionate share of theacquiree’s identifiable net assets, whichare generally at fair value.Changes in the Group’s interest in asubsidiary that do not result in a loss ofcontrol are accounted for as transactionswith owners in their capacity as owners.Adjustments to non-controlling interests arebased on a proportionate amount of the netassets of the subsidiary.(iii) SubsidiariesSubsidiaries are those enterprisescontrolled by the parent. Control existswhen the parent has the power, directlyor indirectly to govern the financial andoperating policies of an enterprise.Subsidiaries are controlled from the datethe parent obtains control until the date thatcontrol ceases.Asian Hotels and Properties PLC has thepower to directly govern the financial andoperating policies of Trans Asia Hotels PLC,accordingly the entity is considered as asubsidiary of Asian Hotels and PropertiesPLC. The total profits and losses forthe period, of the Company and of itsSubsidiaries included in consolidation andall assets and liabilities of the Company andof its Subsidiaries included in consolidationare shown in the consolidated incomestatement and balance sheet respectively.Minority interests which represents theportion of profit or loss and net assets notheld by the Group, are presented separatelyin the income statement and within equity inthe consolidated balance sheet, separatelyfrom parent shareholders’ equity. Theconsolidated cash flow statement includesthe cash flows of the Company and itsSubsidiaries.(iv) Loss of controlOn the loss of control, the Groupderecognises the assets and liabilities of thesubsidiary, any non-controlling interests andthe other components of equity related tothe subsidiary. Any surplus or deficit arisingon the loss of control is recognised in profitor loss. If the Group retains any interest inthe previous subsidiary, then such interestis measured at fair value at the date thatcontrol is lost.Subsequently that retained interest isaccounted for as an equity-accountedinvestee or as an available-for-sale financialasset depending on the level of influenceretained.(v) Transactions eliminated onconsolidationIntra-group balances and transactions,and any unrealised income and expensesarising from intra-group transactions, areeliminated in preparing the consolidatedfinancial statements. Unrealised gainsarising from transactions with equityaccounted investees are eliminated againstthe investment to the extent of the Group’sinterest in the investee.Unrealised losses are eliminated in thesame way as unrealised gains, but onlyto the extent that there is no evidence ofimpairment.(b)Foreign currency(i) Foreign currency transactionsTransactions in foreign currencies aretranslated to the respective functionalcurrencies of Group entities at exchangerates at the dates of the transactions.Monetary assets and liabilities denominatedin foreign currencies at the reporting dateare retranslated to the functional currency atthe exchange rate at that date.

PASSION133 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13The foreign currency gain or loss onmonetary items is the difference betweenamortised cost in the functional currencyat the beginning of the year, adjusted foreffective interest and payments during theyear, and the amortised cost in foreigncurrency translated at the exchange rate atthe end of the year.Non-monetary assets and liabilities that aremeasured at fair value in a foreign currencyare retranslated to the functional currencyat the exchange rate at the date that thefair value was determined. Non-monetaryitems that are measured based on historicalcost in a foreign currency are translatedusing the exchange rate at the date of thetransaction.Foreign currency differences arising on retranslationare recognised in profit or loss.(c)(i)Financial instrumentsFinancial assetsInitial recognition and measurementFinancial assets within the scope of LKAS39 are classified as financial assets at fairvalue through profit or loss, loans andreceivables, held-to-maturity investments,available-for-sale financial assets, oras derivatives designated as hedginginstruments in an effective hedge, asappropriate. The Company and the Groupdetermine the classification of its financialassets at initial recognition.All financial assets are recognised initiallyat fair value plus, in the case of assets notat fair value through profit or loss, directlyattributable transaction costs. Purchases orsales of financial assets that require deliveryof assets within a time frame established byregulation or convention in the marketplace(regular way trades) are recognised on thetrade date, i.e., the date that the Companyand the Group commit to purchase or sellthe asset.However, as at each reporting date, theCompany and the Group hold on only thefinancial assets categorised as ‘loans andreceivables’.The Company and the Group initiallyrecognise such loans and receivables onthe date that they are originated.The Company and the Group de-recognisea financial asset when the contractual rightsto the cash flows from the asset expire,or it transfers the rights to receive thecontractual cash flows in a transaction inwhich substantially all the risks and rewardsof ownership of the financial asset aretransferred. Any interest in such transferredfinancial assets that is created or retainedby the Company and the Group arerecognised as a separate asset or liability.Financial assets and liabilities are offset andthe net amount presented in the statementof financial position when, and only whenthe Company and the Group have a legalright to offset the amounts and intendseither to settle them on a net basis or torealise the asset and settle the liabilitysimultaneously.Subsequent measurementThe subsequent measurement of financialassets depends on their classification andthe Company and the Group only holdfinancial assets categorised as loans &receivables.Loans and receivablesLoans and receivables are non-derivativefinancial assets with fixed or determinablepayments that are not quoted in anactive market. After initial measurement,such financial assets are subsequentlymeasured at amortised cost using thenotes to the financial statementseffective interest rate method (EIR), lessimpairment. Amortised cost is calculatedby taking into account any discount orpremium on acquisition and fees or coststhat are an integral part of the EIR. The EIRamortisation is included in finance incomein the income statement. The losses arisingfrom impairment are recognised in theincome statement in finance costs.De-recognitionA financial asset is de-recognised when:• The rights to receive cash flows fromthe asset have expired• The Company and the Group havetransferred its rights to receive cashflows from the asset or has assumedan obligation to pay the receivedcash flows in full without materialdelay to a third party under a ‘passthrough’arrangement; and either (a)the Company and the Group havetransferred substantially all the risksand rewards of the asset, or (b) theCompany and the Group have neithertransferred nor retained substantially allthe risks and rewards of the asset, buthas transferred control of the asset.When the Company and the Group havetransferred its rights to receive cash flowsfrom an asset or has entered into a passthrougharrangement, and has neithertransferred nor retained substantially allof the risks and rewards of the assetnor transferred control of it, the asset isrecognised to the extent of the Companyand the Group’s continuing involvementin it.In that case, the Company and the Groupalso recognise an associated liability. Thetransferred asset and the associated liabilityare measured on a basis that reflects therights and obligations that the Companyand the Group have retained.

notes to the financial statementsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13134ii)Financial liabilitiesInitial recognition and measurementFinancial liabilities within the scope of LKAS39 are classified as financial liabilities atfair value through profit or loss, loans andborrowings, or as derivatives designatedas hedging instruments in an effectivehedge, as appropriate. The Company andthe Group determine the classification of itsfinancial liabilities at initial recognition.All financial liabilities are recognised initiallyat fair value and, in the case of loans andborrowings, carried at amortised cost. Thisincludes directly attributable transactioncosts.The Company and the Group classifyfinancial liabilities into the other financialliabilities category. Such financial liabilitiesare recognised initially at fair value less anydirectly attributable transaction costs.Subsequent measurementThe measurement of financial liabilitiesdepends on their classification and theCompany and the Group only hold financialliabilities categorised as other liabilities.Loans and borrowingsAfter initial recognition, interest bearingloans and borrowings are subsequentlymeasured at amortised cost using theeffective interest rate method. Gainsand losses are recognised in the incomestatement when the liabilities are derecognisedas well as through the effectiveinterest rate method (EIR) amortisationprocess.Amortised cost is calculated by takinginto account any discount or premiumon acquisition and fees or costs thatare an integral part of the EIR. The EIRamortisation is included in finance costs inthe income statement.De-recognitionA financial liability is de-recognisedwhen the obligation under the liability isdischarged or canceled or expires.When an existing financial liability isreplaced by another from the same lenderon substantially different terms, or theterms of an existing liability are substantiallymodified, such an exchange or modificationis treated as a de-recognition of the originalliability and the recognition of a new liability,and the difference in the respective carryingamounts is recognised in the incomestatement.(d)Property, plant and equipmentBasis of recognitionProperty, plant and equipment arerecognised if it is probable that futureeconomic benefits associated with theasset will flow to the company and the costof the asset can be reliably measured.Basis of measurementAll items of property, plant and equipmentare initially recorded at cost. Where itemsof property, plant and equipment aresubsequently revalued, the entire class ofsuch assets is revalued at fair value.The Group applies cost model to property,plant and equipment except for land andbuildings and records at cost of purchaseor construction together with any incidentalexpenses thereon less accumulateddepreciation and any accumulatedimpairment losses.The carrying values of property plant andequipment are reviewed for impairmentwhen events or changes in circumstancesindicate that the carrying value may not berecoverable.The Group applies the re-valuation model toland and buildings. The Group has adopteda policy of revaluing assets every five years.When an asset is revalued, any increase inthe carrying amount is credited directly toa revaluation reserve, except to the extentthat it reverses a revaluation decreaseof the same asset previously recognisedin the income statement, in which casethe increase is recognised in the incomestatement. Any revaluation deficit thatoffsets a previous surplus in the sameasset is directly offset against the surplusin the revaluation reserve and any excessrecognised as an expense. Upon disposal,any revaluation reserve relating to the assetsold is transferred to retained earnings.De-recognitionAn item of property, plant and equipmentare de-recognised upon replacement,disposal or when no future economicbenefits are expected from its use. Anygain or loss arising on de-recognition of theasset is included in the income statement inthe year the asset is de-recognised.DepreciationDepreciation is calculated by using astraight-line method on the cost or valuationof all property, plant and equipment, otherthan freehold land, in order to write offsuch amounts over the estimated usefuleconomic life of such assets.The estimated useful life of assets is asfollows:AssetsYearsBuildings 75Plant and Machinery 10-20Motor Vehicles 5Floating Restaurant 18Furniture, Furnishings & Equipment 5-15Computers 5Base Stock/ Circulating Assets 3-10

PASSION135 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13The asset’s residual values and useful livesare reviewed, and adjusted if appropriate, ateach financial year end.Buildings are depreciated using reducingbalance method in order to depreciate overthe balance lease period of 67 years.Depreciation of an assets ceases at theearlier of the date that the asset is classifiedas held for sale and the date that asset isde-recognised.(e) Leasehold propertyPrepaid lease rentals paid to acquire landuse rights are amortised over the lease termin accordance with the pattern of benefitsprovided. Leasehold property comprisingof land use rights and stated at valuation,are amortised on a straight line basis overthe remaining lease term. Trans Asia HotelsPLC – The leasehold land is for 99 yearscommencing 7th August 1981 and isbeing amortised over a period of 94 yearscommencing from 1st April 1986.(f)Investment propertiesBasis of RecognitionInvestment properties are initially recognizedat cost. Subsequent to initial recognitionthe Investment Properties are stated at fairvalue, which reflects market conditions atthe Statement of Financial Position date.Basis of MeasurementInvestment properties are revalued wherenecessary to ensure that the carryingamount does not differ materially from fairvalues at the Balance Sheet date, and arerevalued at least once in three years.Gains or losses arising from changes infair value are included in the profit or lossin the year in which they arise. InvestmentProperties are de-recognised whendisposed of, or permanently withdrawn fromuse because no future economic benefitsare expected.Any gains or losses on retirement ordisposal are recognised in profit or loss inthe year of retirement or disposal. Transfersare made to and from Investment Propertyonly when there is a change in use inaccordance with the criteria listed in SriLanka Accounting Standard 40 “InvestmentProperty” (LKAS 40).(g) Intangible assetsAn intangible asset is an identifiable nonmonitory asset without physical substanceheld for use in the production or supplygoods or other services, rental to others orfor administrative purposes.An intangible asset is initially recognised atcost, if it is probable that future economicbenefit will flow to the enterprise, andthe cost of the asset can be measuredreliably. Following initial recognition,intangible assets are carried at cost lessany accumulated amortisation and anyaccumulated impairment losses.(i) Computer softwareAll computer software costs incurred,licensed for use by the Group, whichare not integrally related to associatedhardware, which can be clearly identified,reliably measured and it’s probable thatthey will lead to future economic benefits,are included in the Balance Sheet under thecategory intangible assets and carried atcost less accumulated amortisation and anyaccumulated impairment losses.(ii) AmortisationIntangible assets with finite lives areamortised over the estimated usefuleconomic life and assessed for impairmentwhenever there is an indication that theintangible asset may be impaired. Intangibleassets are amortised on a straight linebasis in the Income Statement from thenotes to the financial statementsdate on which the asset was available foruse, over the best estimate of its usefullife. The estimated useful life of software is5 years. The amortisation period and theamortization method for an intangible assetwith a finite useful life are reviewed at leastat each financial year-end.(iii) De-recognitionAn intangible asset is de-recognised ondisposal or when no future economicbenefits are expected from its use andsubsequent disposal.(h)InventoriesInventories are valued at the lower of costand net realisable value. Net realisable valueis the estimated selling price less estimatedcosts of completion and the estimatedcosts necessary to make the sale.(i) Cash and Cash EquivalentsCash and short-term deposits in thestatement of financial position comprisecash at banks and on hand and short-termdeposits with a maturity of three monthsor less.For the purpose of the cash flow statement,cash and cash equivalents consist of cashand short-term deposits as defined above,net of outstanding bank overdrafts.(j) ImpairmentThe recoverable amount of an asset orCash Generating Unit (CGU) is the greaterof its value in use and its fair value lesscosts to sell. In assessing value in use, theestimated future cash flows are discountedto their present value using a pre-taxdiscount rate that reflects current marketassessments of the time value of moneyand the risks specific to the asset or CGU.For impairment testing, assets are groupedtogether into the smallest group of assetsthat generates cash inflows from continuing

notes to the financial statementsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13136use that are largely independent of the cashinflows of other assets or CGUs.Impairment losses are recognised in profitor loss. Impairment losses recognised inrespect of CGUs are allocated to reducethe carrying amounts of the other assetsin the CGU (group of CGUs) on a pro-ratabasis.For other assets, an impairment loss isreversed only to the extent that the asset’scarrying amount does not exceed thecarrying amount that would have beendetermined, net of depreciation oramortisation, if no impairment loss hadbeen recognised.(i) Financial assetsFinancial assets are assessed at eachreporting date to determine whether thereis objective evidence that it is impaired.A financial asset is impaired if there isobjective evidence of impairment as aresult of one or more events that occurredafter the initial recognition of the asset, andthat loss event(s) had an impact on theestimated future cash flows of that assetthat can be estimated reliably.Objective evidence that financial assets areimpaired includes default or delinquency bya debtor, restructuring of an amount due tothe company on terms that the Companyand the Group would not considerotherwise, indications that a debtor orissuer will enter bankruptcy, adversechanges in the payment status of borrowersor issuers, economic conditions thatcorrelate with defaults or the disappearanceof an active market for a security.The Company and the Group considerevidence of impairment for financial assetsmeasured at amortised cost (loans andreceivables) at specific asset level. Allindividually significant assets are assessedfor specific impairment.An impairment loss in respect of a financialasset measured at amortised cost iscalculated as the difference between itscarrying amount and the present value ofthe estimated future cash flows discountedat the asset’s original effective interestrate. Losses are recognised in profit orloss and reflected in an allowance accountagainst loans and receivables or held-tomaturityinvestment securities. Intereston the impaired asset continues to berecognised. When an event occurring afterthe impairment was recognised causes theamount of impairment loss to decrease,the decrease in impairment loss is reversedthrough profit or loss.(ii) Non-financial assetsThe carrying amounts of the Companyand the Group non-financial assets, otherthan inventories and deferred tax assets,are reviewed at each reporting date todetermine whether there is any indicationof impairment. If any such indication exists,then the asset’s recoverable amount isestimated. An impairment loss is recognisedif the carrying amount of an asset exceedsits recoverable amount.(k)Employee Benefits(i) Defined contribution plansEmployees’ Provident Fund and Employees’Trust Fund (EPF & ETF) are recognised asincurred.Employees are eligible for Employees’Provident Fund contributions andEmployees’ Trust Fund contributions in linewith respective statutes and regulations.The Company and the Group contribute15% and 3% of gross emoluments ofemployees to Employees’ Provident Fundand Employees’ Trust Fund respectively.(ii)Defined benefit plansA defined benefit plan is a post-employmentbenefit plan other than a definedcontribution plan.The Company and the Group are liableto pay retirement benefits under thePayment of Gratuity Act, No. 12 of 1983.The liability recognised in the financialstatements in respect of defined benefitplans is the present value of the definedbenefit obligation as at the reporting date.The defined benefit obligation is calculatedby a qualified actuary as at the reportingdate using the Projected Unit Credit(PUC) method as recommended by LKAS19 - ‘Employee Benefits’. Such actuarialvaluations will be carried out every year.The liability is not externally funded. AllActuarial gains or losses are recognisedimmediately in profit or loss applying thefaster recognition approach.Under the Payment of Gratuity Act No. 12of 1983, the liability to an employee arisesonly on completion of 5 years of continuedservice.(l) ProvisionsProvisions are recognised when theCompany and the Group have a presentobligation (legal or constructive) as a resultof a past event, it is probable that anoutflow of resources embodying economicbenefits will be required to settle theobligation and a reliable estimate can bemade of the amount of the obligation.Where the Company and the Groupexpect some or all of a provision tobe reimbursed, for example under aninsurance contract, the reimbursement isrecognised as a separate asset but onlywhen the reimbursement is virtually certain.The expense relating to any provision ispresented in the income statement net ofany reimbursement.

PASSION137 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13If the effect of the time value of money ismaterial, provisions are discounted usinga current pre-tax rate that reflects, whereappropriate, the risks specific to the liability.Where discounting is used, the increase inthe provision due to the passage of time isrecognised as a finance cost.(m) Contingent Assets and ContingentLiabilitiesAll contingent liabilities are disclosed asa note to the financial statements unlessthe outflow of resources is remote. Acontingent liability recognised in a businesscombination is initially measured at its fairvalue. Subsequently, it is measured at thehigher of:• The amount that would be recognisedin accordance with the generalguidance for provisions above (LKAS37) or• The amount initially recognisedless, when appropriate, cumulativeamortisation recognised in accordancewith the guidance for revenuerecognition (LKAS 18)Contingent assets are disclosed, whereinflow of economic benefit is probable butnot virtually certain.(n) Revenue recognitionRevenue is recognised to the extent thatit is probable that the economic benefitswill flow to the Group, and the revenueand associated costs incurred or tobe incurred can be reliably measured.Revenue is measured at the fair value of theconsideration received or receivable, netof trade discounts and value added taxes,after eliminating sales within the Group.The following specific criteria are used forrecognition of revenue:(i) Sale of ApartmentsRevenue has been recognised onapartment sales of ‘The Emperor’ up to themaximum of percentage completion or cashpaid by the buyer whichever is lower.(ii) Income from Hotel/RestaurantsRevenue is recognised on the roomsoccupied on daily basis and food andbeverages and hotel related sales areaccounted for at the time of sale..(iii) Interest IncomeInterest income is recognised on an accrualbasis.(iv) Rental IncomeRental income is recognised on an accrualbasis.(v) Dividend IncomeDividend income is recognised on a cashbasis.(vi) Other Gains and LossesNet gains and losses of a revenue naturearising from the disposal of property,plant and equipment and other noncurrentassets, including investments, areaccounted for in the income statement,after deducting from the proceeds ondisposal, the carrying amount of suchassets and the related selling expenses.(vii) Other IncomeOther income is recognised on an accrualbasis. Net gains and losses of a revenuenature arising from the disposal of property,plant and equipment and other noncurrentassets, including investments, areaccounted for in the income statement,after deducting from the proceeds ondisposal, the carrying amount of suchassets and the related selling expenses.Gains and losses arising from activitiesincidental to the main revenue generatingactivities and those arising from a Group ofnotes to the financial statementssimilar transactions, which are not materialare aggregated, reported and presented ona net basis.Any losses arising from guaranteed rentalsare accounted for in the year of incurringthe same. A provision is recognised if theprojection indicates a loss.(o) Expenditure recognitionExpenses are recognised in the incomestatement on the basis of a directassociation between the cost incurred andthe earning of specific items of income. Allexpenditure incurred in the running of thebusiness and in maintaining the property,plant and equipment in a state of efficiencyhas been charged to the income statement.For the purpose of presentation of theincome statement, the “function ofexpenses” method has been adopted, onthe basis that it presents fairly the elementsof the Company and Group’s performance.(p) Borrowing costsBorrowing costs directly attributable to theacquisition, construction or production ofan asset that necessarily takes a substantialperiod of time to get ready for its intendeduse or sale are capitalised as part of thecost of the respective assets. All otherborrowing costs are expensed in the periodthey occur. Borrowing costs consist ofinterest and other costs that the Groupincurs in connection with the borrowing offunds.(q) Guaranteed RentalLosses if any, of guaranteed rentals willbe accounted for in the year in which theyoccur. A provision is recognised if the bestestimate indicates a loss.(r) Segment ReportingA segment is a distinguishable componentof the Company that is engaged either

notes to the financial statementsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13138in providing products or services whichare subject to risks and rewards that aredifferent from those of other segments.The rental income generated from theCommercial Centre which is categorized asInvestment Property is shown separately.(s) Income Tax ExpensesIncome tax expenses comprise of currentand deferred tax.(t) Current TaxationThe Company is liable for taxation at a rateof 12% in terms of Section 46(1) of theInland Revenue Act No.10 of 2006 andamendments thereto, on its profits derivedfrom “promotion of tourism”. Income Taxfor any other income is computed at 28%.(ii) Deferred TaxationDeferred taxation is provided using theStatement of Financial Position liabilitymethod providing for temporary differencebetween the carrying amount of assets andliabilities for financial reporting purposesand the amounts used for taxationpurposes. The amount of deferred taxprovided is based on the expected mannerof realization or settlement of the carryingamount of assets and liabilities using taxrates enacted or substantively enacted bythe reporting date.adjustments or disclosures have been madein the respective Notes to the FinancialStatements.(v) Cash Flow StatementThe Cash Flow Statement has beenprepared using the “Indirect Method” ofpreparing Cash Flows in accordance withthe Sri Lanka Accounting Standard LKAS 7.The cash and cash equivalent include cashin-hand, balances with banks and money atcall and short notice.(w) Directors’ ResponsibilityThe Board of Directors is responsible for thepreparation and presentation of the financialstatements. This is more fully describedunder the relevant clause in the Directors’Report.Deferred tax assets including those relatedto tax effects of income tax losses andcredits available to be carried forward,are recognised only to the extent that it isprobable that future taxable profit will beavailable against which the asset can beutilised. Deferred tax assets are reviewed ateach reporting date and are reduced to theextent that is no longer probable that therelated tax benefit will be realised.(u) Events after the Reporting PeriodAll material events after the reporting datehas been considered and appropriate

PASSION139 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13notes to the financial statements5. REVENUEGroupCompanyFor the year ended 31st March 2013 2012 2013 2012Rs.’000 Rs.’000 Rs.’000 Rs.’000Gross Revenue 8,875,761 9,680,432 5,669,197 6,995,985Value Added Tax (984,783) (825,191) (618,442) (516,223)Net Revenue 7,890,978 8,855,241 5,050,755 6,479,762The company has completed its apartment project last year. Accordingly there will not be revenue generated from the said project except forthe sale of the remaining unsold apartments.6. DIVIDEND INCOMEGroupCompanyFor the year ended 31st March 2013 2012 2013 2012Rs.’000 Rs.’000 Rs.’000 Rs.’000Income from Subsidiary (Trans Asia Hotels PLC) - - 234,422 117,2117. OTHER OPERATING INCOMEExchange Gain 11,782 46,929 8,642 45,777Profit/(Loss) on Disposal of Property, Plant & Equipment 191 943 (4,864) (6,070)Car Park Income 16,463 11,827 16,463 11,827Promotional Income 18,970 15,874 18,970 15,874Taxi Line Commission 9,593 8,662 9,593 8,662Sundry Income 14,309 15,233 10,270 13,17271,308 99,468 59,074 89,2428. FINANCE COSTInterest on Loans - 84 - 84Overdraft Interest 455 12,654 359 12,631455 12,738 359 12,7159. FINANCE INCOMEInterest income on a loan to employees 2,172 3,317 2,172 2,786Income from short term investments 309,848 84,438 245,015 70,132312,020 87,755 247,187 72,918

notes to the financial statementsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1314010. PROFIT BEFORE TAXGroupCompanyFor the year ended 31st March 2013 2012 2013 2012Rs.’000 Rs.’000 Rs.’000 Rs.’000Profit Before Tax is stated after charging all expensesincluding the followingRemuneration to Executive Directors 54,401 45,731 52,961 44,411Remuneration to Non-Executive Directors 3,000 3,080 1,440 1,320Remuneration to AuditorsAudit Services - Fee 1,413 1,265 913 825Audit Related Services- Fee 662 420 462 265Cost of Defined Employee BenefitsGratuity Charge and Related Cost 29,463 45,214 19,444 27,638Defined Contribution Plan Cost - EPF and ETf 103,001 101,053 63,855 68,031Staff Expenses 1,110,442 1,137,933 610,360 742,836Depreciation 412,314 376,121 244,784 224,384Amortisation of Leasehold Properties 12,404 12,404 - -Donations 10,948 10,599 6,852 6,895De-recognition of Assets on Refurbishments - 18,151 - -Amortisation of Intangible Assets 5,259 5,711 585 1,167Impairment losses on Trade and other receivables 7,935 6,454 7,524 6,185Impairment losses on Insurance Claim Receivable 3,926 6,074 - -11. INCOME TAX EXPENSEProvision for Current Tax (Note 11.1) 187,259 131,591 67,323 20,858Provision for Deferred Tax (Note 11.2) 25,559 7,439 - -10% Withholding Tax on Inter Company Dividends 26,047 13,023 - -238,865 152,053 67,323 20,858The Profits of Trans Asia Hotels PLC, being involved in the promotion of tourism has been taxed on its adjusted profit at 12% in terms of theInland Revenue Act No. 10 of 2006 and the amendments thereto. Income Tax on other income has been provided at the normal tax rate of28% (2012 - 28%).Income tax of Asian Hotels and Properties PLC (Company) on other income has been provided at the normal tax rate of 28%(2012 -28%).

PASSION141 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13notes to the financial statementsGroupCompanyFor the year ended 31st March 2013 2012 2013 2012Rs.’000 Rs.’000 Rs.’000 Rs.’00011.1 reconciliation between Income Tax Expenses andthe Product of Accounting ProfitProfit Before Tax 3,336,251 2,654,511 2,359,460 2,028,739Aggregate Accounting Profit 3,336,251 2,654,511 2,359,460 2,028,739Exempt Profits (2,121,474) (1,948,719) (2,121,230) (1,954,246)Accounting Profit liable to Income Tax 1,214,777 705,792 238,230 74,493Income Tax on Accounting Profit at Applicable Rates 226,026 120,086 66,704 20,858Tax Effect on Aggregate Disallowed Expenses (25,194) (7,903) - -Qualifying Payment Relief (172) (172) - -Tax effect of Revaluation on Buildings De-recognised - (847) - -Under or Over provision on SRL on previous year (165) - - -Under or Over provision on Income Tax previous year (2,351) - - -Tax effect of adjustment to opening Deferred Tax liability 14,055 (4) - -Tax on Inter Company Dividends 26,047 13,023 - -Adjustments on Prior years 619 27,870 619 -Total Income Tax Expenses 238,865 152,053 67,323 20,858Income Tax charged atStandard Rate of 28% - CSE Listed Companies (2012 - 28%) 91,215 37,320 66,704 20,858Concessionary Rate of 12% (2012 - 12%) 97,941 66,401 - -Adjustments on Prior years (1,897) 27,870 619 -Current Tax Expense 187,259 131,591 67,323 20,85811.2 Provision for Deferred TaxDeferred Tax arising fromAccelerated Depreciation for tax purposes 25,425 8,621 - -Post-Employment Medical Benefits 134 (1,182) - -Total Deferred Tax Charge / Reversal 25,559 7,439 - -12. EARNINGS PER SHARENet Profit for the Year 2,494,296 2,148,877 2,292,137 2,007,881Number of Ordinary Shares 442,775 442,775 442,775 442,775Basic Earnings per Share (Rs.) 5.63 4.85 5.18 4.5313. DIVIDEND PER SHAREFinal Dividend Paid - 2010/2011 - 442,775 - 442,775Interim Dividend - 2011/2012 - 442,775 - 442,775Final Dividend Paid - 2011/2012 1,328,326 - 1,328,326 -Interim Dividend - 2012/2013 442,775 - 442,775 -Total Dividends 1,771,101 885,550 1,771,101 885,550Dividend Per Share (Rs.) 4.00 2.00 4.00 2.00

notes to the financial statementsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1314214. PROPERTY, PLANT AND EQUIPMENTGroupFreehold Buildings Outdoor Plant & Base Furniture, Motor Capital Total Total TotalLand Car Park Machinery Stock & Fittings & Vehicles Work In As atDevelopment Circulating Equipment Progress 1st AprilAssets 2013 2012 2011Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000Cost or ValuationAt the beginning of the year 3,855,240 6,561,661 11,783 1,115,876 1,109,689 1,511,082 81,023 20,536 14,266,890 13,911,670 13,474,838Additions - 54,942 - 73,696 118,930 94,618 8,350 138,562 489,098 579,310 581,784Disposals - - - (416) (30,547) (16,016) (9,791) - (56,770) (197,304) (126,878)De-recognition of Assets on Refurbishments(Note 14 b) - - - - - - - - - (26,786) (18,074)Transfers / Adjustments - 27,373 - 2,339 4,115 52,622 - (86,449) - - -Depreciation adjustment on Revaluation - (513,642) - - - - - - (513,642) - -Revaluation Gain 6,163,085 79,180 - - - - - - 6,242,265 - -At the end of the year 10,018,325 6,209,514 11,783 1,191,495 1,202,187 1,642,306 79,582 72,649 20,427,841 14,266,890 13,911,670Accumulated DepreciationAt the beginning of the year - 404,186 1,967 654,233 531,155 652,404 17,908 - 2,261,853 2,063,872 1,822,961Charge for the year - 109,456 1,178 40,795 143,649 109,632 7,604 - 412,314 376,121 345,711Disposals - - (275) (20,456) (13,027) (7,909) - (41,667) (176,930) (103,536)De-recognition of Assets on Refurbishments(Note 14 b) - - - - - - - - - (1,210) (1,264)Transfers / Adjustments - - - - - - - - - - -Transferred to Revaluation - (513,642) - - - - - - (513,642) - -At the end of the year - - 3,145 694,753 654,348 749,009 17,603 - 2,118,858 2,261,853 2,063,872Carrying ValueAs at 31st March 10,018,325 6,209,514 8,638 496,742 547,839 893,297 61,979 72,649 18,308,983 12,005,037 11,847,798(Note-14 a) Freehold Land and Buildings of Asian Hotels and Properties PLC (Group) were valued by M/s. P.B. Kalugalagedara & Associates, a Chartered Valuation Surveyor as at 31stMarch 2013, and the book values were written up to correspond with the valuation. Valuation Method used is Direct Capital Comparison Method based on depreciated current costapproach.Had the revalued Buildings (Group) been included at cost, the carrying value of the said asset would amount to Rs.4,389 Mn. (Rs.4,368 Mn in 2012) Had the revalued Land (Group) beenincluded at cost, the carrying value of the said asset would amount to Rs.470 Mn. (Rs.470 Mn in 2012).(Note-14 b) In the year 2011/12 as part of refurbishment assets amounting to Rs.25.5 Mn (Rs.16.8 Mn in 2011) were de-recognised by the Subsidiary. Rs.7.3 Mn (Rs.4.6 Mn in 2011)of the said write off was charged against the related revaluation reserve, and remaining Rs.18.2 Mn (Rs.11.8 Mn in 2011) was charged to the Income Statement under Other OperatingExpenses. The value of the assets de-recognised was estimated by an Independent Valuer.(Note-14 c)Details of Groups’ Land and Building stated at valuation are indicated below;Property Land /Building Extent LocationFree hold Land and BuildingCompany Land 1 a08 - R0- P05.08 no 77, Galle Road, Colombo 03Building- Stage(1) 348,818 Sq Ft no 77, Galle Road, Colombo 03Building- Stage (11) & (111) 299,975 Sq Ft no 77, Galle Road, Colombo 03Investment PropertiesCompany Building 1 145,196 Sq Ft no 89, Galle Road, Colombo 03subsidiary Building 1 55,548 Sq Ft no. 117, Sir Chittampalam A. Gardiner Mawatha, Colombo 02.Land a01 - R02- P30.0 no. 117, Sir Chittampalam A. Gardiner Mawatha, Colombo 02.Lease hold Propertiessubsidiary Building 1 316,067 Sq Ft no. 115, Sir Chittampalam A. Gardiner Mawatha, Colombo 02.Land a05 - R02- P34.28 No. 115, Sir Chittampalam A. Gardiner Mawatha, Colombo 02.

PASSION143 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13notes to the financial statements(Note-14 d)The Vessel of floating restaurant of the Subsidiary has been classified under Motor Vehicles.(Note-14 e) The cost of the fully depreciated assets which are still in use of the Group and the Company amounting Rs.737.71 Mn (in 2012 Rs.700.13 Mn) and Rs. 390.58 Mn.(in 2012 Rs. 378 Mn) respectively.(Note-14 f)CompanyThere are no assets pledged that required to disclose in the Group.Freehold Buildings Outdoor Plant & Base Furniture, Motor Capital Total Total TotalLand Car Park Machinery Stock & Fittings & Vehicles Work In As atDevelopment Circulating Equipment Progress 1st AprilAssets 2013 2012 2011Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000 Rs.‘000Cost or ValuationAt the beginning of the year 3,855,240 4,547,838 11,783 700,197 414,204 902,030 21,132 15,793 10,468,217 10,331,037 10,036,105Additions - 33,485 - 17,643 85,642 63,043 1,393 82,051 283,257 213,890 353,916Disposals - - - - (22,588) (15,027) (7,882) - (45,497) (76,710) (58,984)Transfers / Adjustments - 27,373 - 2,339 4,115 52,622 - (86,449) - - -Depreciation adjustment on Revaluation - (386,435) - - - - - - (386,435) - -Revaluation 6,163,085 (320,490) - - - - - 5,842,595 - -At the end of the year 10,018,325 3,901,771 11,783 720,179 481,373 1,002,668 14,643 11,395 16,162,137 10,468,217 10,331,037Accumulated DepreciationAt the beginning of the year - 307,576 1,967 435,841 186,878 365,794 10,122 - 1,308,178 1,144,819 985,712Charge for the year - 78,859 1,178 24,136 63,983 73,644 2,984 - 244,784 224,384 210,506Disposals - - - (13,976) (12,038) (7,515) - (33,529) (61,025) (51,399)Transfers / Adjustments - - - - - - - - - -Transferred to Revaluation - (386,435) - - - - - (386,435)At the end of the year - - 3,145 459,977 236,885 427,400 5,591 - 1,132,998 1,308,178 1,144,819Carrying ValueAs at 31st March 10,018,325 3,901,771 8,638 260,202 244,488 575,268 9,052 11,395 15,029,139 9,160,039 9,186,218(Note-14 a) Freehold Land and Buildings of Asian Hotels and Properties PLC were valued by M/s. P.B. Kalugalagedara & Associates, a Chartered Valuation Surveyor as at 31st March2013, and the book values were written up to correspond with the valuation. Valuation Method used is Direct Capital Comparison Method based on depreciated current cost approach.Had the revalued Buildings been included at cost, the carrying value of the said asset would amount to Rs.3,196 Mn. (Rs.3,183 Mn in 2012) Had the revalued Land been included at cost,the carrying value of the said asset would amount to Rs.470 Mn. (Rs.470 Mn in 2012).(Note-14 e) The cost of the fully depreciated assets which are still in use of the Company amounting Rs. 390.58 Mn. (in 2012 Rs. 378 Mn).(Note-14 f) There are no assets pledged that required to disclose in the Company.15. LEASEHOLD PROPERTYGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Cost/ValuationAt the beginning of the year 945,161 945,161 945,161 - - -At the end of the year 945,161 945,161 945,161 - - -Accumulated AmortizationAt the beginning of the year 101,689 89,285 76,881 - - -Charge for the year 12,404 12,404 12,404 - - -At the end of the year 114,093 101,689 89,285 - - -Carrying Value as at 31st March 831,068 843,472 855,876 - - -The leasehold property is amortised on a straight line basis over 74 years. The remaining period of Lease as at 31st March 2013 was 67years.

notes to the financial statementsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1314416. INVESTMENT PROPERTYGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000At the beginning of the year 3,101,540 2,701,972 2,255,476 1,632,000 1,332,280 1,115,460Additions - 92,749 1,732 - 92,749 1,732Change in Fair Value during the year 517,210 306,819 444,764 228,500 206,971 215,088At the end of the year 3,618,750 3,101,540 2,701,972 1,860,500 1,632,000 1,332,280In order to adopt the Fair Value model on Investment Property, as per Sri Lanka Accounting Standard 40 “Investment Property” the Land &Building classified as Investment Property of Asian Hotels and Properties PLC which includes Crescat Boulevard was valued byMr. P.B. Kalugalagedera, a Chartered Valuation Surveyor using investment method of valuation on 01st of April 2005 (date of adoption of theStandard), 31st March 2006, 31st March 2007, 31st March 2009, 31st March 2011, 31st March 2012 and 31st March 2013 respectively.The Commercial Centre of Trans Asia Hotels PLC was valued by Messrs. A.Y. Daniel and Sons, a Professional Valuer using accreditedcontractor (cost) method of valuation on 1st April 2005, 31st March 2006, 31st March 2009 respectively. The Commercial Centre of TransAsia Hotels PLC was valued by Mr. P.B. Kalugalagedera, a Chartered Valuation Surveyor using the Market Value Method on 31st March2011, 31st March 2012 and 31st March 2013 respectively.The valuation of the Investment property of the Trans Asia Hotels PLC has obtained and confirmed that there has been a substantialincrease in value of property as at 31st March 2013 and hence the market value of the asset has been increased to reflect the marketvalue of Rs. 1,758.25 Mn (Rs.1,469.5 Mn in 2012).Rental Income earned from Investment Property by the Company and Group amounted to Rs. 258 Mn (2012 Rs.218 Mn) and Rs. 292 Mn(2012 Rs.274 Mn) respectively. Direct Operating Expenses incurred by the Company and Group amounted to Rs. 75 Mn (2012 Rs.68 Mn)and Rs. 81Mn (2012 Rs.74 Mn) respectively.17. INTANGIBLE ASSETSGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Computer SoftwareCostAt the beginning of the year 31,218 30,000 53,180 8,436 7,715 38,341Additions 1,586 1,218 7,493 274 721 47Disposals - - (30,673) - - (30,673)At the end of the year 32,804 31,218 30,000 8,710 8,436 7,715Accumulated AmortizationAt the beginning of the year 19,028 13,317 38,953 7,063 5,896 35,633Charge for the year 5,259 5,711 5,037 585 1,167 936Disposals - - (30,673) - - (30,673)At the end of the year 24,287 19,028 13,317 7,648 7,063 5,896Carrying Value as at 31st March 8,517 12,190 16,683 1,062 1,373 1,819

PASSION145 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13notes to the financial statements18. INVESTMENTS IN SUBSIDIARYGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Investments in Subsidiary CompaniesNo. ofShares Holdings%Trans Asia HotelsPLC- at cost(Quoted) 86,823,028 43.41 - - 660,045 660,045 660,045Investment at the end of the year - - 660,045 660,045 660,045Market Value of the above number of shares of Trans Asia Hotels PLC (Quoted Investment ) was Rs.6,112 Mn (2012 - Rs.5,808 Mn) as atthe Balance Sheet date.19. LONG TERM INVESTMENTSGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Sri Lanka Hotel & Tourism 100 100 100 100 100 100(-) Fall in value of the Investment (100) (100) (100) (100) (100) (100)- - - - - -The Company has fully provided for the above investment during the year 2009/2010, due to the non recoverability of the same.

notes to the financial statements20. OTHER NON CURRENT FINANCIAL assetsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13146GroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’00020.1 Loans to ExecutivesAt the beginning of the year 43,659 40,972 26,326 35,689 32,838 19,532Loans Granted/ (Transfers) during the year (5,719) 15,095 20,274 (10,152) 10,977 20,274Loans Recovered during the year (11,289) (12,408) (7,494) (7,496) (8,126) (7,494)At the end of the year 26,651 43,659 39,106 18,041 35,689 32,312Receivable within one year (7,437) (26,186) (8,447) (5,703) (24,896) (8,447)Receivable after one year 19,214 17,473 30,659 12,338 10,793 23,86520.2 Insurance Claim ReceivableAt the beginning of the year 28,926 35,000 35,000 - - -Impairment during the year (3,926) (6,074) - - - -Payment received during the year (25,000) - - - - -At the end of the year - 28,926 35,000 - - -20.3 Prepaid Staff Loan 3,357 2,659 - 2,953 2,465 -Total Other Non Current Financial Assets 22,571 49,058 65,659 15,291 13,258 23,86521. INVENTORIESGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Food & Beverage 72,296 63,627 70,729 46,786 41,388 47,430General 10,836 10,552 15,631 8,561 7,497 10,858Diesel/ Furnace/ Gas Stock 13,293 12,874 10,064 9,471 8,916 6,596Engineering Stock 24,806 28,799 26,322 16,206 15,770 14,576Apartment Inventory 21,130 - - 21,130 - -Inventory Slow moving Provision (7,175) - - - - -135,186 115,852 122,746 102,154 73,571 79,460

PASSION147 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13notes to the financial statements22. WORK-IN-PROGRESS - APARTMENTSGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000At the beginning of the year 64,392 1,353,804 596,156 64,392 1,353,804 596,156Incurred during the year 3,897 576,720 2,311,022 3,897 576,720 2,311,022Transferred to Cost of Sales (47,159) (1,866,132) (1,553,374) (47,159) (1,866,132) (1,553,374)Transferred to Apartment Inventory (21,130) - - (21,130) - -Amount at the end of the year - 64,392 1,353,804 - 64,392 1,353,804Last year the Company completed its Apartment project and accordingly there was no WIP - Apartments as at balance sheet date.The completed Apartments which remain unsold have been reported under Note 21 as Inventories.23. TRADE & OTHER RECEIVABLESGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Trade Receivables 419,374 494,683 353,534 221,037 270,293 215,420Other Receivables 76,585 69,800 142,628 39,685 39,454 94,716495,959 564,483 496,162 260,722 309,747 310,136Less- Impairment Losses (Note 23.1) (17,119) (10,698) (4,375) (15,153) (9,143) (3,089)478,840 553,785 491,787 245,569 300,604 307,04723.1 Impairment LossesAt the beginning of the year 10,698 4,375 3,526 9,143 3,089 3,362Provision for the year 7,935 6,454 849 7,524 6,185 (273)Written off during the year (1,514) (131) - (1,514) (131) -At the end of the year 17,119 10,698 4,375 15,153 9,143 3,089

notes to the financial statements24. RELATED PARTY TRANSACTIONSPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13148GroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’00024.1 Amounts due from Related PartiesParent - John Keells Holdings PLC (JKH PLC) 3,303 2,778 833 799 2,567 652Subsidiary - Trans Asia Hotels PLC - - - 68 1 57Companies under Common Control ofJKH PLC 31,356 43,851 47,060 19,269 25,659 29,32034,659 46,629 47,893 20,136 28,227 30,02924.2 Amounts due to Related PartiesParent - John Keells Holdings PLC (JKH PLC) 3,683 5,902 4,985 3,341 3,219 2,887Subsidiary - Trans Asia Hotels PLC - - - 233 205 180Companies under Common Control ofJKH PLC 83,960 78,412 77,432 54,803 53,268 61,20887,643 84,314 82,417 58,377 56,692 64,27525. OTHER CURRENT ASSETSGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Prepayments 60,342 52,753 83,249 27,912 23,722 26,647Advance to Creditors 92,570 75,363 34,612 54,274 69,124 17,408ESC Recoverable 2,861 27,632 25,167 - 22,993 15,522WHT Recoverable 13,715 17,313 9,759 10,727 15,788 4,331169,488 173,061 152,787 92,913 131,627 63,90826. SHORT TERM INVESTMENTSGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Investments in Repo / Treasury Bonds - 19,700 7,000 - 19,700 7,000Fixed and Call Deposits 2,715,796 2,759,790 310,921 2,155,923 2,407,790 35,9212,715,796 2,779,490 317,921 2,155,923 2,427,490 42,921

PASSION149 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1327. STATED CAPITALnotes to the financial statementsGroupCompanyAs at 31st March 2013 2012 As at 1st April 2011 2013 2012 As at 1st April 2011Number of Value of Number of Value of Number of Value of Number of Value of Number of Value of Number of Value ofShares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Sharesin ‘000s in Rs. ‘000 in ‘000s in Rs. ‘000 in ‘000s in Rs. ‘000 in ‘000s in Rs. ‘000 in ‘000s in Rs. ‘000 in ‘000s in Rs. ‘000442,775 3,345,117 442,775 3,345,117 221,388 3,345,117 442,775 3,345,117 442,775 3,345,117 221,388 3,345,11728. CAPITAL RESERVES - REVALUATION RESERVEGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000At the beginning of the year 5,143,193 5,179,592 5,233,818 4,772,950 4,791,408 4,834,140Transferred to Revenue Reserve (Note 28.1) (13,418) (18,458) (42,732) (13,418) (18,458) (42,732)Transferred to Revenue Reserve (Note 28.2) (14,757) (14,757) (13,320) - - -Transferred from Deferred Tax (47,960) - 3,838 - - -Revaluation Gain on Freehold Land &Buildings 6,043,232 - - 5,842,595 - -De-recognition of Assets onRefurbishments - (3,184) (2,012) - - -At the end of the year 11,110,290 5,143,193 5,179,592 10,602,127 4,772,950 4,791,40828.1 The Revaluation Reserve relates to revaluation of land & buildings and comprises the cumulative increase in the fair value of theproperty at the date of revaluation and related adjustments, after transferring the surplus realised to the retained earnings. This couldbe utilised for the purpose of future issue of shares, excluding Rs. 28.28 Mn which relates to the revaluation of the land allocatedfor the apartments. The said amount will be transferred to retained earnings at the time the title of the property is transferred to theapartment owners. The amount transferred to retained earnings during the year is 13.41 Mn. (2012 - Rs. 18.46 Mn).28.2 When the revalued asset is used by an entity, the difference between depreciation based on the revalued carrying amount of theasset and depreciation based on the assets the original cost is transferred from revaluation surplus to retained earnings amountingRs.14.75Mn. (Rs.14.75 Mn in 2012).29. REVENUE RESERVESGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000General Reserve 85,000 85,000 85,000 85,000 85,000 85,000Retained Earnings 7,157,061 6,405,690 5,109,148 5,697,448 5,162,994 4,022,2057,242,061 6,490,690 5,194,148 5,782,448 5,247,994 4,107,20529.1 General Reserve represents amounts set aside from profits by the Directors from 31st March 1980 to 31st March 1984.

notes to the financial statementsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1315030. INTEREST BEARING BORROWINGSGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Commercial BankAt the beginning of the year - - 247,886 - - 247,886Obtained during the year - - - - - -Repayments during the year - - (247,886) - (247,886)At the end of the year - - - - - -Hatton National BankAt the beginning of the year - - 362,980 - - 362,980Obtained during the year - - - - - -Repayments during the year - - (362,980) - (362,980)At the end of the year - - - - - -Operating Lease ObligationsAt the beginning of the year 4,289 5,725 7,161 - - -Repayments during the year (1,436) (1,436) (1,436) - - -2,853 4,289 5,725 - - -Transferred to Current Liabilities (Refer 30.1) (1,437) (1,437) (1,437) - - -At the end of the year (Refer 30.3) 1,416 2,852 4,288 - - -Total Non Current Interest BearingBorrowings (Refer 30.2) 1,416 2,852 4,288 - - -30.1 Current Portion of Borrowings includedin Current LiabilitiesLong Term Loans - - - - - -Operating Lease Obligations 1,437 1,437 1,437 - - -1,437 1,437 1,437 - - -30.2 Non Current portion of Borrowingsincluded under Non Current LiabilitiesLong Term Loans - - - - - -Operating Lease Obligations 1,416 2,852 4,288 - - -1,416 2,852 4,288 - - -30.3 Lease Installments PayablePayable after one year and before 5 years 1,416 2,852 4,288 - - -Payable after 5 years - - - - - -1,416 2,852 4,288 - - -

PASSION151 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13notes to the financial statements31. EMPLOYEE BENEFITSGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Provision for Retiring GratuityAt the beginning of the year 208,696 175,448 152,384 109,551 86,149 78,012Provision made during the year 16,814 19,185 23,483 9,724 11,508 8,901Interest Cost 20,869 17,545 15,239 10,955 8,615 7,801(Gain)/Loss arising from changes in theassumptions or due to (Over) / UnderProvision in the previous years (8,220) 8,484 1,119 (1,235) 7,515 579Payments during the year (23,828) (12,294) (16,777) (12,690) (4,564) (9,144)Transfers (20,234) 328 - (20,234) 328 -At the end of the year 194,097 208,696 175,448 96,071 109,551 86,149The Employee Benefit Liability of the Company and the Group is based on the actuarial valuation carried out as at 31st March 2013 byMr. M. Poopalanathan, AIA, Messrs. Actuarial & Management Consultants (Pvt) Ltd, a firm of professional actuaries.The principal assumptions used in determining the cost of employee benefits were:Discount Rate 11% (2012 - 10%)Future Salary Increases 10% (2012 - 10%)32. DEFERRED TAXATIONGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000At the beginning of the year 255,793 248,354 302,848 - - -Charge / (Reversal) for the year 25,560 7,439 (45,655) - - -Adjustment on Revaluation - - (8,839) - - -Differed Tax effect on revaluation of Buildings 47,960 - - - -At the end of the year 329,313 255,793 248,354 - - -The closing Deferred Tax liability relates to the following,GroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Revaluation of buildings 47,960 - - - - -Accelerated Depreciation for tax purposes 293,116 267,691 259,070 - - -Employee Benefit Liability (11,763) (11,898) (10,716) - - -329,313 255,793 248,354 - - -

notes to the financial statementsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13152In accordance with the BOI agreement dated 11th March 1994 the profits and income of the Company are exempt from taxationuntil year 2014, and at the expiry of said period the following options are available for the Company.(a) Income tax payable for the year of assessment shall be computed at 2% of the Turnover of the Company or;(b) The provisions of the Inland Revenue Laws for the time being imposed shall apply.In the event the Company elects option (a) no Deferred Tax liability will arise even after the expiry of the tax exemption period.The Company needs to make the election only 90 days prior to the expiration of the said tax exemption period after evaluatingall tax implications prevailing at that time. Therefore, no provision has been made in the Financial Statement by the Companyfor Deferred Tax liability which could arise after the tax exemption period in the event the Company elects option (b).33. TRADE & OTHER PAYABLESGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Deposits from Apartments / Shops - 58,330 184,322 - 58,330 184,322Payable to Contractors 1,671 7,575 3,143 1,671 7,575 3,143Retention on Construction 9,998 112,153 173,295 9,998 112,153 173,295Creditors & Accrued Expenses 543,030 468,808 417,722 386,545 302,027 279,985Deposits & Other Payables 88,763 198,093 141,013 67,314 134,768 78,184643,462 844,959 919,495 465,528 614,853 718,92934. OTHER CURRENT LIABILITIESGroupCompanyAs atAs at1st April1st AprilAs at 31st March 2013 2012 2011 2013 2012 2011Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Advances Received 90,678 77,353 48,866 13,877 7,494 34Refundable deposits 3,650 3,130 2,728 3,650 3,130 2,728Performance Bond - 1,082 1,404 - - -Deferred Revenue 28,475 6,782 850 - - -122,803 88,347 53,848 17,527 10,624 2,76235. RELATED PARTY TRANSACTIONSThe Company carries out transactions in the ordinary course of its business with parties who are defined as related parties in LKAS 24Related Party Disclosure, the details of which are reported below. The pricing applicable to such transactions is based on the assessmentof risk and pricing model of the Company and comparable with what is applied to transactions between the Company and its unrelatedcustomers.

PASSION153 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13notes to the financial statementsGROUPCOMPANYFor the year ended 31st March 2013 2012 2013 2012Rs.’000 Rs.’000 Rs.’000 Rs.’00035.1 TRANSACTIONS WITH PARENT COMPANYThe Company’s parent is John Keells Holdings PLCRendering /(Receiving) of Services (14,890) (32,568) (21,360) (19,201)35.2 TRANSACTIONS WITH SUBSIDIARY COMPANYTrans Asia Hotels PLCRendering /(Receiving) of services - - 1,442 1,53035.3 TRANSACTIONS WITH COMPANIESUNDER COMMON CONTROL OF JKH PLC(Purchase) / Sale of Goods (49,933) (61,702) (28,209) (37,912)Rendering /(Receiving) of services (356,896) (178,006) (183,675) (48,706)(Purchase) / Sales of Property, Plant & Equipment (4,056) - (4,056) -35.4 TRANSACTION WITH KEY MANAGEMENTPERSONNEL (KMP) OF THE COMPANYAccording to LKAS 24 Related Party Disclosure “Key Management Personnel” are those having authority and responsibility for planning andcontrolling activities of the entity. Accordingly, the Directors of the Company (including executives and Non-Executive Directors) and theirimmediate family members have been classified as KMP of the Company.As the John Keells Holding PLC is the Parent of the Company and the Board of Directors of the Parent Company have the authority andresponsibility of planning, directing and controlling the activities of the Company, the directors of the parent Company and their immediatefamily member have also been identified as Key Management Personnel of the Company. Immediate family member is defined as spouse ordependent. A dependent is defined as anyone who depends on the respective director for more than 50% of his /her financial needs.GROUPCOMPANYFor the year ended 31st March 2013 2012 2013 2012Rs.’000 Rs.’000 Rs.’000 Rs.’000Key Management PersonnelRendering /(Receiving) of Services 3,443 3,103 3,210 2,896Post Employment benefit planContribution to provide fund 4,037 4,310 3,596 3,296

notes to the financial statementsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1315436. FINANCIAL RISK MANAGEMENTOBJECTIVES AND POLICIESFINANCIAL INSTRUMENTSFinancial instruments held by the Group,principally comprise of cash, loansand other receivables, trade and otherreceivables, trade and other payables, loansand borrowings and finance leases. Themain purpose of these financial instrumentsis to manage the operating, investing andfinancing activities of the Group.Financial risk management of the Group iscarried out based on guidelines establishedby its parent company’s central treasurydepartment (Group Treasury) which comesunder the purview of the Group ExecutiveCommittee (GEC) of the parent company.Group Treasury identifies, evaluates andhedges financial risks in close co-operationwith the Group’s operating units. The parentcompany provides guidelines for overallrisk management, as well, covering specificareas such as credit risk, investment ofexcess liquidity, interest rate risk and foreigncurrency risk.The Group has established guidelines forrisk controlling procedures and for theuse of financial instruments, including aclear segregation of duties with regard tofinancial activities, settlement, accountingand related controlling. The guidelinesupon which the Group’s risk managementprocesses are based are designed toidentify and analyse these risks throughoutthe Group, to set appropriate risk limits andcontrols and to monitor the risks by meansof reliable and up-to-date administrativeand information systems. The guidelinesand systems are regularly reviewed andadjusted to changes in markets andproducts. The Group manages andmonitors these risks primarily through itsoperating and financing activities.The Audit Committee of the Companyoversees how management monitorscompliance with the Company’s riskmanagement policies and procedures,and reviews the adequacy of the riskmanagement framework in relation to therisks faced by the Company. The AuditCommittee is assisted in its oversight roleby Internal Audit. Internal Audit undertakesboth regular and ad hoc reviews of riskmanagement controls and procedures, theresults of which are reported to the AuditCommittee.36.1 Credit riskCredit risk is the risk that a counter partywill not meet its obligations under a financialinstrument or customer contract, leadingto a financial loss. The Group is exposedto credit risk from its operating activities(primarily trade receivables) and from itsfinancing activities, including deposits withbanks and financial institutions, foreignexchange transactions and other financialinstruments.The Group trades only with recognised,credit worthy third parties. It is the Group’spolicy that all clients who wish to trade oncredit terms are subject to credit verificationprocedures. In addition, receivable balancesare monitored on an ongoing basis withthe result that the Group’s exposure to baddebts is not significant.With respect to credit risk arising from theother financial assets of the Group, suchas cash and cash equivalents, the Group’sexposure to credit risk arises from defaultof the counter party. The Group managesits operations to avoid any excessiveconcentration of counter party risk and theGroup takes all reasonable steps to ensurethe counter parties fulfill their obligations.36.1.1 Credit risk exposureCredit risk is the risk of financial loss tothe Group, if a customer or counter partyto a financial instrument fails to meetits contractual obligations, and arisesprincipally from the Group’s receivablesfrom customers and placements in depositswith banking institutions and in governmentsecurities.

PASSION155 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13notes to the financial statementsThe carrying amount of financial assets representing the maximum credit exposure at the end of the reporting period is as follows:As at 31st March 2013 Note Other Cash in Trade Other Amounts Total % ofnon current hand and and other investments due from allocationfinancial at bank receivables relatedassetspartiesRs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Deposits with bank 36.1.2 - - - 2,715,796 - 2,715,796 74%Loans to executives 36.1.3 19,620 - 7,436 - - 27,055 1%Trade and other receivables 36.1.4 - - 471,404 - - 471,404 13%Amounts due from related parties 36.1.5 - - - - 34,659 34,659 1%Cash in hand and at bank 36.1.6 - 407,409 - - - 407,409 11%Total credit risk exposure 19,620 407,409 478,840 2,715,796 34,659 3,656,324 100%Total equity risk exposure - - - - - - 0%Total 19,620 407,409 478,840 2,715,796 34,659 3,656,324 100%As at 31st March 2012 Note Other Cash in Trade Other Amounts Total % ofnon current hand and and other investments due from allocationfinancial at bank receivables relatedassetspartiesRs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Deposits with bank 36.1.2 - 13,706 - 2,779,490 - 2,793,196 75%Loans to executives 36.1.3 25,350 - 20,397 - - 45,746 1%Trade and other receivables 36.1.4 - - 533,388 - - 533,388 14%Amounts due from related parties 36.1.5 - - - - 46,629 46,629 1%Cash in hand and at bank 36.1.6 - 291,459 - - - 291,459 8%Total credit risk exposure 25,350 305,165 553,785 2,779,490 46,629 3,710,418 100%Total equity risk exposure - - - - - - 0%Total 25,350 305,165 553,785 2,779,490 46,629 3,710,418 100%36.1.2 Deposits with bankDeposits with bank mainly consist of fixed and call deposits .As at 31 March 2013, fixed and call deposits comprise 100% (2012- 100%) were rated “A” or better.GroupCompanyAs at 31 March 2013 2012 2013 2,012Rs. ‘000 Rating% Rs. ‘000 Rating % Rs. ‘000 Rating % Rs. ‘000 Rating %of total of total of total of totalAAA - 0% 408,237 15% - 0.0% 408,237 16.8%AA 559,873 21% 352,000 13% - 0.0% - 0.0%AA+ 1,531,166 56% - 0% 1,531,166 71.0% - 0.0%AA- 624,757 23% 500,000 18% 624,757 29.0% 500,000 20.6%A - 0% 1,519,253 55% - 0.0% 1,519,253 62.6%Total 2,715,796 100% 2,779,490 100% 2,155,923 100% 2,427,490 100%* As per Fitch ratings

notes to the financial statementsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1315636.1.3 Loans to executivesLoans to executive portfolio is largely made up of vehicle loans which are given to staff at manager level and above. The respective business units have obtained thenecessary Power of Attorney/promissory notes as collateral for the loans granted.36.1.4 Trade and other receivablesGroupCompany2013 2012 2013 2012Rs.’000 Rs.’000 Rs.’000 Rs.’000Neither past due nor impaired 76,585 69,800 39,685 39,454Past due but not impaired < 30 days 241,820 263,633 165,535 167,28630–60 days 146,615 131,009 41,929 46,84161–90 days 13,717 26,994 4,235 5,50191–120 days 5,161 10,630 314 (1,585)121–180 days (6,029) (3,770) (6,616) (9,836)> 181 days 19,605 66,317 17,155 62,216Impaired (1,514) (131) (1,514) (131)Gross carrying value 495,959 564,483 260,722 309,748Less: impairment provisionIndividually assessed impairment provision (1,966) (1,555) - -Collectively assessed impairment provision (15,153) (9,143) (15,153) (9,143)Total 478,840 553,785 245,569 300,604The Group/Company has obtained customer deposit from major customers/corporate clients by reviewing their past performance and creditworthiness, as collateral.The requirement for an impairment is analysed at each reporting date on an individual basis for major clients.36.1.5 Amounts due from related partiesThe Group/Company amounts due from related party mainly consists of balances from affiliate companies and parent.36.1.6 Credit risk relating to cash and cash equivalentsIn order to mitigate the concentration, settlement and operational risks related to cash and cash equivalents, the Company consciously managesthe exposure to a single counterparty taking into consideration, where relevant, the rating or financial standing of the counterparty, where theposition is reviewed as and when required, the duration of the exposure in managing such exposures and the nature of the transaction andagreement governing the exposure. The company held cash and cash equivalents amounting to of Rs. 2,340 Mn as at 31 March 2013 (2012 – Rs.2,535 Mn).

PASSION157 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13notes to the financial statements36.2 Liquidity RiskThe Group’s policy is to hold cash and undrawn committed facilities at a level sufficient to ensure that the Group has available funds to meet itsshort and medium term capital and funding obligations, including organic growth and acquisition activities, and to meet any unforeseen obligationsand opportunities. The Group holds cash and undrawn committed facilities to enable the Group to manage its liquidity risk.The Group monitors its risk to a shortage of funds using a daily cash management process. This process considers the maturity of both theGroup’s financial investments and financial assets (e.g. accounts receivable, other financial assets) and projected cash flows from operations.The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of multiple sources of funding includingbank loans, loan notes, overdrafts and finance leases over a broad spread of maturities.36.2.1 Net (debt)/cashGroupCompany2013 2012 2013 2012Rs.’000 Rs.’000 Rs.’000 Rs.’000Short term investments 2,715,796 2,779,490 2,155,923 2,427,490Cash in hand and at bank 407,409 305,164 307,568 181,014Adjustments to liquid assets - - - -Total liquid Assets 3,123,205 3,084,654 2,463,491 2,608,504Borrowings 1,416 2,852 - -Short term borrowings - - - -Current portion of borrowings 1,437 1,437 - -Bank overdrafts 162,683 108,990 123,105 73,084Total liabilities 165,536 113,279 123,105 73,084Net (debt)/cash 2,957,669 2,971,375 2,340,386 2,535,42036.3 Market riskMarket risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect ‘s income or the value of itsholdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptableparameters, while optimizing the return.36.3.1 Currency riskForeign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate, due to changes in foreign exchangerates. Group as at the reporting date, do not hold significant ‘Financial instruments’ denominated in currencies other than its functional / reportingcurrency, hence do not get significantly exposed to currency risk arising from translation of such balances in to the functional / reporting currency,which is Sri Lankan Rupees.However, Group engages in transactions associated with foreign currencies in its ordinary course of operations, hence exposed to ‘Currency risk’.Across the industry, the hotel rates targeting the foreign tourists are quoted in US Dollar terms. However a fluctuation in the exchange rate will nothave a significant impact since majority of the quotes are converted to local currency at the point of invoicing. The Group monitors fluctuations inforeign exchange rates and takes precautionary measures to revise its exchange rates on a regular basis, in an attempt to mitigate the exposure tocurrency risk arising from its transactions.

notes to the financial statementsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1315836.3.2 Interest Rate RiskInterest Rate risk mainly arises as a result of Company having interest sensitive assets and liabilities which are directly impacted by changes in theinterest rates. Management monitors the sensitivities on regular basis and ensure such risks are manage on a timely manner.36.4 Accounting classifications and fair valuesThe Group do not designate any of its financial assets/ liabilities at fair value, hence a classification between fair value hierarchy do not apply.Fair values vs. carrying amountsHeld to Loans and Available Other Total Fair31st March 2013 maturity receivables for sale financial carrying Valueliabilities amountRs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Cash and cash equivalents 2,960,522 2,960,522 2,960,522Trade and other receivables 478,840 478,840 478,8403,439,362 - - 3,439,362 3,439,362Trade and other payables - - 643,462 643,462 643,462- - 643,462 643,462 643,46231st March 2012Cash and cash equivalents 2,975,664 - - 2,975,664 2,975,664Trade and other receivables 553,785 - - 553,785 553,7853,529,449 - - 3,529,449 3,529,449Trade and other payables - 844,959 844,959 844,959- - 844,959 844,959 844,959

PASSION159 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13notes to the financial statements37. FIRST TIME ADOPTION OF SLFRS/LKASAs stated in note 2.(a) these are the Company and the Group’s first Financial Statements prepared in accordance with new SLASs.The accounting policies set out in Note 2 have been applied in preparing the Financial Statements for the year ended 31 March 2013,the comparative information presented in these Financial Statements for the year ended 31 March 2012 and in the preparation of an openingSLAS statement of financial position at 1 April 2011 (the Company and the Group’s date of transition).In preparing the opening SLAS statement of financial position, the Company and the Group should adjust amounts reported previously inFinancial Statements prepared in accordance with previous SLASs. An explanation of how the transition from previous SLASs has affectedthe Company and the Group’s financial position and financial performance is set out in the followings tables and notes that accompany thetables.37.1 RECONCILIATION INCOME STATEMENTGroupCompanyAs per Effect of As per As per Effect of As perFor the year ended 31st March 2012 SLAS transition to SLFRS/ SLAS transition to SLFRS/SLFRS/LKAS LKAS SLFRS/LKAS LKASRs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Revenue (Refer 37.4.1) 8,861,173 (5,932) 8,855,241 6,479,762 - 6,479,762Cost of sales (4,477,465) - (4,477,465) (3,556,776) - (3,556,776)Gross profit 4,383,708 (5,932) 4,377,776 2,922,986 - 2,922,986Dividend income - - 117,211 - 117,211Other operating income (Refer 37.4.2) 185,789 (86,321) 99,468 160,992 (71,750) 89,242Administrative expenses (Refer 37.4.3) (1,522,045) (444) (1,522,489) (970,636) (372) (971,008)Distribution expenses (170,447) - (170,447) (99,707) - (99,707)Other operating expenses (511,633) - (511,633) (297,159) - (297,159)Finance costs (12,738) - (12,738) (12,715) - (12,715)Finance income (Refer 37.4.2) - 87,755 87,755 - 72,918 72,918Change in Fair Value of Investment Property 306,819 - 306,819 206,971 - 206,971Profit before tax 2,659,453 (4,942) 2,654,511 2,027,943 796 2,028,739Tax expense (152,053) - (152,053) (20,858) - (20,858)Profit for the period 2,507,400 (4,942) 2,502,458 2,007,085 796 2,007,881

notes to the financial statementsFIRST TIME ADOPTION OF SLFRS/LKAS (Cont.)37.2 RECONCILIATION OF EQUITY - CONSOLIDATED STATEMENT OF FINANCIAL POSITIONPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13160Equity as at 31st March 2012 Equity As at 1st April 2011As per Effect of As per As per Effect of As perSLAS transition to SLFRS/ SLAS transition to SLFRS/SLFRS/LKAS LKAS SLFRS/LKAS LKASRs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000ASSETSNon-current assetsProperty, Plant and Equipment 12,005,037 - 12,005,037 11,847,798 - 11,847,798Leasehold Property 843,472 - 843,472 855,876 - 855,876Investment Property 3,101,540 - 3,101,540 2,701,972 - 2,701,972Intangible Assets 12,190 - 12,190 16,683 - 16,683Other Non Current Financial Assets (Refer 37.4.3) 48,068 990 49,058 65,659 - 65,65916,010,307 990 16,011,297 15,487,988 - 15,487,988Current assetsInventories 115,852 - 115,852 122,746 - 122,746Work in Progress - Apartments 64,392 - 64,392 1,353,804 - 1,353,804Trade and Other Receivables (Refer 37.4.4) 570,066 (16,281) 553,785 491,787 - 491,787Amounts Due from Related Parties 46,629 - 46,629 47,893 - 47,893Other Current Assets 173,061 - 173,061 152,787 - 152,787Short Term Investments (Refer 37.4.4) 2,763,209 16,281 2,779,490 317,921 - 317,921Cash in Hand and at Bank 305,164 - 305,164 176,350 - 176,3504,038,373 - 4,038,373 2,663,288 - 2,663,288Total assets 20,048,680 990 20,049,670 18,151,276 - 18,151,276EQUITY AND LIABILITIESEquity attributable to equity holders of the parentStated Capital 3,345,117 - 3,345,117 3,345,117 - 3,345,117Capital Reserves 5,143,193 - 5,143,193 5,179,592 - 5,179,592Revenue Reserves (Refer 37.4.5) 6,492,754 (2,064) 6,490,690 5,194,517 (369) 5,194,14814,981,064 (2,064) 14,979,000 13,719,226 (369) 13,718,857Non-controlling interests 2,966,837 (3,728) 2,963,109 2,783,930 (481) 2,783,449Total equity 17,947,901 (5,792) 17,942,109 16,503,156 (850) 16,502,306Non-current liabilitiesBorrowings 2,852 - 2,852 4,288 - 4,288Employee Benefit Liability 208,696 - 208,696 175,448 - 175,448Deferred Taxation 255,793 - 255,793 248,354 - 248,354467,341 - 467,341 428,090 - 428,090Current liabilitiesTrade and Other Payables (Refer 37.4.1) 838,177 6,782 844,959 918,645 850 919,495Amounts Due to Related Parties 84,314 - 84,314 82,417 - 82,417Current Taxation 69,398 - 69,398 79,155 - 79,155Dividend Payable 442,775 - 442,775 - - -Current Portion of Interest Bearing Borrowings 1,437 - 1,437 1,437 - 1,437Other Current Liabilities 88,347 - 88,347 53,848 - 53,848Bank Overdrafts 108,990 - 108,990 84,528 - 84,5281,633,438 6,782 1,640,220 1,220,030 850 1,220,880Total equity and liabilities 20,048,680 990 20,049,670 18,151,276 - 18,151,276

PASSION161 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13notes to the financial statementsFIRST TIME ADOPTION OF SLFRS/LKAS (Cont.)37.3 RECONCILIATION OF EQUITY - COMPANY STATEMENT OF FINANCIAL POSITIONEquity as at 31st March 2012 Equity As at 1st April 2011As per Effect of As per As per Effect of As perSLAS transition to SLFRS/ SLAS transition to SLFRS/SLFRS/LKAS LKAS SLFRS/LKAS LKASRs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000ASSETSNon-current assetsProperty, Plant and Equipment 9,160,039 - 9,160,039 9,186,218 - 9,186,218Investment Property 1,632,000 - 1,632,000 1,332,280 - 1,332,280Intangible Assets 1,373 - 1,373 1,819 - 1,819Investments in Subsidiaries 660,045 - 660,045 660,045 - 660,045Other Non Current Financial Assets (Refer 37.4.3) 12,462 796 13,258 23,865 - 23,86511,465,919 796 11,466,715 11,204,227 - 11,204,227Current assetsInventories 73,571 - 73,571 79,460 - 79,460Work in Progress - Apartments 64,392 - 64,392 1,353,804 - 1,353,804Trade and Other Receivables (Refer 37.4.4) 316,885 (16,281) 300,604 307,047 - 307,047Amounts Due from Related Parties 28,227 - 28,227 30,029 - 30,029Other Current Assets 131,627 - 131,627 63,908 - 63,908Short Terms Investments (Refer 37.4.4) 2,411,209 16,281 2,427,490 42,921 - 42,921Cash in Hand and at Bank 181,014 - 181,014 115,712 - 115,7123,206,925 - 3,206,925 1,992,881 - 1,992,881Total assets 14,672,844 796 14,673,640 13,197,108 - 13,197,108EQUITY AND LIABILITIESEquity attributable to equity holders of the parentStated Capital 3,345,117 - 3,345,117 3,345,117 - 3,345,117Capital Reserves 4,772,950 - 4,772,950 4,791,408 - 4,791,408Revenue Reserves (Refer 37.4.5) 5,247,198 796 5,247,994 4,107,205 - 4,107,205Total equity 13,365,265 796 13,366,061 12,243,730 - 12,243,730Non-current liabilitiesBorrowings - - - - - -Employee Benefit Liability 109,551 - 109,551 86,149 - 86,149Deferred Taxation - - - - - -109,551 - 109,551 86,149 - 86,149Current liabilitiesTrade and Other Payables (Refer 37.4.1) 614,853 - 614,853 718,929 - 718,929Amounts Due to Related Parties 56,692 - 56,692 64,275 - 64,275Dividend Payable 442,775 - 442,775 - - -Other Current Liabilities 10,624 - 10,624 2,762 - 2,762Bank Overdrafts 73,084 - 73,084 81,263 - 81,2631,198,028 - 1,198,028 867,229 - 867,229Total equity and liabilities 14,672,844 796 14,673,640 13,197,108 - 13,197,108

notes to the financial statementsFIRST TIME ADOPTION OF SLFRS/LKAS (Cont.)PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1316237.4 NOTES TO THE RECONCILIATIONS37.4.1 Deferred revenue recognitionUnder previous accounting standards the revenue was not allocated to vouchers and complimentary rooms given free to customers tobe used in the future. Hence the revenue was not deferred. Under new accounting standards the revenue is allocated to vouchers andcomplimentary rooms and revenue is recognised when they are utilised by the customers. Until such time the revenue on such vouchersand complimentary rooms are deferred.The impact arising from the above is summarised as follows:Statement of comprehensive income31stMarch 2012Rs.’000Revenue (5,932)(5,932)Statement of financial position 1st 31st TotalApril 2011 March 2012 31.03.2012Rs.’000 Rs.’000 Rs.’000Revenue reserve (369) (2,575) (2,944)Non-controlling interests (481) (3,357) (3,838)Other current liabilities 850 5,932 6,782- - -37.4.2 Reclassification of Financial IncomeThe Company and Group classified the interest income in to ‘financial income’, which was previously classified in to “other income”.The impact arising from the above is summarized as follows:Statement of comprehensive income 31st March 2012 Group CompanyRs.’000 Rs.’000Other Income (86,321) (71,750)Finance Income 86,321 71,750Net effect on earnings - -37.4.3 Adjustment relating to the Staff Vehicle LoansUnder previous accounting standards the staff loan was stated at the amount that they were estimated to realised. Under new accountingstandards staff loan at initial recognition was measured at fair value plus directly attributable transaction cost. Since staff loan given at belowmarket rate fair valuation was required and the different on fair value measurements was recognised as prepaid staff cost and amortised overthe term of the loan.

PASSION163 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13FIRST TIME ADOPTION OF SLFRS/LKAS (Cont.)notes to the financial statements37.4 NOTES TO THE RECONCILIATIONS (Cont.)The impact arising from the above is summarized as follows:Statement of comprehensive income 31st March 2012 Group CompanyRs.’000 Rs.’000Finance income 1,434 1,168Administrative expenses (444) (372)Net effect on retained earnings at the end of the period 880 796Net effect on Non-controlling Interest 110 -Statement of financial position 31st March 2012 Group CompanyRs.’000 Rs.’000Other Financial assets 1,216 796Trade and other receivables (226) -Net effect on retained earnings at the end of the period 880 796Net effect on Non-controlling Interest 110 -37.4.4 Reclassification of Interest Receivables from Short Term InvestmentsInterest Receivables which was previously classified under Trade and Other Receivables have been classified to Short Term Investments toreflect the amortised cost of the Short Term Investments.The impact arising from the above is summarised as follows:31st March 2012 1st April 2011Statement of financial position Group Company Group CompanyRs.’000 Rs.’000 Rs.’000 Rs.’000Trade and other receivables (16,281) (16,281) - -Short Term Investments 16,281 16,281 - -Net effect on retained earnings at the end of the period - - - -

notes to the financial statementsFIRST TIME ADOPTION OF SLFRS/LKAS (Cont.)PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1316437.4 NOTES TO THE RECONCILIATIONS (Contd.)37.4.5 Impact on earnings / retained earningsThe above changes increased / (decreased) the earnings for the periods as follows:Statement of comprehensive income 31st March 2012 Group CompanyRs.’000 Rs.’000Revenue (5,932) -Administrative expenses (444) (372)Finance income 1,434 1,168Net effect on earnings for the period (1,695) 796Net effect on Non-controlling Interest (3,247) -GroupStatement of financial position 1st 31st TotalApril 2011 March 2012 31.03.2012Rs.’000 Rs.’000 Rs.’000Other Non Current Financial Assets - 990 990Other current liabilities 850 5,932 6,782Net effect on retained earnings at the end of the period (369) (1,695) (2,064)Net effect on Non-controlling Interest (481) (3,247) (3,728)CompanyStatement of financial position 1st 31st TotalApril 2011 March 2012 31.03.2012Rs.’000 Rs.’000 Rs.’000Other Non Current Financial Assets - 796 796Net effect on retained earnings at the end of the period - 796 79637.4.6 Cash flow statementNo material impact to the Cash flow statements of the Company and the Group arises from the transition from SLAS to SLFRS/LKAS.

PASSION165 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1338. OPERATING SEGMENT INFORMATIONnotes to the financial statementsHOTELS PROPERTY GROUPTotal2013 2012 2013 2012 2013 2012Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000REVENUESegment Revenue 7,428,633 6,123,861 462,345 2,731,380 7,890,978 8,855,241Segment Operating Profits BeforeFinance Expenses 2,848,833 1,899,283 205,085 578,358 3,053,918 2,477,641Inter Company Dividends (234,422) (117,211) - - (234,422) (117,211)Finance Expenses (96) (107) (359) (12,631) (455) (12,738)Change in Fair Value of Investment PropertiesCompany - - 228,500 206,971 228,500 206,971Commercial Centre of Subsidiary - - 288,710 99,848 288,710 99,848Profit Before Taxation 2,614,315 1,781,965 721,936 872,546 3,336,251 2,654,511Income Tax Expense (188,888) (128,645) (23,930) (10,385) (212,818) (139,030)Eliminations (26,047) (13,023) - - (26,047) (13,023)Profit After Taxation 2,399,380 1,640,297 698,006 862,161 3,097,386 2,502,458Minority Interest - - - - (603,090) (353,581)Net Profit for the Year 2,399,380 1,640,297 698,006 862,161 2,494,296 2,148,877ASSETSSegment Assets 20,637,284 14,337,342 8,409,145 7,835,498 29,046,429 22,172,840Eliminations - - - - (2,315,162) (2,123,170)Total Assets 20,637,284 14,337,342 8,409,145 7,835,498 26,731,267 20,049,670LIABILITIESSegment Liabilities 3,076,780 3,143,769 186,434 824,342 3,263,214 3,968,111Eliminations/Adjustments - - - - (1,655,106) (1,860,548)Total Liabilities 3,076,780 3,143,769 186,434 824,342 1,608,108 2,107,563OTHERSPurchase / Transfers and Construction ofProperty, Plant and Equipment 486,873 569,380 3,811 9,930 490,684 579,310Depreciation / Amortisation 422,436 374,316 7,541 19,920 429,977 394,236Gratuity Charge and Related Costs 29,037 41,278 426 3,936 29,463 45,214

notes to the financial statements39. CONTINGENT LIABILITIESThere were no material contingent liabilities existing as at balance sheet date.PASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /1316640. CAPITAL COMMITMENTSThe Asian Hotels & Properties PLC Group had capital Expenditure contracted for Rs. 47.4 Mn as at 31st March 2013, which were notprovided for in the consolidated financial statements.41. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEThere have been no events subsequent to the Balance Sheet date which would have any material effect on the Company or on the Group.The Board of Directors of the Company has declared a final Dividend of Rs.3/- per share for the financial year ended 31st March 2013.As required by Section 56 (2) of the Companies Act No 7 of 2007, the Board of Directors have confirmed that the Company satisfies theSolvency test in accordance with Section 57 of the Companies Act No. 7 of 2007, and have obtained a certificate from Auditors, prior todeclaring a final Dividend.In accordance with Sri Lanka Accounting Standard (LKAS) 10, Events after Balance Sheet date, the proposed final Dividend has not beenrecognised as a liability in the Financial Statements as at 31st March 2013.42. DIRECTORS’ RESPONSIBILITY STATEMENTThe Board of Directors is responsible for the preparation and presentation of these Financial Statements. Please refer to the page 124 for theStatement of Directors’ Responsibility for Financial Reporting.

PASSION167 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13consolidated value added statement2013 2012In Rs. ‘000sRevenue 7,890,978 8,855,241Adjustment for Change in Fair Value of Investment Property 517,210 306,819Adjustment for Finance Income 312,020 247,187Adjustment for other Income 71,308 99,4688,791,516 9,508,715Less : Cost of Materials & ServicesPurchased from external sources 1,161,045 4,012,074Value Added 7,630,471 5,496,641Distributed as follows: 2013 % 2012 %To Employees as Remuneration 1,242,906 16 1,284,200 23To the Government as Taxes 1,106,309 14 873,407 16To the Providers of Capitalas Interest on Loans 455 0 12,738 0as Non-controlling Interest 603,090 8 356,828 6To Shareholders as Dividends 1,771,101 23 442,775 8Retained within the businessas Depreciation 412,314 5 376,121 7as Reserves 2,494,296 33 2,150,572 397,630,471 100 5,496,641 100Distribution of Value Added2012/13Distribution of Value Added2011/12To Employees as Remuneration 16%To the Government as Taxes 15%As Interest on Loans 0%As Minority Interest 8%To Shareholders as Dividends 23%As Depreciation 5%As Reserves 33%To Employees as Remuneration 23%To the Government as Taxes 16%As Interest on Loans 0%As Minority Interest 7%To Shareholders as Dividends 8%As Depreciation 7%As Reserves 39%

information to shareholders & investorsPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13168Stock Exchange ListingThe Issued ordinary shares of Asian Hotels and Properties PLC are listed with the Colombo Stock Exchange of Sri Lanka. The AuditedFinancial Statements of the Company and the Consolidated Financial Statements for the year ended 31st March 2013 have been submittedto the Colombo Stock Exchange.Distribution of Shareholdings31.03.2013 31.03.2012From To Number Total Percentage Number of Total Percentageof Share Share of Share Share Share of ShareHolders Holdings Holdings Holdings Holders Holdings1 - 1,000 2,195 655,015 0.1 2,159 670,085 0.11,001 - 10,000 786 2,817,146 0.7 816 2,918,703 0.710,001 - 100,000 176 5,005,402 1.1 193 5,592,386 1.3100,001 - 1,000,000 31 7,871,001 1.8 32 8,822,525 2.01,000,001 and above 15 426,426,736 96.3 17 424,771,601 95.93,203 442,775,300 100.0 3,217 442,775,300 100.0Earnings per ShareDividend Per ShareRs.6.005.004.003.002.001.0002009 2010 2011 2012 2013Rs.4.504.003.503.002.502.001.501.000.5002009 2010 2011 2012 2013Net Asset Value per ShareCurrent RatioRs.60.0050.0040.0030.0020.0010.0002009 2010 2011 2012 2013Times4.003.503.002.502.001.501.000.5002009 2010 2011 2012 2013

PASSION169 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13Analysis of ShareholdersINFORMATION TO SHAREHOLDERS & INVESTORS31.03.2013 31.03.2012Categories of Shareholders Holdings HoldingsNumber % Number %Individual 13,893,764 3.14 14,810,661 3.34Institutions 428,881,536 96.86 427,964,639 96.66442,775,300 100.00 442,775,300 100.00Resident 415,494,111 93.84 414,345,159 93.58Non Resident 27,281,189 6.16 28,430,141 6.42442,775,300 100.00 442,775,300 100.00Public 94,923,108 21.44 94,923,108 21.44Non Public* 347,852,192 78.56 347,852,192 78.56442,775,300 100.00 442,775,300 100.00*Includes shareholdings of Parent Company, Directors & Spouses.For the Year Ended 31st March 2013 2012Market ValueHighest Market Price per share rs. 90.00 200.00Lowest Market Price per share rs. 65.00 61.00Last Traded Market Price per share rs. 70.00 78.00Dividend PaymentsInterim Dividend per Share rs. 1.00 1.00Final Dividend per Share rs. 3.00 2.00

INFORMATION TO SHAREHOLDERS & INVESTORSTop Twenty ShareholdersPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13170As at 31.03.2013 As at 31.03.2012ShareShareName Share Holdings Share HoldingsHoldings Percentage Holdings PercentageJohn Keells Holdings PLC 347,824,192 78.56 347,824,192 78.56Employees Provident Fund 24,209,022 5.47 18,848,807 4.26Sri Lanka Insurance Corporation Ltd-Life Fund 10,055,900 2.27 10,055,900 2.27Bank of Ceylon A/C Ceybank Unit Trust 9,190,407 2.08 9,773,110 2.21Fi-Ciblux S/A Batterymarch Global Emerging Market Fund 8,750,000 1.98 8,750,000 1.98Goldman Sachs & Co S/A Artha Master Fund Ltd. 6,696,512 1.51 6,696,512 1.51HSBC International Nominees Limited-MSNY -BayPond Partners L.P. 3,580,000 0.81 3,580,000 0.81Dr. S. Yaddehige 3,415,200 0.77 3,415,200 0.77Bank of Ceylon-No. 2 A/C 2,583,400 0.58 2,583,400 0.58Bank of Ceylon-No. 1 Account 2,232,400 0.50 2,232,400 0.50Mr. M.J. Fernando 2,018,000 0.46 2,018,000 0.46AVIVA NDB Insurance PLC A/C No.07 1,903,439 0.43 1,041,600 0.24HSBC International Nominees Limited-MSNY-BayPond Investors (Bermuda) L.P 1,724,200 0.39 1,724,200 0.39Bank of Ceylon A/C Ceybank Century Growth Fund 1,144,564 0.26 1,090,200 0.25Mercantile Investments and Finance PLC 1,099,500 0.25 3,000,000 0.68BNYM SA/NV-Legg Mason Global Funds PLC 806,300 0.18 806,300 0.18Employee Trust Fund Board 767,478 0.17 1,022,880 0.23Mr. M. Mannawarajan 650,016 0.15 650,016 0.15Richard Pieris & Co Ltd - Account No. 01 639,400 0.14 639,400 0.14Goldman Sachs & Co S/A Artha Emerging Markets Eris 527,944 0.12 - -429,817,874 97.07 425,752,117 96.17

PASSION171 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /135 year financial review of the group2012/13 2011/12 2010/11 2009/10 2008/09Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000Revenue 7,890,978 8,855,241 7,457,325 4,899,671 4,576,094Profit After Taxation 3,097,386 2,502,458 2,147,886 688,806 622,563Share Capital & ReservesStated Capital 3,345,117 3,345,117 3,345,117 3,345,117 3,345,117Reserve on Revaluation 11,110,290 5,143,193 5,179,592 5,233,818 5,310,167General Reserve 85,000 85,000 85,000 85,000 85,000Retained Profit 7,157,061 6,405,690 5,109,517 3,500,332 3,242,883Shareholders’ Funds 21,697,468 14,979,000 13,719,226 12,164,267 11,983,167Non-controlling Interest 3,425,691 2,963,109 2,783,930 2,464,777 2,441,84825,123,159 17,942,109 16,503,156 14,629,044 14,425,015Assets & (Liabilities)Current Assets 3,941,378 4,038,373 2,705,026 1,766,283 1,804,385Current Liabilities (1,083,282) (1,640,220) (1,219,974) (1,582,940) (1,351,939)Net Current Assets 2,858,096 2,398,153 1,485,052 183,343 452,446Non Current Assets 22,789,889 16,011,297 15,446,194 15,397,524 15,037,478Non Current Liabilities (524,826) (467,341) (428,090) (951,823) (1,064,909)25,123,159 17,942,109 16,503,156 14,629,044 14,425,015Ratio AnalysisEarnings per Share (Rs)* 5.63 4.85 4.01 1.42 1.20Net Assets per Share (Rs) 49.00 33.83 30.98 27.47 27.06Current Ratio (Times) 3.64 2.46 2.22 1.12 1.33Borrowings as a % of Total Assets 0.62% 2.77% 0.50% 4.05% 4.80%After Tax Return on Net Assets 11.50% 14.35% 12.93% 5.18% 4.43%Dividend Per Share* 4.00 2.00 0.50 1.00 1.50P/E Ratio 12.43 16.07 23.44 46.22 10.32* The increased number of ordinary shares of 442,775,300 has been considered for the previous year’s comparative figures.5 year financial summary property development division2012/13 2011/12 2010/11 2009/10 2008/09Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Revenue 428,062 2,675,625 2,468,699 1,586,995 1,515,014Cost of Sales 265,101 2,066,140 1,779,735 1,189,314 1,076,067Gross Profit 162,961 609,485 688,964 397,681 438,947Administration & Other Overheads 121,012 205,362 163,898 151,518 122,582Other Income 134,559 111,903 62,638 43,001 90,396Change in Fair Value of Investment Property 228,500 206,971 215,088 - 31,312Net Profit Before Tax 405,008 722,997 802,792 289,164 438,073

5 year financial summary cinnamon grand hotelPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /131722012/13 2011/12 2010/11 2009/10 2008/09Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000RevenueRooms 2,460,356 1,921,952 1,425,573 947,949 854,479Food 1,638,767 1,405,859 1,220,522 1,007,744 808,161Beverage 284,989 249,572 216,899 169,933 141,648Food & Beverage Others 19,488 20,264 15,638 13,574 12,606Telephone 4,914 5,349 6,451 7,746 8,560Rental Income 15,289 12,510 11,419 11,395 9,624Other Operating Income 198,890 188,631 120,268 87,822 74,864Total Revenue 4,622,693 3,804,137 3,016,770 2,246,163 1,909,942ExpensesRoom 301,195 255,945 210,295 156,643 135,538Food Cost 658,271 561,902 497,769 392,579 322,261Beverage Cost 87,993 79,662 74,734 58,673 49,747Food & Beverage 511,554 454,770 372,665 308,877 270,180Telephone 5,021 4,987 4,453 4,144 4,499Other 157,042 133,371 84,625 58,951 50,265Total Expenses 1,721,076 1,490,637 1,244,541 979,867 832,490Gross Operating Income 2,901,618 2,313,500 1,772,229 1,266,296 1,077,452ExpensesAdministration & General 241,584 199,685 180,941 155,318 153,264Advertising & Sales Promotion 86,428 72,363 86,139 76,840 69,791Heat, Light & Power 324,795 285,126 261,680 201,549 237,578Repair & Maintenance 138,856 140,729 121,717 97,960 84,528Total Deductions 791,663 697,903 650,477 531,667 545,161Gross Operating Profit 2,109,955 1,615,597 1,121,752 734,629 532,291Interest Income 153,787 37,403 6,391 16,816 4,460Dividend Income 234,422 117,211 39,070 19,535 29,303Sundry Income 17,915 12,067 14,832 2,176 7,9552,516,079 1,782,278 1,182,045 773,156 574,009Insurance 17,897 16,098 15,335 16,003 13,510Interest Expenses - 84 39,829 105,880 183,694Rates 11,660 10,516 10,135 10,135 10,135Management/ Marketing Fee 294,239 232,340 178,499 128,093 102,655Depreciation 237,830 218,036 203,297 188,231 200,961561,625 477,074 447,095 448,342 510,955Net Profit Before Tax 1,954,453 1,305,204 734,950 324,814 63,054

PASSION173 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13NOTICE OF MEETINGNOTICE IS HEREBY GIVEN that the Nineteenth Annual General Meeting of Asian Hotels and Properties PLC will be held at the CeylonChamber of Commerce, No. 50, Navam Mawatha, Colombo 2, on 24th June 2013 at 11a.m for the following purposes:1. To read the notice convening the meeting.2. To receive and consider the Annual Report and Audited Financial Statements of the Company for the year ended 31st March 2013together with the Report of the Auditors thereon.3. To re-elect as a Director Mr. S.K.G. Senanayake who retires by rotation in terms of Article 84 of the Articles of Association of theCompany.4. To re-elect as a Director Mrs. S.A. Jayasekara who retires by rotation in terms of Article 84 of the Articles of Association of the Company5. To re-appoint the retiring Auditors, KPMG, Chartered Accountants, and to authorise the Directors to determine their remuneration.6. To consider any other business of which due notice has been given in terms of the relevant laws and regulations.BY ORDER OF THE BOARDKEELLS CONSULTANTS (PRIVATE) LIMITEDSECRETARIESColombo, 28th May 2013Note:(i) A member entitled to attend and vote at the Meeting is entitled to appoint a Proxy to attend and vote instead of him/her. A Form of Proxyaccompanies this Notice.(ii) A Proxy need not be a member of the Company. A Proxy (who is not a member) may vote on a show of hands.(iii) To be valid the completed Form of Proxy should be deposited at the Registered office of the Company not later than 48 hours before thetime appointed for the holding of the Meeting.

NotesPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13174...............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

PASSION175 ASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13FORM OF PROXYI/We …………………………………………………………………………………………………...………..............................................................of ………………………………………………………………………………………………………………..............................................................being a *member/members of Asian Hotels and Properties PLC hereby appoint……………………………………………………………...……………………………..…………………............................................................ of…………………………………………………………………………….……………..............................................................…………… or failinghim/herMr. S.C. RatnayakeMr. A.D. GunewardeneMr. J.R.F. PeirisMr. R.J. KarunarajahMr. S. RajendraMr. C.J.L. PintoMr. S.K.G. SenanayakeMrs. S.A. Jayasekaraof Colombo, failing whomof Colombo, failing whomof Colombo, failing whomof Colombo, failing whomof Colombo, failing whomof Colombo, failing whomof Colombo, failing whomof Colomboas *my/our proxy to represent *me/us and to vote on *my/our behalf at the Annual General Meeting of the Company, to be held on the 24thday of June 2013 and at any adjournment thereof, and at any poll which may be taken in consequence thereof. *I/We the undersignedhereby authorise *my/our proxy to vote on *my/our behalf in accordance with the preferences indicated below:FORAGAINST1. To re-elect as a Director Mr. S.K.G. Senanayake who retires in terms of Article 84 of the Articles of Association.2. To re-elect as a Director Mrs. S.A. Jayasekara who retires in terms of Article 84 of the Articles of Association.3. To re-appoint the retiring Auditors, KPMG, Chartered Accountants, and to authorise the Directors todetermine their remuneration.Signed this ………….................. day of ……………………............ Two Thousand and Thirteen........ ……………………………….Signature of ShareholderNotes:(a) *Strike out whichever is not desired.(b) Instructions to completion of the Form of Proxy are set out on the reverse hereof.(c) A proxy need not be a Member of the Company.(d) Please indicate an “X” in the cage provided how your Proxy should vote on each Resolution. If no indication is given, or if there is, in theview of the Proxy holder, any doubt (by reason of the manner in which the instructions contained in the Proxy have been completed) asto the way in which the Proxy holder should vote, the Proxy holder in his/her discretion may vote as he/she thinks fit.

FORM OF PROXYPASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13176INSTRUCTIONS FOR COMPLETION1. Kindly complete the Form of Proxy by filling in legibly your full nameand address and that of the Proxy holder. Please sign in the spaceprovided and fill in the date of signature.2. The instrument appointing a Proxy shall, in the case of an individual,be signed by the appointer or by his Attorney and in the case of aCorporation must be executed under the Common Seal or in suchother manner prescribed by its Articles of Association or otherConstitutional documents.3. If the Proxy Form is signed by an Attorney the relevant Power ofAttorney or a notarially certified copy thereof, should also accompanythe completed Form of Proxy if it has not already been registered withthe Company.4. To be valid, the completed Form of Proxy should be deposited at theRegistered Office of the Company at No. 77, Galle Road, Colombo 3not later than 48 hours before the time appointed for the holding ofthe Meeting.

corporate informationName of CompanyAsian Hotels and Properties PLCLegal FormA Public Limited Liability Company incorporated in Sri Lanka in1993 and registered with the Board of Investment ofSri Lanka under Section 17 of the Board of Investment LawNo. 4 of 1978. The Company was re-registered as per theNew Companies Act No. 7 of 2007 on 15th June 2007.Stock Exchange ListingThe issued Ordinary Shares of the Company are listed on theMain Board of the Colombo Stock Exchange of Sri Lanka.Company Registration No.PQ 2Board of DirectorsMr. Susantha Chaminda Ratnayake - ChairmanMr. Ajit Damon Gunewardene - Managing DirectorMr. James Ronnie Felitus PeirisMr. Rohan Jebashanthan KarunarajahMr. Suresh RajendraMr. Sanjiva Kanishka Gamini SenanayakeMs. Shirani Anoja JayasekaraMr. Cholmondeley John Lloyd PintoRegistered OfficeNo.77, Galle Road, Colombo 03Tel : 0094 -11 2437437Fax : 0094 -11 5547555E-mail: ahpl@crescat.comAuditorsKPMGChartered Accountants32A, Sir Mohamed Macan Marker Mawatha,Colombo 03.BankersCitibank N.A - ColomboDeutsche Bank AG - ColomboSeylan Bank Ltd - Millennium Branch, ColomboHongkong & Shanghai Banking Corp. Ltd. - ColomboNations Trust Bank PLC - Union Place, ColomboDFCC Vardhana Bank Ltd. - W.A.D. Ramanayake Mw,ColomboBank of Ceylon - ColomboCompany SecretariesKeells Consultants (Private) Limited130, Glennie Street, Colombo 2.Produced by Copyline (Pvt) Ltd Printed by Printel (Pvt) Ltd

Annual Report 2012/13ASIAN HOTELS AND PROPERTIES PLCNo.77, Galle Road, Colombo 03,Sri Lanka.tel : 0094 -11 2437437Fax : 0094 -11 5547555