Hilton Colombo Annual Report 2020

HOTEL DEVELOPERS (LANKA) LTD
ANNUAL REPORT 2020

CONTENTS
FINANCIAL HIGHLIGHTS................................................................................................... 2
CHAIRMAN’S REVIEW........................................................................................................ 3
DIRECTORS PROFILES...................................................................................................... 5
CORPORATE GOVERNANCE.............................................................................................. 7
RISK MANAGEMENT.......................................................................................................... 9
ANNUAL REPORT OF THE DIRECTORS ON THE AFFAIRS OF THE COMPANY................ 12
THE AUDIT COMMITTEE REPORT................................................................................... 14
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT.............................................................................. 17
STATEMENT OF COMPREHENSIVE INCOME.................................................................. 20
STATEMENT OF FINANCIAL POSITION........................................................................... 21
STATEMENT OF CHANGES IN EQUITY............................................................................ 22
STATEMENT OF CASH FLOWS........................................................................................ 23
NOTES TO THE FINANCIAL STATEMENTS...................................................................... 24
NOTICE OF MEETING...................................................................................................... 44
NOTES............................................................................................................................. 45
FORM OF PROXY............................................................................................................. 47
CORPORATE INFORMATION..............................................................INSIDE BACK COVER
2 Hotel Developers Lanka Ltd
 Annual Report 2020
FINANCIAL HIGHLIGHTS
2020 2019
Room Revenue LKR ‘000 313,080 1,171,875

F&B Revenue LKR’000 742,928 1,646,117
Other Revenue LKR ‘000 25,127 60,760
Total Revenue LKR ‘000 1,081,135 2,878,752
Gross Profit LKR ‘000 270,043 1,475,059

Gross Profit Margin % 24.98 51.24
Profit/(Loss)before Tax LKR’000 (877,343) (312,448)
Profit After Tax LKR’000 (918,107) (325,630)
Revaluation Surplus LKR ‘000 - 1,452,978
Total Comprehensive Income for the Period LKR ‘000 (926,194) 1,104,893
Earning/(Loss) per share LKR (0.45) 0.54
Average Room Rate LKR 20,681 21,562
Occupancy % 11 49
Long Term Interest Bearing Borrowings LKR’000 72,156 250,000

Short Term Debt LKR’000 946,040 254,492
Total Equity LKR ‘000 14,099,514 15,025,710
Debt/Equity % 7.22 3.36
Total Assets LKR ‘000 16,295,030 16,605,325
Debt /Total Assets % 6.25 3.04
Current Assets LKR’000 521,978 703,208
Current Lliabilities LKR’000 1,519,046 746,975
Current Ratio (times) 0.34 0.94
Quick Assets Ratio (times) 0.31 0.88
Hotel Developers Lanka Ltd
 Annual Report 2020 3
CHAIRMAN’S REVIEW
“Considering the recent accolade of Club Med anointing Sri Lanka as the second-best
place country in the world for digital nomads, the Company is confident that the island
will be one of the first tourism destinations in the region to benefit as recovery takes place.
Hotel Developers is especially optimistic about the government’s recent commitment to
fast-track tourism to bring the numbers up to prepandemic levels and is actively lobbying
countries to allow its citizens to travel to Sri Lanka. A global marketing promotion
that is being planned in key source markets will underscore the country’s efforts to boost
tourism.”
Dear Shareholder Profit by Rs. 643 Mn since the margin on Rooms Revenue is approx.
75%. In the year under review, Gross Profit declined from Rs. 1475 Mn in
It gives me pleasure to present the Annual Report and Audited 2019 to Rs. 270 Mn which reflects the severe COVID-induced impact on
Financial Statements for the financial year ending 31st December 2020. the hospitality sector. The Net Loss after tax increased from Rs. 325 Mn
Undeterred by the various challenges that arose during the year under to Rs. 918 Mn due to the impact of the depreciation of Rs 378 Mn. With
review, Hotel Developers (Lanka) Ltd sustained its strategy to reposition the Company adopting the Valuation model, the Depreciation declined
itself to be more sustainable and to optimize its resources to enhance its from Rs. 515 Mn in 2019 to Rs. 378 Mn in 2020. Further the economic life
status as one of the leading luxury hotel properties in Colombo. of the building was reassessed by a Chartered Valuer and the economic
life span was increased to 55 years from 40 years thus reducing the
Like other tourism destinations around the world, Sri Lanka’s tourist depreciation further.
arrivals too fell during the year amid the COVID-19 crisis. Since April
2019, following the Easter Sunday terror attacks, Sri Lanka has
witnessed monthly decline in tourist arrivals year-on-year. Sri Lanka HIGHLIGHTS OF THE YEAR
tightened tourist arrivals from mid-March 2020 and suspended all Taking the current pandemic period into consideration, the Company
passenger arrivals from all countries in order to contain the spread of went ahead with its strategic decision to invest on refurbishment
the COVID-19 pandemic. After easing restrictions to some degree in of guest rooms so that the hotel will be well geared to face the stiff
January 2021, inflow of tourists started showing an uptick. In addition, competition in the post-COVID-19 period. The plan to refurbish the
the accelerated vaccination drive coupled with marketing promotions in guest rooms was successfully initiated in October 2020 after 30 years of
overseas markets is setting up the industry for a speedy revival. Already, hotel operations. The procurement process has been completed and
the easing of further restrictions within the country is witnessing an work in this regard has commenced. The Company also went ahead
upsurge in domestic tourists visiting hotels and resorts while city hotels with much-needed expansion of event spaces to secure the opportunity
are seeing a resumption of weddings and corporate functions as well as to penetrate the regional markets for the MICE business, Other F&B
patrons dining out freely. facilities such as the newly constructed Chinese restaurant commenced
operations in in April 2021. The allocated budget for the refurbishment
of rooms and F&B outlets has been restricted to US$ 15 million so as to
OPERATIONAL REVIEW ensure that the company will be able to compete in market pricing with
Considering the status of global travel industry, the Company had to other international operators whilst maintaining profitability. This would
cut back budgeted profitability for the year. During the year, revenue also facilitate the turnaround of the business operations recovering
declined by 62 % YoY from Rs. 2.88 bn to Rs. 1.08 bn. The Room Revenue from the impact from the pandemic period. The hotel MEP services have
overall fell by 77% while occupancy too declined to 11% in 2020 from also gone through a significant upgrade with the replacement of chillers
49% in 2019, whilst the Average Room rate decreased from Rs. 21,562/- and elevators for efficient energy management and efficiency. This is
in 2019 to Rs. 20,681/- in the year under review. The Food and Beverage expected to facilitate the achievement of short-term targets set for the
Sector reduced by more than half due to the lockdowns and closure of year, as mitigating strategies to overcome impact from the COVID-19
hotels and restaurants by the government, recording a modest Revenue pandemic.
of Rs.743 Mn. The Gross Profit Margin declined drastically from 51 % in
2019 to 25% in 2020 due to the decline in the Rooms Revenue. The dip
in the Rooms revenue by Rs. 858 million led to a decline in the Gross
CHAIRMAN’S REVIEW
Further, transformation of the Hilton Colombo Sports Centre to a APPRECIATION

fully-fledged All-Day Club was carried out in November 2020 with the I would like to thank my colleagues on the Board and the senior
successful launch of Sunset Blue. This initiative contributed significantly management for their unstinted support. I would also like to thank the
to improve the revenue of the company. Overall, the aim has been to General Manager and the staff of Hilton Colombo for their contribution
restructure project cost and loan exposure to improve profitability of the in a challenging year and salute their optimism to gear up for a revival
Company. of the industry. Our loyal patrons have been a pillar of support and we
are glad to see them once again frequenting their favourite spots at
The Hilton’s valuable and trained human capital continued to the Hilton hotel. I have no doubt that the future of Sri Lanka Tourism
demonstrate their dedication and commitment despite the challenging remains bright.
ground realities and worked tirelessly under the cloud of the pandemic.
The Company adhered to the highest safety and health protocols as laid
down by health authorities to ensure employees and customers were
not put at risk in any way.
FUTURE STRATEGY Sirinimal Perera

Chairman
The Company remains committed to transforming Hilton Colombo
into a sustainable and profitable entity with optimal use of its assets
with concentrated performance based investment. Several strategies to
expand event spaces in the property were implemented and are nearing
completion. Last year, the government created a Premium Real-Estate
Portfolio by bringing the state-owned prime hospitality assets under
one unit. This led to the Cabinet of Ministers approving the proposal to
incorporate Selendiva Investments Limited with 100% ownership of the
Treasury and to consolidate Canwill Holdings (Pvt) Ltd (Grand Hyatt),
Hotel Developers (Lanka ) Ltd (Hilton), Hotels Colombo (1963) Ltd
(Grand Oriental Hotel) under one institution, namely, Selendiva Leisure
Investments Ltd, for the purpose of capital restructuring to achieve
optimum potential of the assets and profitability.
With this objective, the intention is to complete the 250-guest room

refurbishment in 2022 to target post-COVID-19 business plans for room
occupancy and to attract tourists. Sunset Blue will also be promoted as
the prime night entertainment venue in the city to achieve the market
synergy for promoting the hotel to attract tourist arrivals and domestic
clientele. Plans have also been drawn up to improve revenue plans for
the banquet facilities with aggressive marketing strategies to restructure
financials to obtain high market value for HDL shares. Considering
the rapid adoption of digital platforms during 2020, the Company will
aggressively promote its online business platform and build a stronger
online presence with potential created by the COVID pandemic. Other
contingent business plans were implemented and have successfully
achieved the targets from takeaway services during the lockdown
period, thanks to the loyalty of our longstanding customers and the
new customer base being attracted to our high quality of product and
services.
Considering the recent accolade of Club Med anointing Sri Lanka as

the second-best place country in the world for digital nomads, the
Company is confident that the island will be one of the first tourism
destinations in the region to benefit as recovery takes place. Hotel
Developers is especially optimistic about the government’s recent
commitment to fast-track tourism to bring the numbers up to pre-
pandemic levels and is actively lobbying countries to allow its citizens to
travel to Sri Lanka. A global marketing promotion that is being planned
in key source markets will underscore the country’s efforts to boost
tourism. Meanwhile, tourists continue to enter Sri Lanka under the
bio-bubble facility. Airlines are now permitted to carry fully vaccinated
passengers without any limitation of passenger numbers per flight,
which should increase tourist inflows along with the fact that most
tourist spots have now been opened for visitors and the inter provincial
ban lifted. All these factors point to the government’s commitment to
facilitate the tourism industry.
DIRECTORS PROFILES
MR. SIRINIMAL PERERA MS. DHEESHANA AMERESEKERE

Chairman Director
Mr. Sirinimal Perera is the Secretary, Ministry of Urban Development Ms. Dheeshana Ameresekere holds a Bachelor of Science in Business
and Housing , Coast Conservation, Waste Disposal, and Community Administration (specialising in International Marketing) from the
Cleanliness. He is also an Executive Consultant to the Board of Directors American University in Washington DC, USA, and a Bachelor of Science
of Noritake Lanka Porcelain (Pvt) Ltd., (“Noritake”) from 2007 to date in Travel Industry Management (specialising in Hotel Management) from
and the Chairman of Shore to Shore (Pvt) Ltd., a company engaged the University of Hawaii, USA. Her professional work is as a Hotelier.
in producing of label weaving, box packaging, and garments in IPZ
Katunayake. Mr. Perera has more than 30 years executive experience She is the Managing Director of the Award-Winning Boutique Hotel
in financial management, accounting, internal auditing and general - The Theva Residency and Award-Winning Restaurant - The Theva
management including stints with M/s. R.K. Fryer & Co. Chartered Cuisine in Kandy, Sri Lanka. The Theva Residency and Theva Cuisine
Accountants and International Computers Ltd, United Kingdom as an have won many International Awards consecutively for the 11 years of
audit Senior and Accountant respectively. their operation. The most recent awards for 2020 – “Leading Boutique
Hotel in South Asia”- “Most Romantic Hotels Sri Lanka” at the South
Mr. Perera functioned as the Chairman of Urban Development Authority Asian Travel Awards (SATA), Haute Grandeur Excellence Awards for “Best
(UDA) and its subsidiaries, Lanka Logistics & Technologies Co. Ltd., Honeymoon Hotels in Asia / Best Small Hotels in Asia. Consecutively
On’ally Co. Ltd., Unidep Company., Waters Edge Company Ltd., Lanka for 10 years - The Theva Residency has been awarded as a “Winner of
Salt Limited and Managing Director of Sri Lanka Fisheries Corporation. TripAdvisor Service Excellence Award”.
He also served as a Director in the Boards of Peoples Leasing Co.
Ltd., Ocean View Co. Ltd., Lanka Ceramic Limited and several other
companies. Further he has served for a short period in 2018 as the MR. V. KANAGASABAPATHY
Chairman of Sri Lanka Tea Board and State Engineering Corporation. Director
He completed upto final levels of Association of Chartered and Certified Mr. Kanagasabapathy, Retired Director General of Public Enterprises,
Accountants (ACCA) (UK) and of Higher National Diploma in Business General Treasury currently functions as member of the Finance
Studies at Luton College of Higher Technology in UK. Commission of Sri Lanka, member of the Council of University of Jaffna,
President of the Association of Public Finance Accountants, the Public
Sector Wing of CA Sri Lanka; Chairman of the Public Sector Accounting
He was Conferred with the title “Best Chief Executive” for the best
Standards Committee and Member of the Governmental and Public
Employee in involvement Organization by the Sri Lanka Association of
Sector Enterprise Accounting Committee of the South Asian Federation
the advancement of Quality and productivity which functioning under
of Accountants. He counts over 40 years of service in the public sector
the Ministry of Science Technology.
and was the Financial Management Reform Co-ordinator in the Ministry
of Finance & Planning.
MR. ISHAN DANTANARAYANA
He holds a Master’s Degree in Public Administration from Harvard
Director University and is a Chartered Public Finance Accountant, London. He
Mr. Ishan Dantanarayana has 30 years of human resources and business is also a Fellow Member of the Institute of Chartered Accountants of
partnering experience at senior management level. He is currently Sri Lanka, Association of Public Finance Accountants of Sri Lanka, and
the Group Chief People Officer and is also a member of the Corporate Institute of Certified Management Accountants of Sri Lanka.
Leadership Team of the Brandix Group overlooking operations in Sri
Lanka & Global. He additionally serves as a Director of the Board of
the Brandix College. Brandix is Sri Lanka’s largest exporter & largest MR. PRIYANTHA DENIYAYA
employer as confirmed by the Presidential Award. Currently he is the Director
President of the Association of HR Professionals in Sri Lanka.
Mr. Deniyaye is currently practicing as an Attorney-At-Law, as a Criminal
Counsel in the Criminal Private Bar of the Colombo High Court since
He holds a PhD, an MBA, is a Chartered Marketer - FCIM (UK) and has
year 2000, specializes in Defense Counseling.
Post Graduate HR and Marketing qualifications. He is also part qualified
in Finance - CIMA (UK). He additionally holds an Executive Leadership
Certification equivalent to an MBA from Global U21 consisting of Top 26 His appearances include but not limited to the Magistrate’s Court, High
Universities in the world. Court, Court of Appeal and to the Supreme Court. Also successfully
appeared In several Fundamental Right Cases representing both
Petitioners and Respondents in distinct Landmark Cases and secured
the legal concession thereof.
He served as the legal Advisor of the Sustainable Energy Authority [Sri

Lanka] from March 2016, and was mainly assigned with the duty of
preparing a draft Act, to be presented to the Legal Draftsman with a view
to amend the existing Act, to promote Green Energy sector in Sri Lanka.
DIRECTORS PROFILES
MS. VISAKHA AMARASEKERE

Director
Ms. Visakha Ameresekera counts over 15 years’ of experience at the
Government Treasury, Director of the Department of External Resources
of the General Treasury of the Ministry of Finance, Economy and Policy
Development.
She was appointed to the Board of Bank of Ceylon on 11th January

2020 as the Non-Executive Ex-Officio Director representing the Ministry
of Finance, Economy and Policy Development.
She has represented the Government Treasury on the Boards of several

key State-Owned Enterprises including the Ceylon Electricity Board,
Ceylon Petroleum Corporation and People’s Bank.
Ms. Ameresekere holds a B.Sc (Hons) Degree in Economics and

Management from the University of London, UK and Master of Arts in
Development Economics from the Vanderbilt University, USA. She is a
Member of the Chartered Institute of Management Accountants (CIMA)
UK and is also a Chartered Public Finance Accountant.
MR. P A S ATHULA KUMARA

Director
Mr. P.A. Susantha Kumara joined the Public Service in 1991 as an Audit
Examiner in Auditor General’s Department and joined the Department
of Public Enterprises, Ministry of Finance in 2007. Currently he is the
Director General in Department of Public Enterprises.
He has also been a Director/Board Member of Several Statutory

Institutions including Colombo Commercial Fertilizer, Mantai Salt
Ltd., Building Material Corporation, Ceylon Agro Industries Ltd., Lanka
Hydrolic Ltd., Ceylon Ceramics Corporation.
He holds a B.Sc in Management (Public Admin.) (Special) degree holder

from the University of Sri Jayawardenapura and in 2015 obtained
his Masters degree in Business Studies in University of Colombo . Mr.
Athula Kumara is a Class 1 Officer of Sri Lanka Accounts’ Services and
a member of Chartered Public Accountant in the Institute of Chartered
Accountants of Sri Lanka.
MR. LAL WEERASINGHE

Director
Mr. Lal Weerasinghe was a Director for the “Social Security Board”
from 2010 to 2013. He also served as a Media Secretary for “Road
Development Authority” in 2010.
He has been working as a Business leader for “Riway International”

Singapore since 2017 . He also successfully completed the Business
Leadership Training Program conducted by Riway Dynamic Leadership
Development and Goal Achievement in Malaysia.
He has won two “Sarasaviya” film awards (Best Actor/Most Popular New
Actor). His success in the film industry made him commence his own
Film production company L.W. Films and he has produced and directed
Sri Lanka movies .
CORPORATE GOVERNANCE
The Board of Directors of Hotel Developers (Lanka) Limited is The Directors are provided with Monthly Accounts and Statutory
committed and takes responsibility in maintaining the highest Compliance Statements and all matters of importance are discussed
standards of Corporate Governance in compliance with the Corporate and decisions are taken at the Board Meetings. Further, Board Papers
Governance Rules of the Colombo Stock Exchange and the “Code of are submitted in advance on issues which require specific approval
Best Practice on Corporate Governance” of the Institute of Chartered of the Board. Minutes of all Meetings are properly recorded and
Accountants of Sri Lanka. The Board of Directors ensures that the maintained by the Company Secretaries.
Company’s responsibility to uphold the highest standards of business
integrity, ethical values, transparency and professionalism in all its
activities are maintained. INTERNAL CONTROLS AND RISK MANAGEMENT
The Board has introduced adequate internal controls and risk
management systems to safeguard the shareholder investments and
THE BOARD OF DIRECTORS the Company’s assets. The Board is fully aware that internal controls
It is the responsibility of the Board of Directors to provide have inherent limitations and do not provide absolute assurance
entrepreneurial leadership for the Company, formulate corporate against fraud and error.
strategic goals, values and standards, reviewing performance so that the
Company could fulfill its obligations to its stakeholders. The Directors of The Board of Directors reviews the Monthly Accounts and the
the Company as at 31st December 2020 were: performance of the Company against approved budgets on a regular
basis.
Mr. Sirinimal Perera - Independent Non Executive
Ms. Dheeshana Amarasekere. - Independent Non Executive
AUDIT COMMITTEE
Mr. Ishan Danthanarayana. - Independent Non Executive
With the reconstitution of the Board in 2020, the following were
Mr. V. Kanagasabapathy. - Independent Non Executive appointed as members of the Audit Committee with effect from January
Mr. Priyantha Deniyaye. - Independent Non Executive 2020.
Mr. Lal Weerasinghe. - Independent Non Executive
Mr. V. Kanagasabapathy-Chairman (Independent Non Executive)
Ms. Visakha Amarasekere. - Non Independent Non Executive
Mr. M.K.P. Kumara-Member (Non Independent Non Executive )
Mr. P A Susantha Kumara - Non Independent Non Executive
Mr. J.M.U.P. Jayamaha-Member (Non Independent Non Executive)
None of the above Directors hold shares in the Company.
With effect from 8th June 2020 following the resignation of Mr. J.M.U.P.
Mr. Srinimal Perera and Mr. V. Kanagasabapathy who are over 70 years Jayamaha, the Audit Committee was reconstituted as follows:
of age, offer themselves for re-appointment as Directors in pursuance
of Section 211 of the Companies Act with the recommendation of the Mr. V. Kanagasabapathy-Chairman (Independent Non Executive)
Directors. Resolutions proposing the re-appointment of Mr. Srinimal Mr. M.K.P. Kumara-Member (Non Independent Non Executive )
Perera and Mr. V. Kanagasabapathy to the Board of the Company Mr. Priyantha Deniyaye-Member (Independent Non Executive)
declaring that the age limit of 70 years shall not apply to the said
Directors, will be placed before the shareholders at the forthcoming With effect from 24th August 2020, following the resignation of Mr. M.K.P.
Annual General Meeting. Kumara, the Audit Committee was reconstituted as follows
RESIGNATIONS FROM THE BOARD DURING THE YEAR Mr. V. Kanagasabapathy-Chairman (Independent Non Executive)
ENDED 31ST DECEMBER 2020 Mr. P.A.Susantha Kumara-Member (Non Independent Non Executive )
J.M.U.P Jayamaha (w.e.f.08.06.2020) Mr. Priyantha Deniyaye-Member (Independent Non Executive)
M.K.P. Kumara (w.e.f. 24.08.2020)
The Audit Committee scrutinizes and analyzes the Report on the
During the year ended 31st December 2020 the Board met on eleven Internal Controls of the Hotel Operations which is prepared by the
(11) occasions and the number of meetings attended by the Directors is Internal Auditors Ms. Ernst and Young and ensures application of
given below: strict control over the affairs of the Hotel and the Company. The Audit
Committee makes recommendations to the Board on necessary
improvements to the internal control systems of the Hotel/ Company.
Name of Director Date of No of Meetings
The Audit Committee also reviews Quarterly Financial Statements which
appointment attended
are released to the Colombo Stock Exchange, before recommending
Mr. Sirinimal Perera 24/01/2020 10 to the Board and the Annual Financial Statements before releasing the
Ms. Dheeshana Ameresekere 07/04/2015 10 same for Audit.
Mr. Ishan Dantanarayana 24/01/2020 11
Mr. V. Kanagasabapathy 24/01/2020 11
Mr. Priyantha Deniyaye 24/01/2020 11
Ms. Visakha Ameresekera 03/07/2020 6
Mr. P.A.Susantha Kumara 28/07/2020 5
Mr. Lal Weerasinghe 05/02/2020 10
CORPORATE GOVERNANCE
REMUNERATION COMMITTEE DELISTING OF THE COMPANY

The current composition of the Remuneration Committee with effect The Secretary to the Treasury, the sole Shareholder of the Company
from January 2020 is as follows: pursuant to a recent decision taken by the Cabinet of Ministers dated
26th February 2020, to develop the Company property to reach its full
potential as part of an overall development plan of the Government
Names of the Directors decided to delist the Company.
Mr. Sirinimal Perera - Chairman ( Independent Non Executive)
Mr. V. Kanagasabapathy - Member ( Independent Non Executive) Accordingly, the Company was delisted from the Colombo Stock
Exchange with effect from 25th August 2020.
Mr. Ishan Dantanarayana - Member ( Independent Non Executive)
The Remuneration Committee makes recommendations on OTHER POLICIES AND PRACTICES

remuneration matters to the Board.
OBTAINING INDEPENDENT PROFESSIONAL ADVICE
RELATED PARTY TRANSACTIONS REVIEW COMMITTEE The Board in discharging its duties seeks independent professional
advice from external parties when necessary, at the Company’s expense.
The Related Party Transaction Review Committee was formed as a
Board Sub Committee. The Objective of the Committee is to provide
independent review and oversight on all related party transactions in DEDICATION TO MATTERS OF THE BOARD AND THE
compliance with the Listing Rules of the Colombo Stock Exchange. COMPANY
The Board of Directors devotes adequate time to the fulfillment of
The Board has appointed a committee to review Related Party
its duties to the Company. The Board has delegated the day to day
Transactions and the Committee has laid down procedures and policies
operations of the Company to the Chief Operating Officer and Chief
to identify and review Related Party Transactions.
Financial Officer of the Company.
The composition of the Related Party Transactions Review Committee
By Order of the Board
with effect from January 2020 is as follows:
HOTEL DEVELOPERS (LANKA) LIMITED
Names of the Directors
Mr. V. Kanagasabapathy-Chairman (Independent Non Executive)
Mr. J.M.U.P. Jayamaha-Member (Resigned on 08.06.2020) ( Non
Independent Non Executive)

Ms. Dheeshana Ameresekere - Member ( Independent Non Executive) Srinimal Perera V. Kanagasabapathy
Director Director
The Directors have disclosed transactions, if any, that could be classified
as Related Party Transactions in terms of LKAS 24 – “Related Party Colombo
Disclosures’ and are given in Note 37 to the Financial Statements. 23rd February 2022
COMPANY SECRETARIES
Company Secretaries provide advice to the Board on matters relating
to the Companies Act and the Colombo Stock Exchange regulations, in
order to ensure that the Best Governance practices are adopted by the
Board and its Committees.
On 2nd June 2020, P.W. Corporate Secretarial (Pvt) Ltd were appointed
as the Company Secretaries in place of S.S.P Corporate Services
(Private) Ltd.
COMPLIANCE WITH LEGAL REQUIREMENTS

All Directors have access to the Financial and Management Information
of the Company. The Directors make every endeavor to ensure that
the Company complies with Laws and Regulations and to exercise due
diligence in managing the affairs of the Company. Additionally, checks
and controls are in place to ensure that the policies of the Board are
complied with.
RISK MANAGEMENT
Being in the forefront of a highly competitive industry that resonates RISK MANAGEMENT FRAMEWORK
with the demand of attracting and retaining diversified markets amidst The Risk Management team is headed by the General Manager of
numerous challenges, Company considers Risk Management as an the hotel who is assigned the responsibility to implement the risk
integrated process in its pursuit in delivering long term stakeholder strategies in consultation with the principal Hilton Worldwide regional
value. In its’ current business environment where change has become office, in fulfilling its statutory, fiduciary and regulatory responsibilities
the norm rather than the exception, the Hotel has consistently within a well formulated risk management framework. And report
recognised the pivotal role it plays in balancing strategic planning with to the company Board. Functional heads of the Hotel together
business execution and compliance. This facilitates informed decision- with the General Manager make up the Risk Management team. A
making and a conscious evaluation of opportunities and their inherent methodological process ensures that all relevant internal and external
risks as such, enabling the Hotel to protect or enhance key assets risks are identified with intelligence gathering, quality audits, safety
appropriately. audits, internal audits and means such as customer feedback and
incidents. These identified risks are then assessed in terms of business
Our Risk Management platform is geared in identifying the types of impact, likelihood of occurrence and velocity. Risks are mapped in
risk exposure within the company, measuring those potential risks terms of impact and probability, enabling the prioritization of key risk
and developing strategies to mitigate and control the same. Risk exposures.
Management is an essential element of our corporate governance
structure and strategic development process and the Hotel has The result of these risk rankings are tabulated in a risk grid that rates
successfully and strategically structured appropriate systems, policies the risks in scale of ‘High to Insignificant, which enables the Hotel to
and procedures in all areas of operations with periodical reviews to prioritize the risks and to plan out risk mitigation strategies under the
ensure adequacy and adherence. classification of preventive, detective and corrective action plans.
Our risk management framework constantly reflects the changing The Risk Management Team of the Hotel reviews the identified
dynamics in the operating environment and are woven into in line risks on a monthly basis, the assigned risk owners are responsible
with our policy frameworks and international best practices where for the implementation of any mitigation action and report to the
applicable. Board through the General Manager. The consolidated financial and
operational compliance report is received by the Management. The Risk
The Management oversees and retain ultimate responsibility for the Management Team has also included the Risk Review on the agenda of
risk management framework adopted. A Risk Management Team is Risk Management meetings.
responsible for the overall implementation of the Board approved risk
management policy.
Risk Category & Description Control Measures and Action Plans to Mitigate Risks
Technology & Information Risk Implementation of a fully integrated, property management, material management, Point of Sales and a
Risk of failure of electronic systems financial information system, ensuring a seamless flow of information and operational efficiencies.
and inadequacy of information
systems. Existence and continuous improvement of a Disaster Recovery Plan in the event of a disruption of failure in
the system.
The IT Division of the Hotel has implemented controls to safeguard the computer installations of the hotel to
reduce downtime and ensure continuity of operation.
Continuous review of network protection process is carried out to ensure information security and integrity.
Internal Process & Procedures Clearly defined systems & procedures are in place to ensure compliance with internal controls which are
The risk of financial loss and periodically reviewed for their continued effectiveness.
disruption to business and
breakdown in Internal Controls. A periodic Internal Audit process is carried out by the company who directly report to the Audit Committee
appointed by the Board. Periodic Reports on adequacy and effectiveness of these systems and level of
compliance is submitted to the Audit Committee for review and corrective actions.
Security Risk Effective monitoring surveillance systems have been installed meeting the international standards of the
Hotel Industry. Investment have been made for increase security equipment and surveillance systems
to strengthen the security of the guest and staff. Trained & skilled security staff have been deployed and
continuous training is provided to ensure the security is maintained effectively.
Natural or Man-made Disasters Adequacy of insurance covers are reviewed regularly and updated when necessary. Crisis management and
Loss of property and equipment business recovery plans have been adopted to safeguard the assets and speedy recovery. These are being
resulting in significant losses. reviewed periodically.
A new sprinkler system has been put in place at the hotel’s penthouse level to reduce the risk of fire.
Credit Risk A credit policy and stringent controls are in place to mitigate the impact of default. Credit limits and approval
Exposure and losses due to default process for new debtors are reviewed on a regular basis.
of settlement debtors.
Monthly monitoring and reporting on debtors ageing reports to the management for prompt actions.
Risk Management
Liquidity Risk Systems are in place to closely monitor the cash management and credit facilities from suppliers. Banking
Inability to meet financial facilities for operational cash are obtained through close review and approval process to ensure company has
commitments on due dates. the potential to finance the same.
Capital investment are reviewed by the management and approved based on sufficient availability of cash
flows for financing with realistic cash projections for sustainability.
The company continuously monitor the processes implemented by the hotel to identify, evaluate and manage significant risks that endanger the
operations throughout the year in accordance with the guidelines set out by the Hilton Worldwide of USA for management of hotels. Periodic reviews
are carried out by the regional office overlooking the Risk Management and reports are submitted for corrective actions.
Below are some of the key items included in the risk register along with the status and mitigation strategies for each, for the financial year ending 31st
December 2020.
Operational Risks
Competitive Risk Strict adherence to service standards to ensure superior quality in service delivery and value for money.
Reduction in market share, failure
to be competitive resulting in lower Upgrading and enhancing facilities and services.
occupancy and room rates due to
the Refurbishment program. Reviewing and monitoring adherence to Brand Standards and Standard Operational Procedures (SOP).
Anticipate competitor strategies and new entrants to market and formulate strategies accordingly.
Constant creativity and innovation in products and services.
Continuous review of guest feedback and prompt response to issues in order to create customer delight.
Brand Image & Reputational Conduct regular brand audits and mystery audits for guests’ feedback covering both facilities and services.
Risk
Action that may cause material Compliance with environmental, health & safety best practices by obtaining HACCP and other quality
damage to the brand and certification standards.
reputation of the company.
Food Safety & Hygiene Manager to monitor and manage food safety & hygiene standards as per global Hilton
worldwide standards.
Regular microbiological and chemical analysis of drinking water, swimming pool water, cooling tower water,
guest room water & food processing water is carried out by an accredited laboratory to monitor the safety
levels and requirements.
Air quality in the the hotel is regularly tested for Indoor Air Quality (IAQ) parameters.
Preventive maintenance programmes are regularly scheduled and conducted to the highest standards to
ensure that all food processing/storage equipment are operating at optimum levels.
Benchmark industry best practices in terms of both product and service.
Ensuring key managerial positions are held by suitably qualified and trained staff with sufficient experience in
the hotel industry.
Innovative service delivery in keeping with the brand promise.
Responsible corporate citizenship through CSR initiatives.

Human Resources Risk Structured training programs, cross exposure training opportunities arising from the performance appraisal
Risk of losing key personnel and process.
skilled staff; inappropriate labour
action. Emphasis on good employer-employee relationships, employee welfare, and an effective and open
communication with the labour union to achieve a win-win outcome.
Risk of injuries/health hazards
due to employees being exposed Fostering a spirit of unity and self belonging across the organization via associate gatherings, outings, family
to hazardous work conditions/ get-togethers and religious events.
chemicals.
Adjusting the salary level of the key team members to be more competitive in the market.
Strict adherence to laid down safety standards and procedures.

ANNUAL REPORT OF THE DIRECTORS ON THE AFFAIRS OF

THE COMPANY
The Directors of Hotel Developers (Lanka) Ltd are pleased to present Directors. Resolutions proposing the re-appointment of Mr. Srinimal
their Report and the Audited Financial Statements of the Company for Perera and Mr. V. Kanagasabapathy to the Board of the Company
the Year ended 31st December 2020. declaring that the age limit of 70 years shall not apply to the said
Directors, will be placed before the shareholders at the forthcoming
Annual General Meeting.
1. THE PRINCIPAL ACTIVITY
The principal activity of the Company is to carry on the business of the
proprietors and operators of hotels and for such purpose to construct, 9. INTEREST REGISTER
purchase, take on a lease or otherwise acquire any lands, buildings and The Directors have made general disclosures as provided for in Section
other property and to improve, equip and furnish the same. 192 (2) of the Companies Act No. 7 of 2007. Arising from this, details of
contracts in which they have an interest, if any, are disclosed in Note
37.1 to the Financial Statements.
2. FINANCIAL STATEMENTS
The Financial Statements of the Company are given on page 17 to 43.
10. REMUNERATION OF THE DIRECTORS
The remuneration and other benefits of Directors during the accounting
3. GOING CONCERN period are as follows;
The Directors are satisfied that the Company has adequate resources
to continue its operations in the foreseeable future. The financial Directors’ emoluments Rs 4,065,000 (2019 - Rs. 3,577,500)
statements of the Company have accordingly been prepared on a going
concern basis.
11. DIRECTORS INTERESTS / RELATED PARTY
TRANSACTIONS
4. AUDITORS REPORT The above details are contained in Note 37 to the financial statements.
The Auditors Report of the Financial Statements of the Company is The Directors have no direct or indirect interest in any contracts or
given on page 17 to 19. proposed contracts with the Company other than those disclosed.
5. ACCOUNTING POLICY 12. PAYMENTS TO AUDITORS

The significant accounting policies adopted in the Preparation of the The amount paid or payable to the Auditors for the year ended 31st
Financial Statements are given in Note No 03. December 2020 is Rs. 2,869,105 (2019- Rs. 3,746,000 )
6. TAXATION 13. DONATIONS

Provision for taxation has been computed at the rates given in Note 10 The Company has not made any donations during the year ended 31st
to the financial statements. December 2020.
7. DIVIDENDS 14. AUDIT COMMITTEE

The Directors do not recommend a dividend on ordinary shares for the The Composition of the Audit Committee during the year ended 31st
year ended 31st December 2020. December 2020 was as follows;
8. BOARD OF DIRECTORS AND THEIR SHAREHOLDING Name of the Director

The Directors of the Company as at 31st December 2020 were: Mr. V. Kanagasabapathy - Chairman
Mr. P.A. Susantha - Member
Name of Director Date of appointment Mr. Priyantha Deniyaye - Member
Mr. Sirinimal Perera 24/01/2020
Ms. Dheeshana Ameresekere 07/04/2015
15. REMUNERATION COMMITTEE
Mr. Ishan Dantanarayana 24/01/2020
The composition of the Remuneration Committee is as follows:
Mr. V. Kanagasabapathy 24/01/2020
Mr. Priyantha Deniyaye 24/01/2020
Ms. Visaka Ameresekera 03/07/2020
Mr. Srinimal Perera - Chairman
Mr. P.A.Susantha Kumara 28/07/2020
Mr. V. Kanagasabapathy - Member
Mr. Lal Weerasinghe 05/02/2020
Mr. Ishan Dantanarayana - Member
None of the above Directors hold shares in the Company.
Mr. Srinimal Perera and Mr. V. Kanagasabapathy who are over 70 years
of age, offer themselves for re-appointment as Directors in pursuance
of Section 211 of the Companies Act with the recommendation of the
16. RELATED PARTY TRANSACTIONS REVIEW COMMITTEE 23. AUDITORS

The composition of the Related Party Transactions Review Committee In terms of the 20th Amendments to the Constitution, Auditor General
is as follows: continues to be the Auditor of the Company.
Notice of Meeting relating to Annual General Meeting of the Company is

given on page 44 of the Annual Report.
Mr. V. Kanagasabapathy - Chairman
Ms. Dheeshana Ameresekere - Member By Order of the Board
The Directors, have disclosed transactions, if any, that could be

classified as Related Party Transactions in term of LKAS 24 – “Related
Party Disclosures’ and are given in Note 37 to the Financial Statements.
17. CAPITAL EXPENDITURE

The details of material capital commitments are given in the Financial
Statements. Mr. Sirinimal Perera Mr. V. Kanagasabapathy
Chairman Director
18. PROPERTY, PLANT AND EQUIPMENT

The details of the property, plant and equipment are given in Note 12 .to
the Financial Statements.
P W CORPORATE SECRETARIAL (PVT) LTD
Company Secretaries
19. STATED CAPITAL
Colombo
The stated Capital of the Company as at 31st December 2020 was Rs.
23rd February 2022
20,466,456,860/- representing 2,046,645,686 ordinary shares of Rs. 10/-
each.
20. DIRECTORS RESPONSIBILITIES FOR THE FINANCIAL

REPORTING
The Directors are responsible for the preparation and presentation
of the Financial Statements of the Company to reflect a true and fair
view of its state of affairs. The Directors confirm that these Financial
Statements have been prepared in conformity with the Sri Lanka
Accounting Standards and the Companies Act No. 07 of 2007. The
Directors are accordingly satisfied that the Financial Statements
presented herein give a true and fair view of the state of affairs of the
Company as at 31st December 2020 and the profit for the year ended.
21. STATUTORY PAYMENTS

The Directors are satisfied that to the best of their knowledge and belief,
all statutory payments due to the Government and the employees of the
Company have been made up to date.
22. POST BALANCE SHEET EVENTS

No events have occurred after the balance sheet date, which would
require adjustments to, or disclosure in the Accounts, other than those
given in Note 33. to the Financial Statements.
THE AUDIT COMMITTEE REPORT
AUDIT COMMITTEE CHARTER Mr. V. Kanagasabapathy, is a Retired Director General of Public

Audit Committee operates as a Sub-Committee of the Board of Directors Enterprises, General Treasury counts over 40 years of service in the
in terms of the mandates given in the Audit Committee Charter to public sector and was the Financial Management Reform Co-ordinator
examine any matters relating to the financial affairs of the Company and in the Ministry of Finance & Planning. Holds a Master’s Degree in
to review and monitor the financial reporting. Public Administration from Harvard University and is a Chartered
Public Finance Accountant, London. He is also a Fellow Member of the
Institute of Chartered Accountants of Sri Lanka, Association of Public
ROLE OF THE AUDIT COMMITTEE Finance Accountants of Sri Lanka, and Institute of Certified Management
Accountants of Sri Lanka.
Audit Committee acts as an effective forum to assist the Board of
Directors in discharging their responsibilities on ensuring proper
systems of Internal Control are in place both in terms of decision Mr. J.M.U.P. Jayamaha is a member of the Srilanka Government
making as well as in operations to address the Risk management Accountants’ service having many years of experience in Financial
process and quality of financial reporting covering the following: Management in the public sector.
Integrity of Company Financial Statement and the Company system Mr. M.K.P. Kumara holds a Bachelor of Commerce First Class degree
of Internal Auditing and Financial Controls. from University of Peradeniya. In addition he has obtained a Post
Graduate Diploma in Public Administration from Flinders University. He
Performance of Internal Auditors. is currently the Additional Director General of Trade in Department of
Trade and Investment Policy.
Annual Independent Audit of Company’s Financial Statement.
Impartial review of the reports of internal and external audits and Mr. Priyanatha Deniyaye is currently practicing as an Attorney-At-Law,
taking into consideration findings and recommendations. as a Criminal Counsel in the Criminal Private Bar of the Colombo High
Court since year 2000, specializes in Defense Counselling.
Compliance by the Company with statutory requirements.
Review of Quarterly Unaudited accounts to be released to the Stock Mr. P.A. Susantha Kumara joined the Public Service in 1991 as an Audit
Exchange. Examiner in Auditor General’s Department and joined the Department
of Public Enterprises, Ministry of Finance in 2007. Currently he is the
Adherence to the decisions of the Board of Directors.
Director General in Department of Public Enterprises. He holds a B.
Sc Management (Public Admin.) (Special) degree holder from the
COMPOSITION OF THE AUDIT COMMITTEE University of Sri Jayawardenapura and in 2015 obtained his Masters
degree in Business Studies in University of Colombo . Mr. Athula Kumara
Audit Committee comprised of three Non-Executive Directors and the
is a Class 1 Officer of Sri Lanka Accounts’ Services and a member of
composition is as follows:
Chartered Public Accountant in the Institute of Chartered Accountants
of Sri Lanka.
With the reconstitution of the Board in 2020, the following were
appointed as members of the Audit Committee with effect from January
2020. AUDIT COMMITTEE MEETINGS
During the year ended 31st December 2020, the Audit Committee had 3
Mr. V. Kanagasabapathy - Chairman ( Independent Non Executive)
meetings. Due to the Covid 19 pandemic situation , the Audit Committee
Mr. M.K.P. Kumara - Member (Non Independent Non Executive) could not have the regular Quarterly meetings. The Chief Operating
Mr. J.M.U.P. Jayamaha - Member ( Non Independent Non Executive) Officer, Chief Financial Officer, Accountant of HDL, General Manager &
Director Finance of Hilton Colombo, Internal Auditors Ernst & Young (E &
With effect from 8th June 2020 following the resignation of Mr. J.M.U.P. Y), representatives of the Auditor General and Management Auditors of
Jayamaha, the Audit Committee was reconstituted as follows: Hilton Colombo attended the Audit Committee Meetings by invitation.

EXTERNAL AUDITORS
Mr. M.K.P. Kumara - Member (Non Independent Non Executive) With the enactment of the 20th Amendment to the Constitution the
Auditor General continues to be the external Auditor of the Company
Mr. Priyantha Deniyaye - Member ( Independent Non Executive) since 2016. Accordingly, the Financial Statement for the year ending 31st
December 2020 was audited by the Auditor General.
With effect from 24th August 2020, following the resignation of Mr. M.K.P.
Kumara, the Audit Committee was reconstituted as follows REVIEW OF INTERNAL CONTROL SYSTEMS
E & Y the Internal Auditors of the Company carries out detail audits
of the hotel operations on the basis of the Audit Plan approved by
Mr. P.A. Susantha Kumara - Member (Non Independent Non Executive) the Audit Committee. Internal Audit performs an independent review
Mr. Priyantha Deniyaye - Member (Independent Non Executive) of the system of internal controls established by the Management
and to determine the extent of adherence to the controls by the staff
responsible for the function addressing the risk management process.
The findings and the contents of the internal Auditors reports are
discussed with the Management and corrective measures taken on a
timely manner and such reports are presented to the Audit Committee.
REVIEW OF QUARTERLY FINANCIAL STATEMENTS

Quarterly Financial Statements of the Company were reviewed and
recommended by the Audit Committee to the Board for approval before
releasing the same to the Colombo Stock Exchange (CSE).
ADOPTION OF IFRS/ SLFRS

The Company prepared its financial statements in accordance with the
Sri Lanka Accounting Standards, as applicable for all periods to date.
REVIEW OF COMPLIANCE STATEMENTS.

The committee reviewed the compliance statements to ensure that
the company comply with all statutory requirements. In addition, the
committee is satisfied that the company adheres to the decision of the
Board of Directors.
REVIEW OF DRAFT FINANCIAL STATEMENT FOR THE

YEAR ENDED 31ST DECEMBER 2020
The draft Financial Statements for the year ended 31st December
2020 pertaining to the Company were reviewed by the Audit
Committee, together with the External Auditors, Internal Auditors
and the Management Auditors of the Hotel Hilton Colombo. The
Audit Committee was provided with confirmations and declarations
as required, by the Chief Financial Officer. The Audit Committee
review facilitated that the said Financial Statements to be prepared
in accordance with the Sri Lanka Accounting Standards and the
information required by the Companies Act, No. 7 of 2007 therein and
presented a true and fair view of the Company’s state of affairs as at that
date and the Company’s activities during the year under review.
CONCLUSION
The Audit Committee is of the view that adequate controls are in place
to safe guard the Company’s assets, financial position and the results
disclosed in the audited accounts are free from any material mis-
statements.
V. Kanagasabapathy
Chairman
Audit Committee
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TIP/A/HDL/06/20/FA 02 June 2021
Chairman My opinion on the financial statements does not cover the other
information and I do not express any form of assurance conclusion
Hotel Developers (Lanka) Ltd thereon.
Report of the Auditor General on the Financial Statements and Other In connection with my audit of the financial statements, my
Legal and Regulatory Requirements of the Hotel Developers (Lanka) responsibility is to read the other information identified above when
Ltd for the year ended 31 December 2020 in terms of Section 12 of the it becomes available and, in doing so, consider whether the other
National Audit Act, No. 19 of 2018. information is materially inconsistent with the financial statements
or my knowledge obtained in the audit or otherwise appears to be
materially misstated.
1. FINANCIAL STATEMENTS
When I read the Company's 2020 Annual Report, if I conclude that there
1.1. Opinion are material misstatements therein, I am required to communicate
The audit of the financial statements of the Hotel Developers (Lanka) that matter to those charged with governance for correction. If further
Ltd ("Company") for the year ended 31 December 2020 comprising material uncorrected misstatements are existed those will be included
the statement of financial position as at 31 December 2020and the in my report to Parliament in pursuance of provisions in Article 154 (6) of
statement of comprehensive income statement of changes in equity the Constitution that will be tabled in due course.
and cash flow statement for the year then ended, and notes to the
financial statements, including a summary of significant accounting
policies, was carried out under my direction in pursuance of provisions 1.4. Responsibilities of Management and Those Charged
in Article 154(1) of the Constitution of the Democratic Socialist Republic with Governance for the Financial Statements
of Sri Lanka read in conjunction with provisions of the National Audit Management is responsible for the preparation of financial statements
Act No. 19 of2018. My report to Parliament in pursuance of provisions in that give a true and fair view in accordance with Sri Lanka Accounting
Article 154 (6) of the Constitution will be tabled in due course. Standards, and for such internal control as management determine is
necessary to enable the preparation of financial statements that are free
In my opinion, the accompanying financial statements give a true and from material misstatement, whether due to fraud or error.
fair view of the financial position of the Company as at 31 December
2020, and of its financial performance and its cash flows for the year In preparing the financial statements, management is responsible
then ended in accordance with Sri Lanka Accounting Standards. for assessing the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either
1.2. Basis for Opinion intends to liquidate the Company or to cease operations, or has no
I conducted my audit in accordance with Sri Lanka Auditing Standards realistic alternative but to do so.
(SLAuSs). My responsibilities, under those standards are further
described in the Auditor's Responsibilities for the Audit of the Financial Those charged with governance are responsible for overseeing the
Statements section of my report. I believe that the audit evidence I have Company's financial reporting process.
obtained is sufficient and appropriate to provide a basis for my opinion.
As per Section 16(1) of the National Audit Act No. 19 of 2018, the
Company is required to maintain proper books and records of all
1.3. Other information included in the Company's 2020
its income, expenditure, assets and liabilities, to enable annual and
Annual Report. periodic financial statements to be prepared of the Company.
The other information comprises the information included in the
Company's 2020 Annual Report but does not include the financial
statements and my auditor's report thereon, which is expected
to be made available to me after the date of this auditor's report.
Management is responsible for the other information.
Independent Auditor’s Report
1.5. Auditor's Responsibilities for the Audit of the 2. REPORT ON OTHER LEGAL AND REGULATORY
Financial Statements REQUIREMENTS
My objective is to obtain reasonable assurance about whether the 2.1. National Audit Act, No. 19 of 2018 and Companies Act, No. 7 of
financial statements as a whole are free from material misstatement, 2007include specific provisions for following requirements.
whether due to fraud or error, and to issue an auditor's report that
includes my opinion. Reasonable assurance is a high level of assurance, 2.1.1. I have obtained all the information and explanation that
but is not a guarantee that an audit conducted in accordance with Sri required for the audit and as far as appears from my examination,
Lanka Auditing Standards will always detect a material misstatement proper accounting records have been kept by the Company as per
when it exists. Misstatements can arise from fraud or error and are the requirement of section 163 (2) (d) of the Companies Act, No. 7 of
considered material if, individually or in the aggregate, they could 2007andsection 12 (a) of the National Audit Act, No. 19 of 2018.
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
2.1.2. The financial statements of the Company comply with the
requirement of section 151 of the Companies Act, No. 07 of 2007.
As part of an audit in accordance with Sri Lanka Auditing Standards, I
exercise professional judgment and maintain professional scepticism
throughout the audit. I also: 2.1.3. The financial statements presented 1s consistent with the
preceding year as per the requirement of section 6 (1) (d) (iii) of the
Identify and assess the risks of material misstatement of the National Audit Act, No. 19 of 2018.
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain 2.1.4. The financial statements presented includes all the
audit evidence that is sufficient and appropriate to provide a basis recommendations made by me in the previous year as per the
for my opinion. The risk of not detecting a material misstatement requirement of section 6 (1) (d) (iv) of the National Audit Act, No. 19 of
resulting from fraud is higher than for one resulting from error, 2018.
as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control. 2.2. Based on the procedures performed and evidence obtained were
limited to matters that are material, nothing has come to my attention;
Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on 2.2.1. to state that any member of the governing body of the Company
the effectiveness of the Company's internal control. has any direct or indirect interest in any contract entered into by the
Company which are out of the normal cause of business as per the
Evaluate the appropriateness of accounting policies used and the requirement of section 12 (d) of the National Audit Act, No. 19 of 2018.
reasonableness of accounting estimates and related disclosures
made by the management.
2.2.2. to state that the Company has not complied with any applicable
Conclude on the appropriateness of the management's use of the written law, general and special directions issued by the governing body
going concern basis of accounting and based on the audit evidence of the Company as per the requirement of section 12 (f) of the National
obtained, whether a material uncertainty exists related to events Audit Act, No. 19 of 2018 except for the following.
or conditions that may cast significant doubt on the Company's
ability to continue as a going concern. If I conclude that a material Reference to law/ direction Description
uncertainty exists, I am required to draw attention in my auditor's
Section 6.5.1 of the Public Although the financial statements
report to the related disclosures in the financial statements or,
Enterprises Circular No. PED/12 of should be furnished to Auditor
if such disclosures are inadequate, to modify my opinion. My
2 June 2003 General within 60 days after the
conclusions are based on the audit evidence obtained up to the
closure of the financial year, the
date of my auditor's report. However, future events or conditions
financial statements for the year
may cause the Company to cease to continue as a going concern.
2020 had been submitted to
Evaluate the overall presentation, structure and content of the Auditor General on 01 June 2021
financial statements, including the disclosures, and whether the and draft annual report had not
financial statements represent the underlying transactions and been submitted.
events in a manner that achieves fair presentation.
I communicate with those charged with governance regarding, among 2.2.3. to state that the Company has not performed according to its
other matters, significant audit findings, including any significant powers, functions and duties as per the requirement of section 12 (g) of
deficiencies in internal control that I identify during my audit. the National Audit Act, No. 19 of 2018
2.2.4. to state that the resources of the Company had not been
procured and utilized economically, efficiently and effectively within
the time frames and in compliance with the applicable laws as per the
requirement of section 12 (h) ofthe National Audit Act, No. 19 of 2018.
2.5. Other Matters

(a) The Company had applied USD 27 million syndicated loan in
year 2014 from Bank of Ceylon and Sampath Bank to finance the
refurbishment program of the hotel. However, after negotiating
with the above two banks, the Company had applied a fresh loan
amounting to USD 30 million in year 2018, from the DFCC Bank
by cancelling the above USD 27 million loan. Subsequently, after
negotiating with the DFCC Bank, the Company had applied a rupee
loan amounting to Rs. 2 billion in year 2020 from Peoples Bank by
cancelling the above USD 30 million loan and the agreement fees,
syndication fees and legal fees aggregating to Rs. 17,659,767 and
stamp fees and processing fees amounting to Rs. 5,665,900 incurred
by the Company had been capitalized as cost of the refurbishment
program, even though the USD loans had not been obtained.
(b) The accumulated loss of the Company as at the beginning of the

year under review was Rs.6,937,589,000 and it had been increased
up to Rs.7,821,569,000 as at the end of year under rev.iew and
unfavourable working capital of the Company as at the end of the
year under review was Rs.997,068,000.
W.P.C. Wickramaratne
Auditor General
STATEMENT OF COMPREHENSIVE INCOME
12 Months 12 Months
FOR THE 12 MONTHS ENDED 31ST DECEMBER 2020 31.12.2020 31.12.2019
Rs. ‘000 Rs. ‘000
Revenue 05 1,081,135 2,878,752

Cost of sales (811,092) (1,403,693)
Gross profit 270,043 1,475,059
Investment income 06 10,873 10,708

Other gains and losses 07 25,391 20,807
Administrative expenses (591,036) (910,514)
Other expenses (171,603) (281,942)
Operating Profit (456,330) 314,118
Depriciation (378,443) (515,265)

Revaluation Loss - (61,223)
Finance costs 08 (42,569) (50,078)
Profit/(loss) before taxation 09 (877,343) (312,448)
Income tax expense 10 (40,764) (13,182)

Profit/(loss) after taxation for the period (918,107) (325,630)
Other comprehensive income

Revaluation surplus - 1,452,978
Actuarial Gain/( loss )on employee benefit obligations (8,088) (22,455)
Total comprehensive income/ (expense) for the period (926,194) 1,104,893
Earning per share - Basic (Rs.) 11 (0.45) 0.54
The accounting policies and notes from 1 to 38 form an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
AS AT 31ST DECEMBER 2020 31.12.2020 31.12.2019

Rs. ‘000 Rs. ‘000
Assets
Non-current Assets
Property, plant & equipment 12 8,486,249 8,728,240
Leasehold land - Main Property 13 6,421,326 6,514,390
Capital work-in-progress 865,477 659,487
Total Non-current Assets 15,773,052 15,902,117
Current Assets
Inventories 14 47,841 47,755
Trade and other receivables 15 27,813 163,642
Amount due from related parties 16 10,489 2,523
Other assets 17 237,759 237,750
Current financial assets 18 150,970 109,990
Cash and bank balances 19 47,106 141,548
Total Current Assets 521,978 703,208
Total Assets 16,295,030 16,605,325
Equity and Liabilities

Shareholders’ Equity
Stated capital 20 20,466,456 20,466,456
Revaluation Surplus 1,452,978 1,452,978
Reserves 21 1,649 43,864
Accumulated loss (7,821,569) (6,937,588)
Total Equity 14,099,514 15,025,710
Non-current Liabilities
Interest bearing loans and borrowings 22 72,156 250,000
Retirement benefit obligations 23 148,198 134,550
Deferred tax liability 24 433,198 410,798
Right to use - Lease Land Liability 13 22,918 37,291
Total Non-current Liabilities 676,470 832,639
Current Liabilities
Trade and other payables 25 298,335 349,217
Amount due to related parties 26 10,080 24,619
Contract Liabilities 27 59,892 99,437
Interest bearing loans and borrowings 22 178,479 -
Retention Fees - Refurbishment Project 26,220 19,210
Bank overdraft 946,040 254,492
Total Current Liabilities 1,519,046 746,975
Total Liabilities 2,195,516 1,579,615
Total Equity and Liabilities 16,295,030 16,605,325
Net Assets per share - (Rs.) 28 6.89 7.34

I certify that these financial statements have been prepared in compliance with the requirements of the Companies Act No. 07 of 2007.
Sudarshan Sri Rayen

Head of Finance
The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of the Board on
14th May 2021

V. Kanagasabapathy Srinimal Perera
Director Chairman
STATEMENT OF CHANGES IN EQUITY
FOR THE 12 MONTHS ENDED 31ST Stated Capital Revaluation Furniture, Accumulated Total
DECEMBER 2020 Surplus Fittings & Loss
Equipment
Replacement
Reserves
Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000
Balance as at 01st January 2018 20,466,456 - 187,217 (6,732,856) 13,920,817

Profit / (Loss) for the 12 Months period - - - (325,630) (325,630)
Revaluation Surplus - 1,452,978 - - 1,452,978
Actuarial gain/(loss) on employee benefit
obligations, net of taxes - loss - - - (22,455) (22,455)
Replacement of furniture, fittings &
equipment - - (269,904) 269,904 -
Transfers to furniture, fittings & equipment
reserve - - 126,551 (126,551) -
Balance as at 31st December 2019 20,466,456 1,452,978 43,864 (6,937,589) 15,025,710
Profit / (loss) for the 12 Months period - - - (918,107) (918,107)

Actuarial gain/(loss) on employee benefit
obligations, net of taxes - loss - - - (8,088) (8,088)
Replacement of furniture, fittings &
equipment - - (63,792) 63,792 -
Transfers to furniture, fittings & equipment
reserve - - 21,577 (21,577) -
Balance as at 31st December 2020 20,466,456 1,452,978 1,649 (7,821,569) 14,099,514
STATEMENT OF CASH FLOWS
FOR THE 12 MONTHS ENDED 31ST DECEMBER 2020 31.12.2020 31.12.2019

Rs. ‘000 Rs. ‘000
Profit / (Loss) before taxation (877,343) (312,448)
Adjustment for
Depreciation and amortisation 363,063 515,265
Changes in Impairment of Debtors 6,058 (1,448)
Net changes in right to use of land lease 15,380 (5,972)
Revaluation loss - 61,223
Provision for defined benefit plans 23,415 21,689
Provision for breakages (7,786) (648)
Interest expenses 42,569 50,078
Profit on sale of property, plant & equipment (2,317) -
Unrealized Exchange Gain (113) 1,550
Interest income (10,873) (10,708)
Adjustment to sundry income (8,493) -
Operating profit before working capital changes (456,441) 318,581
(Increase)/ decrease in inventories (86) 15,739

(Increase)/ decrease in receivables 129,771 (23,265)
Increase/decrease in amounts dues to related parties (22,506) 17,149
(Increase)/ decrease in other assets 3,115 33,622
Increase/ (decrease) in trade & other payables (51,065) 55,878
Increase/(decrease) in contract liabilities (39,545) (6,681)
Cash generated from operations (436,757) 411,023
Tax paid - (16,223)
Payment of retirement benefits (17,855) (15,853)
Net cash generated from operating activities (454,611) 378,948
Cash Flows from Investing Activities

Purchase of property, plant & equipment (64,762) (295,822)
Investment in capital work-in-progress (206,755) (110,974)
Proceeds from sale of property, plant & equipment 10,111 -
Interest income received 10,873 10,708
Net cash used in investing activities (250,533) (396,088)
Cash Flows from Financing Activities

New interest bearing loans and borrowings 25,000 250,000
Repayment of interest bearing loans and borrowings (24,364) -
Finance Cost (40,616) (50,078)
Net cash used in financing activities (39,980) 199,922
Net increase/(decrease) in cash & cash equivalents (745,123) 182,782

Cash & cash equivalents at the beginning of the year (Note 30) (2,841) (185,736)
Cash & cash equivalents at the end of the period (747,964) (2,954)
NOTES TO THE FINANCIAL STATEMENTS

TWELVE MONTHS ENDED 31ST DECEMBER 2020
1. CORPORATE INFORMATION Financial assets and financial liabilities are offset and the net amount
reported in the statement of financial position, only when there is a
1.1. General legally enforceable right to offset the recognized amounts and there is
Hotel Developers (Lanka) Ltd is a limited liability company incorporated an intention to settle on a net basis, or to realize the assets and settle
and domiciled in Sri Lanka. The registered office and the principal the liability simultaneously. Income and expenses are not offset in the
place of business of the company is located at No. 02, Sir Chittampalam statement of comprehensive income unless required or permitted by
Gardiner Mawatha, Colombo 2. any accounting standard or interpretation, and as specifically disclosed
in the accounting policies.
1.2. Principal Activities and Nature of Operations

3. ACCOUNTING POLICIES
Hotel Developers (Lanka) Ltd is engaged in the business of hospitality
trade, owning Hilton Colombo Hotel. The accounting policies have been consistently applied by the
Company and, are consistent with those used in the previous year
except for changes in accounting policies stated in note 3.1.
1.3. Date of Authorisation for Issue
The financial statements were authorized for issue by the Board of Comparative information
Directors on 14th May 2021.
The presentation and classification of the financial statements of
the previous year have been amended, where relevant for better
2. BASIS OF PREPARATION presentation and to be comparable with those of the current year.
2.1. Statement of Compliance

3.1. Changes in Accounting Policies and Disclosures
The financial statements of the company (statement of financial
New and amended standards and interpretations
position, statement of comprehensive income, statement of changes in
equity, statement of cash flows together with accounting policies and
notes) are prepared in accordance with Sri Lanka Accounting Standards, SLFRS 16 Leases
commonly referred to as SLFRS as issued by the Institute of Chartered
SLFRS 16 provides a single lessee accounting model, requiring leases
Accountants of Sri Lanka and in compliance with the requirements of
to recognize assets and liabilities for all leases unless the lease term is
the Companies Act No.07 of 2007.
12 months or less or the underlying asset has a low value even though
lessor accounting remains similar to current practice. This supersedes:
2.2. Basis of Measurement LKAS 17 Leases, IFRIC 4 determining whether an arrangement contains
a Lease, SIC 15 Operating Leases- Incentives; and SIC 27 Evaluating the
The financial statements have been prepared on the historical cost
substance of Transactions Involving the Legal form of a Lease. Earlier
basis except for the following material item in the statement of financial
application is permitted for entities that apply SLFRS 15 Revenue from
position:
Contracts with customers.
Property, Plant and Equipment which were subsequently measured at

SLFRS 16 is effective for annual reporting periods beginning on or after
fair value.
1 January 2019.
Liability of defined benefit obligation is recognized as the present value

Land lease rights of Ikoi Tei restaurant at Dutch Hospital and UDA Car
of the defined benefit obligation.
Park of Hilton Colombo will have an impact when adopting SLFRS 16
with effect from 1 January 2019.
2.3. Functional and Presentation Currency
The financial statements are presented in Sri Lankan Rupees, which 3.2 Significant Accounting Judgments, Estimates and
is the Company's functional currency and presentational currency. All Assumptions
financial information presented in Sri Lanka Rupees is rounded to the
The preparation of financial statements requires the application of
nearest rupee unless otherwise stated.
certain critical accounting assumptions relating to the future. Further,
it requires the management of the Company to make judgments,
2.4. Comparative Information estimates and assumptions that affect the reported amounts of income,
expenses, assets and liabilities, and the disclosure of contingent
The accounting policies have been consistently applied by the
liabilities, at the end of the reporting period. However, uncertainty
Company with those of the previous financial in accordance with
about these assumptions and estimates could result in outcomes that
LKAS 01 - presentation of financial statements.
require a material adjustment to the carrying amount of the asset or
liability in future periods. Hence, actual experience and results may
2.5. Materiality & Aggregation differ from these judgments and estimates.
In compliance with LKAS 01 on presentation of financial statements,
In the process of applying the company's accounting policies,
each material class of similar items is presented separately in the
management has made the following judgments, estimates and
financial statements. Items of dissimilar nature or functions too are
assumptions which have the most significant effect on the amounts
presented separately, if they are material.
recognized in the financial statements:
a) Taxation obligation. The mortality rate is based on publicly available mortality

The Company is subject to income taxes and other taxes including tables. Future salary increases are based on expected future inflation
value added taxation and nations building tax. Significant judgment rates and expected future salary increase rate of the Company.
was required to determine the total provision for current, deferred and
other taxes pending the issue of tax guidelines on the treatment of the
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
adoption of SLFRS in the financial statements and the taxable profit
for the purpose of imposition of taxes. Uncertainties exist, with respect The significant accounting policies applied by the Company in
to the interpretation of the applicability of tax laws, at the time of the preparation of its financial statements are included below. The
preparation of these financial statements. accounting policies set out below have been applied consistently to all
periods presented in theses financial statements, unless otherwise is
The Company recognized assets and liabilities for current, deferred and indicated.
other taxes based on estimates of whether additional taxes will be due.
Where the final tax outcome is different from the amounts that were
4.1. Revenue Rrecognition
initially recorded, such differences will impact the income, deferred and
tax amounts in the period in which the determination is made. (i) Revenue from Contracts with Customers
The Hotel is in the business of providing hospitality and leisure services.
b) Revaluation of Property, Plant and Equipment.
The Property, Plant and Equipment of the Company are reflected at Revenue from contracts with Customer is recognized when control of
fair value. When current market prices of similar assets are available, the goods or services are transferred to the customer at an amount that
such evidences are considered in estimating fair values of these assets. reflects the consideration to which the Hotel expects to be entitled in
In the absence of such information the Company determines within exchange for these goods and services.
reasonable fair value estimates, amounts that can be attributed as fair
values, with the assistance of an independent professional valuer. The Hotel has generally concluded that it is the principal in its revenue
arrangements, because it typically controls the goods or services before
transferring them to the customer.
c) Useful Life-time of the Property, Plant and Equipment
The Company reviews the residual values, useful lives and methods Management has assessed the impact of applying SLFRS 15 as
of depreciation of assets as at each reporting date. Judgment of the disclosed below:
management is exercised in the estimation of these values, rates,
methods and hence they are subject to uncertainty.
(a) Rendering of services
Revenue from rendering of services is recognized when performance
d) Going Concern obligations are satisfied over a period of time.
The Directors have made an assessment of the Company's ability to
continue as a going concern and are satisfied that it has the resources to Room revenue is recognized on the rooms occupied on a daily basis
continue in business for the foreseeable future. Furthermore, the board and food and beverage revenue is accounted for at the time of sale. (i.e
is not aware of any material uncertainties that may cast significant when performance obligation is satisfied)
doubt upon the Company's ability to continue as a going concern and
they do not intend either to liquidate or to cease operations of the
Company. Therefore, the financial statements continue to be prepared (ii) Interest
on the going concern basis. For all financial instruments measured at amortized cost and interest
bearing financial assets classified as available for sale, interest income
or expense is recorded using the effective interest rate (EIR), which is
e) Impairment Losses on Financial Assets the rate that exactly discounts the estimated future cash payments
The company assesses at each reporting date or more frequently or receipts through the expected life of the financial instrument or a
to determine whether there is any objective evidence whether an shorter period, where appropriate, to the net carrying amount of the
impairment loss should be recorded in the statement of comprehensive financial asset or liability. Interest income on the non-financial assets is
income. included in FF&E reserve. All other interest income is included in finance
income.
f) Defined Benefit Plans
The cost of defined benefit plans are determined using actuarial (iii) Shop Rental Income
valuations. An actuarial valuation involves making various assumptions Shop Rental income is recognized on accrual basis.
which may differ from actual developments in the future. These include
the determination of the discount rate, future salary increases, mortality
rates, etc. Due to the complexity of the valuation, the underlying Turnover based taxes
assumptions and their long term nature, a defined benefit obligation is Turnover based taxes include Value Added Tax, Nation Building Tax, and
highly sensitive to changes in these assumptions. All assumptions are Tourism Development Levy. Hotel pays such taxes in accordance with
reviewed at each reporting date. the respective statutes.
In determining the appropriate discount rate, management considers

the yield of Sri Lanka Government bonds with extrapolated maturities
corresponding to the expected duration of the defined benefit
Notes to the Financial Statements

Other income 4.4. Non-financial Asset

Other income is recognized on an accrual basis.
4.4.1. Property, Plant and Equipment
4.2. Expenditure Recognition a) Recognition and Measurement

Expenses are recognized in the statement of comprehensive income At Initial Recognition
on the basis of a direct association between the cost incurred and the
earning of specific items of income. All expenditure incurred in running Property, plant & equipment are recognized if it is probable that future
the business and in maintaining property, plant and equipment in a economic benefits associated with the asset will flow to the entity and
state of efficiency has been charged to the statement of comprehensive the cost of the asset can be measured reliably in accordance with LKAS
income. 16 - property, plant & equipment. Initially property and equipment are
measured at cost net of accumulated depreciation and accumulated
impairment losses, if any. Such cost includes the cost of replacing parts
For the purpose of presentation of the statement of comprehensive
of the Property, Plant and Equipment and borrowing costs for lohg term
income, the "function of expenses" method has been adopted, on the
construction projects if the recognition criteria are met. When significant
basis that it presents fairly the elements of the Company's performance.
parts of Property, Plant and Equipment are required to be replaced at
intervals, the Company recognizes such parts as individual assets with
Income tax expense comprises current and deferred tax. Income tax
specific useful lives and depreciates them accordingly. Likewise, when a
expense is recognised in the statement of comprehensive income.
major refurbishment is performed, its cost is recognized in the carrying
amount of the Property, Plant and Equipment as a replacement if the
4.3. Taxation recognition criteria are satisfied. All other repair and maintenance costs
are recognised in the profit or loss as incurred.
4.3.1. Current Tax
Current tax assets and liabilities consist of amounts expected to be At Subsequent Measurement
recovered from or paid to the Commissioner General of Inland Revenue All Property, Plant and Equipment are subsequently measured at fair
in respect of the current year and any adjustment to tax payable in value less accumulated depreciation and such valuation are carried by
respect of prior years. The tax rates and tax laws used to compute the external independent valuers. Valuations are performed with sufficient
amount are those that are enacted or substantially enacted as at the frequency tci ensure that the fair value of a revalued asset does not
reporting date. differ materially from its carrying amount.
4.3.2. Deferred Tax A revaluation surplus is recognised in other comprehensive income and
credited to the revaluation surplus in equity. However, to the extent that
Deferred tax is provided using the liability method on temporary
it reverses a revaluation deficit ofthe same asset previously recognised
differences at the reporting period date between the tax bases of
in the Income Statement, in which case the increase is recognised in
assets and liabilities and their carrying amounts for financial reporting
the Income Statement. A revaluation deficit is recognised in profit or
purpose.
loss, except to the extent that it offsets an existing surplus on the same
asset recognised in the asset revaluation reserve. Upon disposal or
Deferred tax assets are recognized for all deductible differences. Carry de-recognition, any revaluation reserve relating to the particular asset
forward of unused tax credits and unused tax losses, to the extent that being sold is transferred to retained earnings.
it is probable that taxable profits will be available against which the
deductible temporary differences and the carry forward of unused tax
An annual transfer from the asset revaluation reserve to retained
credits and unused tax losses can be utilized.
earnings is made for the difference between depreciation based on the
revalued carrying amount of the assets and depreciation based on the
The carrying amount of a deferred tax asset is reviewed at each assets original cost.
reporting date and reduced to the extent it is no longer probable that
sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be utilized. Unrecognized deferred tax assets are Subsequent Cost
reassessed at each reporting date and are recognized to the extent that Subsequent expenditure incurred for the purpose of acquiring,
it is probable that future taxable profit will allow the deferred tax asset extending, or improving assets of a pennanent nature by means of
to be recovered. which to carry on the business or to increase the earning capacity of
the business is treated as capital expenditure and such expenses are
Deferred tax assets and liabilities are measured at the tax rate that recognized in the carrying amount of an asset. The costs associated
are expected to apply in the year when the assets are realized or the with day-to-day servicing of property, plant and equipment is
liabilities are settled, based on tax rates and tax laws that have been recognized in the statement of comprehensive income as incurred.
enacted or subsequently enacted at the reporting date.
Depreciation
Depreciation is calcuIated using the straight-!ine method to write
down the cost of property and equipment to their residual values
over their estimated useful lives. Depreciation is charged from the
date of purchase to the date of disposal on prorate basis. The rates of
depreciations based on the estimated useful lives are as follows:
Category of asset % 4.4.3. Fair Value Measurement

Buildings 1.82 The Company measures all Property, Plant and Equipment at fair value.
Fair value is the price that would be received to sell an asset or paid to
Plant and machinery 7.50
transfer a liability in an orderly transaction between market participants
Refrigerators & kitchen equipment 7.50 at the measurement date. The fair value measurement is based on the
Computers & televisions 20.00 presumption that the transaction to sell the asset or transfer the liability
Motor vehicles 25.00 takes place
Furniture, fittings & equipment 10.00
In the principal market for the asset or liability or
Operating Equipment 33.00
In the absence of a principal market, in the most advantageous
The asset's residual values, useful lives and methods of depreciation are market for the asset or liability
reviewed, and adjusted if appropriate, at each financial year end.
The principal or the most advantageous market must be accessible by
the Company.
De-recognition
Property, plant and equipment are derecognized on disposal or when The fair value of an asset or a liability is measured using the
no future economic benefits are expected from its use. Any gain or assumptions that market participants would use when pricing the asset
loss arising on de-recognition of the asset (calculated as the difference or liability, assuming that market participants act in their economic best
between the net disposal proceeds and the carrying amount of the interest.
asset) is recognized in 'other operating income' in the statement of
comprehensive income in the year the asset is derecognized. The The Company uses valuation techniques that are appropriate in the
revaluation surplus included in the equity in respect of an item of circumstances and for which sufficient data are available to measure fair
Property, Plant and Equipment is transferred directly to equity when the value, maximising the use of relevant observable inputs and minimising
assets in derecognized. the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in
4.4.2. Impairment of Non-financial Assets
the Financial Statements are categorised within the fair value hierarchy,
The Company assesses at each reporting date whether there is an described as follows, based on the lowest level input that is significant
indication that an asset may be impaired. If any indication exists, or to the fair value measurement as a whole:
when annual impairment testing for an asset is required, the Company
estimates the asset's recoverable amount. An asset's recoverable Level 1 - Quoted (unadjusted) market prices in active markets for
amount is the higher of an asset's or cash-generating unit's fair value identical assets or liabilities.
less costs to sell and its value in use and is detennined for an individual
asset, unless the asset does not generate cash inflows that are largely Leve12 - Valuation techniques for which the lowest level input that
independent of those from other u:: l3 or groups of assets. Where the is significant to the fair value measurement is directly or indirectly
carrying &1uuunt of an asset exceeds its recoverable amount, the asset observable.
is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted
Level 3 - Valuation techniques for which the lowest level input that is
to their present value using a pre-tax discount rate that reflects current
significant to the fair value measurement is unobservable.
market assessments of the time vulut: uf 1nuru.:y uml th ,; risks specific
to the asset. In determining fair value less costs to sell, an appropriate
For assets and liabilities that are recognised in the Financial Statements
valuation model is used. These calculations are corroborated by
on a recurring basis, the Company determines whether transfers have
valuation multiples or other available fair value indicators.
occurred between levels in the hierarchy by reassessing categorisation
(based on the lowest level input that is significant to the fair value
Impairment losses of continuing operations are recognized in the
measurement as a whole) at the end of each reporting period. The
Income Statement in those expense categories consistent with the
Company's management determines the policies and procedures for
function of the impaired asset, except for property previously revalued
both recurring fair value measurement. External valuers are involved for
where the revaluation was taken to equity. In this case the impairment is
valuation of Property, Plant and Equipment. Involvement of external
also recognized in equity up to the amount of any previous revaluation.
valuers is decided by the management after discussion with and
approval by the Company's Audit Committee. Selection criteria include
For assets, an assessment is made at each reporting date as to whether market knowledge, reputation, independence and whether professional
there is any indication that previously recognised impairment losses standards are maintained.
may no longer exist or may have decreased. If such indication exists,
the Company makes an estimate of recoverable amount. A previously
recognised impairment loss is reversed only if there has been a change 4.5. Prepaid Lease Rental
in the estimates used to determine the asset's recoverable amount
The leasehold lands are being amortised on an equal annual basis
since the last impairment loss was recognised. If that is the case the
over the period of the lease and charged to the Income Statement on a
carrying amount of the asset is increased to its recoverable amount.
straight-line basis over the period of the lease.
That increased amount cannot exceed the carrying amount that would
have been determined, net of depreciation, had no impairment loss
been recognised for the asset in prior years. Such reversal is recognised
in the Income Statement unless the asset is carried at revalued amount,
in which case the reversal is treated as a revaluation increase.

4.6. Inventories iii. Financial assets designated at fair value through OCI with no
Inventories are valued at the lower of cost and estimated net realizable recycling of cumulative gains and losses upon de-recognition
value, after making due allowances for obsolete and slow moving items. (Equity Instruments)
Net realizable value is the price at which inventories can be sold in the iv. Financial assets at fair value through profit or loss
normal course of business after allowing for cost of realization and/ or
cost of conversion from their existing state to saleable condition. Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Hotel. The Hotel measures
The cost of each category of inventory is determined on the weighted
financial assets at amortised cost if both of the following conditions are
average basis.
met:
4.7. Financial Assets- Recognition and Measurement The financial asset is held within a business model with the
objective to hold financial assets in order to collect contractual cash
A financial instrument is any contract that gives rise to a financial asset
flows and
of one entity and a financial liability or equity instrument of another
entity. The contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets
(a) Initial Recognition and Measurement Financial assets at amortised cost are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and
Financial assets are classified at initial recognition, as subsequently losses are recognised in profit or loss when the asset is derecognised,
measured at amortised cost, fair value through other comprehensive modified or impaired.
income (OCI) and fair value through profit or loss.
The Hotel's financial assets at amortised cost includes cash and bank
The classification of financial assets at initial recognition depends balances, short term investments, amount due from related parties,
on the financial asset's contractual cash flow characteristics and the trade receivables, and non-current investments.
Hotel's business model for managing them. With the exception of
trade receivable that do not contain significant financing component
The Hotel does not classify financial assets at fair value through OCI
for which Hotel has applied the practical expedient, the Hotel initially
(debt instruments) and financial assets at fair value through OCI (equity
measures a financial asset at its fair value plus, in the case of financial
instruments) and financial assets at fair value through profit or loss.
asset not a fair value through profit or loss, transaction costs. Trade
receivable that do not contain a significant financing component for
which the Hotel has applied the practical expedient are measured at the (c) De-recognition
transaction price determined under SLFRS 15. A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is primarily derecognised) when:
In order for a financial asset to be classified and measured at amortised
cost or fair value through OCI it needs to give rise to cash flows that The rights to receive cash flows from the asset have expired or
are 'solely payments of principal and interest' on the principal amount
outstanding. The Hotel has transferred its rights to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows
In order for a financial asset to be classified and measured at amortised in full without material delay to a third party under a 'pass-through'
cost or fair value through OCI, it needs to give rise to cash flows that arrangement; and either
are 'solely payments of principal and interest (SPPI)' on the principal (a) the Hotel has transferred substantially all the risks and rewards of
amount outstanding. the asset, or
The Hotel's business model for managing financial assets refers to how (b) the Hotel has neither transferred nor retained substantially all the
it manages financial assets in order to generate cash flows. The business risks and rewards of the asset, but has transferred control of the
model determines whether cash flows will result from collecting asset
contractual cash flows selling the financial assets or both.
When the Hotel has transferred its rights to receive cash flows from an
Purchases or sales of financial assets that require delivery of financial asset or has entered into a pass- through arrangement, it evaluates if,
assets within a time frame established by regulation or convention in and to what extent, it has retained the risks and rewards of ownership.
the market place are recognised on the trade date, i.e., the date that the When it has neither transferred nor retained substantially all of the
Hotel commits to purchase or sell the asset. risks and rewards of the asset, nor transferred control of the asset,
the Hotel continues to recognise the transferred asset to the extent of
its continuing involvement. In that case, the Hotel also recognises an
(b) Subsequent Measurement associated liability. The transferred asset and the associated liability
For purposes of subsequent measurement, financial assets are are measured on a basis that reflects the rights and obligations that the
classified in four categories: Hotel has retained.
i. Financial assets at amortised cost (Debt Instruments)

ii. Financial assets at fair value through OCI with recycling of
cumulative gains and losses (Debt Instruments)
Continuing involvement that takes the form of a guarantee over the (c) De-recognition
transferred asset is measured at the lower of the original carrying A financial liability is derecognised when the obligation under the
amount of the asset and the maximum amount of consideration that liability is discharged or cancelled or expires. When an existing financial
the Hotel could be required to repay. liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially
(d) Impairment modified, such an exchange or modification is treated as the de-
recognition of the original liability and the recognition of a new liability.
The Hotel recognises an allowance for expected credit losses (ECLs) for The difference in the respective carrying amounts is recognised in the
all debt instruments not held at fair value through profit or loss. ECLs statement of profit or loss.
are based on the difference between the contractual cash flows due
in accordance with the contract and all the cash flows that the Hotel
expects to receive, discounted at an approximation of the original Offsetting of Financial Instruments
effective interest rate. The expected cash flows will include cash flows Financial assets and financial liabilities are offset and the net amount is
from the sale of collateral held or other credit enhancements that are reported in the consolidated statement of financial position if there is a
integral to the contractual terms. currently enforceable legal right to offset the recognised amounts and
there is an intention to settle on a net basis, to realise the assets and
For trade receivables, the Hotel applies a simplified approach in settle the liabilities simultaneously.
calculating ECLs. Therefore, the Hotel does not track changes in credit
risk, but instead recognises a loss allowance based on lifetime ECLs at
each reporting date. The Hotel has established a provision matrix that 4.8. Cash and Bank Balances
is based on its historical credit loss experience, adjusted for forward- Cash and bank balances are defined as cash in hand and balances
looking factors specific to the debtors and the economic environment. with banks. For the purpose of statement of cash flows, cash and
cash equivalents consist of cash in hand and deposits in banks net of
Financial liabilities outstanding bank overdrafts. Investments with short maturities i.e. three
months or less from the date of acquisition are also treated as cash
(a) Initial recognition and measurement equivalents.
Financial liabilities are classified, at initial recogmtwn, as financial
liabilities at fair value through profit or loss, loans and borrowings, 4.9. Stated Capital
payables, or as derivatives designated as hedging instruments in an
Ordinary shares are classifies as equity. Equity instruments are
effective hedge, as appropriate.
measured at the fair value of the cash or other resources received or
receivable, net of the direct costs of issuing the equity instruments.
All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable
transaction costs. 4.10. Retirement Benefit Obligations
The Hotel's financial liabilities include trade and other payables, 4.10.1. Defined Benefit Plan - Gratuity
amounts due to related parties including bank overdrafts. The liability recognized in the statement of financial position represents
the present value ofthe defined benefit obligation at the reporting date
Hotel does not have financial liabilities at fair values through profit and estimated based on actuarial valuation using the projected unit credit
loss and derivative financial instruments. method. The actuarial valuations involve making assumptions about
discount rates and future salary increases. A defined benefit obligation
(b) Subsequent measurement is highly sensitive to changes in these assumptions. These benefits
are not externally funded. The Company recognizes all actuarial gains
The measurement of financial liabilities depends on their classification,
and losses arising from defined benefit plans immediately in the other
as described below:
comprehensive income.
Loans and borrowings However, as per the Payment of Gratuity Act No. 12 of 1983, the liability
This is the category most relevant to the Hotel. After initial recognition, to pay gratuity arises only on completion of 5 years of continued service.
interest-bearing loans and borrowings are subsequently measured at
amortised cost using the EIR method. Gains and losses are recognised 4.10.2. Defined Contribution Plan
in profit or loss when the liabilities are derecognised as well as through
the EIR amortisation process. A defined contribution plan is a post-employment benefit plan under
which an entity pays fixed contributions into a separate entity and
will have no legal or constructive obligation to pay further amounts.
Amortised cost is calculated by taking into account any discount or
Obligations for contributions to defined contribution plans are
premium on acquisition and fees or costs that are an integral part of the
recognised as an employee benefit expense in the statement of
EIR. The EIR amortisation is included as finance costs in the statement
comprehensive income as in the periods during which services are
of profit or loss. This category generally applies to interest-bearing loans
rendered by employees.
and borrowings.

a) Employees' Provident Fund 4.12. Provisions

The company and employees contribute 12% and 8% respectively on Provisions are recognised when the Company has a present obligation
the salary of each employee to the approved Provident Fund. (legal or constructive) as a result of a past event, and it is probable
that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made
b) Employees' Trust Fund
of the amount of the obligation. The expense relating to any provision
The Company contributes 3% ofthe salary of each employee to the is presented in the statement of comprehensive income net of any
Employees' Trust Fund. reimbursement.
4.11. Financial Liabilities 4.13. Statement of Cash Flows

The cash flow statement has been prepared using the indirect method,
4.11.1. Initial Recognition and Measurement
as stipulated in LKAS 7- statement of cash flows. Cash and cash
The Company classifies financial liabilities in to financial liabilities at equivalents comprise of cash in hand, cash at bank and bank overdrafts.
Fair Value Through Profit or Loss (FVTPL) or other financial liabilities in
accordance with the substance of the contractual arrangement and the
definitions of financial liabilities. 4.14. Segmental Information
A Segment is a distinguishable component engaged in providing
The Company recognizes financial liabilities in the statement of services and that is subject to risks and returns that are different to
financial position when the Company becomes a party to the those of other segments. The Company does not have distinguishable
contractual provisions of the financial liability. components to be identified as a segment as all operations are treated
as one segment.
a) Financial Liability at FVTPL
Financial liabilities at FVTPL include financial liabilities held-for-trading 4.15. Standards Issued But Not Yet Effective
or designated as such upon initial recognition. Subsequent to initial The company has adopted all the relevant standards and
recognition, financial liabilities at FVTPL are measured at fair value, and interpretations that are issued as of 31 December 2020.
changes there in recognized in profit or loss.
Upon initial recognition, transaction cost are directly attributable to the

acquisition are recognized in profit or loss as incurred. The criteria for
designation of financial liabilities at FVTPL upon initial recognition are
the same as those of financial assets at FVTPL.
b) Other Financial Liabilities

Other financial liabilities including deposits, debt issued by the
Company and the other borrowed funds are initially measured at
fair value less transaction cost that are directly attributable to the
acquisition and subsequently measured at amortised cost using the
EIR method. Amortised cost is calculated by taking into account any
discount or premium on the issue and costs that are an integral part of
the EIR.
4.11.2. De-recognition of Financial Liabilities

A financial liability is de-recognised when the obligation under the
liability is discharged or cancelled or expires. Where an existing financial
liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a de-
recognition of the original liability and the recognition of a new liability.
The difference between the carrying value of the original financial
liability and the consideration paid is recognised in profit or loss.
31.12.2020 31.12.2019
Rs. ‘000’ Rs. ‘000’
5. REVENUE FROM CONTRACTS WITH CUSTORMERS

5.1 Gross Revenue from contracts with customers 1,092,264 2,908,639
Less : Tourism Development Levy (11,128) (29,886)
Net Revenue from contracts with customers 1,081,135 2,878,752
Value added tax of Rs. 85 Mn (2019 - Rs. 312Mn) has been deducted in arriving at Revenue.
5.2 Revenue
Room revenue 313,080 1,171,875
Food and Beverage revenue 742,928 1,646,117
Other operating departments 25,127 60,760
1,081,135 2,878,752
6. INVESTMENT INCOME
Interest income - Loans and receivables
Interest on treasury bills 1,812 8,643
Interest on staff loans 6 7
Interest on RFC accounts 741 1,542
Interest on fixed deposits 7,709 -
Interest income on FF&E replacement reserve 604 516
10,873 10,708
7. OTHER GAINS AND LOSSES

Profit on disposal of plant & equipment 2,317 -
Shop rentals 4,896 12,546
Exchange gain / (loss) unrealized 113 (1,550)
Exchange gain realized 2,691 1,015
Sundry income 15,374 8,796
25,391 20,807
8. FINANCE COSTS
Bank charges 23 142
Overdraft Interest 32,794 47,529
Concessionary loan facility 7,799 2,407
Lease Assets 1,953 -
42,569 50,078
31.12.2020 31.12.2019
Rs. ‘000’ Rs. ‘000’
9. PROFIT FOR THE PERIOD

Profit for the period is stated after charging all expenses including the following:
Directors’ emoluments 4,065 3,578
Auditors’ remuneration - Company 1,200 1,996
- Colombo Hilton 1,669 1,750
Depreciation 378,443 515,265
Staff costs (including the following employee benefit plan costs) 456,114 515,394
- Defined benefit plan cost - Gratuity 23,415 21,689
- Defined contribution plan costs - EPF & ETF 59,668 68,571
Management fees - (10,256)
Group service & benefit charge - Hilton International 5,473 58,195
Legal fees 158 1,015
10. INCOME TAX EXPENSE

Provision for the period 1,153 -
Tax Credit Write off 17,211 -
Deferred tax (Income) Expense 22,400 (13,182)
40,764 (13,182)
10.1. A reconciliation between Taxable profit and Accounting Profit for the Years Ended 31st December 2020 and 31st December 2019 are as follows
31.12.2020 31.12.2019
Rs. ‘000’ Rs. ‘000’
Accounting Profit Before Income Tax (877,343) (312,448)

Aggregate Disallowed Items 382,544 494,820
Aggregate allowable Expense (505,112) (639,126)
Trading Profits and Other Sources of Income @ 12% (999,911) (456,755)
Other sources of Income Liable @ 24% 4,805 10,708
Total Taxable Profit 4,805 10,708
Loss claimed - (10,708)
Taxable Profit 4,805 -
Taxable Trading Profit @ 14% - -

Taxable other source of Income @ 24% 1,153 -
Tax on Trading Profit - -
Tax on other source of Income 1,153 -
Current Year Total Tax Expense 1,153 -
10.2. Deferred tax

Deferred tax arising from:
- Origination and reversal of temporary difference (Note 24) 22,400 13,182
Total deferred tax charge 22,400 13,182
31.12.2020 31.12.2019
Rs. ‘000’ Rs. ‘000’
10.3. Tax losses carried forward

Tax losses carried forward 10,244,912 9,986,701
Tax losses incurred during the year 999,911 268,919
Tax losses set off in the current period - (10,708)
Tax losses carried forward for future periods 11,244,823 10,244,912
11. EARNING PER SHARE - BASIC

Basic earning per share is calculated by dividing the profit for the year attributable to ordinary shareholders by the ordinary shares outstanding
during the year.
31.12.2020 31.12.2019
Rs. ‘000’ Rs. ‘000’
Profit per ordinary share (0.45) 0.54
Amount used as the Numerator Rs. ‘000 Rs. ‘000
Profit attributable to the ordinary shareholders (926,194) 1,104,893
Amount Used as the Denominator Nos. ‘000 Nos. ‘000
Weighted average number of ordinary shares for the purpose of basic profit per share 2,046,646 2,046,646
12. PROPERTY, PLANT AND EQUIPMENT

Buildings Plant & Hotel Motor Refrigerator Television Operational Total
on machinery furniture vehicle & & Equipment
leasehold & kitchen computers
land fittings equipment
Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000
Cost/ Revaluation
Balance as at 31st December 2018 8,859,132 590,134 1,688,892 92,938 928,607 302,268 172,784 12,634,756
Additions during the year 46,159 140,812 66,558 - 13,755 13,944 3,877 285,104
Transferred to revaluation reserve (2,788,845) (487,270) (1,278,688) (92,938) (478,815) (293,555) (163,262) (5,583,375)
Revaluation Surplus 1,192,554 26,790 61,983 56,020 (61,223) 23,030 92,601 1,391,756
Balance as at 31st December 2019 7,309,000 270,465 538,744 56,020 402,324 45,687 106,000 8,728,240
Disposal - (4,988) (2,428) - (1,095) (26) - (8,537)
Additions during the year 28,207 4,783 25,272 - 1,603 4,901 - 64,766
Accumulated Depreciation
Balance as at 31st December 2018 2,566,765 470,496 1,198,530 92,879 428,959 275,888 106,710 5,140,228
Charge for the year 222,079 16,774 80,158 58 49,856 17,667 56,552 443,146
Transferred to revaluation reserve (2,788,845) (487,270) (1,278,688) (92,938) (478,815) (293,555) (163,262) (5,583,375)
Balance as at 31st December 2019 - - - - - - - -
Charge for the year 133,197 20,279 55,335 14,005 30,206 9,865 35,333 298,220
Balance as at 31st December 2020 133,199 20,286 55,345 14,030 30,213 9,885 35,367 298,220
Written Down Value

Balance as at 31st December 2018 6,292,367 119,637 490,362 59 499,648 26,380 66,074 7,494,527
Hotel Developers (Lanka) Ltd has full possession and control of the property, plant & equipment of the hotel.
12.2. A bridge was constructed in 1998 linking the World Trade Centre and Hilton Hotel at a cost of USD 360,000. Overseas Realty Ltd and Hilton
International contributed US $ 180,000 and US $ 90,000 respectively, and the company contributed the balance amount. USD 90,000 incurred by the
company has been capitalised in the financial statements under buildings.
12.3. The Company uses the revaluation model of measurement for property, plant and equipment (PPE) effective from 31st December 2019. The
Company engaged G.W.G. Abeygunawardene, an accredited independent valuer, to determine the fair value of company owned PPE. Fair value is
determined by reference to market-based evidence. Valuations are based on open market prices, adjusted for any difference in the nature, location or
condition of the specific property, all of which falls under level 3 of the fair value measurement hierarchy.The date of the valuation was 31st December
2019.
Property Buildings (Extent - 431,286 sq. ft.) No.02, Sir Chittampalam A Gardiner Mawatha Colombo 02 and other movable
assets
Method of valuation Based on depreciated replacement cost approach
Effective date of valuation 31st December 2019
Property Valuer Mr. G.W.G. Abeygunawardene, Chartered Valuation Surveyor
If the PPE is presented at Cost less depriciation, the carrying value would be as follows
31.12.2020 31.12.2019
Rs. ‘000’ Rs. ‘000’
Cost 12,984,626 12,919,860

Accumulated Depreciation (6,108,930) (5,583,375)
Writtendown Value 6,875,696 7,336,485
13. Lease Hold Land Main Property Shop at Dutch UDA Car Park Total
99 Year Lease Hospital
Rs. ‘000’ Rs. ‘000’ Rs. ‘000’ Rs. ‘000’
Balance as at 01. 01. 2018 6,610,530 3,017 - 6,613,547

Amortisation (70,707) (1,006) - (71,713)
Payments in advance - - - -
Capitalized Value during the year as per IFRS 16 - - - -
Balance as at 31. 12. 2018 6,539,823 2,011 - 6,541,834
Amortisation (70,707) (1,006) - (71,713)
Payments in advance - - 6,978 6,978
Capitalized Value during the year as per IFRS 16 - 13,784 23,507 37,291
Balance as at 31. 12. 2019 6,469,116 14,789 30,485 6,514,390
Amortisation (70,707) (8,337) (14,020) (93,064)
Payments - - - -
Capitalized Value during the year as per IFRS 16 - - - -
Balance as at 31. 12. 2020 6,398,409 6,453 16,465 6,421,326
The leasehold land is for a period of 99 years effective from 28th June 2012. The leasehold land value amounting to Rs. 7 Bn. has been capitalised and
shares issued to the Government of Sri Lanka. Further, approval of Cabinet of Ministers was granted on 3rd October 2012 to lease the land in which the
Sport Complex is built for a period of 5 years on a rent free basis commencing from 28th June 2012. Interms of the cabinet decision dated 13/12/2016,
the lease of this land has been extended up to June 2111 in line with the lease of the main building and the lease terms are yet to be finalized.
The amount paid to Urban Development Authority to acquire leasehold land where Ikoi Tei Restaurent of Hilton Colombo situated, is amortised over
the lease period of 5 years commencing from 02.12.2016. Further, the company signed lease agreement with UDA for the 30 perch land in front of the
hotel for a car park for 5 year period effective from 01 January 2020.
31.12.2020 31.12.2019
Rs. ‘000’ Rs. ‘000’
14. INVENTORIES
Food 13,880 7,099
Beverages 21,980 29,608
General stores 11,981 7,913
Engineering stores - 3,135
47,841 47,755
15. TRADE AND OTHER RECEIVABLES

Trade receivables 34,170 163,942
Less: Impairment of debtors (6,358) (300)
27,813 163,642
16. AMOUNTS DUE FROM RELATED PARTY

Hilton Colombo Residence 564 1,339
Hilton Weerawila 2,870 937
Hilton Yala 17 247
Hilton Worldwide Manage Limited - UK 7,038 -
10,489 2,523
17. OTHER ASSETS

Deposits, prepayments and advances 82,411 101,249
Other receivables 39,565 23,842
Advances - Refurbishment Expenses 71,451 49,962
Income tax receivable 44,333 62,697
237,759 237,750
18. CURRENT FINANCIAL ASSETS

Short-term investments
Call deposits 150,970 102,570
FF&E Reserve Investment
Call deposits - 7,420
Total Short-term investment 150,970 109,990
Investments for FF&E Reserve are restricted in use and to be used for the replacement of furniture, fittings and equipment as per Article V Section 4
of the Management Agreement entered into between Hilton International Management Corporation and Hotel Developers (Lanka) PLC dated 18th
October 2012. Since this investment has been utilized for Hotel Refurbishment, it has now been re classified as Current financial assets from the
previous classification of Non current financial assets.
31.12.2020 31.12.2019
Rs. ‘000’ Rs. ‘000’
19. CASH AND BANK BALANCES

Saving A/C BOC - US$ 4,770 4,567
Operating Bank A/C 6,196 130,596
Cash 36,140 6,386
47,106 141,548
The year end balance in the USD saving account has been translated to functional currency of Sri Lankan Rupees at the closing rate as at Balance
Sheet date in terms of the accounting standards.
31.12.2020 31.12.2019
Rs. ‘000 Rs. ‘000
20. STATED CAPITAL

20.1. Issued and Fully Paid
2,046,645,686 Ordinary shares 20,466,456 20,466,456
21. RESERVES
Furniture, fittings & equipment replacement reserve (Note 21.1) 1,649 43,864
21.1. Furniture, Fittings and Equipment Replacement Reserves

Balance at the beginning of the year 43,864 187,217
Add: Provision made during the year 21,577 126,551
Less: Amounts transferred to equity statement
Amounts utilized for purchase & replacement - of furniture & fittings (63,792) (269,904)
Balance at the end of the year 1,649 43,864
An amount equivalent to USD 700,000 has been transferred to furniture, fittings & equipment reserve during the year.
22. INTEREST BEARING BORROWINGS

Amounts due Amounts due Total
within one year after one year
Rs. ‘000 Rs. ‘000 Rs. ‘000
DFCC Bank - Concessionary Loan facility - Post Easter Attack 170,080 55,556 225,636
Peoples Bank - Post Covid Working Capital Loan 8,400 16,600 25,000
178,480 72,156 250,636
Security and Repayment Terms

Financial Institution People’s Bank DFCC Bank
Nature of the facility Term Loan Term Loan
Amount Rs. 25 Mn Rs. 250 Mn
Rate of interest 4% p.a 3.46% p.a
Security Nill Nill
Repayment period 18 installement 18 installement
31.12.2020 31.12.2019
Rs. ‘000 Rs. ‘000
23. RETIREMENT BENEFIT OBLIGATIONS

Charge for the year 9,959 8,938
Recognition of transitional liability /(asset) and actuarial loss/(gain) 14,636 8,019
Loss/ (gain) arising from changes in the assumptions or due to (over)/under provisions in the previous years (6,548) 14,436
Interest cost for the year 13,456 12,751
Payments made during the year (17,855) (15,853)
The retirement benefit obligation of the company is based on the actuarial valuation carried out by Messrs. Piyal S. Goonetilleke and Associates. All
assumptions remain the same, except for the discount rate assumption and the annual basic salary increase and No material change is expected in
the contribution to the defined benefit plan for the next annual reporting period. The discount rate was revised to 7.00% (vs 10.0% last year) to reflect
the yield rates of the Treasury Bonds The principal assumptions used in determining the cost of employee benefits were:
31.12.2020 31.12.2019
Discount rate 7.00% 10.00%

Future salary increase 3.00% 3.00%
Sensitivity & maturity profile Discount Rate Salary Increment

2020 2019 2020 2019
Increase by one percentage point (5,326) (4,172) 5,603 4,443

Decrease by one percentage point 5,853 4,538 (5,179) (4,142)
31.12.2020
Rs. ‘000
Maturity Analysis of the payments as at 31 December 2020 - Undiscounted

With in next 12 Months 17,841
Between 1 and 2 years 6,867
Total Expected payments 103,333
31.12.2020 31.12.2019
Rs. ‘000 Rs. ‘000
24. DEFERRED TAX LIABILITY

Deferred tax expense/(income) 22,400 13,182
24.1. The closing deferred tax liability balance relates to the following:
Accelerated depreciation for tax purposes 781,229 756,919
Retirement benefit obligation (20,748) (18,837)
Deferred tax asset relating to utilisation of brought forward - tax losses (327,284) (327,284)
433,198 410,798
The deferred tax has been calculated at the rate of 14%
25. TRADE AND OTHER PAYABLES

Trade payables 68,358 166,832
Sundry creditors and including accrued expenses 78,652 86,364
Management fee payable * (14,239) (14,239)
Other liabilities 114,610 57,330
Replacement of breakages 2,398 10,185
Statutory payables 48,556 42,745
298,335 349,217
* Negative balance represents the over payment of Management fees to Hilton International Management LLC.
31.12.2020 31.12.2019
Rs. ‘000 Rs. ‘000
26. AMOUNTS DUE TO RELATED PARTIES

Hilton International Asia Pacific - 12,322
Hilton International USA 10,080 12,297
10,080 24,619
27. CONTRACT LIABILITIES

Guest Advance Deposits and Advances 59,892 99,437
59,892 99,437
28. NET ASSETS PER SHARE

Net Assets Value (Rs) 14,099,514 15,025,710
Number of ordinary shares “000” 2,046,646 2,046,646
Net Assets per share 6.89 7.34
29. INCOME TAX LIABILITY

Opening Balance (62,696) (41,485)
Provision for the period - -
Previous year under provision - -
Tax credit
Economic Service Charge 18,363 (21,134)
Withholding tax - (77)
Notional Tax - -
Self Assessment Payment - -
Balance at the end of the year(Current year balance transferred to Other Assets) (44,333) (62,696)
30. NOTES TO THE CASH FLOW STATEMENT

30.1 Cash and Cash Equivalents at the Beginning of the Year
Cash and bank balance 141,548 241,848
Bank overdraft (254,492) (432,938)
Unrealized exchange gain on USD Saving deposit 113 (1,550)
(2,841) (185,736)
30.2 Cash and Cash Equivalents at the end of the Year

Cash and bank balance 47,106 141,548
Bank overdraft (946,040) (254,492)
(747,964) (2,954)
31.12.2020 31.12.2019
Rs. ‘000 Rs. ‘000
31. ANALYSIS OF FINANCIAL INSTRUMENTS BY MEASUREMENT BASIS AS AT 31ST

DECEMBER 2020
Financial assets by categories Loans and receivables
Financial instruments in current assets

Trade and other receivables 27,813 163,642
Other assets 237,759 237,750
Amounts due from related party 10,489 2,523
Other current financial assets 150,970 109,990
Cash in hand and at bank 47,106 141,548
Total 474,137 655,453
Financial liabilities by categories Financial Liabilities measured at

amortized cost
Financial Instruments in current liabilities
Trade and other payables 298,335 349,217
Amounts due to related party 10,080 24,619
Bank overdrafts 946,040 254,492
Total 1,254,455 628,329
32. FINANCIAL RISK MANAGEMENT

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

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.
The Hotel is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities.
The Hotel trades only with recognized, credit worthy third parties. It is the Hotel’s policy that all clients who wish to trade on credit terms are subject
to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Hotel’s exposure to bad
debts is not significant.
With respect to credit risk arising from the other financial assets of the Hotel, such as cash and cash equivalents, other non financial assets and
amounts due from related parties, the Hotel’s exposure to credit risk arises from default of the counterparty. The Hotel manages its operations to
avoid any excessive concentration of counterparty risk and takes all reasonable steps to ensure the counterparties fulfil their obligations.
32.2. Credit risk exposure

The maximum risk positions of financial assets which are generally subject to credit risk are equal to their carrying amounts (without consideration of
collateral, if available). Following table shows the maximum risk positions.
As at 31 December 2020
In Rs. “000” Cash in hand Short term Trade and other Amounts due Total
and at bank investments receivable from related
parties
Deposits with bank - 150,970 - - 150,970

Trade and other receivables - - 27,813 - 27,813
Amounts due from related parties - - - 10,489 10,489
Cash in hand and at bank 42,336 4,770 - - 47,106
Total credit risk exposure 42,336 155,740 27,813 10,489 236,378
As at 31 December 2019
In Rs. “000” Cash in hand and Short term Trade and other Amounts due Total
at bank investments receivable from related
parties
Deposits with bank - 109,990 - - 109,990

Trade and other receivables - - 163,642 - 163,642
Amounts due from related parties - - - 2,523 2,523
Cash in hand and at bank 136,982 4,567 - - 141,549
Total credit risk exposure 136,982 114,557 163,642 2,523 417,704
32.3. Trade and other receivables

In Rs. “000” As at 31 As at 31
December 2020 December 2019
Neither past due nor impaired 56,793 109,240

30-60 349 19,240
not impaired
61-90 1,184 31,042

Past due but
91-120 174 285

121-150 827 -
151> 7,131 2,220
Gross carrying value 34,170 163,942
Less: impairment provision
Individually assessed impairment provision (6,358) (300)
Total 27,813 163,642
32.4. Amounts due from related parties

The balance consists of amount due from affiliate companies of Hiton Chain.
32.5. Credit risk relating to cash and cash equivalents

The company maintains an authorised list of acceptable cash counterparties based on current ratings and economic outlook, taking into account
analysis of fundamentals and market indicators. The Hotel held cash and cash equivalents of Rs. 741,964,666/- as at 31 December 2020 (as at 31
December 2019 - Rs. 2,953,810/-).
32.6. Liquidity risk

The Company’s policy is to hold cash at a level sufficient to ensure that the Company has available funds to meet its short and medium term funding
obligations, including organic growth, and to meet any unforeseen obligations and opportunities.
The Company monitors its risk to a shortage of funds using a daily cash management process. This process considers the maturity of both the
Company’s financial investments and financial assets (e.g. accounts receivable, other financial assets) and projected cash flows from operations.
Net (debt)/cash As at 31 As at 31
December December
2020 2019
In Rs. “000”
Short term investments 150,970 109,990

Cash in hand and at bank 47,106 141,548
Total liquid Assets 198,076 251,538
Bank overdrafts 946,040 254,492

Total Borrowings 946,040 254,492
Net (debt)/cash (747,964) (2,954)
32.7. Maturity analysis

The table below summarises the maturity profile of the Hotel’s financial liabilities at 31 December 2020 based on contractual undiscounted
payments.
As at 31 December 2020 As at 31 December 2019

In Rs. “000” Within one year Total Within one year Total
Trade & other payables 298,335 298,335 349,217 349,217

Amounts due to related parties 10,080 10,080 24,619 24,619
Retention Fees - Refurbishment Project 26,220 26,220 19,210 19,210
Bank overdrafts 946,040 946,040 254,492 254,492
1,280,675 1,280,675 647,539 647,539
32.8. Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Hotel is
exposed to market risk through its use of financial instruments and specially to currency risk, and certain other price risks.
33. EVENTS AFTER THE REPORTING DATE

There have been no material events after reporting date that require adjustment to or disclosure in the financial statements other than the below.
The spread of COVID-19 has severely impacted many local economies around the globe. In many countries, businesses are being forced to cease or
limit operations for long or indefinite periods of time. The duration and impact of the COVID-19 pandemic remains unclear at this time. Hence, it is
not possible to reliably estimate the duration and severity of these consequences, as well as their impact on the financial position and results of the
Company for future periods. The Company has determined that these events are non-adjusting subsequent events. Therefore, the financial position
and results of operations as of and for the year ended 31 December 2020 have not been adjusted.
On 16th March 2020, in response to significant decreases in demand resulting from social distancing efforts, quarantines and border closures related
to the spread of COVID-19, the Company had operating losses and negative cash flows from operations for the period from 16th March 2020 to 22nd
April 2020. However, the management having considered this as a temporary setback, made contingency plan to sustain the business during this
critical period. Management is confident that it can successfully tackle the situation and turn around the company based on the present strength. It
has therefore decided to fast track the existing renovation program during the existing lock down to exploit the opportunity of minimal disturbances
to operation from construction work envisaging to make the best out of the peak business period from 2021 onward.
34. CAPITAL COMMITMENTS

There were no capital commitments or contingent liabilities that requires disclosures in these financial statements other than the following:
34.1. The company has commenced a major refurbishment of the hotel from October 2014. Accordingly, Hilton Colombo has been undergoing
major renovations from 2014, which will see improvements across the property including rooms, food and beverage outlets and meeting spaces. The
Refurbishment program has been reduced to budget of US $ 10Mn including duties and will be financed by long term debtr and internaly generated
funds. Capital commitment approved by the Board but not contracted for amounts to approximately US$ 10 Mn.
34.2. Lease Commitments

31.12.2020 31.12.2019
Rs. ‘000 Rs. ‘000
Lease rentals due on non-cancellable operating leases;

Within one year 7,984 7,984
Between one and five years 14,934 37,291
22,918 45,275
The lease commitment is related to the Ikoi Tei restaurant at the former Dutch hospital premises & 30 Perch UDA Car Park which is on 5 year leased
property.
35. CONTINGENT LIABILITY

The hotel is a defendant in several lawsuits in respect of termination of employment and compensation for loss and damages due to power
interruption during a function. The management is unable to predict the outcome of such cases on the date of the issue of the financial statements.
Accordingly, no provision for any liability has been made in these financial statements.
By a Notice Published in the Gazette dated 6th July 2007 the Colombo Municipal Council has revised the license fee in relation to the hotels,
restaurants and lodging places for the period applicable from 1st January 2007. Hotels in the city of Colombo including the Hilton Colombo had
protested against the increase of the said license fee, hence filed cases in the Magistrate Court. As at 31 December 2020, the Hotel maintains a
provision of Rs. 48,974,858 (2019: Rs. 16,832,522). The outcome of the said case is unknown as of the reporting date
36. ASSETS PLEDGED AS SECURITIES

The Company has mortgaged the main property of the Hotel against the loan agreement signed with DFCC Bank for a loan facility of USD 30Mn for the
refurbishment project. However, this loan facility has not been utilized to date.
37. RELATED PARTY DISCLOSURES
37.1. Transaction with Key Management Personnel

Related Parties include key management personnel defined as those persons having authority and responsibility for planning, directing and
controlling the activities of the company. Key management personnel include members of the Board of Directors of the company and the Competent
Authority who has been appointed in terms of the provisions of the revival of underperforming or under utilized assets act no. 43 of 2011.
Directors’ emoluments and payments to Competent Authority paid during the period amounts to Rs. 4,065,000/- (Y/E 2019 - Rs. 3,577,500/-).
37.2. Amounts due from related parties (Refer Note16)
37.3. Amounts due to related parties (Refer Note 26)

37.4. Transactions with related parties

31.12.2020 31.12.2019
Rs. ‘000 Rs. ‘000
Managing Company - Hilton International Management Corporation

Receiving of services 5,473 47,939
Affiliates/Group Hotel
I. Hilton Worldwide Manage Ltd - UK Receiving of services 44,506 68,053
II. Hilton Colombo - Residence Rendering of services 564 49
III. Hilton Yala Resorts- Rendering of services 17 248
IV. Hilton Weerawila- Rendering of services 20,640 29,749
Terms and conditions of transactions with related parties

Transactions with related parties are carried out in the ordinary course of the business. Outstanding current account balances at year end are
unsecured, interest free and settlement occurs in cash.
38. LITIGATION AS OF THE REPORTING DATE
38.1. SC HCCA LA 225/16

This is an Appeal filed by Cornel & Co Ltd against the order of court dated 31st March 2016 in HCCA LA 69/14.
38.2. H.C. [Civil] 1/98 [2] [ Date of filing 31/3/1998]

This case has been filed by Cornel & Co Ltd., against Mitsui & Co Ltd, Taisei Corporation and 9 other Defendants, including HDL [5th Respondent].
The Plaintiff filed action in the High Court of the Western Province and supported and obtain an exparte Enjoining Orders in terms of prayers [m] and
[n] of the Plaint, preventing the implementation of the Settlement Agreements.
This case has been laid by since 29.10.2003 pending a settlement [if any].
38.3. D.C.COLOMBO CASE NO. 21819/MR

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

[Date of Filing 4/8/1994]
HDL is the Plaintiff in this Action.
This action has been instituted for Judgement against the Defendant Mr. Nihal Sri Amarasekera to recover a sum of Rs. 26,626,613.00 with legal
interest thereon.
The case has been laid by since 28th February 2007 pending a settlement [if any].
38.5 . Case No. H.C. ( Civil) 754/2018/MR

This case had been instituted by Mr. Nihal Sri Amarasekera seeking an Enjoining Order to restrain the Company and the Company Secretaries from
taking any steps to transfer the shares of the Company.
NOTICE OF MEETING
NOTICE is hereby given that the ANNUAL GENERAL MEETING of HOTEL Note:
DEVELOPERS (LANKA) LIMITED will be held at the Onyx Function Room A member of the Company is entitled to appoint a Proxy to attend
of Hotel Developers (Lanka) Ltd, at No.2, Sir Chittampalam A Gadiner and vote on his or her behalf.
Mawatha, Colombo 02 on 8th April 2022 at 4.00 p.m.
A Proxy need to be a member
A Proxy form, which is enclosed should be deposited at the
AGENDA
Registered Office of the Company not less than 48 hours before the
1. To pass the following resolution to accept the Notice of Meeting meeting.
“RESOLVED that the Notice dated 28th February 2022 convening the
Annual General Meeting of the Company be and is hereby accepted as
a valid notice irrespective of the fact that the meeting has been called
with shorter notice than that specified in the Article of Association and
in the Companies Act No. 07 of 2007”
2. To receive and consider the Annual Report of the Board of Directors,

Statement of Accounts and the Balance Sheet of the Company for the
year ended 31st December 2020 together with the report of the Auditors
thereon.
3. To pass the ordinary resolution set out below to appoint Mr.

Palihawadana Arachchige Irenius Sirinimal Perera who is 77 years of age
as a Director of the Company.
“IT IS HEREBY RESOLVED THAT the age limit stipulated in Section 210
of the Companies Act No.07 of 2007 shall not apply to Mr. Palihawadana
Arachchige Irenius Sirinimal Perera Who is 77 Years of age and that he be
and is hereby appointed a Director of the Company in terms of section
211 of the Companies Act No.07 of 2007.”
4. To pass the ordinary resolution set out below to appoint Mr.

Veluppillai Kanagasabapathy who is 75 years of age as a Director of the
Company.
“IT IS HEREBY RESOLVED THAT the age limit stipulated in Section 210
of the Companies Act No.07 of 2007 shall not apply to Mr. Veluppillai
Kanagasabapathy who is 75 of age and that he be and is hereby
appointed a Director of the Company in terms of section 211 of the
Companies Act No.07 of 2007.”
5. To note that the Auditor General continues to be the Auditor of the

Company pursuant to the 20th Amendment to the Constitution.
By order of the Board of Directors of

P W CORPORATE SECRETARIAL (PVT) LTD
SECRETARIES
Colombo
23rd February 2022
NOTES
Notes
FORM OF PROXY
I/We ………………………………………………………………………………………………………...………………….....………................……………….. of
……………….………………….................……………………………......…….. Being a member/member of Hotel Developers (Lanka) Ltd hereby appoint:
………………………………………………………...………..................………………………………………………………………………………………….. of
…………………………………………………………………………………………………………………….. or falling him/her
Mr. Sirinimal Perera of Colombo falling him

Ms. Dheeshana Ameresekere of Colombo falling her
Mr. Ishan Dantanarayana of Colombo falling him
Mr. V. Kanagasabapathy of Colombo falling him
Mr. Priyantha Deniyaya of Colombo falling him
Mr. Lal Weerasinghe of Colombo falling him
Ms. Visakha Amarasekere of Colombo falling her
Mr. P.A. Susantha Kumara of Colombo falling him
As my/our to represent me/us to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on the 8th Day of
April 2022 at 4.00 p.m. and at any adjournment thereof and at every poll which may be taken in consequence thereof.
AGENDA ITEM
For Against
1. To accept the Notice of Meeting.
2. To receive and consider the Report of the Directors and the statements of Accounts for the year ended 31st December2020
together with the Report of The Auditors thereon.
3. To pass the ordinary resolution set out under item 3 of the Notice of Meeting For the reappointment of Mr. Sirinimal Perera
4. the ordinary resolution set out under item 4 of the Notice of Meeting For the reappointment of Mr. V Kanagasabapathy
5. To note that the Auditor General continues to be the Auditor of the Company pursuant to the 20th Amendment to the
Constitution
Singed this ………………………….. day of ……………………. 2022
Signature of the Shareholder ………………………………………….
Note:
1. Instructions as to completion are noted on page 48
2. A Proxy need not be a member of the Company
3. Please mark “X” in appropriate cages to indicate your instructions as to voting
Form of Proxy
INSTRUCTIONS AS TO COMPLETION OF PROXY

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

Mr. Ishan Priyantha Dantanarayana
Ms. Dheeshana Ameresekere
Mr. Veluppillai Kanagasabapathy
Mr. Punchy Hewage Priyantha Deniyaya
Ms. Maha Tantrige Indivari Visakha Amarasekere
Mr. Patikiri Arachchige Susantha Athula Kumara
Mr. Lal Ranjith Sahabandu Weerasinghe
The above Directors do not hold shares in the company
Registered Office : Hotel Developers (Lanka) PLC

C/o Hilton Colombo
No. 2 Sr Chittampalam A Gardiner Mawatha
Colombo 02
Tel: +94 112433435
Fax: +94 112446545
Email: [email protected]
Web site: www.hoteldevelopers.lk
Secretaries and Registrars : P W Corporate Secretarial (Pvt) Ltd

No. 3/17 Kynsey Road,
Colombo 08
Bankers : DFCC Bank PLC – Head office

Peoples Bank – Corporate Branch
Lawyers : M/s. D L & F De Saram

Attorneys-at-Law and Notaries Public
47, Alexandra Place
Colombo 07
Auditor : Auditors General

National Audit Office
Polduwa Road
Battaramulla
www.hoteldevelopers.lk

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HOTEL DEVELOPERS (LANKA) LTD

ANNUAL REPORT 2020

Room Revenue LKR ‘000 313,080 1,171,875

Gross Profit LKR ‘000 270,043 1,475,059

Long Term Interest Bearing Borrowings LKR’000 72,156 250,000

Further, transformation of the Hilton Colombo Sports Centre to a APPRECIATION

FUTURE STRATEGY Sirinimal Perera

With this objective, the intention is to complete the 250-guest room

Considering the recent accolade of Club Med anointing Sri Lanka as

MR. SIRINIMAL PERERA MS. DHEESHANA AMERESEKERE

He served as the legal Advisor of the Sustainable Energy Authority [Sri

MS. VISAKHA AMARASEKERE

She was appointed to the Board of Bank of Ceylon on 11th January

She has represented the Government Treasury on the Boards of several

Ms. Ameresekere holds a B.Sc (Hons) Degree in Economics and

MR. P A S ATHULA KUMARA

He has also been a Director/Board Member of Several Statutory

He holds a B.Sc in Management (Public Admin.) (Special) degree holder

MR. LAL WEERASINGHE

He has been working as a Business leader for “Riway International”

REMUNERATION COMMITTEE DELISTING OF THE COMPANY

The Remuneration Committee makes recommendations on OTHER POLICIES AND PRACTICES

COMPLIANCE WITH LEGAL REQUIREMENTS

Constant creativity and innovation in products and services.

Benchmark industry best practices in terms of both product and service.

Innovative service delivery in keeping with the brand promise.

Responsible corporate citizenship through CSR initiatives.

Strict adherence to laid down safety standards and procedures.

ANNUAL REPORT OF THE DIRECTORS ON THE AFFAIRS OF

5. ACCOUNTING POLICY 12. PAYMENTS TO AUDITORS

6. TAXATION 13. DONATIONS

7. DIVIDENDS 14. AUDIT COMMITTEE

8. BOARD OF DIRECTORS AND THEIR SHAREHOLDING Name of the Director

16. RELATED PARTY TRANSACTIONS REVIEW COMMITTEE 23. AUDITORS

Notice of Meeting relating to Annual General Meeting of the Company is

The Directors, have disclosed transactions, if any, that could be

17. CAPITAL EXPENDITURE

18. PROPERTY, PLANT AND EQUIPMENT

20. DIRECTORS RESPONSIBILITIES FOR THE FINANCIAL

21. STATUTORY PAYMENTS

22. POST BALANCE SHEET EVENTS

THE AUDIT COMMITTEE REPORT

AUDIT COMMITTEE CHARTER Mr. V. Kanagasabapathy, is a Retired Director General of Public

Mr. V. Kanagasabapathy - Chairman ( Independent Non Executive)

REVIEW OF QUARTERLY FINANCIAL STATEMENTS

ADOPTION OF IFRS/ SLFRS

REVIEW OF COMPLIANCE STATEMENTS.

REVIEW OF DRAFT FINANCIAL STATEMENT FOR THE

INDEPENDENT AUDITOR’S REPORT

TIP/A/HDL/06/20/FA 02 June 2021

Independent Auditor’s Report

2.5. Other Matters

(b) The accumulated loss of the Company as at the beginning of the

STATEMENT OF COMPREHENSIVE INCOME

Revenue 05 1,081,135 2,878,752

Investment income 06 10,873 10,708

Depriciation (378,443) (515,265)

Income tax expense 10 (40,764) (13,182)