Trans Asia Hotels PLC Annual Report 2015/16 Trans Asia Hotels PLC Annual R eport 2015/16

120 Pages·2016·1.81 MB·English

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Trans Asia Hotels PLC
Annual Report 2015/16
CORPORATE INFORMATION
Contents
NAME OF THE COMPANY AUDITORS
Financial Highlights of the Year 2 Trans Asia Hotels PLC Messrs. KPMG
Chairman’s Review 6 Chartered Accountants
Directors’ Profiles 10 LEGAL FORM 32A, Sir Mohamed Macan Markar Mawatha,
Management Discussion & Analysis 14 A Public Limited Liability Company incorporated in Sri Lanka on Colombo 03
Corporate Governance Report 38 17th July, 1981 and quoted on the Colombo Stock Exchange
Risk Management 59 BANKERS
Information to Shareholders & Investors 62 COMPANY REGISTRATION NUMBER Citibank NA
Financial Contents 66 PQ 5 Deutsche Bank AG
Annual Report of the Board of Directors 67 Sampath Bank PLC
Statement of Directors’ Responsibility 73 REGISTERED OFFICE The Hongkong and Shanghai Banking Corporation Ltd
Audit Committee Report 74 No. 115, Sir Chittampalam A. Gardiner Mawatha, Colombo 2 Nations Trust Bank PLC
Independent Auditors’ Report 77 Tel: [phone] People’s Bank PLC
Statement of Profit or Loss and Fax: [phone] Commercial Bank of Ceylon PLC
Other Comprehensive Income 78 E-mail: [email protected] Hatton National Bank PLC
Statement of Financial Position 79 Website: http://www.cinnamonhotels.com/cinnamonlakeside.htm
Statement of Cash Flows 80 COMPANY RELATED INFORMATION
Statement of Changes in Equity 81 BOARD OF DIRECTORS REQUIREMENTS
Notes to the Financial Statements 82 Mr. Susantha Chaminda Ratnayake - Chairman Shareholders can contact Keells Consultants (Private)
Quarterly Financial Data 109 Mr. Ajit Damon Gunewardene Limited on 011-2306245 for any Company related
Five Year Financial Summary & Key Indicators 110 Mr. James Ronnie Felitus Peiris information requirements
Glossary of Financial Terms 112 Mr. Navindra Lal Gooneratne
Notice of Meeting 114 Mr. Cholmondeley John Lloyd Pinto
Form of Proxy 115 Mr. Eranjith Harendra Wijenaike
Ms. Jhansi Carryl Ponniah
Mr. Rohan Jebashanthan Karunarajah
Mr. Krishan Niraj Jayasekara Balendra (Appointed w.e.f. 01st April 2016)
AUDIT COMMITTEE
Mr. C. J. L. Pinto - Chairman
Mr. E. H. Wijenaike
Ms J. C. Ponniah
COMPANY SECRETARIES AND REGISTRAR
Keells Consultants (Private) Limited
117 Sir Chittampalam A Gardiner Mawatha,
Colombo 02
Design & Concept by: Optima Designs (Pvt) Ltd.
Printed by: Printel (Pvt) Ltd.
The Urban GeTaway
SWathed In the quInteSSence of tranquIlIty
and relaxatIon, cInnamon l akeSIde embraceS
the calm SerenIty of the heart and Soul of a
reSort In the cIty. PromP tIng elegant urbanIty
Into a formula of lIvIng lIfe to the fulleSt,
cInnamon lakeSIde haS Perfected the art
of PreSentIng vIgnetteS of fun for famIly
getaWayS to become the true SIgnature of a
luxurIouS haven denotIng the lIfe and tImeS
of an urban reSort.
Vision
“We will always be the hospitality trendsetter”
Our 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
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Trans Asia Hotels PLC
annual report 2015/16
Financial highlights of the year
        2012/13 2013/14 2014/15 2015/16
creating operational excellence            
occupancy % 60% 61% 51% 43%
Room Available Number 126,290 126,290 126,290 126,636
Room Nights Sold Number 76,199 76,790 64,923 54,246
Average Room Rate rs. 17,794 18,224 18,267 18,569
Room Sales per Employee per Month rs. ’000 135 143 117 97
creating financial value            
Wealth creation Value Generated by the Company rs. mn 2,263 1,973 1,774 1,413
market value added rs. mn 8,026 9,881 12,812 10,277
net assets per Share rs. 30.3 30.5 29.9 28.5
market capitalisation rs. mn 14,080 15,980 18,800 15,980
market Price of share as at 31st march rs. 70.40 79.90 94.00 79.90
Shareholder return Earning Based
earnings per Share rs. 5.33 3.72 2.92 1.60
ePS growth (%) % 71% -30% -21% -45%
Price earnings ratio ( Pe) Times 13 21 32 50
return on assets % 16.47 10.69 8.41 4.56
total Shareholder return % 9.7 18.5 22.0 (12.9)
Dividend Based
dividend per Share rs. 3.00 3.50 3.50 2.00
dividend cover Times 1.78 1.06 0.84 0.80
dividend yield % 4.3% 4.4% 3.7% 2.5%
dividend Payout ratio % 56% 94% 120% 125%
Profitability on Investment Return on Capital Employed % 21% 14% 11% 7%
return on equity % 19% 12% 10% 5%
revenue rs. mn 2,840 2,939 2,786 2,484
Gross Profit Margin % 64% 63% 61% 57%
Profit from Operating Activities rs. mn 858 816 609 272
Profit Before Tax (PBT) rs. mn 1,211 872 664 358
Profit After Tax (PAT) rs. mn 1,066 743 585 321
Playing by the rules            
Taxes Paid to Government rs. mn 512 483 434 270
Serving the Community            
Investing in community Community Development investments (CSR) rs. ’000 4,096 7,104 10,843 4,103
Community Investments as percentage of PAT % 0.4% 1.0% 1.9% 1.3%
Being Friendly Towards the Environment          
Combating climate change total carbon footprint mt 6,453 6,354 6,317 6,277
Waste generated per guest night kg 5.3 3.8 3.7 5.3
Position and liquidity ended 31st march          
liquidity current ratio Times 2.43 2.09 1.91 1.07
quick asset ratio Times 2.35 2.01 1.84 1.01
assets Position total assets rs. mn 6,901 6,999 6,908 7,174
equity assets ratio % 88% 87% 87% 79%
equity total equity rs. mn 6,054 6,099 5,988 5,703
no of Shares in Issue (mn) mn 200 200 200 200
debt to equity % n/a n/a n/a 8%
Interest cover Times 12,628 22,900 3,488 9
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Trans Asia Hotels PLC
annual report 2015/16
Financial highlights of the year
43% Rs. 2.5 Bn Rs. 0.36 Bn
Occupancy Revenue Profit Before Tax
(2014-15) : 51% (2014-15) : Rs. 2.8 Bn (2014-15) : Rs. 0.66 Bn
Rs. 0.48 Bn Rs. 1.60 Rs. 79.90
Cash Generated from Operating Earnings per Share Market Price per Share
Activities
(2014-15) : Rs. 2.92 (2014-15) : Rs. 94.00
(2014-15) : Rs. 0.79 Bn
Room Occupancy Return on Assets Gross Profit
% % Rs. Mn
70 18 2,000
456000 55 60 61 51 43 11110246 11 16 11 11,,260000 1,503 1,819 1,859 1,692 1,407
30 8 8 800
6
20
4 5 400
10 2
0 0 0
2 3 4 5 6 2 3 4 5 6 2 3 4 5 6
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
1/ 2/ 3/ 4/ 5/ 1/ 2/ 3/ 4/ 5/ 1/ 2/ 3/ 4/ 5/
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Return on Earnings per Share vs Price Net Asset Value per Share vs
Capital Employed Earnings Ratio Market Price per Share
% Rs. Times Rs.
25 6.00 8 60.0 100
49. 90 6.9 0.3 0.5 9.9 8.5
1125050 14.6 21.5 14.3 11.0 7.0 12435.....0000000000 21.03.12 5.3313.2 3.7221.5 2.9227.3 60 1243500000.....00000 24683570000000 6.26 70.43 79.93 94.02 79.92
1. 10 2
0 0 0 0
2 3 4 5 6 2 3 4 5 6 2 3 4 5 6
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
1/ 2/ 3/ 4/ 5/ 1/ 2/ 3/ 4/ 5/ 1/ 2/ 3/ 4/ 5/
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Earnings per Share (Rs.) Market Price
Price Earnings Ratio (Times) (Adjusted for the sub division of shares)
Net Asset per Share
4
Trans Asia Hotels PLC
annual report 2015/16
a luxurious haven
5
Trans Asia Hotels PLC
annual report 2015/16
The quintessence of tranquility and relaxation
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Trans Asia Hotels PLC
annual report 2015/16
ChaIrMan'S reVIew
Our brand promise is to be the hospitality
trendsetter which has always formed the blueprint to
all initiatives we continue to introduce to the market.
Based on our new brand strategy, Dear Stakeholder, (unWto) in January 2016 the largest single source market
our services and product standards On behalf of the Board, I am indicated that international with 316,247 arrivals, whilst east
were enhanced through the
pleased to present the annual tourism reached new heights asia was the fastest growing
‘Cinnamonization’ initiative, which is
developed to heighten our offerings Report and Financial Statements in 2015 with international source market with a year-on-
to guests on the simple platform of of trans asia hotels Plc tourist arrivals reaching 1,184 year growth of 29.4 per cent,
‘Inspired Living’, offering a lifestyle
(Cinnamon Lakeside Colombo) million, which is a 4.4 per cent driven by the strong growth in
experience to patrons. Thus, the
for the year ended 31st march year-on-year growth. by region, chinese arrivals of 67.6 per cent
focus is on catering to the next
generation of travellers, specifically 2016. Europe, the Americas and to 214,783. Arrivals from China
in the Asian middle class. Asia Pacific recorded growth continue to grow at a rapid
The Company recorded a Profit of approximately 5 per cent. pace driven by increasing flight
before tax (Pbt) of rs. 358 arrivals to the middle east grew connectivity and increasing
million compared to Rs. 664 by 3 per cent while arrivals to awareness of the Sri lankan
million achieved in the previous africa declined by 3 per cent tourism offerings.
year which includes revaluation approximately. Results from
gains on investment property the UNWTO Confidence Index according to the central bank of
of Rs. 126 million and Rs. 21 remain positive for 2016. Sri Lanka, earnings from tourism
million respectively. The year- recorded a 22.6 per cent growth
on-year decline in profitability SRi LAnkA TOuRiSM against last year to reach uS$
was primarily due to the partial Sri Lanka recorded 1.79 million 2.98 billion during the twelve
closure of the hotel for essential tourist arrivals for the calendar months ended in December
enhancements and upgrades year 2015, representing a 2015.
during the first seven months of growth of 17.8 per cent over
the year under review. the previous calendar year. COMPAny PERfORMAnCE
Western Europe emerged as due to the partial closure, where
GLOBAL TOuRiSM the largest regional contributor only 45 per cent of the total
The World Tourism Barometer with arrivals increasing by room inventory was in operation,
published by the united nations 15.3 per cent year-on-year to room revenue fell below last
World Tourism Organisation 552,442. India continued to be year by Rs. 179 million. Food
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Trans Asia Hotels PLC
annual report 2015/16
ChaIrMan'S reVIew
& beverage (f&b) revenue The Company entered into a opening in the third quarter of lakeside has a dedicated
was also adversely affected long term financing facility of the financial year. floor for Chinese guests,
due to operational limitations US$ 3 million to partially fund conceptualised to complement
of specialty restaurants and the cost of the refurbishment based on our new brand strategy, their travel requirements – from
banquet venues during the which resulted in a decrease our services and product the décor, to room amenities,
partial closure. in net finance income by Rs. standards were enhanced specially curated menus and
75 million compared to the through the ‘Cinnamonization’ mandarin speaking guest
as a result, total turnover for last year. Arising from the initiative, which is developed Relations Officers. The Hotel has
the year was Rs. 2,484 million depreciation of the Sri lanka to heighten our offerings to received very positive feedback
compared to Rs. 2,786 million rupee against the uS dollar,the guests on the simple platform from this segment, which will
in the previous year. Gross profit Company incurred an unrealised of ‘Inspired living’, offering a undoubtedly enable the hotel
benefitted from the impact exchange valuation loss of rs. lifestyle experience to patrons. to maximise the potential from
of the depreciation of the Sri 42 million on the US Dollar loan thus, the focus is on catering to china.
lankan rupee against the uS which is included in the finance the next generation of travellers,
Dollar. The gross profit margin expenses. specifically in the Asian middle In commemorating World
decreased to 57 per cent from class. Tourism Day in September,
61 per cent in the previous year, The Company recorded a PBT, Cinnamon Lakeside played
primarily due to lower revenue. including revaluation gains on Cinnamon Lakeside, in host to the conference, ‘future
investment property of Rs. 358 collaboration with Srilankan of Tourism and Responsible
Although administrative million compared to the Rs. 664 airlines, introduced a unique Tourism for Driving Revenue'
expenses declined by rs. 25 million recorded last year. Profit holiday package customised which featured an eminent
million from the previous year attributable to equity holders for the Indian tourist. the panel of global industry
due to the partial closure, a stood at Rs. 321 million against competitively priced ‘See Shop speakers. the full-day
significant increase of Rs. 64 Rs. 585 million last year. Party Colombo’ package was conference was attended by
million was incurred in selling launched in february 2016 at over 350 participants from the
and distribution expenses to nEw iniTiATivES the one World travel mart (otm) tourism industry, both locally
implement an aggressive Leisure Cinnamon Lakeside Colombo in India. and regionally.
marketing strategy which worked on the hotel-wide
enabled the hotel to secure a ‘Cinnamonization’ Strategy in In a similar paradigm, observing ACCOLADES AnD AwARDS
23 per cent year-on-year growth tandem with the other hotel the emerging potential in the Cinnamon Lakeside secured five
in room nights in the Leisure properties within the group, in world’s most prolific traveller, gold medals, ten silver medals
segment. preparation for the fully fledged the Chinese tourist, Cinnamon and fifteen bronze medals in
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Trans Asia Hotels PLC
annual report 2015/16
ChaIrMan'S reVIew
The Company is looking at a future that will
undoubtedly be competitive, but one which also
promises to be exciting, with tourism continuing to
retain its title as the fastest growing industry in the
world.
Cinnamon Lakeside has now been addition to numerous other as an emerging hot-spot for moderation in the previous
repositioned as an urban resort awards at the chefs guild the global traveller. Sri lanka two years, we are beginning
for leisure travellers. This new
Culinary Art 2015 competition Tourism established a target to see an increase in overall
positioning has helped leverage
the inherent strengths of our organised by the chefs guild of 2.2 million visitors for 2016 occupancies as indicated by the
location and the facilities, which of Sri lanka in collaboration with an annual growth of 22 fourth quarter of the financial
post refurbishment, has given
with the World association per cent. The proximity to India, year under review.
considerable impetus to improving
of Chef's Societies. The Hotel increasing flight connectivity
the standards among city hotels
overall. was successfully audited for from China coupled with the Your Company has been charting
recertification of international value proposition offered by Sri plans that will complement the
standard certifications. These lanka as a destination where initiatives to drive the country’s
include the green globe diverse attractions can be tourism goals forward. The
certification and recertification accessed within a short-time overall outlook for the corporate
for ISo 22000 and ohSaS horizon, are seen as key drivers segment appears promising with
18001. in attracting arrivals. several mIce events also in the
pipeline for next year. Cinnamon
OuTLOOk fOR THE fuTuRE Whilst the available room lakeside will look at attracting
The Company is looking at a inventory in Sri lanka has the growing volumes from the
future that will undoubtedly be increased substantially over the MICE segment as well as the
competitive, but one which also last few years, there is a need Leisure segment where the
promises to be exciting. With for more capacity considering Hotel has a competitive edge.
tourism continuing to retain the ambitious medium to long
its title as the fastest growing growth plans for tourism in the hotel will also concentrate
industry in the world, Sri lanka the country. Whilst city hotel on the significant markets
continues to reiterate its status occupancies did witness slight of India and china and will