Serendib Hotel AR 2014-15

SERENDIB HOTELS PLC
Annual Report 2014/15
Pursuing
We are what we repeatedly do.
Excellence, then, is not an act, but a habit.
excellence

Contents
About 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
Leisure’s 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
Vision / 4
Mission / 5
Group Financial Highlights / 6
Serendib Leisure Properties / 8
Chairman’s Message / 12
Managing Director’s Review / 16
The Board of Directors / 20
Senior Management / 25
Management Discussion and Analysis / 30
Hotel Management / 42
Sustainability Report / 44
Risk Management / 50
Corporate Governance / 53
Remuneration Committee Report / 65
Annual Report of the Board of Directors /66
Directors' Interest in Contracts with the Company /70
Report of the Audit Committee / 72
Financial Reports
Statement of Directors’ Responsibility In Relation
To Preparing Financial Statements / 76
Independent Auditor’s Report / 77
Statement of Financial Position / 78
Statement of Profit or Loss / 79
Statement of Comprehensive Income / 80
Statement of Changes in Equity (Group) / 81
Statement of Changes in Equity (Company) / 82
Statement of Cash Flows / 83
Notes to The Financial Statements / 84
Supplementary Information
Investor Information / 128
Ten Year Group Financial Review / 130
Notice of Meeting / 131
Form of Proxy
(Voting Shareholders) / 133
Form of Proxy
(Non -Voting Shareholders) / 135
Corporate Information / IBC

Pursuing
excellenceExcellence is doing ordinary things
extraordinarily well.
John W. Gardner
Serendib Hotels PLC owns and operates a truly unique
portfolio of hotels including Club Hotel Dolphin, Hotel
Sigiriya, AVANI Bentota Resort & Spa and AVANI Kalutara
Resort. Beautifully located on the perfect beaches of the
western seaboard and near the spectacular ‘palace in the
sky’ that is Sigiriya. Each of these hotels are reputed for fine
dining, exceptional quality accommodation and the friendly
warmth of real Sri Lankan hospitality.
The year under review was a positive one where we achieved
several important milestones in our journey, as we continue
to pursue the qualities of excellence that inspire all that we
undertake to do.

Our properties are designed in harmony with their surroundings and aim to give our
guests not just a holiday, but a treasured experience they will carry with them for life
Destination
experiences
that include
beach, jungle
and lagoon.

SERENDIB HOTELS PLC
4
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
Vision

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

SERENDIB HOTELS PLC
6
Delivering
good results
Group Financial Highlights
Year ended 31st March 2015 2014
Revenue Rs.000's 1,575,999 1,278,216
Profit before Interest, Tax, Depreciation & Amortization (EBITDA) Rs.000's 514,811 406,919
Profit before Tax Rs.000's 328,739 236,979
Profit /(Loss) after Tax Rs.000's 279,472 201,707
Profit /(Loss) Attributable to Equity Holders of the Parent Rs.000's 201,356 151,835
Earnings /(Loss) per Share Rs. 1.81 1.36
Cash Earnings per Share Rs 3.10 3.42
Interest Cover Times 10 6
Return on Equity (ROE) % 10 8
Return on Capital Employed (ROCE) % 10 8
Balance Sheet Highlights and Ratios
Total Assets Rs.000's 3,917,383 4,149,403
Total Shareholders' Funds Rs.000's 2,838,454 2,424,755
No. of Shares in Issue 000's 111,526 111,526
Net Assets per Share Rs. 25.45 21.74
Debt / Total Equity % 20 47
Debt / Total Assets % 14 27
Market/ Shareholder Information
Market Price per Share as at 31st March Rs. 28.00 28.00
Market Capitalization Rs.000's 3,122,722 3,122,722
Price Earnings Ratio Times 15.5 20.6
Dividends per Share Rs. - -
Dividends pay out % - -

Pursuing Excellence
7
2014: 215Mn Operating Profit
2014: 237Mn Profit Before Tax
329Mn
10/11 11/12 12/13 13/14 14/15
Earnings Per Share
(Rs.)
0
0.75
1.50
2.25
3.00
10/11 11/12 12/13 13/14 14/15
Market Price per Share
(Rs.)
0
10
20
30
40
10/11 11/12 12/13 13/14 14/15
Net Assets per Share
(Rs.)
0
10
20
30
40
386Mn
2014: 1,278Mn Revenue
1,576Mn

SERENDIB HOTELS 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 Sigiriya 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 group hotels.

World class
hospitality
delivered with
the unique
Serendib
touch...
Each of our properties are unique in their own sense and together they uphold the
Serendib promise of premium hospitality that is truly a class apart

SERENDIB HOTELS PLC
12
The passion for excellence
continues to be our mantra
Chairman’s Message
Scan this QR Code to read the
Chairman’s Statement online
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

Pursuing Excellence
13
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,
Serendib Hotels 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.
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 242,734 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 has led to the informal sector
receiving more visibility with wider
reach to the end customer, resulting
in more room nights generated to this
sector.
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.
I am happy to note
that as one of the key
player in Sri Lanka’s
tourism milieu,
Serendib Hotels PLC
too has played its part
in putting Sri Lanka
on world tourism map.

SERENDIB HOTELS PLC
14
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
Chairman’s Message
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.

Pursuing Excellence
15
strengthening each aspect individually,
while at the same time creating a
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 Group performed commendably
well during the year after refurbishment
of Club Hotel Dolphin and Hotel
Sigiriya and posted strong earnings in a
challenging environment.
Turnover Rs. 1,576Mn
Operating Profit Rs. 386Mn
Profit Before Tax Rs. 329Mn
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 Managing
Director Mr. Ranil De Silva, and the
Board of Management, who have lead
from the front to deliver the consistent
results.
My heartfelt appreciation goes to each
and every member of the Serendib
Hotels 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

SERENDIB HOTELS PLC
16
Setting
benchmarks...
Managing Director’s Review
The outlook for Sri Lanka’s tourism
industry remains positive, particularly
as Sri Lanka attempts to rebrand itself
as a destination of choice for the global
traveller. I feel this calls for a much
bigger role for the private sector as key
stakeholders of the country’s leisure
industry.
The financial year 2014/15, was a
challenging one for all in the tourism
industry. For our part, we took these
challenges in our stride and went
ahead with planned investments to
develop our properties. We kicked off
the second phase of the Hotel Sigiriya
refurbishment in May 2014. We also
carried out a major upgrade of our
Restaurants at AVANI Bentota in
keeping with our promise to improve
the dining experience at our properties.
Further, we also engaged in many
other campaigns to improve our
portfolio of offerings and reconfirm our
commitment to the development of the
Tourism Industry in Sri Lanka.

Pursuing Excellence
17
Not only are these
awards a testament to
our outstanding brand
value, they also signify
our commitment
to excellence in
all aspects of the
business.
These awards are a testament to our
outstanding service quality and signify
our commitment to excellence in all
aspects of the business.
Operating Environment
With the country surpassing the 1.5
million tourist arrival target set for the
2014 calendar year, guest arrivals for
the same period also grew by 19.8%
YoY, boosted by strong growth in the
first nine months of the year. However,
from about September 2014, multiple
factors resulted in a slow start to the
crucial winter season. Key among them
was the Russian Ruble crisis and the
Ukraine war which led to a dramatic
reduction in the arrivals from this key
source market. In addition, many tour
operators in the crisis ridden region
were seen declaring bankruptcy, which
meant a further loss of captive business
for the winter season. In the wake of
this instability, many hotels reduced
their room rates, purely to maintain
decent occupancy levels. Meanwhile, in
the lead up to Sri Lanka’s Presidential
Election in January 2015, many
Western European nations, especially
the United Kingdom issued travel
advisories for Sri Lanka. The ensuing
dip in arrivals from the region during
January 2015 thankfully was short-
lived, with a notable upswing in arrivals
in February and March 2015.
Meanwhile, Sri Lanka continues to
struggle to attract tourists during the
off peak season, given its perceived
reputation as a high cost destination
compared to other Asian countries. To
overcome this challenge, the industry
has become accustomed to relying on
the local market to boost occupancy
levels, vis-à-vis attractive off-season
rates. Although this strategy has
proven to be fairly successful in terms
of maintaining occupancy levels, the
discounted rates offered mean that,
most hotels had to once again, contend
with a much lower Revenue per
available room (RevPAR).
Group Operational Highlights
In terms of guest arrivals, our properties
more or less mirrored the industry
movements. Interestingly though, we
were able to record healthy arrivals
from all source markets in the first two
quarters, save for a temporary dip in
arrivals from the Middle-East market
following the civil unrest in Aluthgama
in June 2014. However, we did see a
revival of the Middle-East market from
about September 2014.
Overall occupancy levels of the Group
for the year improved by two percentage
points, with all hotels performing
well, notwithstanding the challenges
encountered during the peak season.
AVANI Bentota, and AVANI Kalutara
recorded annual average occupancy
levels of 69% and 70% respectively,
while Club Hotel Dolphin and Hotel
Sigiriya registered 84% and 74%
respectively.
All group hotels experienced a 17%
increase in revenue from online
bookings. Notably, Hotel Sigiriya
registered the highest percentage
of online bookings among all our
properties.
We have continued to pursue key
strategic partnerships with Online
Travel Agents (OTAs), which has
allowed us to benefit from the better
yield offered via this channel. We have
also harnessed the power of the online
booking platform as a barometer to
gauge customer pulse. This has proved
I am proud to announce that, this year
too, all our hotels were the recipients
of a number of highly acclaimed travel
awards. At the World Luxury Hotel
Awards, AVANI Bentota Resort &
Spa claimed the top spot as the Best
Luxury Beach Resort in the Indian
Ocean for 2014. Widely considered
to be the pinnacle of recognition, the
property remains a strong contender
for the award in 2015 as well, being
nominated for the third consecutive
time. Meanwhile, both Hotel Sigiriya
and Club Hotel Dolphin were
among the TripAdvisor Certificate of
Excellence, "Hall of Fame" inductees for
2015, having secured the TripAdvisor
Certificate of Excellence award, for five
consecutive years. Among the other
notable accolades, Club Hotel Dolphin
was recognized by leading online travel
agents, claiming both The “Holiday
Check Award–2015 for Beach Holidays”
and also the “TripAdvisor : Travellers
Choice –Top 25 Hotels in Sri Lanka”
award.

SERENDIB HOTELS PLC
18
to be a highly effective, providing
insights on customer perceptions and
helping us manage customer feedback.
New Market development
The group invested heavily to gain
more traction in what are seen as new
emerging global travel markets. A series
of road shows were held throughout
the year, specifically to tap into markets
in the Middle-East, Japan and China.
While showcasing the versatility of our
portfolio, the road shows were also
used as a platform to interact with key
leisure industry stakeholders and to
study market behaviour patterns in
these countries. We also leveraged on
the Partner GSA’s (Global Sales Agents)
aligned to the Minor Hotels Group, in
each of these countries to strengthen
our presence in those markets. I am
happy to note that these measures
appear to have yielded positive results
within the year itself, but are most likely
to bear fruit only in the forthcoming
financial year.
Financial Review
Supported by the growth of emerging
markets and online bookings, Group
Revenue reached Rs. 1,576 million as at
31st
March 2015, a YoY increase of 23%
from the Rs. 1,278 million recorded in
the previous financial year.
Bolstered by the increase in revenue,
operating profits for the year grew by
79%. Part of the increase was due to a
one-off provisional write-back that took
place during the year.
Our bottom line grew steadily
throughout the year, which translated
into a group PBT of Rs. 329 Mn as at
31st
March 2015, a 39% improvement
over the corresponding period in
2014. Nevertheless, we could have
registered a much better result, had
we not accounted for the Rs. 52
million exchange loss arising from the
revaluation of foreign currency Deposits
and Receivables as at the Balance
Sheet date, in keeping with Accounting
Standards.
Staying Ahead
As we continued to grapple with key
market challenges, we had to also
contend with competition from the
country’s burgeoning hotel sector,
particularly from the larger home-
grown hotel chains. In response, our
fundamental strategy was aimed at
differentiating each of our brands
from the mainstream offerings of our
competitors. We have identified our
target markets and put in place precise
offerings to cater to the demand.
Admittedly, we do have the added
advantage of leveraging on the
internationally recognized AVANI
brand power to differentiate high-end
offerings. Our own home-grown brands
also have their inimitable qualities.
Club Hotel Dolphin, is perhaps the only
full-fledged, resort in Sri Lanka that
offers all-inclusive club concept holidays
coupled with a unique “pause and play”
offering. Undeniably, Hotel Sigiriya
epitomizes the concept of affordable
luxury. Whatever the offering, we have
always sought to deliver on our brand
promise. The pursuit of excellence
continues to be the nucleus of our brand
DNA.
In 2014/15, we once again worked with
the underlying theme of “Excellence”,
to bring out the uniqueness of each
of our properties and to reinforce our
value proposition. Our goal was to
present guests with the unexpected and
create a three-dimensional “wow” factor
as the highlight of the overall guest
experience. I believe this will act as a
key differentiator to keep guests coming
back year after year. The three key areas
that we specifically looked into were
food and beverage, service excellence
and human capital development,
in keeping with our vision to be Sri
Lanka’s most outstanding hospitality
group.
We recognize that Food and Beverage
(F & B) is an integral part of the overall
guest experience and it is also the most
likely element to be remembered by
guests. During the year, we introduced
a dynamic new F & B agenda to feature
the individuality of each property. At
AVANI Bentota, among other things,
Our goal was to present guests with the
unexpected and create a three-dimensional
“wow” factor as the highlight of the overall
guest experience. I believe this will act as a key
differentiator to keep guests coming back year
after year.
Managing Director’s Review

Pursuing Excellence
19
we introduced “The Loft”, a new
concept that allows guests to relax
amidst the calm serenity of the early
evening sunset. In addition, we also
re-conceptualized the Frangipani
Restaurant as a specialty Asian dining
option. At AVANI Kalutara, the
newly introduced Seafood Market
has proved to be hugely popular,
while “The Mango Tree”, a restaurant
serving traditional Sri Lankan village
cuisine was introduced at Club
Hotel Dolphin. At Hotel Sigiriya, we
introduced “Breakfast by the Rock”, a
novel concept, where guests are served
their breakfast against the backdrop
of the majestic Sigiriya rock fortress.
These were but a few, of the numerous
value additions that were done at all
properties during the year.
Much work was also done to improve
the guest services at all properties. At
the AVANI hotels, we used standards
of our associate partners, the Minor
Hotels Group as a benchmark for
improvement, while ongoing training
ensured the service levels at both Club
Dolphin and Hotel Sigiriya matched up
to our regional peers. The steps taken
to improve service levels also served as
part of our human capital development
initiatives aimed at enhancing the
sustainability of our people, vis-à-
vis proficiency mapping and skills
development.
Future Outlook
As far as our core markets are
concerned, no dramatic improvements
are likely to take place in the near
future. With the Euro expected to
depreciate even further in the coming
months, we are likely to experience a
dip in realized room rates, although it
is unlikely to have a material impact
on volumes from Germany and other
Eurozone markets. Nevertheless,
by restructuring our proposition
accordingly, I am confident that we
can grow our revenue from this key
source market. The deepening political
tensions in Russia and Eastern Europe
are likely to continue for some time,
casting a doubt on recovery prospects of
this key market in the near future.
On the positive side, the exponential
growth in tourist arrivals from China
and India appears encouraging.
On the whole, I believe the outlook
for Sri Lanka’s tourism industry
remains positive, particularly as Sri
Lanka attempts to rebrand itself as
a destination of choice for the global
traveller. I feel this calls for a much
bigger role for the private sector as key
stakeholders of the country’s leisure
industry.
Moreover, the renewed focus by the
Sri Lanka Tourism Promotions Bureau
on developing traditional European
markets is definitely a good sign
which is likely to herald a new era for
tourism in Sri Lanka. For our part, I
am confident that the Serendib Hotels
group is ideally placed to complement
this strategy with its already established
strong presence in this market even
as we plan to expand our island-wide
footprint in the coming years.
Appreciations
I take this opportunity to thank our
customers and make a special mention
of our guests who have embraced our
hotels as their home-away-from-home
year after year.
I also express my gratitude and
appreciation for the visionary guidance
and support of the Chairman and the
Board of Directors of Serendib Hotels
PLC and its subsidiaries, and the
strong commitment of the corporate
management and hotel teams. It is
their collective effort that has made it
possible to achieve success, despite the
many challenges.
I would also like to thank our partners,
The Minor Hotels Group, for their
long and fruitful association with
the Serendib Hotels Group. We have
benefitted immensely from their
knowledge and expertise, which has
inspired our pursuit of excellence.
In conclusion, I wish to thank
our shareholders for the trust and
confidence placed in the company. I
seek your continued to patronage in the
years ahead as well.
Ranil De Silva
Managing Director
26th May 2015

SERENDIB HOTELS PLC
1
43 5
Effective
Leadership
The Board of Directors
20

Pursuing Excellence
1. A N Esufally
Chairman
Non Executive Director
2. D T R De Silva
Managing Director
3. W M De F Arsakularatne
4. Deshamanya J C L De Mel
Independent Director
5. Professor L D K B Gamage
6. E J D Rajakarier
2
8
6
7
9
7. M A Jafferjee
8. S M Enderby
9. Dr. R N A Athukorala
21

SERENDIB HOTELS PLC
22
1. A N Esufally
Chairman
Non-Executive Director
Mr. Abbas Esufally was appointed to
the Board in 1994 and was elected as
Chairman of the Company in 2003.
With over 35 years’ experience in the
tourism industry, Mr. Esufally has
played a pivotal role in expanding the
Groups’ Leisure interest. He serves as
a Group Director of Hemas Holdings
PLC and also serves as Chairman of
Dolphin Hotels PLC, Hotel Sigiriya PLC
and Diethelm Travel Lanka (Private)
Limited. 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 is
a Member of the Advisory Committee
of the Tourist Hotels Association of Sri
Lanka (THASL).
Mr. 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.
2. D T R De Silva
Managing Director
Mr. Ranil De Silva was appointed as
the Managing Director of the Company
in 2010. He also serves as an Executive
Director of Dolphin Hotels PLC and
Hotel Sigiriya PLC. He is a Fellow
Member of the Chartered Institute
of Management Accountants UK,
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.
3. W M De F Arsakularatne
Non-Executive Director
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 Dolphin
Hotels PLC and Hotel Sigiriya 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.

Pursuing Excellence
23
4. Deshamanya J C L de Mel
Deshamanya Lalith De Mel was
appointed to the Board in 2002.
He counts over 40 years of Board
experience as a Director in several
companies abroad and in Sri Lanka.
He spent most of his career at Reckitt
Benckiser PLC UK and served on
its Board of Directors. He was also a
Director of CDC PLC in the UK. He
served as Chairman, Hemas Holdings
PLC, Chairman Sri Lanka Telecom
PLC, Chairman Reckitt Benckiser Sri
Lanka PLC and as Chairman of the
Board of Investment. He has also served
as a Senior Advisor to the Ministry of
Finance and as a Director of the Peoples
Bank, Chairman of First Capital PLC
and as a Director of several other
companies.
He holds a Master of Arts Degree from
the University of Cambridge UK and
the AMP Harvard Business School
USA.
5. Professor L D K B Gamage
Prof. Lalith Gamage was appointed to
the Board in March 2008. He serves
as the President and Chief Executive
Officer of the Sri Lanka Institute of
Information Technology. He is also an
Adjunct Professor of the University
of British Columbia, Canada and of
the Curtin University, Australia. Prof.
Gamage serves as Chairman, Lanka
Software Foundation (LSF) and as an
Advisory Board Member of Sri Lanka
Association of Software and Service
Companies. He has also served as
Chairman, Arthur C. Clarke Institute
for Modern Technologies , Chairman
of the ICT Cluster, Executive Director,
Sri Lanka Export Development Board
and Chairman of the IT Task Force,
Ministry of Enterprise Development.
An Electronic and Telecommunication
Engineering graduate from the
University of Moratuwa. Prof. Gamage
holds a Masters’ Degree in Information
Technology from the De Montfort
University, UK and an PhD in Artificial
Intelligence and Computer Vision from
the University of British Columbia,
Vancouver, Canada.
6. E J D Rajakarier
Mr. Dillipraj Rajakarier was appointed
to the Board in 2010. He is the
Chief Operating Officer of Minor
International Public Company Limited
and the Chief Executive Officer of the
Minor Hotels Group. He has also served
as the Deputy Chief Financial Officer of
Orient-Express Hotels, Trains & Cruises
and as the Group Financial Controller
of Easi Solutions PLC.
Mr. Rajakarier has a Masters’ Degree
in Business Administration, from
the UK and is also a Member of UK
Institute of Management Information
Systems. He is also an Associate
Member of the British Association of
Hotel Accountants, a Member of the
Association of Computer Professionals,
a Member of the Association of
Business & Administrative Computing,
UK, and a Member of the Institute of
Directors .

SERENDIB HOTELS PLC
24
7. M A Jafferjee
Mr. Murtaza Jafferjee was appointed
to the Board in 2010 He is the Chief
Executive Officer of JB Securities
Limited with over 20 years’ of industry
experience in the stock market in
Sri Lanka. He serves on the Board
of Nations Trust Bank PLC as an
Independent Director and on the board
of So Others May See (SOMS) – a not
for profit organization. He is the current
Advocacy Chair for CFA Sri Lanka,
the local member society of the CFA
Institute. He has also served on the
Board of the Colombo Stock Exchange
from August 2007 to July 2009.
Mr. Jafferjee holds a Bachelors’ Degree
in Mechanical Engineering and
Computer Science from the University
of New South Wales, Australia and a
Masters’ Degree in Financial Economics
from the University of Colombo. He is a
Chartered Financial Analyst (CFA).
8. S M Enderby
Mr. Steven Enderby was appointed
to the Board in March 2014. He has
had a successful track record in the
private equity space with Actis, a
leading global emerging markets fund
until his retirement in 2011 as an Actis
Partner. Some of the most successful
private equity transactions he led
include South Asia Gateway Terminal,
Ceylon Oxygen and Millennium
Information Technologies in Sri Lanka.
He has served on the Boards of leading
companies in Sri Lanka and India such
as John Keells Holdings, Lion Brewery
and Punjab Tractors.
He joined Hemas Holdings PLC to
head the group's efforts in Mergers and
Acquisitions. He took up the office of
Deputy CEO and Director of Hemas
Holdings PLC in November 2013 and
was appointed as the Chief Executive
Officer of Hemas Holdings PLC on 1st
April 2014.
He is a Fellow Member of the Chartered
Institute of Management Accountants
UK. He holds a Degree in Economics
and Accounting from the Queens
University Belfast, and a Masters’
Degree in Development Studies from
the University of Melbourne.
Mr. Enderby also serves on the board of
J L Morison Son & Jones (Ceylon) PLC
and multiple subsidiary boards of the
Hemas Group as well as on the boards
of CIC Holdings PLC and Paints and
General Exports Limited.
9. Dr. R N A Athukorala
Dr. Rohantha Athukorala was
appointed to the Board in 2010.
In a fifteen year career with global
multinationals Unilever, Reckitt
Benckiser and Johnsons, Dr. Athukorala
has twice won the “Best Marketer”
Award in Sri Lanka and has gone on to
win a Global Award for Brand Building.
He was head-hunted by the United
Nations where, he won the 'merit’
performance award twice in the UN
system and thereafter secured the ‘Best
Global Award” for a lead project in Sri
Lanka.
In the public sector, Dr. Athukorala
was the 7th Chairman of the Sri Lanka
Export Development Board and served
the EDB for a six years during which
Sri Lanka's export revenues grew from
$5 to $11Billion. He has presently been
appointed Chairman of the Sri Lanka
Tourism Promotions Bureau. He also
serves on the Sri Lanka Tea Board -
Marketing Committee and was recently
appointed by the Cabinet of Ministers
as the Commissioner General for Sri
Lanka for World Expo 2015.
In 2013, Dr. Athukorala was appointed
by the Central Bank Monetary Board, as
an Independent Director to the Board
of The Finance Company PLC to re-
structure and turnaround the 75-year
old financial institution, on which he
continues serve to this date.
Dr. Athukorala is an alumni of Harvard
University, DBA, MBA and holds a
double degree in marketing from the
University of Sri Jayewardenepura and
the Chartered Institute of Marketing
(UK).

Pursuing Excellence
25
Our winning
team!
Senior Management
1
6
5
3
4
2
1 Ranil De Silva
Managing Director
2 Sanjiv Wijayasinghe
Director - Human Resources
3 Shantha Kurumbalapitiya
Director – Commercial
4 Sanjika Perera
Director – Business Development and
Projects
5 Suranjith De Fonseka
Director – Sales and Marketing
6 Dayan Gunasekera
Director – Finance

SERENDIB HOTELS PLC
26
Ranil De Silva
Managing Director
Refer to the Board of Directors Profile
on page 22
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.
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.
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.
Senior Management

Pursuing Excellence
27
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.
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.

SERENDIB HOTELS PLC
28
Unmatched
service
standards that
take care of
your every
need...
We know that little things make a big difference. It is why our staff don’t need to be
told, they are trained to anticipate. Whether it is a pot of freshly brewed coffee at your
doorstep every morning or a crisp set of sheets at bed time, our people will ensure you
continue to bask in the lap of luxury

SERENDIB HOTELS PLC
30
Management Discussion
and Analysis
Over the past six decades, tourism has
experienced continued expansion and
diversification, becoming one of the
largest and fastest-growing economic
sectors in the world. Despite occasional
shocks, international tourist arrivals
have shown virtually uninterrupted
growth since the 1950s.
More recently, an ever increasing
number of destinations worldwide
have also opened up to and invested in
tourism, for the most part eroding the
captive share enjoyed by traditional
tourist destinations. Case in point, the
market share of emerging economies
increased from 30% in 1980 to nearly
50% in 2014. This has propelled
tourism as a key driver of global
socio-economic progress vis-à-vis
export revenues, the creation of jobs
and enterprises, and infrastructure
development.
Global Highlights for 2014
International tourism as an industry
expanded in 2014 as the number of
international tourists grew by 4.7% or
51 million more than in 2013, to reach
a new record total of 1,139 million.
This was the fifth consecutive year of
growth since the global economic crisis
of 2009, reflective of the sector´s strong
and consistent performance in spite of
the global challenges faced in 2014.
Long term Outlook for Global
Tourism
 International tourist arrivals
worldwide are expected to increase
by 3.3% a year from 2010 to 2030
to reach 1.8 billion by 2030,
 Between 2010 and 2030, arrivals
in emerging destinations (+4.4%
a year) are expected to increase at
twice the rate of those in advanced
economies (+2.2% a year)
 The market share of emerging
economies are expected to reach
57% by 2030, equivalent to over
1 billion international tourist
arrivals
Notably, all key source markets showed
an improvement, with arrivals from
Western Europe and North America
recording steady YoY growth of
13.8% and 10.7% respectively as at
31st December 2014. Meanwhile,
the Middle-East market experienced
a dip, following the civil unrest on
the southern coast in mid-2014, but
nevertheless, arrivals from the region
did pick up in the latter part of the year,
leading to a 10.5% growth.
Arrivals from Eastern European
markets remained strong in the first six
months of the year, but were severely
affected during the 2nd half of the
year on account of the political and
economic downturn in Russia and
Ukraine which have been key source
markets in the recent past.
In contrast, East Asia demonstrated the
largest growth percentage, recording
a 53.2% growth in arrivals for 2014.
Notably, China was the largest
contributor to this equation, with
the number of arrivals registering a
remarkable 136% YoY growth owing
to the increase in government to
government ties and improved air links
between the countries. Arrivals from
South Asia also increased by 13.4% for
the year. For the second consecutive
year, the largest number of visitors to
Sri Lanka were from India.
Room occupancy rates in graded hotel
establishments approved by the Sri
Lanka Tourism Development Authority
(SLTDA) increased to 74.3% in 2014,
Sri Lanka Tourism update
The country surpassed the 1.5 million
tourist arrival target for 2014, with
1,527,153 arrivals recorded for the
calendar year. The 19.8% growth over
the previous was on top of the 26.7%
growth achieved in 2013.
Despite the deceleration last year, Sri
Lanka’s tourism sector growth for 2014
is well above the global and regional
growth statistics released by the
UNWTO for 2014.
Source: UNWTO, 2014

Pursuing Excellence
31
All group properties were able to sustain
satisfactory occupancy levels throughout the
year, despite a number of low-occupancy
pockets in the first and final quarters of the year.
The group’s annual average occupancy rate
stood at 78%, up by 2pp from the 76% average
registered in the previous year.
up slightly from 71.7% in the previous
year. Meanwhile, earnings from tourism
surpassed the US Dollars two billion
mark to reach Rs 2.4 billion by the
end of the year, registering an annual
growth of 41.7 % for 2014.
Our Performance
Financial Review
The Serendib Hotels Group revenue
grew by 23% to Rs. 1.58 Bn. during the
year, assisted by an increase in available
room inventory at Club Hotel Dolphin,
Hotel Sigiriya and higher yields in
some market segments. The loss in

SERENDIB HOTELS PLC
32
arrivals from Russia and Ukraine was
further compounded by a significant
depreciation of the Euro by over 20%
during the peak tourist season. Group
operating profit stood at Rs 386 Mn,
recording a growth of 79% over the
previous year.
Group finance costs declined due to
loan repayments and lower interest
rates, while lower market interest rates
together with the utilization of excess
funds to prepay the loans resulted in a
sharp decline in finance income during
the year.
The Group recorded an exchange loss
of Rs. 52 Mn due to the fall in value
Source Markets to Sri Lanka
2014
Western Europe
North America
Eastern Europe
Middle East
33%
5%
10%6%
18%
24%
4%
East Asia
South Asia
Australia
of Forex assets. The Group’s share in
its associate company, JADA Resort
& Spa (Pvt) Ltd and its subsidiaries
declined from last year mainly due to
non-capitalized expenses of the hotel
under construction being accounted for.
Nevertheless its hotel operations grew
despite market challenges.
Accordingly, Group Profit before Tax of
Rs. 329 Mn was a 39% growth over the
previous year.
Having reviewed the movement in
the ForEx markets and strategic
investments for the next year, Dolphin
Hotels PLC prepaid a project loan using
surplus funds. As disclosed in last year’s
AMERICA
+7%
EUROPE
+2%
AFRICA
+2%
EUROPE
+7%
WORLD
International Tourist Arrivals 2014
+5%
EUROPE
+2%
Management Discussion and Analysis
Source: UNWTO, 2014
Source: SLTDA, 2014

Pursuing Excellence
33
report, the Group implemented Hedge
Accounting to mitigate the exchange
rate risk arising due to fluctuations
between currencies. Accordingly,
an exchange gain of Rs. 58 Mn was
transferred to the Hedge Reserve as a
result of the prepayment of the loan.
This amount will be written back to
the Income Statement over a period of
seven years starting from December
2015 as per Sri Lanka Accounting
Standards.
The Group improved its gearing from
47% to 20% as of the year end.
Occupancy
All group properties were able to
sustain satisfactory occupancy levels
throughout the year, despite a number
of low-occupancy pockets in the first
and final quarters of the year. The
group’s annual average occupancy rate
stood at 78%, up by 2pp from the 76%
average registered in the previous year.
Notably, average occupancy levels at the
AVANI Bentota and AVANI Kalutara
stood at 69% and 70% respectively
for the 2014/15 period in the face of
strong regional competition. This was
also the first full year of operation for
Hotel Sigiriya and Club Hotel Dolphin,
following an extensive year-long
refurbishment, which led to an increase
in the available room inventory at both
properties. For the year under review,
the annual average occupancy at Hotel
Sigiriya stood at 74%, while Club
Hotel Dolphin registered 84% average
occupancy for the same period.
Bookings from traditional source
markets in Western Europe, including
Germany, remained intact throughout
the year, except for a slight decline
in January 2015, following the Euro
currency depreciation against the US
Dollar. Encouragingly though, the
German market recovered quickly
with all group properties registering a
significant increase in bookings from
Germany in the months of February
and March 2015.
In contrast, the Russian and Eastern
European markets failed to make any
significant contributions to the group
occupancy levels for 2014/15. Hit by
the wave of political turmoil in Ukraine
alongside the crash of the Russian
Ruble, forward bookings from the
region dropped sharply ahead of the
peak winter season.
Middle-East markets continued to
demonstrate positive growth for the
most part, but fell short of expectations
in the wake of the civil unrest that
erupted in Aluthgama and Beruwela.
This mainly affected our coastal
properties which experienced a slow-
down in Middle-East bookings during
the months of June and July. This also
coincided with what is considered to
be the off-peak season for the coastal
properties. However, to help boost
occupancy levels and tide over the
slow period, a series of promotional
discounts were offered to stimulate local
travel and MICE markets.
Marketing
A notable increase was observed in the
volume of online bookings during the
year, particularly from new emerging
markets in East Asia. Interestingly,
among all group properties, Hotel
Sigiriya experienced the largest online
booking volume for the 2014/15 period.
The group stepped up measures to
further develop the online market,
vis-à-vis improvements to the web-
based monitoring and online feedback
mechanism.
Conventional business channels
continued to bring in bookings from
traditional markets, with international
travel promoters being the most
significant source of volumes.
Apr 01
2014
May 01
2014
Jun 01
2014
Jul 01
2014
Aug 01
2014
Sep 01
2014
Oct 01
2014
Nov 01
2014
Dec 01
2014
Jan 01
2015
Feb 01
2015
Mar 01
2015
USD/EUR:LKR
EUR:USD
Currency Coversion Rates
120
140
160
180
200
USD:LKR
EUR:LKR
0.9
1.0
1.1
1.2
1.3
1.4
1.5
EUR:USD
2011 2012 2013 2014 2015
Occupancy
0
20
40
60
80
100
Group
Hotel

SERENDIB HOTELS PLC
34
2011 2012 2013 2014 2015
Equity / Debt
0
600
1200
1800
2400
3000
Equity
Debt
Gearing
0
20
40
60
80
100
2011 2012 2013 2014 2015
Gross Operating Profit /
Cash Generated from Operations
0
200
400
600
800
1000
Gross Operating Profit
Cash Generated From Operations
In recognition of the shifts now
underway in global tourism, the Group
initiated an integrated marketing
campaign to tap into the lucrative
Middle-East and Far-East Asian
travel markets. Spearheaded by a
series of road shows, the itinerary
was a collective effort to showcase
the versatility of the Serendib
Leisure portfolio in catering to both
mainstream and niche travel markets.
The promotional campaign also sought
to develop key stakeholder partnerships
in these regions to help the group
establish a firmer foothold in these
markets.
Operational Improvements
The group operational focus for the
year was underpinned by the pursuit
of excellence, which was deployed
across the group under three themes,
namely; Food and Beverage (F & B),
service excellence and human capital
development. The entire process was
aimed at accentuating the uniqueness
of each property, while enhancing the
overall standards at each hotel.
Key deployments on F & B saw a
number of innovative changes being
introduced at all properties, including
a wider range of dining options, new
restaurants, revamped menu selections
and themed nights, among others.
Meanwhile, efforts to further refine
service standards at all Serendib
Hotels properties were aimed at
raising the bar for skilled hospitality
services among graded hotels in Sri
Lanka. The measures taken to develop
human capital also stem from the goal
of achieving service excellence. As
part of the initiatives for the year, the
group apprenticeship programme was
expanded by increasing the intake of
trainees at all properties. The possibility
of tying up with an internationally
accredited hospitality training school
was also looked into.
In addition, more focused, needs-
based efforts were initiated to address
possible service gaps at each property.
Selected members of the AVANI team
were provided with overseas training
opportunities, arranged in collaboration
with the groups’ overseas partners,
Minor Hotels in Thailand. Meanwhile,
cross functional teams were deployed
to allow Hotel Sigiriya and Club Hotel
Dolphin employees to gain a broader
perspective of the hospitality business,
especially during the refurbishment
period.
Awards and Accolades
The properties belonging the Group
received recognition from multiple
sources during the year:
AVANI Bentota – World Luxury Hotel
Awards 2014 - winner Luxury Beach
Resort - Indian Ocean. Winners are
adjudged annually, and is based purely
on service excellence and effective
management. Awardees are decided on
the votes received by international tour
operators and hotel guests.
Management Discussion and Analysis
2011 2012 2013 2014 2015
Revenue /
Profit Before Tax
0
400
800
1200
1600
2000
Revenue
Profit Before Tax

Pursuing Excellence
35
AVANI Kalutara - Booking.com 2014
Award of Excellence, TripAdvisor
Certificate of Excellence - 2014, Switch
Asia Green Award - Merit Award
2014.
Hotel Sigiriya – TripAdvisor Certificate
of Excellence Hall of Fame 2015, Hall
of fame inductees are those that have
secured the “Certificate of Excellence
Award” for five consecutive years.
Club Hotel Dolphin – TripAdvisor
Travellers’ Choice Award 2015, the hotel
is ranked among the top 25 hotels in Sri
Lanka
HolidayCheck Award 2015, awarded in
recognition of the “Beach Holidays” and
“Pool Paradises” categories.
Tripadvisor Certificate of Excellence
Hall of Fame 2015.

SERENDIB HOTELS PLC
36
First class, customized
services for a truly
exceptional stay
Guest Service
Guests are made to feel welcome
from the moment they step in to
any Serendib Group Hotel. Sri
Lankan hospitality and warm smiles
set the scene for an extraordinary
hotel experience with unrivalled
personalized services. From day-to-
day necessities to attentively tailored
services, each hotel in the chain
prides itself on providing guests
with everything they need for a truly
perfect stay.
Personalised service
With skillful, attentive staff and a
range of services tailored to your
needs, every moment is a pleasure.
To ensure that we maintain our
exceptional standards throughout the
range of hotels, our hotel managers
on call 24/7 providing easy access to
our guests in case of need, ensuring
that we live up to our brand promise.
Hotel Facilities
• Spa
• Gymnasium
• Watersports Centre
• Kids Club
• Housekeeping at your convenience
• Dry Cleaning and Laundry Service
• Luggage Storage at lobby level for
easy access
• Business Centre facilities
• Parking with 24 hour valet service
Bell Services
• In-room dining for your
convenience
• Concierge service
Amenities for convenience
A range of luxury amenities to satisfy
even the highest of expectations.

Pursuing Excellence
37
Food & Beverage Standards
World-class food and beverage is the hallmark of every Serendib Hotels Group
property and is exemplified by distinguished dining establishments. From fine
dining to family favourites, trust our chefs to bring you only the best.
Guests are invited to discover something delicious every single day, at our
themed buffet specials or splendidly prepared À la carte dishes.
Dining Experiences
• In-Room Dining
• Fine Dining
• Seafood Market
• Beach BBQ
• Chef’s Dining
In-Room Dining
Our In-room dining service offers
the privacy and comfort of dining
in your own room for a special
occasion or simply because the
idea appeals to the romantic in
you!

SERENDIB HOTELS PLC
38
Fine Dining
Break with tradition and try out
fine dining at one of the exotic
locations we offer. It will surely be
an unforgettable experience you will
encounter in Sri Lanka. The aroma of
a gourmet meal, impeccable service
and the taste of a perfectly prepared
cocktail are the ingredients for a
magical evening.
Seafood Market
Our Seafood market offers guests a
fine selection of fresh seafood each
day. Guests are invited to select their
favourite seafood for the evening and
then it’s over to our chef to prepare
every dish to perfection.
Beach BBQ
The idea of beach BBQs never fail to
surprise and delight our guests. Our
in-house BBQ experts get our guests
in the mood with sizzling meats and
delectable accompaniments.
Chef’s Dining
Ever wondered where all this
gourmet cuisine is whipped into
shape? Or imagined what the inside
of a hotel kitchen looks like? Guests
are invited to find out at the Chef’s
Dining special, roll up their sleeves
and get ready for some serious eating
when our chefs make a personal
presentation of their masterpieces.
Food & Beverage Standards

Pursuing Excellence
39
Human Capital
Great guest experiences begin
with team members who
feel appreciated, valued and
respected. That’s what you
can expect at every hotel in
our chain. We have created a
culture of excellence, continuous
improvement and innovation that
helps team members reach their
full potential.
There are more than 850 team
members in the Serendib Hotels
Group. We work hard to attract
and select the right talent. Our
goal is to hire people who share
our passion for hospitality and
want to further their careers while
remaining committed to our
Vision, Mission and Values.
Career Development
The Serendib Hotels Group believes that it is critical that our leaders
and team members have the necessary knowledge and skills to do their
jobs effectively and have the ability to grow and develop personally and
professionally. Our training programs encompass a mix of classroom
learning, on the job and overseas assignments tailored to bring out the
best in our team to deliver superior guest service.

SERENDIB HOTELS PLC
40
We take pride in our heritage and inimitable Sri Lankan values. Our legendary
hospitality draws inspiration from centuries old traditions to invoke a mesmerizing
sense of well-being among our guests
Experience
the warmth
of authentic
Sri Lankan
hospitality

SERENDIB HOTELS PLC
42
Hotel Management
Standing - from left:
Hasantha Sooriyaarachchi – HR Manager, Indika De Silva - Maintenance Engineer, Pradeep Krishantha - Executive Chef,
Jayamith Wickramasinghe - Executive Housekeeper, Sahan Moratuwage – F & B Manager
Seated - from left:
Tissa De Zoysa – Community Development & Sales Promotion Manager, Kumara Adikari – Front Office Manager, Thomas Barguil – General Manager,
Sarath Samarasinghe – Financial Controller
M. Srilal J. Fernando - Chief Engineer, Don Chandika Jayakody - Training Manager, W. A. I. Sampath De Silva - Front Office Manager,
W. M. B. Chitra Fernando - Manager Internal Audit, Fathi Boughanmi - Chief Animator, J. K. Niroshan Jayakody - Food & Beverage Manager
Seated - from left:
A. D. G. Athula Jayawardena - Human Resources Manager, T. M. Saman Kumara - Financial Controller, Daniel Ludwig - General Manager,
T.D. Prasanna S. De Alwis - Resident Manager

Pursuing Excellence
43
Jayantha Gunawardena - Assistant Front Office Manager, Namal Padmakantha - F & B Manager, Andrew Bartholomeusz - T & D Manager,
Sunil Wikramage - Chief Engineer, Suranga Wewegedara - HR Manager
Seated - from left:
Pradeep Paranamanna - Executive Chef, Jude Silva - Resident Manager, Chrisanthus Cooray - Finance Controller, Eric Fernando - Executive Housekeeper
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

SERENDIB HOTELS PLC
44
Sustainability Report
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 Leisure Group
Sustainability Policy
Statement
All properties under the Serendib
Leisure 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 all properties under
Serendib Leisure PLC. 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.
Reduce, Reuse,
Recycle
Energy Reduction
Core PrinciplesKey initiatives Focus Areas
Strategic
Imperatives
Water
Conservation
Waste Control
Bio-diversity
preservation
Reduce the use of
plastic by 5% year-
on-year
Reduce water
consumption by 5%
Reduce electricity
consumption by 5%
annually electricity
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 by
10% annually
Invest in protecting
coastal properties
and marine life
Increase employee awareness
Encourageguestparticipation
Promotecommunityinvolvement

Pursuing Excellence
45
Highlights for 2014
Indicator
Hotel Sigiriya AVANI Bentota AVANI Kalutara Club Hotel Dolphin
2013/14 2014/15 2013/14 2014/15 2013/14 2014/15 2013/14 2014/15
Direct energy consumption
(kwh). **
531,570 553,606 683,610 1,500,490 807,121 2,179,435 953,271 2,809,546
Energy saved due to
conservation (kwh)
869 2100 275 1,937 371,262 167,259 258,128 2,428
Investment to introduce
energy efficient systems (Rs)
395,000 355,500 52,000 135,470 208,209 71,435 - 647,500
Water withdrawal
(Units or ltr )**
18,000 31,482 17,916 35,020 27,856 38,579 32,241 83,614
Water recycled and reused
(Ltr)
14,000 27,386 - - 2,160 6,955 22,788 36,983
Waste generate (MT) 7.50 v6.60 4.1 63.0 1.97 3.17 0.4 19.2
Liquid waste (ltr) 2,160 4,240 2,350 5,360 340 1,150 1,114 11,099
% of liquid waste treated (ltr) 14 260 1 4
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.
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.
Employee awareness programmes Community involvement Guest participation initiatives

SERENDIB HOTELS PLC
46
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, for
our part, 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, deployed at every
property across all hotels in the
Serendib Leisure Group. It is how
we have succeeded in moulding our
workforce to overcome the day-
to-day challenges encountered in
the hospitality industry. It 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:
Travellife Gold certificate recipients - Serendib Leisure Group
Remuneration and benefits
All Serendib Hotels Group employees
are entitled to 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 also provide all employees with on-
location accommodation facilities
Health and Safety of Employees
All our properties have adopted fire
safety standards which require them
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
Our philosophy:
To hire and retain talented people
who embody the Serendib Leisure
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.
Recruitment and Retention
As an equal opportunity employer, the
group does not discriminate against any
status protected by law. This is strictly
applied both in the case of new recruits
as well in consideration of internal
promotions.
Our aim is to cultivate 80% of our
management team from within the
group and in doing so all employees
are subject to an annual performance
evaluation to assess their readiness to
take on bigger 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 recruitments will be hired purely
on their ability to perform the tasks
assigned to them in accordance with
the Serendib Leisure employee code of
conduct. As part of the group’s strategic
social development initiatives 61% of
the workforce at each property are hired
from the local area.

Pursuing Excellence
47
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.)
AVANI
Bentota
188 169 19 68 99 21 45 5 43
AVANI
Kalutara
203 188 15 80 111 12 31 9 29
Hotel
Sigiriya
128 120 8 66 56 6 31 8 20
Club
Hotel
Dolphin
294 273 21 101 178 15 66 9 84
of experiential growth process,
rather than as a part of the enforced
protocol. As such, all learning activities
ultimately focus on improving the guest
experience.
Ongoing investments in a multi-
layered training agenda has ensured
the creation of a dynamic learning
culture at all our properties. Moreover,
it has helped instil our inimitable value
culture as part of the common work
ethic.
However, 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.
State of the art staff accommodation
German Food Training – A training
program for Chefs of all Serendib
Leisure Hotels, which was conducted
in-house by experienced Chefs.
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
training 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 – A Training on
Champagne & Cognac Training for F&B
Staff
Best Cuppa Tea Brewing Training – A
training programme on how to Brew
the ideal cup of tea conducted by Sri
Lanka Tea Board
Microsoft Excel-Intermediate Level – A
Basic training 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.

SERENDIB HOTELS PLC
48
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 training programme conducted for
all pool attendants on life saving by the
Lifeguard Association of Sri Lanka
Our Training
KPI's
Hotel Sigiriya
Investment on training:
Rs. 7778,199/-
Training hours:2,236
Hotel Club Dolphin
Investment on training:
Rs. 2,040,806/-
Training hours: 5,576
AVANI Bentota
Investment on training
Rs. 2,147,707/-
AVANI Kalutara
Investment on training
Rs. 1,722,203/-
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. All properties under
the group remain aligned to the
internationally accredited best practices
set out under the HACCP food safety
management guidelines.
Further we have also initiated a
“Group Mystery Audit” as the basis of
ensuring that all on-location products
and services meet with specific safety
parameters spelt out as per the group
operational mandate. As part of the
learning drive, we conducted “Chemical
Training” – A training 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
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 each 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
Serendib Leisure Awards -
Pinnacle Award Winner

Pursuing Excellence
49
and growers who have adopted ethically
responsible farming and growing
practices. Most of our fresh fruits,
vegetables and seafood is procured in
this manner. 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
Local sourcing:
AVANI Bentota - 26%
AVANI Kalutara - 40%
Hotel Sigiriya - 17%
Hotel Club Dolphin - 74%
Community Service
We have always been mindful of our
impact on the communities in and
around our properties. As such we have
always tried 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.
Key Initiatives for 2014/15;
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 helps local families in the
village of Diyakepilla, providing the
community with an additional source
of income
Ongoing “Vishwa Wahara” English
classes conducted for the youth
community in Bentota and Kalutara
Staff Family Day AVANI Bentota
Resort & Spa
Staff Family Day Club Hotel Dolphin Avurudu Celebrations Serendib Leisure
Management

SERENDIB HOTELS PLC
50
Serendib Hotel 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
Serendib Hotel 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 achieved 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
Monitor&Review
COMMUNICATIONANDCONSULTATION
ISO 31000 Risk Management Framework.

Pursuing Excellence
51
Risk Risk exposure Mitigating actions
Market Adverse impact on yields and
occupancies
Fluctuation 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
Interest Rate
Risk
Rising interest rates will
increase borrowing cost
• Borrowings in foreign currency to enjoy lower rates compared to
locally sourced borrowings.
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. 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.

SERENDIB HOTELS PLC
52
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, Serendib Hotel 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
53
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 also
held when necessary.
Apart from taking decisions at Meetings, the Board also takes decisions via Circular
Resolutions. These resolutions are required to be 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.
• Promotion of 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 when necessary at the expense of the Company.
Corporate Governance
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 Corporate
Governance
Serendib Hotels 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 Serendib’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
the Institute of Chartered Accountants
of Sri Lanka:-

SERENDIB HOTELS PLC
54
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. D T R De Silva Managing Director 4/4
Deshamanya J C L
De Mel
Independent Director 4/4
Mr. W M De F
Arsakularatne
Non-Executive Director 4/4
Prof. L D K B Gamage Independent Director 4/4
Mr. E J D Rajakarier Non-Executive Director 1/4
Mr. M A Jafferjee Independent Director 4/4
Dr. R N A Athukorala Independent Director 4/4
Mr. S M Enderby Non-Executive Director 4/4
Mr. E J D Rajakarier, CEO of Minor Hotel Group has been able to attend only one
Board Meeting during the financial year. However, his observations on the Discussion
Papers are sent to the Chairman prior to the Board Meetings in order that his
views may be discussed and recorded. He has also had several discussion with the
Chairman and Managing Director on matters of the Company which require Board
guidance during his visits to Sri Lanka.
The Board has delegated some of its functions to its Sub-Committees, while
retaining the rights for final decision 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, Managing Agents 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.

Pursuing Excellence
55
Corporate
SEC & ICASL
Code Reference
Level of Compliance
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 hotels and meetings with the Managing Director
and the Senior Management Team.
In addition, the Directors are also encouraged to participate in continuous
professional and self-development activities.
Chairman and Managing Director
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Separation of the role
of Chairman & MD
A.2.1. The role of the Chairman and Managing Director is distinct, ensuring the balance of
power and authority within the organization.
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 except the Managing Director are Non-Executive Directors.
Independent
Directors
A.5.2
A.5.3
Four out of the eight 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.

SERENDIB HOTELS PLC
56
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Determination of
independence
A.5.5 The Board annually determines the independence of each Non-Executive Director
based on the Declarations submitted by them.
The Board believes that the independence of Deshamanya J C L De Mel is not
compromised by him serving on the Board continually for a period exceeding nine
years from the date of his first appointment.
Therefore, the following Directors are considered Independent in terms of the Listing
Rules.
Deshamanya J C L De Mel
Prof. L D K B Gamage
Mr. M A Jafferjee
Dr. R N A Athukorala
Alternate Directors A.5.6 The Alternate Directors appointed by the Non-Executive Directors are not Executives
of the Company.
The Independent Directors have not appointed Alternate Directors
Senior Independent
Director
A.5.7
A.5.8
A Senior Independent Director has not been appointed since the Chairman and the
Managing Director are not the same person.
Chairman’s meetings
with NEDs
A.5.9 Chairman meets with the NEDs, with the Executive Director not being present,
whenever necessary.
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.
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 Meetings and connected discussion papers are circulated
to the Directors at least seven days in advance to facilitate the effective conduct of the
Meeting.

Pursuing Excellence
57
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 recommendation
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 it 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 a brief resume of the Director which includes;
(a) the nature of his experience in the 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 Annual General Meeting commencing next 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.
Appraisal of Board Performance
Corporate
SEC & ICASL
Code Reference
Level of Compliance
Appraisal of the
Board and Sub-
committees
A.9.1 The Board undertakes an annual evaluation of its own performance and its
Committees in the discharge of its key responsibilities. .

Serendib Hotel AR 2014-15

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