Hotel Sigiriya PLC AR 2014

HOTEL SIGIRIYA PLC
Pursuing
We are what we repeatedly do.
Excellence, then, is not an act, but a habit.
Annual Report 2014/15
HOTELSIGIRIYAPLC-AnnualReport2014/15
www.serendibleisure.com
excellence

Our Vision, Mission / 4
Financial Highlights / 6
Serendib Leisure Properties / 8
Chairman’s Message / 10
Board of Directors / 14
Senior Management / 16
Management Discussion and Analysis / 20
Hotel Management / 24
Sustainability Report / 25
Risk Management / 32
Corporate Governance / 35
Remuneration Committee Report / 45
Annual Report of the Board of Directors / 46
Directors’ Interest in Contracts with the Company / 49
Report of the Audit Committee / 50
Financial Reports
Statement of Directors’ Responsibility in Relation to
Preparing Financial Statements / 54
Independent Auditor’s Report / 55
Income Statement / 56
Statement of Comprehensive Income / 57
Statement of Financial Position / 58
Statement of Changes in Equity / 59
Statement of Cash Flow / 60
Notes to the Financial Statements / 61
Supplementary Information
Investor Information / 90
Ten Year Financial Review / 92
Notice of Meeting / 94
Form of Proxy / 95
Corporate Information / IBC
Contents
NAME OF THE COMPANY
Hotel Sigiriya PLC
(Formally Ceylon Luxury Hotels Ltd.)
LEGAL FORM
A public Quoted Company with Limited Liability
incorporated on 1st October 1971 under the Companies
Ordinance No. 51 of 1938 (Cap 145) and Re-registered
under the Companies Act No. 7 of 2007.
COMPANY REGISTRATION NO.
PQ 81
BOARD OF DIRECTORS
A N Esufally - Chairman
(Alt. V H A Perera)
L P Fernando
B S M De Silva
A R Gamage (Mrs)
(Alt: Prof. L D K B Gamage)
W M De F Arsakularatne
D T R De Silva
REGISTERED OFFICE
“ Hemas House”, No. 75, Braybrooke Place,
Colombo 02.
Tel: +94 (11) 4790500-6
Fax: +94 (11) 2438933
E-mail: inquiries@serendibleisure.lk
Website: www.serendibleisure.com
SECRETARIES
Hemas Corporate Services (Pvt) Ltd.
Level 9, “Hemas House”,
No. 75, Braybrooke Place,
Colombo 02.
Tel : + 94 (11) 4731731
Fax : +94 (11) 4731777
Corporate Information
REGISTRARS
SSP Corporate Services (Pvt) Ltd.
No. 101, Inner Flower Road
Colombo 03.
Tel : + 94 (11) 2573894
Fax : +94 (11) 2573609
MANAGING AGENT
Serendib Leisure Management Limited
AUDITORS
PricewaterhouseCoopers
100, Braybrooke Place,
Colombo 02.
BANKERS
Commercial Bank of Ceylon PLC
Sampath Bank PLC
HOTEL
Hotel Sigiriya
Sigiriya
Tel : + 94 (66) 4930500-3
Fax : + 94 (66) 2286820
About Serendib Hotels Group
Hotel Sigiriya is part of the Serendib Hotels Group. From the golden sands of Bentota and Waikkal, to the beauty of the Kalutara peninsula
and the exotic jungle retreat of Sigiriya - Serendib Hotels portfolio of four unique hotels – AVANI Bentota Resort and Spa, AVANI Kalutara
Resort, Club Hotel Dolphin and Hotel Sigiriya capture the essence of Sri Lankan hospitality.
For more information go to www.serendibleisure.com
Designed & produced by
Printed by Softwave Printing and Publishing (Pvt) Ltd
Photography by Dhanush De Costa

Pursuing
excellenceExcellence is not a skill.
It is an attitude.
Ralph Marston
Uniquely located beneath the towering ‘palace in the sky’
that is the spectacular Sigiriya rock fortress, Hotel Sigiriya
has something special for everyone. Enjoy a range of exciting
outdoor excursions and activities, outstanding local and
international cuisine and the soothing pleasures of our
Ayurveda spa experience’; all adding up to an unforgettable
experience for every guest.
This year, as always we remained true to our vision of
pursuing excellence in all we do, delivering good results and
fine destination experiences to the many stakeholders we
partner and the thousands of guests we serve every day.

The Elephant Gathering at Minneriya and Kaudulla National Parks have been listed
amongst the top ten wildlife events in the world. It is the largest annually recurring
concentration of wild elephants anywhere in the world. Stay at Hotel Sigiriya and catch
this amazing experience.
Explore the
sights and
sounds of the
jungle...

HOTEL SIGIRIYA PLC
4
Vision of the Serendib Hotel Group
To be one of the top
three contributors to the
development of the hospitality
industry in Sri Lanka and
be the benchmark for guest
service, F&B standards and
management of human
capital

Pursuing Excellence
5
Mission
Stakeholder Mission
Our
Guests
Create experiences to write
home about by exceeding the
expectations of our guests at
all times
Our
Customers
To be the most trusted hotel
partner, delivering consistently
superior value at all times
Our
People
To create an environment
that will inspire our people to
work with pride, happiness
and passion which will reflect
in service excellence thus
delighting our guests
Our
Community
To develop our community and
protect our environment by
adopting and implementing
sustainable tourism initiatives
Our Shareholders To deliver superior returns
to our shareholders through
sustained performance
excellence

HOTEL SIGIRIYA PLC
6
Delivering
good results
Financial Highlights
Year ended 31 March at a glance 2015 2014
Revenue Rs.000's 258,288 211,883
Profit before Interest, Tax, Depreciation & Amortization (EBITDA) Rs.000's 81,224 43,290
Profit /(Loss) before Tax Rs.000's 63,930 30,727
Profit after Tax Rs.000's 60,808 27,589
Earnings per Share Rs. 10.38 4.71
Cash Earnings per Share Rs. 9.20 8.80
Return on Equity (ROE) % 19 10
Balance Sheet Highlights and Ratios
Total Assets Rs.000's 395,002 333,321
Total Shareholders' Funds Rs.000's 324,890 264,488
No. of Shares in Issue 000's 5,859 5,859
Net Assets per Share Rs. 55.45 45.14
Market/ Shareholder Information
Market Price per Share Rs. 87.90 78.00
Market Capitalization Rs.000's 515,006 457,002
Price Earnings Ratio Times 8.5 16.6
Dividend Per Share Rs. - -
Dividend Pay out % - -

Pursuing Excellence
7
2014: 27Mn Operating Profit
2014: 31Mn Profit Before Tax
258Mn2014: 212Mn Revenue
64Mn
62Mn
10/11 11/12 12/13 13/14 14/15
Earnings Per Share
(Rs.)
0
10
20
10/11 11/12 12/13 13/14 14/15
Market Price Per Share
(Rs.)
0
20
40
60
80
100
10/11 11/12 12/13 13/14 14/15
Net Assets Per Share
(Rs.)
0
20
40
60

HOTEL SIGIRIYA PLC
8
Serendib Leisure Properties
AVANI Bentota Resort & Spa
Inspired by 18th Century Dutch architecture, the property was designed by world-renowned architect Geoffrey Bawa. Located
along the pristine beaches of the southern coast, AVANI Bentota Resort and Spa captures the essence of world class-luxury in
a home-away-from-home setting.
AVANI Kalutara Resort
The AVANI Kalutara is a perfect blend between old world charm and cosmopolitan elegance. Nestled between
the Indian Ocean and the Kalu Ganga, the hotel’s unique location and contemporary design makes it one of the
most sought after properties in the region.
Hotel Sigiriya
Nestled at the foot of the majestic Sigiriya Rock Fortress, Hotel Sigirya has been providing guests with truly unforgettable holidays
for the past three decades. Always in tune with nature, the hotel’s unique experiences cater to both the avid nature lover as well as
the cultural tourist, while the premium service has seen many a guest return year after year.
Club Hotel Dolphin
The perfect destination for an unforgettable beach holiday, Club Hotel Dolphin is the ideal family-friendly hotel. A short 30 minute
drive from the international airport, Club Hotel Dolphin is a veritable oasis that offers a gamut of modern facilities, entertainment
and cuisine choices to suit every member of the family. The hotels’ unique ‘pause and play’ concept, allows for uninterrupted fun,
adventure and relaxation for the entire family.

Pursuing Excellence
9
Among the top hospitality chains in the country, Serendib Leisure stands apart for its
unique, portfolio of offerings. While each property retains its own unique characteristics, it is
definitely the pursuit of excellence that has been the common denominator of success for all
our hotels.

HOTEL SIGIRIYA PLC
10
‘The passion for excellence
continues to be our mantra’
Chairman’s Message
Sri Lanka is now a much sought-after
global travel destination. Having
emerged as a frontline industry in
the recent past, tourism continues to
attract more and more foreign direct
investments into the country
Scan this QR Code to read the
Chairman’s Statement online

Pursuing Excellence
11
I am happy to note
that as one of the key
players in Sri Lanka’s
tourism milieu, Hotel
Sigiriya PLC too has
played its part in
putting Sri Lanka
on world tourism
map.
In what is widely seen as a good year
for global tourism, record numbers
were seen travelling the world in 2014.
Moreover, the remarkable resilience
and uninterrupted growth since 2009,
has led to the tourism industry being
labelled as a catalyst of global growth.
What is more encouraging though,
is the commitment shown by many
countries to develop tourism as a key
driver of economic growth. This will no
doubt set the pace for sustained growth
in the years to come.
As I recap the highlights for the year, I
am happy to note that as one of the key
players in Sri Lanka’s tourism milieu,
Hotel Sigiriya PLC too has played its
part in putting Sri Lanka on the world
tourism map. It is thus with a deep
sense of accomplishment that I present
to you, the annual report and financial
statements for the year ended 31st
March 2015.
Global Tourism industry – a
snapshot
For the fifth consecutive year
international tourist arrivals expanded
to reach 1,139 million by end 2014,
a YoY increase of 4.7%. In terms of
numbers, this translates into 51 million
more overnight visitors globally,
compared to the previous year. Notably
all regions registered growth, with the
Asia-Pacific region expanding by 5%,
second only to the Americas which grew
by 7% in 2014.
International tourist receipts also
mirrored this trend, crossing the USD
1.4 billion mark in 2014.
Meanwhile, a notable pick up in
expenditure from traditional source
markets helped make up for the
slowdown of the large emerging
markets seen in 2014. According to
UNWTO data, China still remained
the largest outbound market for 2014,
despite growing at a slower pace than
in the recent past. The USA, the second
largest outbound market grew by 6%,
while key European markets were seen
rebounding strongly, with France and
Italy recording 11% and 6% growth
respectively. The UK rounded up the
top five, registering 4% growth in
outbound travel expenditure for 2014.
Russia, another one of the world’s
largest outbound markets was hit by
a wave of trouble due to economic
sanctions and the fall in global oil
prices. The rapid deceleration of
demand for outbound travel that
followed, resulted in a 6% de-growth in
outbound travel expenditure from the
Russia.
Sri Lanka’s Tourism Industry
The country’s tourism industry
continued to perform well throughout
2014, surpassing the arrival target of
1.5 million set for the year. The country
recorded 1,527,153 arrivals for 2014,
a robust YoY increase of 19.8%, with
Western Europe accounting for the bulk
of this growth. Interestingly however,
the overall percentage share of arrivals
from source markets in Western
Europe declined in 2014, mainly due
to a notable increase in arrivals from
emerging source markets in Asia.
For the third consecutive year, India
remained the largest source market,
bringing in 243,000 visitors to the
country, closely followed by the UK,
China and Germany, with the Maldives
rounding up the top five, together
accounting for over 46% of the total
arrivals. Moreover, a coordinated effort
by industry stakeholders to boost the
country’s profile and attract travellers
from China, Indonesia and Japan
resulted in a remarkable increase in
inbound tourists from these countries,
signalling a definite shift in Sri Lanka’s
tourism demographics.
However, the increase in arrivals did not
necessarily translate into the arrival logs
at hotels. Foreign guest nights at resort
hotels would be a possible indicator
of the real growth in the country’s
tourist industry for the year. The steady
growth of online travel agents have led
to the informal sector receiving more
visibility with wider reach to the end
customer resulting in more room nights
generated to this sector.

HOTEL SIGIRIYA PLC
12
Advocating a sustainable
tourism proposition
Sri Lanka is now a much sought-after
global travel destination. Having
emerged as a frontline industry in
the recent past, tourism continues to
attract more and more foreign direct
investments into the country.
However, it is important to bear in
mind that with the promise of growth
comes myriad challenges that, if not
dealt with in a cohesive manner, could
undermine whatever progress has been
made so far. Therefore it is imperative
that all stakeholders of the industry
come together to work out a structured
agenda that would underpin the
progress of the industry, in the years
ahead.
This calls for a unified marketing
strategy that would reflect the country’s
vision for tourism. I believe that
destination branding should be the
nucleus of this long term branding
model and am glad to note that SLTPB
and the SLTDA are taking necessary
action in this regard. To do this, the
country would need to make extensive
investments to develop, nurture and
sustain a globally competitive brand.
The challenge is to bring out a dynamic
value proposition that personifies
the unique characteristics of our
island nation in a manner that would
differentiate our offering from that of
regional peers.
This can only be done through a
broader strategic vision that leverages
on the country’s vast untapped
resources. For instance, Sri Lanka is
blessed with resplendent waterways,
wherein lies a possible opportunity to
develop the country’s numerous bays
and harbours to serve as a regional
marina, capable of attracting luxury
yachts, cruise ships and other leisure
lines. In addition, the country’s
magnificent bird life and endemic
flora and fauna, represent abundant
opportunities that could also be
harnessed.
Given Sri Lanka’s cultural diversity,
experiential tourism is yet another
concept that offers great promise.
Experiential travel is likely to be the
next big thing that will reshape the
prospects of global tourism in the
coming years. Here too, what is needed
is a sustainable long term manifesto
that combines suitable regulations to
help cultivate an experiential travel
model that is uniquely Sri Lankan.
It is important to remember that any
or all of these opportunities should
be managed systematically, by first
strengthening necessary infrastructure,
while establishing clear guidelines to
ensure effective administration and
regulations are enforced.
Once again, I cannot overemphasize
the importance of stricter controls to
preserve the country’s resources and
protect what is rightfully our legacy. At
present, the overuse of our resources
has become a critical issue. To quote a
few examples, vehicular overcrowding
in many of the country’s wild life
parks, including national parks in
Yala and Wilpattu among others, have
already caused untold damage to the
wild life who inhabit these parks. The
deployment of boats without adequate
safety measures and overcrowded
waters with unregulated vessels
significantly increase the risk to visitors
and marine life alike.
We urge the government to introduce
suitable regulations to limit the damage
to our natural resources. It is equally
important that measures be taken
to preserve and protect our cultural
heritage sites.
Our focus
For our part, we continue to work
cognizant to the challenges and
opportunities that are currently
reshaping the local tourism industry,
where the passion for excellence
continues to be our mantra. Hence
our focus for the year was centered
on three key pillars namely, food and
beverage quality, service quality and
human capital development. As part of
the development process, we looked at
strengthening each aspect individually,
while at the same time creating a
We urge the
government to
introduce suitable
regulations to limit
the damage to our
natural resources. It is
equally important that
measures be taken to
preserve and protect
our cultural heritage
sites.
Chairman’s Message

Pursuing Excellence
13
cohesive platform that would spearhead
future growth. I feel this is a step in
the right direction which will be the
cornerstone in our journey towards
sustainable tourism.
Our Performance
The hotel performed admirably during
the year after refurbishment and
posted strong earnings in a challenging
environment.
Turnover Rs. 258Mn
Operating Profit Rs. 62Mn
Profit Before Tax Rs. 64Mn
Appreciations
I take this opportunity to thank my
colleagues on the Board of Directors for
the invaluable support extended to me
during the year under review.
I also wish to thank our Executive
Director, Mr. Ranil De Silva, and the
Board of Management, who have led
from the front to deliver the consistent
results.
My heartfelt appreciation goes to each
and every member of the Hotel Sigiriya
team for their commitment towards
achieving corporate goals. I rely on their
passion and professionalism to realize
the future aspirations of the company
and all its stakeholders.
In conclusion, I wish to thank
our shareholders for the trust and
confidence placed in the company and
seek their continued patronage in the
years ahead.
A.N. Esufally
Chairman
26th May 2015

HOTEL SIGIRIYA PLC
14
Effective
Leadership
The Board of Directors
1. A. N. Esufally
Chairman
Non-Executive Director
2. A. R. Gamage (Mrs)
Independent Director
3. D. T. R. De Silva
Executive Director
4. L. P. Fernando
5. B. S. M. De Silva
6. W. M. De F. Arsakularatne
4 3
5
2
6
1

Pursuing Excellence
15
Managing Director of Serendib Hotels
PLC and is a Non-Executive Director
of Dolphin Hotels PLC. He is a Fellow
Member of the Chartered Institute
of Management Accountants UK, an
Associate Member of the Institute of
Chartered Accountants of Sri Lanka
and a Member of the Chartered
Institute of Marketing UK. He began
his career at Ernst & Young and has
worked overseas with a Multi-National
for 10 years. Mr. De Silva has wide
experience locally in diverse industries
having previously held the position of
Group CEO of the DCSL Group. He is
also an Independent Director of Singer
Sri Lanka PLC, Singer Industries PLC
and Regnis Lanka PLC.
L P Fernando
Mr. Lasantha Fernando is founder
Director of the Company. He also
holds directorships in other companies
including; Kelani Tyres PLC, Silverstock
Holdings (Private) Limited, Silverstock
Limited, Ceat-Kelani Holdings (Private)
Limited, Ceat-Kelani International
Tyres (Private) Limited, Associated Ceat
(Private) Limited, Ceat-Kelani Radials
(Private) Limited, Asian Tyres (Private)
Limited, Wheels (Private) Limited,
Smart Wheels (Private) Limited,
Hercules Motor Company (Private)
Limited, Tyres Express (Private)
Limited, Power Wheels (Private)
Limited, Wheels Logistics (Private)
Limited & Executive Cars (Private)
Limited.
B. S. M. DE SILVA
Mr. Sarada de Silva Counts over 25
years’ experience in the Tourism and
Leisure industries. He was appointed to
the Board in 1990. He also has extensive
experience in the Spice industry
and is the Founder Chairman of the
Spice Council. He is the Chairman &
A. N. Esufally
Chairman
With over 35 years’ experience in the
tourism industry, Mr. Abbas Esufally
has played a pivotal role in expanding
the Groups’ Leisure interest. He was
appointed to the Board in 1994 and
elected Chairman of the Company in
2012. He serves as a Group Director
of Hemas Holdings PLC and is the
Chairman of Serendib Hotels PLC,
Dolphin Hotels PLC and Diethelm
Travel Lanka (Private) Limited,
Sri Lanka’s premier Destination
Management Company. He serves
on several other listed and unlisted
company boards as well.
He has taken an active part in the
growth and development of the
tourism industry. Mr. Esufally serves
as the Chairman of the Mercantile
Service Provident Society of the Ceylon
Chamber of Commerce and a Member
of the Advisory Committee of the
Tourist Hotels Association of Sri Lanka
Mr. Abbas Esufally is a Fellow Member
of both the Institute of Chartered
Accountants of England & Wales and
the Institute of Chartered Accountants
of Sri Lanka. He is an All Island Justice
of Peace and serves as the Honorary
Consul of Bhutan in Sri Lanka.
A. R. Gamage (Mrs)
Mrs. Ramani Gamage was appointed
to the Board in 1994. She is a Fellow of
the Chartered Institute of Management
Accountants UK. Mrs. Gamage also
serves as a Director of Dolphin Hotels
PLC and Infocraft Limited.
D. T. R. De Silva
Executive Director
Mr. Ranil De Silva was appointed to
the Board in 2012. He also serves as the
Managing Director B. Darsin De Silva
& Sons (Private) Limited and serves
as a Director of Intercom Group of
Companies, the Chairman, Cinnamon
Training Academy Limited and also
holds directorships in Dolphin Hotels
PLC and several other companies. Mr.
De Silva is also the President of the
National Chamber of Exporters of Sri
Lanka.
W. M. De F. Arsakularatne
Mr. Malinga Arsakularatne was
appointed to the Board in 2007. He
serves as a Board Director and Chief
Financial Officer of Hemas Holdings
PLC, and is also a member of the Board
of Management of the Group. He has
been part of the Hemas Group since
2004. Mr. Arsakularatne has nineteen
years of experience spread across
investment management, corporate
finance and business strategy. He
also serves on the Boards of Serendib
Hotels PLC and Dolphin Hotels PLC
and in several more unlisted subsidiary
companies within the Hemas Group in
the capacity of Non-Executive Director
and also serves as a Non-Executive
Director of NDB Capital Holdings PLC.
Mr. Arsakularatne is a CFA Charter
Holder and a Past President of CFA Sri
Lanka. He is also a Fellow Member of
the Chartered Institute of Management
Accountants (CIMA), UK and a Past
Board Member of the CIMA Sri Lanka
Division. He holds a BSc in Computer
Science & Engineering from the
University of Moratuwa, Sri Lanka,
an MSc in Investment Management
from Cass Business School, UK, and an
Executive MBA from INSEAD, France|
Singapore| UAE.

HOTEL SIGIRIYA PLC
16
Our winning
team!
Senior Management
1. Ranil De Silva
Executive Director
2. Sanjika Perera
Director – Business
Development and Projects
3. Sanjiv Wijayasinghe
Director - Human Resources
4. Suranjith De Fonseka
Director – Sales and Marketing
5. Shantha Kurumbalapitiya
Director – Commercial
6. Dayan Gunasekera
Director – Finance
4
2
15
6 3

Pursuing Excellence
17
Ranil De Silva
Executive Director
Refer to Board of Directors Profile on
page 15.
Sanjika Perera
Director – Business
Development and Projects
He possesses extensive Branding,
Marketing and General Management
experience in diverse sectors such as
FMCG, Retail, B2B and Service Sectors
in South Asia and Western Europe
during a career spanning over 20 years.
He last served as the Director – UK
and Ireland for Sri Lanka Tourism. He
read for his MBA at The Postgraduate
Institute of Management, University of
Jayewardenepura. He is a Fellow of the
Chartered Institute of Marketing and
a Chartered Marketer. He is a Board
Member of CIM – Sri Lanka Regional
Office where he currently serves as
the Chairman of the CIM Sri Lanka
Regional Board.
Sanjiv Wijayasinghe
Director - Human Resources
Sanjiv has to his credit 35 years of
experience in the field of Human
Resource Management of which 30
years in Senior Managerial positions.
He is a Fellow Member of the Institute
of Personnel Management Sri Lanka
where he has also served as its
president, and he is also a Member of
the Chartered Management Institute
UK and a Member of the Institute of
Professional Managers UK.
Suranjith De Fonseka
Director – Sales and Marketing
He joined the management team of
Serendib Leisure Hotels in September
2007 and has gathered over 12 years’
experience in the tourism industry. He
holds a B.A. (Hons) degree in Business
Administration from Nottingham Trent
University – UK, is a Sri Lanka prize
winner of the Chartered Institute of
Marketing – UK, and is a Chartered
Marketer. He also holds an MBA
from the Postgraduate Institute of
Management of the University of Sri
Jayewardenepura, and has participated
in executive education programs
conducted by the Indian School of
Business (ISB) and the Cornell Nanyang
Institute of Hospitality Management
in Singapore. In addition, he is a
committee member of the Marketing
sub-committee of the Tourist Hotels
Association of Sri Lanka (THASL), and
is also the Vice President of the Travel
Trade Sports Club.
Shantha Kurumbalapitiya
Director – Commercial
He has over 20 years experience in
the areas of Accounting & Finance,
Business Restructure, Production
Management, International Marketing,
Construction and Project Management,
Human Resource Management,
Business Process Re-engineering
and General Management, including
CEO responsibilities. Prior to joining
Serendib Leisure, he was the Group
CFO of Rockland Distilleries (Private)
Limited. He is a Fellow Member of the
Institute of Chartered Accountants
Sri Lanka and a Fellow Member of the
Chartered Institute of Management
Accountants UK. He currently serves on
the Council of the Institute of Chartered
Accountants of Sri Lanka.
Dayan Gunasekera
Director – Finance
Dayan has spent the majority of his
career at the Hemas group; initially
with the FMCG Sector and then with
the Transportation Sector prior to his
appointment to the management team
of Serendib Leisure. He is an Associate
Member of the Chartered Institute of
Management Accountants (UK) and a
Diplomate of the Chartered Institute of
Marketing (UK). He holds an honours
degree in Accounting and Financial
Management from the University of Sri
Jayewardenepura and a MBA from the
Postgraduate Institute of Management
of the same university.

A destination
experience
that is exciting,
relaxing...and
unforgettable
Traditional Sri Lankan hospitality at its finest to help you immerse yourself in the charm
of the moment and at the same time be transported to the serenity of a bygone era.

HOTEL SIGIRIYA PLC
20
Management Discussion and
Analysis
Global Tourism grows for the
fifth consecutive year
Tourism continues to be a driver of
global growth, growing 4.7% in 2014
as 1,139 million travellers undertook
overseas travel, 51 million more than
the previous year.
It is pertinent to note that the
composition of arrivals and earnings
is now shared almost 50:50 between
traditionally favoured destinations and
exciting new emerging destinations.
The mix of source markets too has
undergone change.
Traditional European markets remain
among the top travellers to Asia, but are
now opting for shorter durations and
intra-regional travel while emerging
source markets such as China, Russia
and Brazil have led growth during
recent years. China continued its strong
performance in 2014 while numbers
from Eastern Europe dwindled as the
region was gripped by the fallout from
the Crimean crisis.
The tourism sector continues to
outperform regional markets as well
as most other industry sectors within
Sri Lanka; it has been a key driver of
economic growth in
Sri Lanka accounting for significant
foreign investment, infrastructure
development and job creation.
Room occupancy rates in graded hotel
establishments approved by the Sri
Lanka Tourism Development Authority
(SLTDA) increased to 74.3% in 2014,
up slightly from 71.7% in the previous
year. Meanwhile, earnings from tourism
April
M
ay
June
July
AugustSeptem
ber
OctoberN
ovem
berDecem
ber
January
February
M
archTourist Arrivals to Sri Lanka
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2010/11
2011/12
2012/13
2013/14
2014/15
Source: SLTDA

Pursuing Excellence
21
F&B excellence was pursued at Hotel
Sigiriya through innovations including
new dining options, revamped
restaurant, fresh menu selections and
theme nights which all contributed
towards an exciting experience for
guests.
surpassed the US Dollars two billion
mark by the end of the year, registering
an annual growth of 41.7 % for 2014.
Financial Review
Revenue grew over last year by 22% to
Rs. Rs.258 Mn due to increased room
inventory and higher occupancy. The
hotel was successful in growing yields
during a year that witnessed the entry of
new inventory to the region and lower
yields from the conversion of Euros .
The web channel continued to perform
throughout the year with a significant
growth in online bookings being made
with the hotel.
Profit Before Tax of Rs. 64 Mn grew by
108% from last year which included a
one-off reversal of an expense provision.
The company was successful in funding
its entire refurbishment internally
which led to a decline in cash and
equivalents by 11.8 Mn from last year.
Occupancy
The hotel achieved an average
occupancy of 74% during the year, with
its full room inventory of 79 rooms
operational following refurbishment.
2011 2012 2013 2014 2015
Occupancy
68
69
70
71
72
73
74
(%)

HOTEL SIGIRIYA PLC
22
Management Discussion and Analysis
This compared well with the annual
average occupancy of 70% achieved
during the nine months the hotel was in
operation in 2013/14.
The hotel is popular among European
travellers, and as in the past, this year’s
arrivals too were topped by British,
German and French nationals. The
hotel’s location within the cultural
triangle, in close proximity and with
enviable views of the Sigiriya Rock – a
world heritage site, makes it a popular
destination within the region.
The region has witnessed a
transformation of its tourism offering,
with a multitude of formal and
informal operators stepping into the
fray, creating heavy competition across
hotel grades. Hotel Sigiriya, one of the
pioneering properties in the region,
has differentiated itself by taking the
lead in sustainable tourism and green
initiatives.
Marketing
Hotel Sigiriya was the foremost
beneficiary of the Serendib Hotel
Group’s enhanced online and mobile
marketing platforms; during the year,
the largest volume of online bookings
was directed towards the hotel.
The hotel continued to attract
bookings from traditional source
markets through conventional business
channels, mainly from international
travel promoters.
The Hotel was promoted at a series
of road shows in the main travel
markets to gain a foothold with key
stakeholders. The roadshow sought to
highlight the diversity and versatility of
the entire property offered by Serendib
Leisure as it is a favourite among
experiential travellers who enjoy the
hospitality of the hotel which includes
an ayurvedic spa and interaction with
the surrounding villages.
Operational Improvements
The Serendib Hotel group pursues
a three pronged strategy towards
operational excellence, which has
been deployed across all of the
properties including Hotel Sigiriya.
The three themes encompassed within
the strategy are food and beverage
2011 2012 2013 2014 2015
Revenue / Profit Before Tax
0
100
200
300
Rs. Mn
Revenue
Profit Before Tax
2011 2012 2013 2014 2015
Gross Operating Profit /
Cash Generated from Operations
0
20
40
60
80
100
120
Rs. Mn
Gorss Operating Profit
Cash Generated From Operation
Composition of Expenses 14/15
Cost of Sales
Sales & Marketing
7%
27%
66%
Administrative
Composition of Revenue 14/15
Room
Others
4%
53%
43%
Food & Beverage

Pursuing Excellence
23
excellence, service excellence and
human capital development. At each
property, the strategy also seeks to
accentuate the unique aspects on offer.
F&B excellence was pursued at Hotel
Sigiriya through innovations including
new dining options, a revamped
restaurant, fresh menu selections and
theme nights which all contributed
towards an exciting experience for
guests.
Service excellence is a clear
differentiator in the crowded Sri
Lankan tourism market and our pursuit
of best in class service levels has been
driven by many initiatives to refine and
instil internationally accepted standards
of hospitality services.
One of the foremost challenges facing
the country’s tourism sector is the
lack of suitably skilled and trained
personnel. To combat this, the hotel has
2011 2012 2013 2014 2015
Equity/Debt
0
100
200
300
400
Rs. Mn
Equity
Gearing
Debt
0
20
40
60
80
100
%
taken a number of measures including
enhanced training and development
for employees and an expanded
apprenticeship programme. In addition,
more focused, needs-based efforts are
initiated to address identified service
and skill gaps.
Selected employees were provided cross
functional exposure at the Group’s other
properties as well as overseas training
opportunities in collaboration with the
group’s overseas partner, Minor Hotel
Group.
Awards
Hotel Sigirya had the honour of
being inducted into the TripAdvisor
Certificate of Excellence Hall of Fame in
2015. Hall of fame inductees are those
Hotels that have secured the “Certificate
of Excellence” for five consecutive
years. The hotel also won the Booking.
com award 2015 for having obtained
excellent feedback from its customers
on guest services and F & B.

HOTEL SIGIRIYA PLC
24
Standing from left :
Ananda Karunaratne - Maintenance Engineer, W. P. D. M. De Silva - Naturalist, Sugath Wijesinghe - Executive Housekeeper,
E. G. G. N. Ekanayake - Pastry Chef, A. H. C. A. Dias - F & B Manager , H. N. P. Kumarage - HR Manager
Seated from left :
J. A. D. Jayampathi - Executive Chef, Laksitha Wegodapola - General Manager, T. M. S. Kumara - Financial Controller ,
E. W. P. C. Samarakoon - Front Office Manager
Hotel Management

Pursuing Excellence
25
Sustainability has always been
considered part and parcel of our
business and is the fundamental
premise that drives our operations. Our
philosophy is “To be Sri Lanka’s most
responsible hospitality brand, capable
of driving positive change for the
benefit of the environment, people and
communities impacted by our work”.
In tribute to this philosophy we have
always pursued a sustainable business
model that will support a scalable
platform for triple bottom line growth.
Accordingly, we adopt an integrated
approach that aligns our sustainability
initiatives with our corporate goals. It
is how we are able to deliver consistent
financial results, while at the same
time, transmit greater value to all
other stakeholders associated with the
business.
Serendib Hotels Group
Sustainability Policy
Statement
All properties under the Serendib
Hotels PLC umbrella are required
to maintain high standards of
performance and advocate socially
and environmentally sustainable
business practices. Our aim is
to bring a positive benefit to the
societies in which we operate through
high quality services, economic
growth, environmental protection,
community involvement and
employment.
Environmental Sustainability
The group remains committed
to minimize the impact on the
environment resulting from the
operation of the property. Our aim
is to go beyond the basic legal and
regulatory obligations to fulfil a
broader environmental agenda,
where concern for the environment
influences all our actions. In our search
for environmental–friendly business
practices, we have established sound
environmental objectives and targets
together with an integrated review
process to highlight possible cause and
effect. Our efforts are illustrated below.
Reduce, Reuse,
Recycle
Energy Reduction
Core PrinciplesKey initiatives Focus Areas
Strategic
Imperatives
Water
Conservation
Waste Control
Bio-diversity
preservation
Reduce the use of
plastic annually
by 5%
Reduce water
consumption by 5%
Reduce electricity
consumption
annually by 5%
Energy efficient
lighting
Energy efficient
equipment
Improve operational
efficiencies
Improve efficiency
of the self-contained
sewerage plant
Rain water
harvesting
Waste segregation
Composting
Increase volume
of recycled water
annually by 10%
Invest in protecting
coastal properties
and marine life
Increase employee awareness
Encourageguestparticipation
Promotecommunityinvolvement
Sustainability Report

HOTEL SIGIRIYA PLC
26
Moreover, our transparent reporting
framework is used to communicate with
stakeholders and create environmental
awareness among our employees,
guests and the community at large. We
also use this as a benchmark to work
towards improving our environmental
performance on an ongoing basis. Some
of our efforts have been outlined below.
Underpinned by our pursuit of
excellence, we strive to provide
a premier F & B offering, service
excellence and the ultimate in guest
comfort at all our properties. We remain
committed at all times to protect and
preserve the authenticity of nature.
Indicator
Hotel Sigirya
2013/14 2014/15
Direct energy consumption (kwh). 531,570 553,606
Energy saved due to conservation (kwh) 869 2100
Investment to introduce energy efficient systems (Rs.) 395,000 355,500
Water withdrawal
(Units or Ltrs)
18,000 31,482
Water recycled and reused (Ltrs) 14,000 27,386
Waste generate (MT) 7.50 6.60
Liquid waste (Ltrs) 2,160 4,240
Travellife Gold certificate recipients - Serendib Leisure Group
Human Capital Development
We entrust our human capital to operate
our properties and we expect them to
convey our brand promise to our guests.
Further, we see it as their duty to ensure
that our guests experience world-class
hospitality that we promise to provide.
Therefore, it is critical that we develop
the best and brightest talent in the
industry to help us in our pursuit of
excellence.
To achieve this, we have in place a
comprehensive Human Resources
infrastructure. It is how we have
succeeded in moulding our workforce
to overcome the day-to-day challenges
encountered in the hospitality industry.
It is also the underlying premise
used to identify our human capital
development strategies needed to give
us a competitive advantage. To help us
accomplish our leadership goals, we
specifically focus on the following areas:

Pursuing Excellence
27
Recruitment and retention
As an equal opportunity employer, the
Company does not discriminate against
any status protected by law. This is
strictly applied both in the case of new
recruits as well as in consideration for
internal promotions.
Our philosophy:
To hire and retain talented people
who embody The Serendib Hotels
core values and reflect our character
as a responsible hospitality company.
Accordingly, we will create a
compelling work culture that help us
become an employer of choice and
allows us to grow in a positive and
sustainable manner.
Our aim is to cultivate 80% of our
management team from within the
business and in doing so all employees
are subjected to an annual performance
evaluation to assess their readiness to
take on greater responsibilities. This
talent assessment module is used as the
basis for internal promotions and career
mapping which allow employees to
access both vertical and lateral growth
opportunities within the group.
Meanwhile, in order to encourage
a healthy flow of diverse ideas and
perspectives, we seek to acquire 20%
of our management talent from outside
our current team, vis-à-vis new recruits
who are able to envision their personal
goals congruent to our own corporate
ambitions. Many of these are trainee
apprentices who can adapt to the
changing environment of work life.
Our recruitment policy specifies that all
new recruits will be hired purely on their
ability to perform the tasks assigned to
them in accordance with the Serendib
Hotels employee code of conduct. 60% of
the workforce of the property are hired
from the local area.
Workforce statistics 2014/15
Property Total
Workforce
(No.)
Gender
distribution
(% of total
workforce)
Age Distribution (%
of total workforce)
Workforce Mobility
M F <30 30 - 50 >50 New
recruits
(No.)
Internal
Promotions
(No.)
Attritions
(No.)
Hotel
Sigiriya
128 120 8 66 56 6 31 8 20
Remuneration and benefits
All employees are entitled to a fair and
equitable remuneration in line with
industry standards. We also have in
place a systematic performance-based
incentive scheme for executive and
associate employee categories.
We provide all employees with on-
location accommodation facilities
Health and safety of employees
The Hotel has adopted fire safety
standards which requires it to be
equipped with fire detection, alarm and
emergency communication systems, fire
suppression systems and fire training.
Fire drills are conducted at least twice
yearly and the evaluation of fire-
readiness is monitored continuously
under supervision of the Group
Engineer. All our staff have been trained
on fire prevention and evacuation
procedures which are subjected to
review periodically.
Learning and development
Our aim is to inculcate a vibrant
learning and development culture,
where learning is viewed as more
of an experiential growth process,
rather than as a part of the enforced
protocol. As such, all learning activities
ultimately focus on improving the guest
experience.
Despite the overriding focus on
improving service levels, our training
itinerary also seeks to boost the long
term employability of workforce vis-à-
vis skills development initiatives that
improve employee sustainability. The
following programmes undertaken
during the year, achieve the dual
objectives of enhancing the guest
experience as well as providing
employees with a bankable long term
skill.
German Food Training – A program
for Chefs of all Serendib Group Hotels,
which was conducted by experienced
Chefs in-house.

HOTEL SIGIRIYA PLC
28
Menu Engineering & Food Costing – A
programme aimed at aspiring F&B
Managers and Chefs with a view to
driving value through our F&B effort
to provide an unparalleled culinary
experience
Bakery & Pastry Demonstration – A
programme for all Bakery and Pastry
chefs on different types of Desserts,
Cookies, sweets & toffees, Croissant and
Danish bread varieties.
Toress Wine Training and Champagne
& Cognac Training.
Best Cuppa Tea Brewing Training – A
programme on how to Brew the ideal
cup of tea conducted by the Sri Lanka
Tea Board
Microsoft Excel-Intermediate Level
– A basic programme that covers all
the fundamentals of MS Excel which
is focused for those of less or no
knowledge In MS Excel.
Employee Engagement
As a business built on relationships,
we understand the importance of
maintaining a healthy dialogue with
our employees. In essence the “eyes and
ears” of our hotels, we realize that our
employees function as an instantaneous
feedback mechanism for guests.
Hence, we have always encouraged
greater employee engagement by
opening up a number of formal and
informal channels, including regular
networking forums that promote
greater knowledge sharing. These
mediums have proved to be successful
not only in conflict resolution, but also
as a hot bed for new ideas that can be
used for the betterment of business.
Service Excellence
Service excellence has and always will
be the ultimate goal of our human
capital development model. In striving
to provide our guests with a premium
experience, we continue to deploy
both general training as well as area-
specific content that is deemed by the
management to be timely and relevant
in addressing possible service gaps at
each property.
Key initiatives for 2014/15;
• Customer Service and Upselling – A
program conducted to focus on the
development of customer service
skills, upselling and good speaking
skills in English for Front office,
Restaurant and Pool Staff
• Lifeguard Training – A programme
conducted for all pool attendants
on life saving by the Lifeguard
Association of Sri Lanka
Health & safety of products and
services
Ensuring the health and safety of our
products and services, is among our
key priorities in providing a superior
guest experience. The property remains
aligned to the internationally accredited
best practices set out under the HACCP
food safety management guidelines.
Further we have initiated a “Mystery
Audit” as the basis of ensuring that all
on-location products and services meet
with specific safety parameters spelt
out as per the operational mandate. As
part of the learning drive, we conducted
“Chemical Training” – A programme
for Kitchen and Housekeeping staff on
the proper usage of chemicals, impact
on using detergents and sanitizers,
handling & storage and safety measures
to avoid accidents.
Meanwhile, to ensure the general safety
of on-location equipment we conduct
regular training to educate staff on the
following aspects;
• First aid, evacuation, firefighting,
legionella, food hygiene
• Swimming pool safety, general hotel
safety
• Gas safety, beach & water sports
safety, children’s safety
• Accidents, incidents, illness and
transport safety
Training
KPI's
Hotel Sigiriya
Investment on training:
Rs. 778,199/-
Training hours: 2,236

Pursuing Excellence
29
Guest feedback mechanism
All properties are equipped with Guest
Satisfaction Survey (GSS) software to
manage guest feedback. Online review
sites such as TripAdvisor are monitored
on a regular basis and our General
Managers are encouraged to respond
to compliments and complaints alike.
The General Manager of the property
hosts the guests for cocktails each week
providing an opportunity for the hotel’s
management team to interact with
guests whilst on their stay and look
into ways of enhancing their in-house
experience.
Supply Chain Management
As a group-wide policy, at each
property, we aim to source at least 30%
of our fresh produce from local farmers
and growers who have adopted ethically
responsible farming and growing
practices. Most of our fresh fruits,
vegetables and seafood is procured in
this manner 17% of our product needs
are sourced locally. We believe in paying
a fair market price for the produce that
we buy from these suppliers, some of
whom have been supplying to us for
over a decade. While ensuring a degree
of backward integration, these practices
also tie in with the group’s social
development goals.
Our philosophy:
To promote local sourcing, wherever
possible and practical so as to ensure
a sustainable source of produce at
any time
Community Service
We have always been mindful of our
impact on the communities in and
around our property. As such we try to
integrate these social concerns as part
of our day-to-day operations, as much
as possible. The ties we have fostered
in the process have helped to make a
positive impact on these communities
and resulted in greater economic
progress for the area.
Hotel Sigiriya carried out
sharamadhana campaigns involving
the cleaning and clearing of the area
leading from the hotel to the Sigiriya
Rock fortress. These campaigns are
carried out by the staff of the Hotel and
take place regularly throughout the
year.
Our philosophy:
To interact with the communities
impacted by our work and make a
positive socio-economic change for
the betterment of the community and
the nation as a whole.
“The village lunch” excursion promoted
by the hotel which helps local families
in the village of Diyakepilla, providing
the community with an additional
source of income.
Sharamadhana Campaign “The village lunch” Preparation of the village lunch

The lush foliage, exotic wildlife and our brand of
service to pamper you, all under the shadow of the
spectacular wonder of the world.
Relax in the
shadow of a
rock fortress in
the sky

HOTEL SIGIRIYA PLC
32
Hotel Sigiriya PLC believes that our
dynamic approach to risk management
ensures that key risks are proactively
identified, assessed and responded to.
Our ongoing assessment process takes
into account the likelihood of an event,
its potential impact on the business and
the need for mitigation.
We have adopted the ISO 31000
standard of risk management
illustrated below. It elaborates on
risk identification, risk assessment,
risk response and risk reporting
methodologies.
The Company’s risk policy
Our policy for risk management is
to proactively manage risk to ensure
continued growth of our business
and to protect our people, assets and
reputation. This implies that we will:
• Implement an effective and
integrated risk management
system while maintaining business
flexibility.
• Identify and assess material risks
associated with our business,
monitor, manage and mitigate risks.
Internal Control and Risk
Management
The group reviews and assess significant
risks on a regular basis and has
implemented an oversight programme
to ensure that there is a system of
information gathering, awareness and
action to mitigate exposure to identified
risks.
The Group Risk Management
Committee (GRMC) of Hemas
Holdings PLC, the ultimate parent of
Hotel Sigiriya PLC overlooks the risk
management process of the Serendib
Hotels group . The GRMC reviews the
company’s risk profile and provides
guidance on required risk responses on
a quarterly basis.
The Audit Committee of the Serendib
Hotels PLC reviews and monitors
internal controls. The internal audit
scope is approved by the Audit
Committee at the start of the year and
one internal audit per hotel is done by
an external party and one by the Hemas
internal audit team. The audit reports,
risk reports and compliance reports are
reviewed by the Audit Committee on a
quarterly basis.
As a part of the Risk Management
process, the Board reviews its strategies,
processes, procedures and guidelines on
a continuous basis to effectively identify,
assess and respond to risks.
The group wide risk management
programme is facilitated by the Risk
and Control division with the inputs
from Business Strategy, Corporate
Finance, Group Treasury and Group
Human Resource divisions.
Risk facilitation is exercised through
risk workshops, risk reviews, essential
control checklists and risk reporting.
Risk Management
ESTABLISH THE CONTEXT
Analyse business environment and set objectives
IDENTIFY THE RISKS
Deviation from expected results
ANALYSE THE RISKS
Analyse the likelihood and impact
EVALUATE THE RISKS
Prioritise the issue
TREAT THE RISKS
Implement a suitable risk treatment plan
COMMUNICATIONANDCONSULTATION
MONITORANDREVIEW
Source: ISO 31000 Risk Management Framework.

Pursuing Excellence
33
Risk Risk exposure Mitigating actions
Market Adverse impact on yields and
occupancies
Fluctuations in demand
• Closely monitor the socio-economic environment of the traditional
markets and targeting new emerging markets
• Analyse resources and capabilities to identify core competencies and
differentiate through brand and service levels
• Sourcing new markets and developing new channels
• Participate in trade fairs both local and foreign in order to promote
the properties and to attract new tour operators.
• Using the corporate website to improve revenue through direct
bookings and marketing the hotel by partnering with popular online
travel agents to push web based sales
Human Resource
Risk
Risk of losing skilled and trained
human capital and recruitment of
staff for new hotel developments.
Trade union activities resulting in
work disruptions.
• Establish career development programs and succession plans in order
to retain and motivate the talent pool of the company
• Provide focused and structured training for staff at all levels to aid
personal and professional development
• Develop a strong employer brand to attract staff of the right quality
Foreign Exchange
Rate Risk
Depreciation of the Rupee and
loss on exchange in conversion
of loans denominated in foreign
currency
• Exchange rate movements are taken into consideration when entering
into contracts with travel agents
• Structure ForEx borrowings in proportion to the revenue currency mix
Operational
Process Risk
Internal process failures, fraud,
pilferage and breakdown of
internal controls.
• Provide focused and structured training to staff at all levels to
familiarize processes and procedures
• Systems and procedures are in place to ensure compliance with
internal controls, which are monitored and reviewed for their
continued efficiency and effectiveness
• Action is taken immediately as per employment policies on any staff
involved to fraud / pilferage
• Outsource internal audits to reputed Audit Firms to review and report
on the adequacy of the financial and operational controls
Credit Risk Risk arising due to default by
customers. of payments. Impact
on liquidity and profitability
• Credit is allowed only to approved customers which is reviewed
annually
• Monitor and review the debtor balances monthly.
• Obtain booking advances.
• Compliance to laid down credit SOPs on credit control.
Key Risks and Action Plans
The following framework depicts the specific and most relevant risks faced by the company and management actions to mitigate
them.

HOTEL SIGIRIYA PLC
34
Risk Risk exposure Mitigating actions
Political Risk Changes to government policy
could adversely impact the
operating environment
• Compliance with existing regulations and statutes.
• Actively participate in industry associations to lobby for policy changes
to grow and develop the tourism industry.
• Maintain good relationships with State agencies and ministries.
Fire and Natural
Disaster
Fire or natural disaster can halt or
cease operations
• Insurance is taken to cover all aspects of fire and natural disaster
• Fire safety drills and training is provided to the staff at the Hotel.
Health and Safety
Risk
Risk of litigation due to non-
adherence to laid down health
and safety regulations. This could
be due to, but not restricted
to food poisoning, personal or
accidental harm to guests or
employees.
• Insurance taken to cover both employee and guest injuries. Further,
regular maintenance of the property and equipments is done to ensure
all operating equipment are of good operating condition
• The hotel takes all precautions from sourcing the supplier to storage
and preparation of food to ensure contamination is avoided
• Tour operator safety standards are complied with and necessary action
is taken immediately on any concern area related to health and safety
based on audit inspections done by tour operators
• The company sources its products and services from approved
suppliers
Reputation Risk Adverse impact on the corporate
image and brand equity which
is likely to diminish shareholder
value.
• Proper adherence to the statutory, health & safety concerns by
obtaining appropriate quality certification standards including
HACCAP and environmental regulations
• Continuous review of guest comments in order to exceed customer
expectations and ensure quality standards are adhered and improved
upon
• Reputation management software (Brand-Gain) is used to monitor,
report and respond to the on-line reviews in the public domain/review
sites (eg. Trip advisor, HolidayCheck, etc)
• Maintenance of highest ethical standards at all times in all business
activities
• Conducting meaningful CSR initiatives in the locale of the hotel
In conclusion, Hotel Sigiriya PLC’s transparent risk management system engages risks posed to the company on a broad front. Our
risk management process is entrenched in the core values of the company and the senior management demonstrates leadership in
championing the company’s risk management initiatives, thereby ensuring the company’s competitiveness and sustainability in the
long term.
Risk Management

Pursuing Excellence
35
Corporate Governance
SECTION 1 : THE COMPANY
A. DIRECTORS
The Board
Corporate
Governance Principle
SEC & ICASL
Code Reference
Level of Compliance
Board Meetings A 1.1 Four regular Board Meetings are scheduled during a year to review the strategic
direction of the operational units, annual budgets and progress towards achieving
those budgets and key business risks and other matters. Ad hoc meetings are held
when necessary. Board decisions are taken at Meetings and via Circular Resolutions
signed by all the Directors.
Responsibilities of
the Board
A 1.2 The Directors are responsible for;
• Formulating, implementing and monitoring overall business policy and strategy.
• Ensuring effective systems are in place to secure integrity of information, internal
controls and risk management.
• Ensuring compliance with relevant laws, statutes and regulations.
• Ensuring all stakeholder interests are considered in corporate decisions.
• Promoting open and proper communication between the Company and its
stakeholders.
Compliance with the
law and independent
professional advice
A 1.3 The Board collectively and the Directors individually act in accordance with the laws
and regulations applicable to the business enterprise.
In discharging their duties, Directors may seek independent professional advice from
external parties where necessary at the expense of the Company.
Introduction
Corporate Governance involves
a set of relationships between a
Company’s management, its Board, its
shareholders and other stakeholders.
Corporate Governance also provides
the structure through which the
objectives of the Company are set, and
the means of attaining those objectives
and monitoring performance are
determined.
Company’s Philosophy on
Hotel Sigiriya PLC is fully aware
and committed to implementing
governance standards that conform to
best practices. As part of the corporate
culture, it engages and interacts with all
the stakeholders in a way that promotes
mutual trust, better understanding and
good faith.
The main scope of the Company's
Corporate Governance policies
encompass; clear description of duties
and responsibilities among the Board
of Directors, checks and balances, clear
business roles and strategies within the
Company, ethical business conduct,
engagements with stakeholders through
risk mitigation, upholding corporate
social responsibility in sustaining
good corporate citizenship as well as
disclosure of material information in a
timely and accurate manner.
Set out below is the extent to which the
Company complies with the Code of
Best Practice on Corporate Governance
issued jointly by the Securities &
Exchange Commission of Sri Lanka and
of Sri Lanka.

HOTEL SIGIRIYA PLC
36
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Company Secretary A1.4 All Directors have access to the advice and services of the Company Secretary who is
responsible to the Board in ensuring that proper Board procedures are followed and
applicable rules and regulations are complied with.
The appointment and removal of the Company Secretary is a decision taken by the
Board as a whole.
Independent
judgment
A1.5 The Directors exercise independent judgment on matters pertaining to strategy,
performance, resource allocation and standards of business conduct and act free
from any undue influence and bias from other parties.
Dedication of
adequate time
and effort by the
Directors
A1.6 The members of the Board dedicate adequate time and effort in discharging their
duties and responsibilities towards the Company.
The Board met on four occasions during the year under review and the attendance at
these meetings are given below:
Name of Director Capacity No. of
meetings
attended
Mr. A N Esufally Chairman/ Non Executive Director 4/4
Mr. L P Fernando Independent Director 3/4
Mr. B S M De Silva Independent Director 3/4
Mrs. A R Gamage Independent Director 4/4
Mr. W M De F Arsakularatne Non Executive Director 2/4
Mr. D T R De Silva Executive Director 4/4
The Board has delegated some of its functions to its Sub-Committees, while retaining
the rights for final determination pertaining to matters under the purview of the
Committees. The composition and the functions of these sub–committees are
discussed in detail under the relevant sections of this Report.
The management of the hotel owned by the Company has been delegated to Serendib
Leisure Management Limited through a formal Management Agreement. The
Managing Agent operates the hotel within the policy framework outlined by the
Board and is assessed periodically by way of Management Reports and presentations.
Induction and
Training for
Directors
A1.7 An Induction programme is in place which includes the provision of key corporate
documents, facilitation of visits to the hotels and meetings with the Senior
Management Team.
In addition, the Directors are also encouraged to participate in continuous
professional and self-development activities.

Pursuing Excellence
37
Chairman’s Role
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Role of Chairman in
conducting meetings
A 3.1 The Chairman encourages the participation of all the Directors in decision making, seeks
and ascertains the views of the Directors and thereby ensures that the Board functions in
an efficient manner which is beneficial to the stakeholders and the Company.
Financial Acumen
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Availability of those
with sufficient
financial knowledge
A.4 The Board comprises of several professional accountants who posses the necessary
knowledge and competence to guide the Board on matters pertaining to finance.
Board Balance
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Non executive
Directors
A.5.1 All the Directors are Non-Executive Directors.
Independent
Directors
A.5.2
A.5.3
Three out of the Six Non-Executive Directors are considered independent.
These Directors are independent of management and free of any business or other
relationship that could materially interfere with or could reasonably be perceived to
materially interfere with the exercise of their unfettered and independent judgement.
Annual Declaration A.5.4 The Independent Directors have submitted written Declarations of their
independence as required by section 7.10.2(b) of the Listing rules.
Determination of
independence
A.5.5 The Board annually determines the independence of each Non-Executive Director
based on the Declarations submitted by them.
Messrs. L P Fernando, B S M De Silva and Mrs. A R Gamage meet the criteria of
Independence specified in Rule 7.10.4 of the Listing Rules except that they have
served on the Board for more than nine years. However, the Board having evaluated
all the factors concluded that their independence has not been impaired due to them
serving on the Board for continually for a period exceeding nine years from the date
of their first appointment.
Alternate Directors A.5.6 The Alternate Director appointed by the Non-Executive Director is not an Executive
of the Company.
Recording of
concerns in Board
Minutes
A.5.10 Concerns raised by the Directors on matters of the Company which cannot be
unanimously resolved are recorded in the Board Minutes.

HOTEL SIGIRIYA PLC
38
Supply of Information
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Management’s
obligation to provide
appropriate and
timely information
A.6.1
A.6.2
The Board is provided with appropriate and timely information to discharge its duties.
The Directors are also entitled to request for additional information where they consider
such information necessary to make informed decisions.
The Agenda for the Board Meeting and connected discussion papers are circulated to the
Directors at least seven days in advance to facilitate the effective conduct of the Meeting.
Appointments to the Board
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Nominations
Committee
A 7.1 The Board has not established a Nominations Committee to make recommendations
on Board appointments; instead appointments to the Board are made collectively and
with the consent of all the Directors.
Assessment of Board
composition
A.7.2 The Board assesses its composition to ascertain whether the combined knowledge
and experience of the Board matches the strategic demands facing the company and
takes this into account when new board appointments are considered.
Disclosure of
required details of
new Directors
A.7.3 On appointment of a new Director, the Company communicates to the Colombo
Stock Exchange the appointment including a brief resume of the Director which
includes;
(a) the nature of his experience in relevant functional area
(b) other Directorships or memberships in Board Sub-Committees; and
(c) whether the Director is considered an Independent, Non-Executive or Executive
Director
Re – election
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Re-election of
Directors
A.8.1
A.8.2
The Company’s Articles require a Director appointed by the Board to hold office until
the next Annual General Meeting and seek re-appointment by the shareholders at
that meeting.
One third of the Directors including the Chairman retire by rotation at each Annual
General Meeting in conformity with the Articles of Association of the Company.
Directors who retire are those who have served for the longest period after their re-
appointment/ re-election.
In addition, a Director who has reached 70 years of age vacates office at the
conclusion of the next Annual General Meeting after he attains the age of seventy
years or if he is re-appointed as a Director after attaining the age of 70 years, at the
Annual General Meeting following that re-appointment.

Pursuing Excellence
39
Disclosure of Information in Respect of Directors
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Information in
respect of Directors
A.10.1 The biographical details of the Directors, natures of his/her expertise in relevant
functional areas, memberships in Board Sub–Committees, attendance at Board and
Sub-Committee Meetings, other directorships and Directors' Interests in Contracts
are disclosed under the relevant sections in the Annual Report.
B. DIRECTORS REMUNERATION
Remuneration Procedure
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Establishment of
a Remuneration
Committee
B.1.1 The Board has delegated powers to the Remuneration Committee of its Ultimate
Parent Company, Hemas Holdings PLC to make recommendations to the Board
on remuneration policy and practice that is consistent with the objectives of the
Company.
Composition B.1.2
B.1.3
The Remuneration Committee of the Parent Company consists of two Independent
Non-Executive Directors.
The Chairman of the Committee is an Independent Director appointed by the Parent
Company Board.
The names of the Chairman and members of the Committee are indicated in the
Annual Report of the Board of Directors.
Determination of
remuneration
B.1.4 In terms of the Articles of Association of the Company, the Board determines the fees
payable to the Independent Directors.
Access to
professional advice
B.1.5 The Committee has access to professional advice in discharging their duties.
Disclosure of Remuneration
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Disclosures B.3.1. The Remuneration Policy supports a strong performance-oriented culture and
ensures that individual rewards and incentives relate directly to the performance of
the individual, the operations and functions for which they are responsible for and
the Group as a whole.
The Directors were not paid a remuneration during the year under review.

HOTEL SIGIRIYA PLC
40
C. RELATIONS WITH SHAREHOLDERS
Constructive use of the Annual General meeting and conduct of General Meetings
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Proxy votes C.1.1 The Company counts all proxies lodged on each resolution.
Separate resolutions C.1.2 A separate resolution is proposed for each issue at the Annual General Meeting.
Adequate notice of
AGM
C.1.4 The Notice of Meeting of the Annual General Meeting and the relevant documents
are published and dispatched to the shareholders 15 working days prior to the
Meeting as required by the Companies Act No. 7 of 2007.
Procedure of voting
at General meetings
C.1.5 The procedure for voting at the Meeting is circulated along with the Notice of
Meeting.
Communication with Shareholders
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Policy and
methodology for
communication with
shareholders
C.2 The Company disseminates information pertaining to the performance of the
Company through the publication of the Interim Financial Statements and the
Annual Report in a timely manner. Announcements are also made to the Colombo
Stock Exchange on any information which may materially affect the share
performance.
The Company Secretary could be contacted in relation to shareholder matters. The
contact details are indicated in the Corporate Information section of this Report.
Major Transactions
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Disclosure on major
transactions
C.3.1 The Directors ensure that any corporate transaction that would materially affect the
net assets base of the Company is communicated to the Shareholders.
There were no major transactions as defined under section 185 of the Companies Act
no. 7 of 2007 during the year under review.
D. ACCOUNTABILITY AND AUDIT
Financial Reporting
Principle
SEC & ICASL
Code Reference
Level of Compliance
Board’s responsibility
for statutory and
regulatory reporting
D.1.1 The Board is accountable for presenting the Financial Statements of the Company
as well as the information required to be presented by Statute, to regulators.

Pursuing Excellence
41
Principle
SEC & ICASL
Code Reference
Level of Compliance
Declarations by
Directors
D.1.2 The Declarations to be made by the Directors are included in the Annual Report of
the Board of Directors.
Statement of Directors
and Auditors
responsibility for the
Financial Statements
D.1.3 The Statement of Directors' Responsibilities in the preparation of the Financial
Statements is given on page 54 while the Independent Auditors' Statement on page
55 state the Auditor's responsibility for the Financial Statements.
Management
Discussion Analysis
D.1.4 Management Discussion Analysis is given on page 20 of this Report.
Declaration on Going
Concern of business
D.1.5 The Declaration by the Board that the Company is a going concern is given in the
Annual Report of the Board of Directors.
Serious loss of Capital D.1.6 The Directors ensure that in the event the net assets of the Company fall below
50% of the value of the Company’s Shareholders funds an Extraordinary General
Meeting will be called to notify the shareholders of the position and the remedial
action being taken.
Related Party
Transactions
D.1.7 The transactions entered into by the Company with related parties are disclosed in
Note 27 to the Financial Statements.
Internal Control
Principle
SEC & ICASL
Code Reference
Level of Compliance
Annual review of the
system of internal
controls
D.2 The Board maintains a sound system of internal control to safeguard shareholder
investments and the Company’s assets. The adequacy and the effectiveness of the
internal controls are reviewed by the Internal Auditors under the direction of the
Audit Committee.
Audit Committee
Principle
SEC & ICASL
Code Reference
Level of Compliance
Composition D.3.1 As permitted by the Listing Rules of the Colombo Stock Exchange, the Audit
Committee of the Parent Company Serendib Hotels PLC functions as the Audit
Committee of the Company.
The Audit Committee of Serendib Hotels PLC consists of two Independent
Directors and a Non-Executive Director. The Chairman of the Committee is an
Independent Director.
Duties D.3.2 The main purpose of the Committee is to assist the Board in the effective discharge
of its responsibilities on financial reporting, risk management and internal
control. It also reviews the nature and extent of non–audit services provided by the
Auditors seeking to balance objectivity and independence.
Terms of Reference D.3.3 The Committee has written Terms of Reference dealing clearly with its authority
and duties.

HOTEL SIGIRIYA PLC
42
Principle
SEC & ICASL
Code Reference
Level of Compliance
Disclosures D.3.4 The Members of the Committee are indicated in the Annual Report of the Board
of Directors. The Managing Director of the Company attends the Meetings by
invitation.
The Committee met four times during the year under review and the attendance at
these Meetings are given below:
Name of Director Capacity No. of meetings
attended
Prof. L D K B Gamage Chairman/Independent Director 4/4
Mr. M A Jafferjee Member/Independent Director 4/4
Mr. A N Esufally Member/Non-Executive Director 4/4
Mr. D T R De Silva Managing Director 4/4
The Report of the Audit Committee is given on page 50.
Code of Business Conduct and Ethics
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Disclosure of Code of
Business conduct and
Ethics
D.4.1 The Company has adopted a Code of Business Conduct and Ethics and the
Directors and Members of the Senior Management are committed to the Code and
the principles contained therein.
Corporate Governance Disclosures
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Report
D.5.1 The manner and extent to which the Company complies with the provisions and
principles of the Code is disclosed in the Report on Corporate Governance.
SECTION 2 : SHAREHOLDERS
E: INSTITUTIONAL INVESTORS
Shareholder Voting
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Communication with
shareholders
E.1.1 The Chairman conducts a structured dialogue with the institutional shareholders
based on the mutual understanding of objectives and ensures that the views of the
shareholders are communicated to the Board as whole.
Evaluation of
Governance
disclosures
E.2 When evaluating the governance arrangements particularly in relating to Board
structure and composition, institutional investors are encouraged to give due
weight to all relevant factors drawn to their attention.

Pursuing Excellence
43
F : OTHER INVESTORS
Investing /Divesting Decisions
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Individual
shareholders
F.1 Individual investors are encouraged to carry out adequate analysis or seek
independent advice when making investing and divesting decisions.
The Company places great emphasis on releasing its Financial Statements in a timely
manner so as to ensure that shareholders have access to information on which they
could make informed decisions.
Shareholder Voting
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Individual
shareholder voting
F.2 All shareholders are encouraged to participate at General Meetings of the Company
and a Form of Proxy accompanies each Notice providing shareholders who are
unable to attend such meeting the opportunity to cast their vote.
G : SUSTAINABILITY REPORTING
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Principles of
Sustainability
Reporting
G.1 The Sustainability Report on Page 25 details the sustainability practices of the
Company.
The following table presents the Company’s compliance with Section 7.10 of Listing Rules on Corporate Governance issued by
the Colombo Stock Exchange.
CSE Rule No. Applicable Rule Requirement Status of compliance
Board of Directors
7.10.1. Non executive
Directors(NEDs)
One – third of the total number of Directors subject to
a minimum of two.
Complied
7.10.2 (a) Independent Directors One – third of the Non–Executive Directors subject to
a minimum of two.
Complied
7.10.2(b) Declaration of
Independence
Each Non-Executive Director should submit a
declaration of independence/ non-independence.
Complied
7.10.3(a) and
(b)
Disclosure relating to
Directors Independence
Names of Independent Directors should be disclosed
in the Annual Report and the basis for determination
of independence of Non–Executive Directors, if criteria
for independence is not met.
Complied
7.10.3(c) A brief resume of each Director should be included in
the Annual Report, including his area of expertise.
Complied
7.10.3(d) Upon appointment of a new Director a brief resume of
the Director to be submitted to the Stock Exchange.
Complied

HOTEL SIGIRIYA PLC
44
CSE Rule No. Applicable Rule Requirement Status of compliance
Remuneration Committee
7.10.5(a) Composition The Committee shall comprise of
Non–Executive Directors, a majority of whom shall be
independent.
The Chairman of the Committee shall be a Non-
Executive Director.
Complied
7.10.5(b) Functions of the
Remuneration
Committee
The Committee shall recommend the remuneration
payable to the Executive Directors and Chief Executive
Officer or equivalent role.
Complied
7.10.5 (c) Disclosure in the
Annual Report
The Annual Report should set out the names of
the Members of the Remuneration Committee, a
statement of Remuneration Policy and the aggregate
remuneration paid to Executive and Non-Executive
Directors.
Complied
Audit Committee
7.10.6.( a) Composition The Committee shall comprise Non-Executive
Directors a majority of who shall be independent.
The Chairman shall be a Non-Executive Director.
The Chairman or a Member should be a member of a
recognized professional accounting body.
Complied
7.10.6. (b) Functions *Overseeing the preparation , presentation and
adequacy of the disclosures in the financial statements
in accordance with the SLAS.
*Overseeing compliance with financial reporting
related regulations and requirements.
*Overseeing the processes to ensure that internal
controls and risk management are adequate.
*Assessing the independence and performance of the
External Auditors.
*Recommending to the Board the appointment, re-
appointment and removal of the External Auditors
and approving their remuneration and terms of
engagement.
Complied
7.10.6.(c) Disclosure in the
Annual Report
The names of the Members of the Audit Committee
should be disclosed in the Annual Report
The Audit Committee to determine the independence
of Auditors and disclose the basis of such
determination in the Annual Report.
Annual Report to contain a report by the Audit
Committee setting out the manner of compliance in
relation with their functions.
Complied

Pursuing Excellence
45
In accordance with the Rules on
Corporate Governance issued by
the Colombo Stock Exchange, the
Remuneration Committee appointed
by the Board of the Ultimate Parent
Company, Hemas Holdings PLC,
functions as the Remuneration
Committee of the Company.
At the commencement of the financial
year, the Remuneration Committee
comprised of the following Independent
Directors of Hemas Holdings PLC
— Mr. Pradipta Mohapatra –
Independent Director (Chairman)
— Dr. Anura Ekanayake –
Frequency of meetings
The Committee meets at least four
times a year. Additional meetings
shall be convened at the request of
the Chairman or a Member of the
Committee.
Remuneration Policy
The Committee has given full
consideration to the principles of Good
Governance as set out in the Code with
reference to Directors’ remuneration.
The main objectives of the policy
are to ensure that pay and benefits
packages are sufficiently competitive
to attract, develop and retain high
calibre executives. The Committee
will continue in the future to ensure
that a competitive and well-balanced
package is maintained. It also seeks to
align individual reward and incentives
with the performance of the Group
and hence, with the interests of the
shareholders. When carrying out its role
the Committee will consider corporate
performance in environmental, social
and corporate governance issues.
Role of the Committee
The scope of the Remuneration
Committee shall cover the following
responsibilities:-
— Compensation Philosophy /
Policies including stock options
and benefits
— Fixed Pay (based on grading /
evaluation)
— Performance Bonus
— Special schemes
— Performance Management Systems
— Annual Goals and Performance
Targets
— Performance Assessment and
development plans
— Executive search
Pradipta Mohapatra
Chairman
26th May 2015
Remuneration Committee Report

HOTEL SIGIRIYA PLC
46
The Board of Directors of Hotel Sigirya
PLC takes pleasure in presenting their
Report together with the Audited
Financial Statements of the Company
for the year ended 31st March 2015.
Principal Activity of the
Company & Group
The Principal activity of the Company
which is operating a tourist hotel
remained unchanged during the year
under review. The Company owns and
operates a 79 room hotel in Sigiriya.
The Directors to the best of their
knowledge and belief confirm
that neither the Company nor its
subsidiaries have been engaged in
any activity that contravenes laws and
regulations.
Review of Operations & Future
Developments
The financial and operational
performance of the Company
during the year under review and
future developments are discussed
in the Chairman’s Review and the
Management Discussion & Analysis.
These Reports together with the
Audited Financial Statements reflect
the state of affairs of the Company and
the Group.
The Directors confirm that the
Company complies with the Rules on
Corporate Governance laid down by
the Colombo Stock Exchange and has
adopted the relevant rules on Corporate
Governance issued by the Securities &
Exchange Commission of Sri Lanka and
of Sri Lanka . The Corporate
Governance practices of the Company
are given from page 35 to 44 of the
Annual Report.
Risk Management
The Company has put in place a
process to identify, evaluate and
manage any significant risks faced by
the entity, where annual risk reviews
are carried out by the Group Risk &
Control Dept. The principal risks and
mitigating actions are reviewed by
the Audit Committee on a quarterly
basis. A detailed overview of the Risk
Management process is outlined in the
Risk Management Report on page 32.
Going Concern
The Board having considered the
financial position, operating conditions,
regulatory and other factors and such
matters required to be addressed in
the Corporate Governance Code, have
a reasonable expectation that the
Company possesses adequate resources
to continue its operations for the
foreseeable future. For this reason,
the Company continues to adopt the
‘Going Concern basis’ in preparing the
Financial Statements.
Financial Statements &
Auditors Report
The Financial Statements of the
Company as at 31st March 2015 duly
signed by the Directors are given from
page 56 to 89 while the Auditor’s
Report on the Financial Statements is
provided on page 55.
Accounting Policies
The Financial Statements for the
period ended 31st March 2015 have
been prepared in accordance with
the Sri Lanka Accounting Standards
which were in effect upto that date.
The Accounting Policies adopted in
the preparation of these Financial
Statements are given from page 61 to
73.
Results
The Financial Results of the Company
as at the Balance Sheet date are
tabulated below:-
2015 (Rs) 2014 (Rs)
Revenue 258,287,530 211,882,730
Gross Profit 204,169,931 161,348,996
Profit Before Tax 63,930,106 30,727,163
Income Tax expenses (3,122,476) (3,138,124)
Profit/(loss) After Tax 60,807,630 27,589,039
Dividends
The Directors have approved the
payment of an Interim Dividend of
Rs. 5/- per share for the financial
year 2014/15 which is payable to the
shareholders by 17th June 2015 (2014
– Nil)
As required by Section 56(2) of the
Companies Act No. 7 of 2007, the
Directors have signed Certificate stating
Annual Report of the
Board of Directors
that in their opinion the Company
based on the information available
satisfies the Solvency Test immediately
after the dividend distribution. A
Certificate of Solvency was obtained
from the Auditors of the Company in
terms of the Act.
Property Plant & Equipment
The capital expenditure incurred by the
Company during the year amounted
to Rs. 53,795,402/-.(2014 – Rs.
99,806,431/-).
Details of Property, Plant & Equipment
and their movement during the
financial year is disclosed under Note 11
to the Financial Statements.
Details of Land and Buildings held by
the Group is given below;-
Location Extent
Sigiriya 8A- 0R- 16.0 P
(Leasehold land)
Stated Capital
The stated capital of the Company as
at 31st March 2015 amounted to Rs.
97,650,000 dividend into 5,859,000
ordinary shares. There was no change
to the Stated Capital of the Company
during the year under review.
Events Occurring After the
Balance Sheet Date
No circumstances have arisen since the
Balance Sheet date that would require
adjustment to or disclosure in the
Accounts other than those disclosed in
Note 26 to the Financial Statements.

Pursuing Excellence
47
Statutory Payments &
Compliance with Laws and
regulations
The Directors confirm that to the best
of their knowledge, all taxes, duties
and levies payable by the Company,
all contributions, levies and taxes
payable on behalf of and in respect of
the employees of the Company as at
the Balance sheet date have been paid
or where relevant provided for in the
Financial Statements.
The Company has also ensured that it
complied with the applicable laws and
regulations including the Listing rules
of the Colombo Stock Exchange.
Employment
Permanent and Contract employees of
the Company as at the Balance Sheet
dates was 128 (2014-123)
The Company adopts a non
discriminatory policy in recruitment
and employment which gives full
and fair consideration to persons in
selection, training, development and
promotion ensuring that all decisions
are based on merit.
Sustainability
The Company has taken specific
steps, particularly in ensuring the
conservation of the natural resources
and environment and addressing
material issues highlighted by its
stakeholders. Every endevour is made
to minimize the adverse effect on the
environment to ensure sustainable
continuity of our natural resources. The
Company’s sustainable practices are
detailed on pages 25 to 29.
Corporate Donations
Donations made by the Company
during the year under review amounted
to Rs. 9,500/- (2014 – Rs. 6,500 /-).
Directors
The Board of Directors of the Company
during the financial year under review
is given below:-
Mr. A N Esufally – Chairman
Mr. L P Fernando
Mr. B S M De Silva
Mrs. A R Gamage
Mr. W M De F Arsakularatne
Mr. D T R De Silva
Mr. V H A Perera (Alternate Director to
Mr. A N Esufally)
Prof. L D K B Gamage (Alternate
Director to Mrs. A R Gamage)
Mr. A N Esufally and Mrs. A R Gamage
retire by rotation in terms of Article
86 of the Articles of Association of
the Company and being eligible offer
themselves for re-election, with the
unanimous support of the Board.
Board Committees
Audit Committee
The Audit Committee of the Parent
Company, Serendib Hotels PLC,
functions as the Audit Committee of the
Company. The names of the members
of the Committee is indicated below.
Prof. L D K B Gamage - Chairman
Mr. M A Jafferjee
Mr. A N Esufally
Remuneration Committee
The Remuneration Committee
of the Ultimate Parent Company,
Hemas Holdings PLC functions as
the Remuneration Committee of the
Company. The names of the Members
of the Committee are given below:-
Mr. Pradipta Mohapatra - Independent
Director (Chairman)
Dr. Anura Ekanayake - Independent
Director
Related Party Transactions
Review Committee
In compliance with the Code of Best
Practices on Related Party Transactions
issued by the Securities & Exchange
Commission of Sri Lanka in December
2013 the Board appointed a Related
Party Transactions Review Committee
comprising the following members.
Mr. M A Jafferjee – Chairman
Prof. L D K B Gamage
Mr. A N Esufally
Mr. D T R De Silva
Remuneration & Other Benefits
of Directors
No remuneration was paid to the
Directors for the year under review
(2014 - Nil)
Interest Register
In compliance with the requirements
of the Companies Act No. 7 of 2007, an
Interest Register was maintained by the
Company during the accounting period
ended 31st March 2015.
Directors' Interest in Contract
In terms of section 192 (2) of the
Companies Act, the Directors have
declared their interests in contracts
in the Company and have refrained
from voting on matters in which they
were materially interested. Directors'
Interest in contracts with the Company
is disclosed on page 49 of the report.
Directors’ interest in shares
In compliance with Section 200 of the
Companies Act, the Directors have
disclosed their relevant interest in
shares of the Company.
The shareholdings of the Directors
during the financial year were as
follows:
2015 2014
31.03.15 01.04.14 31.03.14
Mr. A N Esufally - - -
Mr. L P Fernando 13,548 13,548 13,548
Mr. B S M De Silva 19,500 19,500 19,500
Ms. A R Gamage 2,100 2,100 2,100
Mr. W M De F Arsakularatne - - -
Mr. D T R De Silva 1,500 1,500 1,500

HOTEL SIGIRIYA PLC
48
As explained in the Report of the Audit
Committee Messrs Ernst & Young
will be appointed as Auditors at the
forthcoming Annual General Meeting.
By Order of the Board of
Hotel Sigiriya PLC
A N Esufally D T R De Silva
Chairman Director
Hemas Corporate Services (Pvt) Ltd.
Secretaries
26th May 2015
Annual Report of the Board of Directors
Related Party transactions
There were no recurrent or non-
recurrent transactions carried out
by the Company with related parties
during the year under review that is
required to be disclosed in terms of the
Code of Best Practice on Related Party
Transactions.
Company Secretaries
Messrs. Hemas Corporate Services
(Pvt) Ltd. of Hemas House, No.
75, Braybrooke Place, Colombo 02
functions as the Secretaries of the
Company.
Registrars
Messrs. SSP Corporate Services
(Pvt) Ltd. of 101, Inner Flower Road,
Colombo 03 function as the Registrars
of the Company.
Internal Control
The Board has reviewed the internal
controls covering financial, operational
and compliance controls and risk
management and have obtained
reasonable assurance of its effectiveness.
Shareholders
The Company has made all endeavours
to ensure equitable treatment to all its
shareholders.
Auditors
During the year under review Messrs
PricewaterhouseCoopers, Chartered
Accountants served as the External
Auditors of the Company. The Audit
Fees payable and fees paid for other
services rendered are as follows;
Audit Fees -
Rs. 411,780/- (2014 – Rs. 275,000/-)
Fees for non –audit services -
Rs. 224,406/- (2014 – Rs. 224,406/-)
The Directors have confirmed that to
the best of their knowledge the Auditors
have had no interest in or relationship
with the Company or its subsidiaries
other than that of External Auditors.
The Auditors have confirmed that they
are independent in accordance with
the Code of Ethics of the Institute of
Chartered Accountants of Sri Lanka.

Pursuing Excellence
49
Related Party Disclosures as required by the Sri Lanka Accounting Standards No. 24 on Related Party Disclosures is detailed in
Note 27 to the Financial Statements. In addition, the Company carried out transactions in the ordinary course of business with
entities where the Directors of the Company are Directors of such entities.
Company Director/s Nature of Transaction Value 2014/15 Value 2013/14
Dolphin Hotels PLC A N Esufally
D T R De Silva
B S M De Silva
A R Gamage (Ms)
Sale of goods/services
Purchases of goods / services
33,600
1,170,512
141,800
287,355
Serendib Hotels PLC A N Esufally
D T R De Silva
Sale of goods/services
-
870,015
286,644
1,437,118
Serendib Leisure
Management Ltd.
A N Esufally
D T R De Silva
Loan advanced
Loan Repayment
Finance expense
Management fees paid
Accounting fees paid
Expenses reimbursed
-
-
-
21,554,158
612,245
20,877,345
6,000,000
6,000,000
65,492
14,597,901
612,245
23,556,494
Jada Resort & Spa (Pvt) Ltd. A N Esufally Sale of goods/services
-
8,000
129,725
216,725
Diethelm Travels Lanka (Pvt)
Ltd.
A N Esufally
Sale of goods/services 23,033,086 17,208,619
Hemas Corporate Services
(Pvt) Ltd.
W M De F Arsakularatne Secretarial & professional fees 363,732 330,720
Hemas Holdings PLC A N Esufally
Loan advanced
Loan repayment
Finance income
15,000,000
10,000,000
650,273
-
53,000,000
2,568,138
Directors' Interest in Contracts
with the Company

HOTEL SIGIRIYA PLC
50
Composition
The Audit Committee of the Parent
Company, Serendib Hotels PLC
functions as the Audit Committee of the
Company. The Committee comprises
two Independent Directors, namely
Prof. Lalith Gamage (Chairman), Mr.
Murtaza Jafferjee and a Non-Executive
Director, Mr. Abbas Esufally.
The Executive Director and Director
Finance of the Managing Agent and
the Head of Risk & Control of Hemas
Group attend Meetings by invitation.
The Company Secretary serves as the
Secretary to the Committee.
The activities and views of the
Committee have been communicated
to the Board through verbal briefings
and by tabling the Minutes of the
Committee Meetings.
Role of the Committee
The Audit Committee operates within
the Terms of Reference outlined in
its Charter and assists the Board in
fulfilling their oversight responsibilities
in the following areas;
(i) quality and integrity of the
Company’s Financial Statements
and financial reporting process
including the preparation,
presentation and adequacy of
disclosures in the Financial
Statements in accordance with the
Sri Lanka Accounting Standards;
(ii) system of internal accounting and
financial control of the Company;
(iii) compliance with legal and statutory
requirements including financial
reporting requirements, disclosure
requirements of the Companies
Act and other relevant financial
reporting related regulations and
requirements;
(iv) performance of internal audit
function including the process
to ensure that the internal
controls and risk management of
Company are adequate to meet
the requirements of the Sri Lanka
Auditing Standards.
(v) assess the independence and
performance of the external
Auditors of the Company and make
recommendations to the Board
pertaining to the appointment, re-
appointment or removal of external
Auditors and their remuneration
and approve terms of engagement
of the external Auditors.
Main activities carried out
during the year
The Audit Committee met four times
during the year ended 31st March 2015
and carried out the following activities;
• Reviewed and discussed the
Un-audited Quarterly Financial
Statements with the Management
prior to publication.
• Reviewed and discussed the
Audited Financial Statements with
both the Management and External
Auditors prior to publication.
• Discussed the Management Letter
issued by the external Auditors
for the year 2014/15 along with
the Management responses and
monitored follow up action.
• Approved the Internal Audit Plan
and monitored the performance of
the Internal Auditors.
• Reviewed and discussed with
the Internal Auditors, the
Internal Audit Reports and
monitored follow-up action by the
Management.
• Reviewed the Reports on statutory
and regulatory compliance
submitted by the Management.
Internal Audit
The Internal Audit function of the
Company is carried out by Messrs.
B R De Silva & Company, Chartered
Accountants under the overarching
control of the Hemas Group Risk
& Control Division. Internal audit
independently reviews the risks
and control processes operated
by Management. It carries out
independent Audits in accordance
with an Internal Audit Plan which
is approved by the Audit Committee
before the commencement of the
financial year.
The Internal Audit Report which
includes recommendations to improve
internal controls together with
agreed Management action plans
to resolve the issues, is presented to
the Audit Committee for review. The
Group Internal audit follows up the
implementation of recommendations
and reports progress to the Audit
Committee.
Report of the Audit Committee

Pursuing Excellence
51
External Audit
The External Audit function of
the Company for the Financial
Year was carried out by Messrs.
PricewaterhouseCoopers, Chartered
Accountants. The Letter of Engagement
of the External Auditors including the
scope of the audit is discussed with the
External Auditors and the Management
prior to commencement of the Audit.
The Committee is satisfied that the
independence of the External Auditors
has not been impaired by any event
or service that gives rise to a conflict
of interest. Confirmation has been
obtained from the External Auditors of
their compliance with the independence
guidance given in the Code of Ethics of
of Sri Lanka.
Having reviewed the effectiveness
of the external audit, the Committee
appreciates the work carried out by
Messrs. PricewaterhouseCoopers.
However, as recommended by the
Company’s Holding Company, Hemas
Holdings PLC, the Company proposes
to engage the services of the External
Auditors of its Holding Company,
Messrs Ernst & Young, Chartered
Accountants of No. 201, De Saram
Place, Colombo 10 as the External
Auditors of the Company for the year
ending 31st March 2016, subject to
approval by the Shareholders at the
forthcoming Annual General Meeting.
Prof. L. D. K. B. Gamage
Chairman – Audit Committee
26th May 2015

HOTEL SIGIRIYA PLC
52
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