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| Annual Report of the Board of Directors |
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The directors have pleasure in presenting the 29th annual report of your company together with the audited financial statements of John Keells Holdings PLC, and the audited consolidated financial statements of the group for the year ended 31 March 2008.
PRINCIPAL ACTIVITIES
John Keells Holdings PLC, the group's holding company, manages a portfolio of diverse businesses, which together constitute the John Keells group, and provides function based services to its subsidiaries and associates.
The companies within the group and their principal business activities are described in the group directory.
REVIEW OF BUSINESS SEGMENTS
A review of the financial and operational performance and future business developments of the group, sectors, and its business units are described in the management discussion and analysis section of the annual report. These reports together with the audited financial statements reflect the state of the affairs of the company and the group.
Segment wise contribution to group revenue, results, assets and liabilities is provided in note 33 to the financial statements.
The group divested its investment in Unawatuna Walk Inn Ltd on 19 April 2007.
On 6 May 2007, the group acquired controlling interest in Tranquility (Pte) Ltd via the purchase of a 100% equity stake by John Keells Maldivian Resorts (Pte) Ltd., at a purchase consideration of Rs. 554 mn. The results of Tranquility (Pte) Ltd., have been consolidated by the group from 6 May 2007.
John Keells Hotels PLC (KHL) successfully completed a rights issue of ordinary shares in July 2007. Consequent to John Keells Holdings PLC (JKH) subscribing to additional shares of this rights issue, the group's effective holding in KHL increased to 92.69%. The group's effective holding in the subsidiaries of KHL also increased proportionately as a result of this additional subscription.
In August 2007, John Keells Hotels PLC increased its stake in Yala Village (Pvt) Ltd. to 89.63% by subscribing to additional shares of its rights issue. Accordingly, the group's effective holding in Yala Village (Pvt) Ltd. increased to 83.08%.
A major portion (74%) of the group's equity interest in Keells Business Systems Ltd (KBSL) was divested on 31 March 2008. The group ceased to have the power to participate in the financial and operating policy decisions of KBSL with effect from 1 April 2008.
FINANCIAL STATEMENTS & AUDITOR’S REPORT
The complete financial statements duly signed by the directors and the auditors report thereon for the year ended 31 March 2008 are attached to this report.
REVENUE
Revenue generated by the company amounted to Rs. 604 mn (2007 Rs. 482 mn), whilst group revenue amounted to Rs. 41,805 mn (2007 Rs. 32,855 mn). Contribution to group revenue from the different business segments is provided in note 33 to the financial statements.
RESULTS AND APPROPRIATIONS
The profit after tax of the holding company was Rs. 3,803 mn (2007 Rs. 2,145 mn) whilst the group profit attributable to equity holders of the parent for the year was Rs. 5,118 mn (2007 Rs. 3,535 mn).
Results of the company and of the group are given in the income statement.
The final dividend of Rs. 1.00 (2007 Rs. 1.00) per share for the financial year 2006/07 paid on 6 July 2007 together with the interim dividends (including a one off extraordinary dividend of Rs. 2.00) of Rs. 4.00 (2007 Rs. 2.00) per share paid on 5 December 2007, 18 February 2008 and 31 March 2008 respectively, results in a total cash dividend pay out of Rs. 5.00 (2007 Rs. 3.00) per share during the year amounting to Rs. 3,176 mn (2007 Rs. 1,412 mn).
Dividend per share has been computed based on the amount of dividends distributed to equity holders during the period. As required by Section 56 (2) of the Companies Act No 7 of 2007, the Board of directors have confirmed that the company satisfies the solvency test in accordance with Section 57 of the Companies Act No 7 of 2007, and have obtained a certificate from the auditors, prior to declaring a final dividend of Rs. 1.00 per share for this year. As already announced, the final dividend will be paid on 27 June 2008 to the shareholders of the company as at the close of trading on 13 June 2008.
Detailed description of the results and appropriations are as follows.
|
For the year ended 31st March
In Rs. 000s |
2008 |
2007 |
| Profit earned before interest after providing for all known liabilities, bad and doubtful debts and depreciation on property, plant and equipment |
5,898,939 |
4,239,719 |
| Interest paid |
(1,618,255) |
(1,314,490) |
|
4,280,684 |
2,925,229 |
| Profit on sale of investments |
55,151 |
58,952 |
| Change in fair value of investment property |
- |
109,612 |
| Profit accruing to the company and subsidiaries |
4,335,835 |
3,093,793 |
| Share of results of associates |
2,242,713 |
1,700,992 |
| Profit before tax |
6,578,548 |
4,794,785 |
| Provision for taxation including deferred tax |
(1,054,742) |
(851,563) |
| Profit after tax |
5,523,806 |
3,943,222 |
| Profit attributable to minority shareholders |
(405,562) |
(408,548) |
| Amount available to the group's shareholders |
5,118,244 |
3,534,674 |
| Other adjustments |
(105,553) |
961,686 |
| Balance brought forward from the previous year |
7,701,281 |
5,349,754 |
| Amount available for appropriation |
12,713,972 |
9,846,114 |
| Transfers to general reserve |
- |
(500,000) |
|
12,713,972 |
9,346,114 |
| 1st interim dividend of Rs. 1.00 per share (2007- Rs. 1.00) paid out of dividend received. |
(635,742) |
(459,442) |
| 2nd interim dividend of Rs. 2.00 per share (2007- Rs. 1.00) paid out of dividend received. |
(1,271,896) |
(552,722) |
| |
|
|
| |
|
|
| 3rd interim dividend of Rs. 1.00 per share (2007-Nil) paid out of dividend received. |
(635,995) |
- |
|
10,170,339 |
8,333,950 |
| Final dividend declared of Rs. 1.00 per share (2007-Rs. 1.00) paid out of dividend received. * |
(635,994) |
(632,669) |
| Balance to be carried forward next year |
9,534,345 |
7,701,281 |
| |
|
|
* The final dividend declared for this financial year has not been recognised as at the balance sheet date in compliance with SLAS 12 (Revised 2005) Events after the Balance Sheet Date.
ACCOUNTING POLICIESThe group decided on the early adoption of the Sri Lanka Accounting Standard 16 (revised 2006) on Employee Benefits and the liability recognized in the balance sheet reflects the present value of the defined benefit obligation at the balance sheet date using the projected unit credit method.
Details of accounting policies have been discussed in note 1 of the financial statements.
DONATIONS
Total donations made by the company and group during the year amounted to Rs. 0.8 mn (2007 Rs. 0.5 mn) and Rs. 22 mn (2007 Rs. 5.3 mn), respectively. Of these, the donations to approved charities were Rs. 0.1 mn (2007 Rs. 0.03 mn) at company and Rs. 10 mn (2007 Rs. 2.5 mn) at group. The amounts do not include contributions on account of corporate social responsibility (CSR) initiatives.
The John Keells Social Responsibility Foundation, which operates with funds contributed by each of the companies in the group, handles most of the group's CSR initiatives and activities. The Foundation manages a range of programmes that underpin its key principle of acting responsibly in all areas of business to bring about sustainable development. The CSR initiatives, including completed and ongoing projects, are detailed in the sustainability report.
In quantifying the group's contribution to charities no account has been taken of 'inhouse' costs or management time.
PROPERTY, PLANT AND EQUIPMENT
The book value of property, plant and equipment as at the balance sheet date amounted to Rs. 289 mn (2007 Rs. 380 mn) and Rs. 29,172 mn (2007 Rs. 20,404 mn) for the company and group respectively.
Capital expenditure for the company and group amounted to Rs. 20 mn (2007 Rs. 125 mn) and Rs. 6,111 mn (2007 Rs. 2,769 mn), respectively.
Details of property, plant and equipment and their movements are given in note 2 to the financial statements.
MARKET VALUE OF PROPERTIES
All land and buildings owned by group companies were revalued as at 31-3-2008. Valuations were carried out by Mr. P B Kalugalgedera, Chartered Valuation Surveyor, Mr R.G Wijesinghe, Consultant Valuer and Assessor, Mr G.J Sumanasena, Consultant Valuer and Assessor, Mr H.R de Silva, Chartered Valuation Surveyor(UK) and M/s A.Y Daniel & Son, Certified Valuers. The group share of the revaluation surplus recorded amounted to Rs. 2,904 mn.
All properties classified as investment property were valued in accordance with the requirements of SLAS 40 (2005). The carrying value of investment property of the company and group amounted to Rs. 832 mn (2007 Rs. 800 mn) and Rs. 2,288 mn (2007 Rs. 2,505 mn) respectively. The directors have decided to retain the fair values of investment property recognized previously as at the balance sheet date.
Investment properties of business units, when significantly occupied by group companies, are classified as property, plant
and equipment in the consolidated financial statements in compliance with SLAS 40 (2005). This year, the land and building owned by John Keells Properties (Pvt) Ltd was reclassified as property, plant and equipment in the consolidated financial statements as a result of a total group occupation.
Details of the revaluation of property, plant and equipment and investment property are provided in notes 2 and 4 to the financial statements.
Details of group properties as at 31 March 2008 are disclosed in the real estate portfolio section of the comprehensive annual report.
INVESTMENTS
Investments of the company and the group in subsidiaries, associates, joint ventures and other external investments amounted to Rs. 23,768 mn (2007 Rs. 20,548 mn) and Rs. 10,054 mn (2007 Rs. 8,668 mn), respectively.
Detailed description of the long term investments held as at the balance sheet date, are given in note 6 to the financial statements.
STATED CAPITAL
The Authorised Capital and Par Value concept in relation to share capital were abolished by the Companies Act No 07 of 2007. The total amounts received by the company in respect of the issue of shares are now referred to as stated capital. The total stated capital of the company as at 31 March 2008 was Rs. 22,464 mn (2007 Rs. 22,246 mn).
Options in respect of 4,094,227 shares (2007 3,666,283 shares) were exercised during the year under the employee share option plan, for a total consideration of Rs. 276 mn (2007 Rs. 247 mn).
SHARE INFORMATION
The distribution schedule and composition of shareholders and the information relating to earnings, dividend, net assets, market value per share and share trading are given under the investor information section of the comprehensive annual report.
MAJOR SHAREHOLDERS
Details of the twenty largest shareholders of the company and the percentages held by each of them are disclosed in the investor information section of the comprehensive annual report.
RESERVES
Total reserves as at 31 March 2008 (excluding share premium) for the company and group amounted to Rs. 6,343 mn (2007 Rs. 5,716 mn) and Rs. 21,753 mn (2007 Rs. 16,989 mn), respectively.
The movement and composition of the capital and revenue reserves are disclosed in the statement of changes in equity.
DIRECTORS
The Board of directors of the company as at 31 March 2008 and their brief profiles are given in the Board of directors section of the comprehensive annual report.
Mr. R S Captain resigned from the board with effect from 6 May 2008.
In accordance with Article 84 of the Articles of Association of the company, Messrs G S A Gunesekera, E F G Amerasinghe and S Enderby retire by rotation and being eligible offer themselves for reelection.
The group directory details the names of persons holding office as directors of the company and all its subsidiary and associate companies, as at 31 March 2008 and the names of persons who were appointed or who ceased to hold office as directors during the period.
BOARD COMMITTEES
The following members serve on the Audit, Remuneration and Nomination Committees of the Board;
Audit Committee
P D Rodrigo Chairman
E F G Amerasinghe
S Enderby
S S Tiruchelvam
The report of the Audit Committee is given under the Board committee reports section of the comprehensive annual report.
Remuneration Committee
E F G Amerasinghe Chairman
M V Muhsin
P D Rodrigo
The report of the Remuneration Committee is given under the Board committee reports section of the comprehensive annual report and the remuneration policy is given in the corporate governance section.
Nominations Committee
T Das - Chairman
S Enderby
M V Muhsin
S C Ratnayake
S S Tiruchelvam
The report of the Nominations Committee is given under the Board committee reports section of the comprehensive annual report.
INTERESTS REGISTER
The Company has maintained an Interests Register as contemplated by the Companies Act No 7 of 2007 and entries have been made therein from 3 May 2007 being the date on which the Companies Act No 7 of 2007 came into operation.
In compliance with the requirements of the Companies Act No. 7 of 2007, this annual report also contains particulars of any entries made in the Interests Registers of subsidiaries which are public companies or private companies which have not dispensed with the requirement to maintain an Interests Register as permitted by Section 30 of the Companies Act No 7 of 2007.
Particulars of entries in the JKH Interests Register
a) Interests in contracts
The directors have all made a general disclosure to the Board of directors as permitted by Section 192 (2) of the Companies Act No 7 of 2007 and no additional interests have been disclosed by any director.
b) Relevant interests in shares and share dealings:
The relevant interest of the directors in the shares of the company as at 31 March 2008 are as follows:
John Keells Holdings PLC
S C Ratnayake 3,227,747 (2007 3,057,223)
A D Gunewardene 4, 018,568 (2007 3,749,192)
G S A Gunesekera 1,348,374 (2007 1,036,523)
J R F Peiris 3,428 (2007 3,000)
E F G Amerasinghe 4,136 (2007 3,619)
T Das Nil (2007 Nil)
S Enderby Nil (2007 Nil)
M V Muhsin 35,163 (2007 30,769)
P D Rodrigo Nil (2007 Nil)
S S Tiruchelvam Nil (2007 Nil)
R S Captain 124,234,951 (2007 124,789,380)
Options available under the employee share option plan of John Keells Holdings PLC.
S C Ratnayake 1,931,981 (2007 1,389,159)
A D Gunewardene 1,759,824 (2007 1,352,302)
G S A Gunesekera 1,260,611 (2007 1,217,511)
J R F Peiris 1,587,617 (2007 883,667)
Share dealings:
|
|
NAME OFDIRECTOR |
NATURE OF AGGREGATE SHARE DEALINGS FROM 3 MAY 2007 UPTO 31 MARCH 2008 |
| Mr S C Ratnayake |
Sale of 680,000 shares of JKH |
| Mr A D Gunewardene |
Sale of 680,000 shares of JKH |
| Mr R S Captain |
Sale of 3,721,600 shares of JKH by Paints & General Industries Limited |
| Mr R S Captain |
Sale of 7,365,400 shares of JKH by CEI Plastics Limited |
| Mr R S Captain |
Sale of 2,568,000 shares of JKH by Polypak Secco Limited |
| Mr R S Captain |
Sale of 970,000 shares of JKH by Paints & General Industries (Exports) Limited |
| Mr R S Captain |
Sale of 2,000,000 shares of JKH by Mr S E Captain |
| Mr G S A Gunesekera |
Sale of 250,000 shares of JKH |
|
c) Indemnities and remuneration
The Board approved the payment to executive directors of the company, namely S C Ratnayake, Chairman/CEO, A D Gunewardene, Deputy Chairman/President, G S A Gunasekera, President and J R F Peiris, Group Finance Director, remuneration for the period 1 April 2007 to 31 March 2008 comprising of;
| • |
individual increments from 1 July 2007 based on individual performance matrices; |
| • |
short term variable incentives based on individual performance, organization performance and role responsibility; |
| • |
long term incentive in the nature of employee share options in John Keells Holdings PLC dependant on the aforesaid performance rating, organisational rating and role responsibility, |
as recommended by the Remuneration Committee having conducted market surveys, spoken to experts and having taken into consideration the specific management complexities associated with the John Keells group and in keeping with the group remuneration policy.
Additional disclosures (not in Interests Register)
Given below, as additional disclosure, are the directors’ shareholding in group companies:
Asian Hotels and Properties PLC
S C Ratnayake 10,000 (2007 10,000)
M V Muhsin 3,600 (2007 3,600)
Associated Motorways PLC
S C Ratnayake 3,000 (2007 3,000)
Ceylon Cold Stores PLC
S C Ratnayake 760 (2007 760)
A D Gunewardene 7,000 (2007 7,000)
G S A Gunesekera 3,812 (2007 3,812)
J R F Peiris 150 (2007 150)
John Keells Hotels PLC
S C Ratnayake 468,984 (2007 255,810)
A D Gunewardene 62,480 (2007 62,480)
G S A Gunesekera 70,033 (2007 38,200)
Keells Food Products PLC
S C Ratnayake 2,500 (2007 2,500)
G S A Gunesekera 1,666 (2007 1,666)
Nations Trust Bank PLC
A D Gunewardene 3,281,933 (2007 1,118,001)
G S A Gunesekera 3,626 (2007 2,720)
Tea Smallholder Factories PLC
G S A Gunesekera 1,000 (2007 1,000)
Trans Asia Hotels PLC
S C Ratnayake 100 (2007 100)
A D Gunewardene 100 (2007 100)
G S A Gunesekera 100 (2007 100) J R F Peiris 100 (2007 100)
Union Assurance PLC
A D Gunewardene 3,746 (2007 2,498)
Further, warrants held at Nations Trust Bank PLC are as follows.
A D Gunewardene
2,115,822 (Warrants 2010)
1,057,911 (Warrants 2011)
G S A Gunesekera
906 (Warrants 2010)
453 (Warrants 2011)
Particulars of entries in Interests Registers of subsidiaries
Asian Hotels & Properties PLC
a) Relevant interests in shares and share dealings:
The relevant interest of the directors in the shares of the company as at 31 March 2008 are as follows:
S C Ratnayake 10,000 (2007 10,000)
R J Karunarajah 100 (2007 100)
M T L Fernando 5,001 (2007 5,001)
B M Amerasekera 70,700 (2007 70,700)
b) Indemnities and remuneration
The Board approved the payment to the executive director of the company, namely Mr R J Karunarajah of remuneration for the period 1 April 2007 to 31 March 2008 comprising of:
| • |
an increase in the monthly salary; |
| • |
a variable element, based on the individual performance and the performance of Cinnamon Grand for the period 1 April 2006 to 31 March 2007; |
| • |
long term incentive in the nature of employee share options in John Keells Holdings PLC dependant on individual performance and the performance of Cinnamon Grand, |
as recommended by the Remuneration Committee of John Keells Holdings PLC, (being the holding company of Asian Hotels & Properties PLC and as permitted by the rules of the Colombo Stock Exchange), in keeping with the JKH group remuneration policy.
Ceylon Cold Stores PLC
a) Relevant interests in shares and share dealings:
The relevant interest of the directors in the shares of the company as at 31 March 2008 are as follows:
S C Ratnayake 760 (2007 760)
A D Gunewardene 7,000 (2007 7,000)
G S A Gunesekera 3,812 (2007 3,812)
J R F Peiris 150 (2007 150)
J R Gunaratne 1,140 (2007 1,140)
M D de Silva 150 (2007 150)
U P Liyanage 300 (2007 300)
P S Jayawardena 300 (2007 300)
A R Rasiah 2,900 (2007 2,900)
b) Indemnities and remuneration
The Board approved payment to the executive directors of the company, namely Mr J R Gunaratne and Mr M D De Silva of remuneration for the period 1 April 2007 to 31 March 2008 comprising of :
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an increment from 1 July 2007 based on the individual performance rating obtained by Mr J R Gunaratne and Mr M D De Silva in terms of the performance management system of the John Keells Group; |
| • |
a short term variable incentive for the period 1 April 2006 to 31 March 2007 based on the individual performance rating, organisation performance rating and the respective career levels of Mr J R Gunaratne and Mr M D De Silva in terms of the variable pay plan of John Keells Holdings PLC; and |
| • |
long term incentive in the nature of employee share options in John Keells Holdings PLC dependant on the aforesaid performance rating and the organisational rating, |
| • |
as recommended by the Remuneration Committee of John Keells Holdings PLC (being the holding company of Ceylon Cold Stores PLC) in keeping with the group remuneration policy. |
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|
International Tourists and Hoteliers Ltd.
Relevant interests in shares and share dealings:
The relevant interest of the directors in the shares of the company as at 31 March 2008 are as follows:
J E P Kehelpannala 50 (2007 50)
John Keells PLC
Indemnities and remuneration
The Board approved the contract with and payment to Ms S T Ratwatte, non executive director of fees as recommended by the Remuneration Committee of John Keells Holdings PLC (being the holding company of John Keells PLC and as permitted by the rules of the Colombo Stock Exchange) commensurate with the market and complexities of the business of the company
The Board also noted that Mr L D Ramanayake had resigned as an executive director with effect from 31 July 2007 and that prior to such resignation the Board had authorised payment to Mr L D Ramanayake of remuneration comprising of :
| • |
an increment on his salary for July 2007 based on the individual performance rating obtained by Mr. L D Ramanayake in terms of the performance management system of the John Keells Group. |
| • |
a short term variable incentive for the period 1 April 2006 to 31 March 2007 based on the individual performance rating, organisation performance rating and the career level of Mr. L D Ramanayake in terms of the variable pay plan of John Keells Holdings PLC; and |
| • |
long term incentive in the nature of employee share options in John Keells Holdings PLC dependant on the aforesaid performance rating and the organisational rating, |
| |
|
as recommended by the Remuneration Committee of John Keells Holdings PLC in keeping with the JKH group remuneration policy.
John Keells Hotels PLC
Relevant interests in shares and share dealings:
The relevant interest of the directors in the shares of the company as at 31 March 2008 are as follows:
S C Ratnayake 468,984 (2007 255,810)
A D Gunewardene 62,480 (2007 62,480)
G S A Gunesekera 70,033 (2007 38,200)
Keells Food Products PLC
a) Relevant interests in shares and share dealings:
The relevant interest of the directors in the shares of the company as at 31 March 2008 are as follows: S C Ratnayake 2,500 (2007 2,500)
b) Indemnities and remuneration
The Board approved the contract with and payment to Mr M P Jayawardene, non executive director, fees as recommended by the Remuneration Committee of John Keells Holdings PLC (being the holding company of Keells Food Products PLC and as permitted by the rules of the Colombo Stock Exchange) commensurate with the market and complexities of the business of the company.
Keells Hotel Management Services Ltd.
Indemnities and remuneration
The Board approved payment to the executive director of the company Mr J E P Kehelpannala of remuneration, comprising of :
| • |
an increment from 1 July 2007 based on the individual performance rating obtained by Mr. J E P Kehelpannala in terms of the performance management system of the John Keells Group. |
| • |
A short term variable incentive for the period 1 April 2006 to 31 March 2007 based on the individual performance rating, organisation performance rating and the career level of Mr. J E P Kehelpannala in terms of the variable pay plan of John Keells Holdings PLC; and |
| • |
long term incentive in the nature of employee share options in John Keells Holdings PLC dependant on the aforesaid performance rating and the organisational rating, as recommended by the Remuneration Committee of John Keells Holdings PLC in keeping with the JKH group remuneration policy. |
Lanka Marine Services (Private) Ltd.
Indemnities and remuneration
The Board approved with effect from 1 August 2007
| • |
payment of remuneration to Mr. L D Ramanayake, comprising of: |
| |
• |
a fixed element; |
| |
• |
a variable element in the form of a short term incentive which is based on the individual performance and an organization performance which covers revenues and profit after tax; and |
| |
• |
long term incentive in the form of employee share options at John Keells Holdings PLC. |
| |
|
as recommended by the Remuneration Committee of John Keells Holdings PLC in keeping with the group remuneration policy.
Further, the Board approved with effect from 1 July 2007
| • |
payment of remuneration to Mr. R S Fernando (who subsequently resigned from the Board of directors with effect from 1 August 2007) comprising of; |
| |
• |
an increment on his salary for July 2007 based on the individual performance rating obtained by Mr. R S Fernando in terms of the performance management system of the John Keells Group. |
| |
• |
a short term variable incentive for the period 1 April 2006 to 31 March 2007 based on the individual performance rating, organisation performance rating and the career level of Mr. R S Fernando in terms of the variable pay plan of John Keells Holdings PLC; and |
| |
• |
long term incentive in the nature of employee share options in John Keells Holdings PLC dependant on the aforesaid performance rating and the organisational rating, |
| |
|
as recommended by the Remuneration Committee of John Keells Holdings PLC in keeping with the JKH group remuneration policy.
Tea Smallholder Factories PLC
Relevant interests in shares and share dealings:
The relevant interest of the directors in the shares of the company as at 31 March 2008 are as follows:
G S A Gunesekera 1,000 (2007 1,000)
R E Rambukwella 2,300 (2007 2,300)
J S Ratwatte 1,000 (2007 1,000)
Trans Asia Hotels PLC
a) Relevant interests in shares and share dealings:
The relevant interest of the directors in the shares of the company as at 31 March 2008 are as follows:
S C Ratnayake 100 (2007 100)
A D Gunewardene 100 (2007 100)
G S A Gunesekera 100 (2007 100)
J R F Peiris 100 (2007 100)
D S J Pelpola 100 (2007 100)
N L Gooneratne 94,301 (2007 94,301)
R L Nanayakkara 100 (2007 100)
A R Gunasekara 1,000 (2007 Nil)
{Alt N Wijeyekoon 58,940 (2007 58,940)}
Share dealings:
|
NAME OF DIRECTOR |
NATURE OF AGGREGATE SHARE DEALINGS FROM 3 MAY 2007 UPTO 31 MARCH 2008 |
| Mr A R Gunasekara |
Purchase of 1,000 shares by Mr A R Gunasekera and Mrs S R Gunasekera |
|
| |
b) Indemnities and remuneration
The Board approved the contract with and payment to Mr A R Gunasekera, non executive director, of fees as recommended by the Remuneration Committee of John Keells Holdings PLC (being the holding company of Trans Asia Hotels PLC and as permitted by the rules of the Colombo Stock Exchange) commensurate with the market and complexities of the business of the company.
Walkers Tours Ltd.
Indemnities and remuneration
The Board approved payment to the executive director of the company Mr V Leelananda of remuneration comprising of :
| • |
an increment from 1 July 2007 based on individual performance rating obtained by Mr. V. Leelananda in terms of the performance management system of the John Keells Group. |
| • |
a short term variable incentive for the period 1 April 2006 to 31 March 2007 based on individual performance, organisation performance rating and the career level of Mr V Leelananda in terms of the variable pay plan of John Keells Holdings PLC; and |
| • |
long term incentive in the nature of employee share options in John Keells Holdings PLC dependant on the aforesaid performance rating, organisational rating and role responsibility, |
| |
|
as recommended by the Remuneration Committee of John Keells Holdings PLC in keeping with the group remuneration policy.
DIRECTORS' REMUNERATION
Details of the remuneration and other benefits received by the directors are set out in note 29 of the financial statements.
EMPLOYEE SHARE OPTION PLAN
The current employee share option plan consists of the second, third and fourth plans approved by the shareholders on 29 June 2001, 28 June 2004 and 13 December 2007 respectively.
Under the second plan, the company was authorized to issue up to five per cent of the issued share capital, with an annual limit of up to two per cent, of nontransferable call share options. Options granted under this plan have to be exercised within five years of such grant. Under the third plan, the company was authorised to issue up to five per cent of the issued share capital within an annual limit of up to two per cent of nontransferable call share options and the options granted under this plan have to be exercised within five years of such grant. The options outstanding under the third award of plan 2 and all the awards of plan 3 are valid for exercise as at 31 March 2008. On 13 December 2007, the shareholders approved a fourth plan, whereby the company could issue nontransferable call share options, not exceeding in aggregate 0.85% of the shares in issue of the company as at the date of granting the award.
Details of the options granted, options exercised, the grant price and the options cancelled / outstanding as at the date of the directors' report have been tabulated below.
EMPLOYMENT
The group has an equal opportunity policy and these principles are enshrined in specific selection, training, development and promotion policies, ensuring that all decisions are based on merit. The group practices equality of opportunity for all employees irrespective of ethnic origin, religion, political opinion, gender, marital status or physical disability. Employee ownership in the company is facilitated through the employee share option plan.
Details of the group's human resource initiatives are detailed in the employees' section of the sustainability report.
The number of persons employed by the company and group as at 31 March 2008 was 143 (2007 193) and 9,992 (2007 9,703), respectively. |
EMPLOYEE SHARE OPTION PLAN AS AT 31ST MARCH 2008 |
|
Date of
Grant |
Shares
Granted |
Expiry
Date |
Option
Grant
Price |
Shares **
Adjusted |
Exercised |
Lapsed/
Cancelled |
Outstanding |
Current
Price ** |
| PLAN 2 |
| Award 2 |
12.11.2002 |
3,728,580 |
11.11.2007 |
76.00 |
6,810,320 |
6,679,392 |
130,928 |
- |
- |
| Award 3 |
23.01.2004 |
2,994,209 |
22.01.2009 |
104.25 |
5,129,406 |
2,051,778 |
115,605 |
2,962,023 |
70.81 |
|
|
6,722,789 |
|
|
11,939,726 |
8,731,170 |
246,533 |
2,962,023 |
|
| PLAN 3 |
| Award 1 |
29.03.2005 |
5,503,850 |
28.03.2010 |
136.00 |
9,746,823 |
2,247,494 |
387,905 |
7,111,424 |
92.72 |
| Award 2 |
10.04.2006 |
6,645,575 |
09.04.2011 |
157.25 |
10,301,859 |
502,319 |
519,046 |
9,280,494 |
120.74 |
| Award 3 |
28.05.2007 |
10,551,062 |
27.05.2012 |
146.00 |
10,551,062 |
- |
448,520 |
10,102,542 |
146.00 |
|
|
22,700,487 |
|
|
30,599,744 |
2,749,813 |
1,355,471 |
26,494,460 |
|
| PLAN 4 |
|
25.03.2008 |
5,405,945 |
24.03.2013 |
120.00 |
5,405,945 |
|
|
5,405,945 |
120.00 |
| Total |
|
34,829,221 |
|
|
47,945,415 |
11,480,983 |
1,602,004 |
34,862,428 |
|
|
| **Adjusted for bonus issues and rights issues |
| |
SUPPLIER POLICY
The group applies an overall policy of agreeing and clearly communicating terms of payment as part of the commercial agreements negotiated with suppliers, and endeavors to pay for all items properly charged in accordance with these agreed terms. As at 31 March 2008 the trade and other payables of the company and group amounted to Rs. 314 mn (2007 Rs. 345 mn) and Rs. 7,869 mn (2007 Rs. 5,795 mn), respectively.
ENVIRONMENTAL PROTECTION
The group complies with the relevant environmental laws, regulations and endeavors to comply with best practices applicable in the country of operation. A summary of selected group activities in the above area is contained in the sustainability report.
RESEARCH AND DEVELOPMENT
The group has an active approach to research and development and recognises the contribution that it can make to the group's operations. Significant expenditure has taken place over the years and substantial efforts will continue to be made to introduce new products and processes and develop existing products and processes to improve operational efficiency.
STATUTORY PAYMENTS
The directors confirm that to the best of their knowledge, all taxes, duties and levies payable by the company and its subsidiaries, all contributions, levies and taxes payable on behalf of, and in respect of the employees of the company and its subsidiaries, and all other known statutory dues as were due and payable by the company and its subsidiaries as at the balance sheet date have been paid or, where relevant provided for, except as specified in note 35 to the financial statements, covering contingent liabilities.
RISK MANAGEMENT AND INTERNAL CONTROL
The Board confirms that there is an ongoing process for identifying, evaluating and managing any significant risks faced by the group. Risk assessment and evaluation for each business unit takes place as an integral part of the annual strategic planning cycle and the principal risks and mitigating actions in place are reviewed regularly by the Board and the Audit Committee. The Board, through the involvement of the risk review and control department takes steps to gain assurance on the effectiveness of control systems in place. The Audit Committee receives reports on the results of internal control reviews and the head of the group risk review and control department has direct access to the chairman of the Audit Committee.
EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
There have been no events subsequent to the balance sheet date, which would have any material effect on the company or on the group other than those disclosed in this report and in note 39 to the financial statements.
GOING CONCERN
The directors are satisfied that the company, its subsidiaries and associates, have adequate resources to continue in operational existence for the foreseeable future, to justify adopting the going concern basis in preparing these financial statements.
AUDITORS
Messrs Ernst & Young, Chartered Accountants, are willing to continue as Auditors of the company, and a resolution proposing their reappointment will be tabled at the annual general meeting.
The Audit Committee reviews the appointment of the Auditor, its effectiveness and its relationship with the group, including the level of audit and nonaudit fees paid to the Auditor.
The group works with many firms of Chartered Accountants in Sri Lanka and aboard, namely, Ernst & Young, KPMG Ford Rhodes Thornton and Co, PricewaterhouseCoopers, Someswaran Jayawickrama and Co, Deloitte Haskins & Sells and Luthra & Luthra. Details of audit fees are set out in note 29 of the financial statements. The Auditors, do not have any relationship (other than that of an Auditor) with the company or any of its subsidiaries.
Further details on the work of the Auditor and the Audit Committee are set out in the Audit Committee Report.
ANNUAL REPORT
The Board of directors approved the consolidated financial statements on 22 May 2008. The appropriate number of copies of this report will be submitted to the Colombo Stock Exchange and to the Sri Lanka Accounting and Auditing Standards Monitoring Board on 30 May 2008.
ANNUAL GENERAL MEETING
The annual general meeting will be held at the Institute of Chartered Accountants of Sri Lanka, 30A, Malalasekera Mawatha, Colombo 7, on Friday, 27 June 2008 at 09.30 a.m. The notice of the annual general meeting appears on page 162.
This annual report is signed for and on behalf of the Board of directors.
 |
 |
| Director |
Director |
Keells Consultants Ltd.
Secretaries
22 May 2008 |
| |
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