Archive | June, 2010

Aitken Spence Amongst the World’s Firsts to Sign Up to the UN’s Women’s Empowerment Principles

22 Jun

Aitken Spence PLC is among the first 38 leading companies worldwide who have signed up to the United Nations’ Women’s Empowerment Principles, comprising of actions that advance and empower women in the workplace, marketplace and community, and communicate progress. The diversified conglomerate is the only publicly-listed company in Sri Lanka to sign up to the Women’s Empowerment Principles.

The Women’s Empowerment Principles—Equality Means Business, an initiative by The United Nations Development Fund for Women (UNIFEM) and the United Nations Global Compact were launched at the UN on 8 March 2010.

“Aitken Spence has embraced the Women’s Empowerment Principles, in an effort to strengthen our commitment towards internationally proclaimed human rights. We believe that concerted action on these principles would help businesses perform better by facilitating the development of a stronger human resource. We commend UNIFEM and the UN Global Compact for spearheading this initiative”, said Mr. J M S Brito, Deputy Chairman/Managing Director, Aitken Spence PLC.

“Growth of the employee and the organization are intertwined in our human resources strategy. We believe that the Women’s Empowerment Principles provide a robust global framework for companies to nurture a fair and productive work culture that would drive business results”, said Mr.  Rohan Pandithakorralage, Head of HR, Aitken Spence PLC.

The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. Aitken Spence PLC became a signatory to the Global Compact in 2002 and is a member of the Steering Committee of the Local Network.

UNIFEM provides financial and technical assistance to innovative programmes and strategies to foster women’s empowerment and gender equality.

The Principles offer a practical approach to advance women and point the way to a business and social environment that is both fairer and more prosperous for everyone.

The Women’s Empowerment Principles
1. Establish high-level corporate leadership for gender equality.
2. Treat all women and men fairly at work – respect and support human rights and nondiscrimination.
3. Ensure the health, safety and well-being of all women and men workers.
4. Promote education, training and professional development for women.
5. Implement enterprise development, supply chain and marketing practices that empower women.
6. Promote equality through community initiatives and advocacy.
7. Measure and publicly report on progress to achieve gender equality.

Media Release – 21 June 2010

Aitken Spence Travels TTSC Bowling Champs

18 Jun

Aitken Spence Travels retained the Travel Trade Sports Club Bowling Championship 2010 for a second consecutive year at the 9th tournament sponsored by Coca Cola which took place at Strikes Cosmic Bowling Centre, Excel World.

A record number of 40 teams took part this year.

Aitken Spence Travel A Team won the Championship scoring 500 points (Tournament best scores). The team consisted of Naleen Fernando scoring 169 Points, Lalin Sumanasinghe 172 Points  and Sajeewa Kalambaarachchige who scored 159 Points.

For more info, click:

Awards – 18 June 2010

Aitken Spence Bags Both Top Travel Awards Again and Enters the Hall Of Fame

16 Jun


Aitken Spence Travels and its subsidiary Ace Travel & Conventions won the two most important awards given for travel companies as the Best Destination Management Company and the Best Conference Organiser respectively for the third consecutive year at the Presidential Awards for Travel & Tourism held at the Bandaranaike Memorial International Conference Hall on 15th June 2010.

By winning these two prestigious awards every year since the award scheme was introduced, the two companies have become the first two travel companies to enter the exclusive Hall of Fame.

Aitken Spence Travels continues to demonstrate its leading positing in the industry consistently despite challenging circumstances. With the return of peace to the country, the company is well poised to expand its operations and take Sri Lanka to its rightful position in international tourism. As the largest inbound tour operator in Sri Lanka, it has continued to innovate and is the cynosure in the travel industry. The company will be upgrading its vehicle fleet to maintain international standards. The first five luxury coaches in the first stage of the investment have arrived in Sri Lanka this week and will become operational shortly.

Aitken Spence Travels was the first travel company in Sri Lanka to invest in a fully-automated tour operating system and the first to obtain ISO 9001 and Green Globe certifications 10 years ago. It was also the first travel company in Sri Lanka to receive PATA Gold awards.

Commenting on the accolades received, Mr. Gehan M. Perera, Managing Director of Aitken Spence Travels and Ace Travels & Conventions and Director of Aitken Spence PLC attributes the phenomenal achievement to the exceptional team at Aitken Spence who continue to rise above themselves and out-perform the market consistently.

“Such achievements are only possible if we continue to work as a well-knit team, to offer outstanding value and service to our customers and principals. We will continue to be customer obsessed in all our endeavours”.

“We are indeed grateful to all our hotel partners and suppliers in Sri Lanka as well as all our overseas tour operators who have supported us throughout our long journey. Whilst acknowledging this honour with humility, we will re-dedicate ourselves to support our partners even more and exceed our customers’ expectations, whilst expanding our operations in the exciting times ahead of us with the dawn of peace and stability in our country”.

With over three decades of experience, Aitken Spence Travels is one of Asia’s foremost destination management companies. It is a joint venture between of Aitken Spence PLC, the Sri Lanka-based diversified conglomerate and TUI Travel Plc, the world’s largest integrated tourism organisation.

Media Release – 16 June 2010

Heritance Kandalama is the Best Five Star Resort for the Third Successive Year and Joins the Hall of Fame

16 Jun

Presidential Awards for Travel & Tourism

Heritance Kandalama, Sri Lanka’s most awarded hotel, was rated as the Best 5-Star Resort in the island for the third consecutive year and was welcomed to the prestigious the Hall of Fame, at the Presidential Awards for Travel and Tourism, held on the 15th of June at the BMICH in Colombo.

The objective of this prestigious awards ceremony is to recognize and reward excellence among industry stakeholders of past and present and to encourage and ensure an even greater contribution in the future. The awards criterion is designed to motivate industry stakeholders to work towards the primary goal of sustainable development of the tourism industry.

Heritance Kandalama was adjudged the winner of the 5-star resort category by a distinguished panel of judges based on comprehensive evaluation criteria comprising revenue generation, innovation, social, cultural, environmental and economic best practices, as well as its contribution as a role model for tourism excellence.

“The ability to provide the world’s finest guest experiences is made tangible by the accolades won by Heritance Kandalama. The awards won by the hotel are a testament of our commitment to our guests and the environment in which we operate in. At Heritance Kandalama award-winning service is more than a goal, it is an expectation and has become part of our culture which we are all very proud of”, said Mr. B H R Sariffo’deen, Assistant Vice President, Aitken Spence Hotels.
“We are delighted that Heritance Kandalama has for the third consecutive year been recognized by the Presidential Awards for Travel and Tourism. It is a great honour to have been awarded a place in the hall of fame, which attests to our goal of striving continuously to ensure that the guest experience at our hotel is unparalleled globally. Being recognised as the country’s best is a humbling feat, which has invigorated our commitment of delivering exceptional experiences to our guests”, said Mr. Jeevaka Weerakone, General Manager, Heritance Kandalama.
Heritance Kandalama is positioned regally by the placid waters of the Kandalama tank; it surveys the rich wildlife that visits its precincts. Located amidst verdant jungle, calm waters and rocky mountains, it offers a holiday where one can wake up to bird calls, stunning vistas, profuse foliage and absolute luxury. Heritance Kandalama is flanked by two UNESCO world heritage sites-the 1st century BC Dambulla rock temple and the 5th century AD Sigiriya rock fortress while it also has its share of unrivalled international recognition.

“Winning this award for the third consecutive year is another endorsement of our commitment towards maintaining a high standard of service at our hotels. We will continuously yearn to position Sri Lanka as a world-class tourist destination” said Mr. Malin Hapugoda, Managing Director, Aitken Spence Hotels.

The company’s premier resorts operate under Heritance Hotels & Resorts. Its latest Heritance property in India will be Heritance Cochin, opening in 2011. It will join award-winning Hertitance Hotels & Resorts portfolio consisting of Heritance Kandalama, Heritance Ahungalla and Heritance Tea Factory.

Media Release – 16 June 10

Chairman’s Review: D H S Jayawardena

15 Jun

It is with a sense of pride and satisfaction that I present to you the Annual Report and Statement of Accounts of your Company for a year which heralded the dawn of a terrorism free era in Sri Lanka and in which Aitken Spence has recorded an outstanding performance despite the continued fallout of the global recession. Aitken Spence consolidated its bases both in Sri Lanka and overseas during the year, in readiness for an expansion drive over the next few years. Having focused on overseas growth in the recent past, we feel the time is opportune to shift our focus to Sri Lanka where a terrorism-free landscape offers countless opportunities. The experiences we gathered from our overseas markets – the Maldives, Bangladesh, South Africa, Oman and India – has expanded the Group’s management capabilities and its ability to cope with diverse situations. The proficiency and expertise we have acquired therein can now be employed to reap similar success in Sri Lanka. The Colombo-based employees are now housed at the new building on Vauxhall Street, which has enabled the Group to bring together many of its previously scattered offices in and around Colombo, enabling greater efficiencies and better interaction.

Economic Review

As the world emerges from a recession that has seen extraordinary policy intervention from governments across the world, the post crisis economic landscape will become clearer in the coming year. Already an increasing number of countries have registered positive GDP growth in late 2009, along with a recovery in international trade and global industrial production. Despite facing widespread domestic and global challenges, Sri Lanka recorded a growth of 3.5% in 2009, with the economy making a very commendable recovery in the second half. Buoyant investor confidence consequent to the end of the conflict in May 2009, together with several policy measures, boosted the economy and resulted in an unprecedented balance of payments surplus of USD 2.7 billion and foreign exchange reserves of USD 5.1 billion at the year end. Inflation declined significantly from the unwieldy double digit rates of 2008 to close the year at 4.8%, as lower commodity prices and tighter monetary policy measures contributed to facilitate an annual average inflation of 3.4%, the lowest levels in twenty four years. The Central Bank has forecast a 6.5% expansion of the economy for this year.

Corporate Performance

Despite the economic downturn worldwide and a year full of challenges faced by the country, I am proud of your Company’s performance which recorded the highest ever profit attributable to shareholders amounting to Rs. 2,077 million.

This year’s growth was driven mainly by the maritime transport, integrated logistics, printing and tourism segments. Although our Sri Lankan resorts made losses during the first half of the year, due to the escalation of the war during the final battle to liberate the country, the positive returns in the second half negated these adverse effects. Our hotels in the Maldives fared marginally better than last year, which is still an impressive performance, even though global conditions continued to impact the market. The money transfer businesses recorded reduced profitability, while losses arose in the airline GSA business, where reduced flights and reduced airfares combined with the oppressive conditions of the industry worldwide.

Shareholder Returns

The Board of Directors recommend a final dividend of Rs. 6.50 while an interim dividend of Rs. 3.50 was paid in May 2010. In total, this will amount to a dividend of Rs. 10.00 per share. The performance of the Aitken Spence share has been outstanding – it closed the year at a market value of Rs. 1,373.75 per share, compared to a value of Rs. 315.00 per share a year ago. You would be happy to note that the current price is a much closer reflection of the true value of your investment.

It is significant to note that your Company has followed a strategy of self-sustaining its investments without resorting to further raising of capital from the shareholder community. The Company has over the past fifteen years pursued a policy of funding its expansion through internally generated funds and through debt financing. Aitken Spence Hotel Holdings PLC., the investing company of our Hotels and Resorts segment which is earmarked to lead the Group’s growth over the next few years, has approached its shareholders to raise Rs. 2.5 billion through a right issue which was successfully concluded recently.

Future Outlook

His Excellency the President Mahinda Rajapaksa and his government have both garnered resounding mandates at the recently concluded presidential and parliamentary elections. This is no doubt an endorsement of the government’s successful campaign to wipe out terrorism and end the thirty year conflict in the North and East. I congratulate the President and his government on their magnificent achievement and I am confident that their vision of making Sri Lanka the ‘new miracle of Asia’ can be realised through the proposed strategies, timely action and the creation of an enabling environment. Our Company will actively participate in the development strategies outlined by the government to bring prosperity and success to the country as well as the Company. Foreign investments will be essential to meet the country’s ambitious growth targets over the next few years as Sri Lankan enterprises on their own do not have the required ability and capacity to absorb the scale of earmarked projects. Over the past year, we have witnessed a significant increase in foreign investor interest both in Aitken Spence and Sri Lanka as a whole. This interest must be converted into investment through selective incentives, particularly for the tourism sector, to enable the country to reap the benefits of such interest. It is important to note that enabling rules and regulations and many incentives do currently exist, but their implementation involves many bureaucratic obstructions and delays, which could discourage potential investors.

The public sector is a pivotal player in the country’s forward march, and needs to be structured and directed to support the policies of the government and efforts of the private sector. The economic policy needs to be strengthened by addressing areas of concern. One such area is the prevalent taxation policy which is not conducive to an enabling business environment. The current tax regime involves in addition to corporate taxes, a plethora of indirect taxes applicable to various industries. It is hoped that the government will consider the weight of these taxes on the business community and also consider broad-basing the tax net as an alternative method to increase tax revenue. A consistent, clear and concise tax policy would benefit the entire corporate sector while at the same time enabling the government to realise its revenue targets. High duties on imports also have a negative effect on business; it is often counterproductive to levy high duties on imports that the country requires in order to achieve a high economic growth. The newly liberated economies of the North and East offer much potential for development. Resources available in these provinces require to be complemented by the necessary logistics and incentives. The traditional industries of the North and East should be supported through area specific incentives, a tool that has been used by countries such as India, with much success. 2010/11 will see Aitken Spence embark on a new phase in its expansion in Sri Lanka. As I stated last year, the Group remains committed to play its part in the nation building agenda of the government. With this in mind, our expansion plans will encompass the newly liberated areas of North and East.


My fellow Directors on the Board have been a source of great strength, supporting the vision of the Company through their respective expertise. I welcome two new members to the Board – eminent professional Mr. Rajan Asirwatham and Dr. Parakrama Dissanayake, who heads the Group’s maritime business. The management team has driven Aitken Spence to exemplary performances even through the toughest times and it is due to their guidance and strategic foresight that the Group is well positioned today. I thank them on behalf of the Board.

I thank all the members of the Aitken Spence team and take this opportunity to recognise the key role played by its employees, especially over the past two years of considerable challenges. Their commitment and loyalty to the Company and belief in the spirit of Aitken Spence is indeed noteworthy.

My appreciation also to you- our shareholders, who have kept their faith in Aitken Spence. It is your confidence in the Company that has driven it to greater heights.

For more information on the Groups reports and performance, click:

Annual Report – Message from Our Chairman – 15 June 2010

Deputy Chairman/MD Review: J M S Brito

15 Jun

The Group achieved a noteworthy growth during the year 2009/10 despite the many challenges and obstacles placed in its path by both the global and local operating environments, demonstrating the strength and resourcefulness of a resilient organisation which was driven by a clear vision, strategic foresight and a spirit of endurance. The net profit attributable to shareholders increased by 1.8% to Rs. 2.08 billion, although there was a decline in revenue from Rs. 29.3 billion to Rs. 24.4 billion. The reduction in revenue was primarily due to the lower tariff rates applicable to the companies in the power generation segment of the Group. The operating profits for the year declined by 2.0 % to Rs. 4.0 billion while the net profit after tax declined by 2.1 % to Rs. 3.0 billion compared to the previous year.

The share price in your Company as at the year end stood at Rs. 1,373.75 which represents a growth of 336.1%, when compared to the price as at the previous year end, which is a true reflection of the value of the Company. The Total Shareholder Return (TSR) which reflects the total returns received by a shareholder was a positive of 339.3% for the financial year 2009/10.

An indepth analysis of the financial statements is given in the operational and financial reviews. The prolonged downturn of the global economy influenced the Group’s operations during the year, necessitating us to think beyond conventional markets and strategies so as to ensure a continued enhancement of shareholder value. It was heartening to note that many of our businesses – in particular the Cargo Logistics sector – vastly benefited from the diversity of products and services offered within the Group. The prudent and strategic diversification over the years has thus borne fruit, giving the Company the strength to be resilient  during unexpected downturns which could overwhelm corporates that are not geared to meet such situations. With the ending of the three decade long war, Sri Lanka is optimistic of being able to exploit the advantages of a peaceful, stable and unified nation amidst widespread global pessimism. As expected, the dawn of peace led to a resurgence of economic activity across the country, including the North and East, and improved international investor confidence in the ability of Sri Lanka to achieve high economic growth. This improved confidence is clearly evidenced by the fact that Sri Lanka has been listed by several leading global publications as one of the best destinations to visit in 2010.

The dramatic change in the investment climate resulting from the end of the war, coupled with renewed optimism on the future of the country and our conviction of the potential of the tourism industry, merited a shift of focus towards the expansion of the Group’s resort portfolio within Sri Lanka. Having expanded our footprint in the leisure sector across the region and beyond in recent years, the time is now opportune to capitalise on the new opportunities available in Sri Lanka.


With the prospects of a growing Sri Lankan market triggering a shift of emphasis towards strengthening our presence in the country, we have fast tracked the Group’s expansion plans in the tourism sector. As a corporate that has pioneered innovative tourism product offerings in Sri Lanka with ten award winning properties, Aitken Spence is uniquely positioned to reap rich dividends from the expected boom of tourist arrivals to Sri Lanka. In view of these developments, we are optimistic and confident that the Tourism sector will be the key engine of growth for the Group over the next few years.

Emphasising our confidence in the future of the tourism sector, the holding company of the Group’s hotels, Aitken Spence Hotel Holdings PLC., successfully concluded a rights issue to raise equity funding of Rs. 2.5 billion in order to finance some of the high priority expansion projects including those in the North and East. In addition to the projects in Sri Lanka, a small portion of the funds will be utilised for the development of a unique resort with floating villas in Kerala, South India, in a joint venture with an Indian partner. Our Heritance properties as well as most of our other properties in Sri Lanka were refurbished and maintained at optimum levels even when the industry was in the doldrums. The Tea Factory was brought under the Heritance brand during the year following a complete upgrade. As such, Aitken Spence is well prepared and poised to take advantage of the expected increase in tourist arrivals during 2010/11.

Key projects rolled out during the year include the conversion of Neptune Hotel, the Group’s first ever resort property, into a sixty four roomed specialised Ayurveda and wellness resort, due to open in December 2010. The Group acquired the ninety four roomed Ramada Resort, formerly known as Golden Sun Resort, in Kalutara which was managed by us since 1998. This resort will be refurbished and upgraded in the near future so that it can command a higher price for the excellent value it offers to the traveller. We also intend developing the 100 acre beachfront property at Nilaveli as a priority project. We are in the process of evaluating a number of options before deciding on the final development plan at Nilaveli which would be aimed at harnessing the maximum value of this prime property. Also in the pipeline is a hotel in Jaffna where there is presently a dearth of high quality accommodation for both international and domestic travellers.

The tourism industry is vitally important to the economy both as a source of direct and indirect employment for a large number of Sri Lankans and as a valuable foreign exchange generator for the country. Therefore, it is desirable that both the government and the private sector work hand in hand to ensure the sustainable growth of the tourism industry. The increased arrivals can be translated to long term growth only through a well planned and cohesive tourism development strategy. The responsibility for the implementation of this strategy should be jointly shouldered by the government and the private sector. Further, the country’s infrastructure ought to be improved in tandem to support the demands of the modern traveller, while the construction of large scale properties providing quality accommodation should be encouraged via investment incentives, in order to gain economies of scale.

The performance of the Group’s resorts in the Maldives was satisfactory during the year as the world recovered from the recession. By the end of the year the Maldives and in particular our resorts, were enjoying heavy demand and high occupancy rates, although the average room rates declined. An increase in average room rates is expected in the coming year. Maldivian authorities are considering a new regime of higher lease rents as well as the introduction of new taxes and as one of the largest international resort operators in the country we hope that conditions conducive to investment and operations will continue in the future.

The destination management segment grew from strength to strength, as tour operators welcomed the dawn of peace in Sri Lanka by increasing their volumes. The segment continues to pursue new markets even as the visitor arrivals from its traditional markets in Europe continued to improve. Increased tourist arrivals to Sri Lanka have resulted in the hotel industry being able to increase room rates. Whilst this would no doubt benefit the earnings of the hotel industry, it could also result in travellers finding Sri Lanka an unattractive destination in terms of price. In order to preserve its competitiveness as a destination, Sri Lanka has to aspire to be more competitive with regional destinations by giving priority to fine tuning a diversified, high quality tourism product which would tangibly justify the increase in rates, as well as attract an assortment of travellers. We also hope that the government would favourably consider a proposal by the travel industry advocating an open skies policy, which would facilitate more airlines and charter flights to the country. It is vital that the world’s major airlines fly to Sri Lanka on a regular basis for the long term development of the tourism industry. The country will truly benefit from such a policy and it is essential that it is accompanied by the liberalisation of ground handling and catering services.

The General Sales Agents for Singapore Airlines and Kingfisher Airlines have reported losses during the period. The global financial crisis which compelled airlines to reduce the number of flights as well as the increased operating costs had an adverse impact on the profitability of this segment. We are hopeful of improved performance in the coming year. Singapore Airlines has already introduced daily night flights while Kingfisher Airlines may also add at least one additional destination to its present schedule of one flight per day from Chennai. Aitken Spence takes pride in managing hotels overseas with a portfolio encompassing five resorts in Oman and five in India. The Indian properties enjoyed a stable year and the Group’s sixth managed property in India will commence operations shortly in time to offer its services during the Commonwealth Games. The profitability in the Oman market reduced this year due to the economic uncertainties in the Middle Eastern hub Dubai, with an almost 30% drop in occupancy. The Group continues to explore new opportunities for management of hotels in other regions, including those in which we already have a presence.

Cargo Logistics

A consortium comprising of Aitken Spence and China Merchant Holdings International – one of China’s largest port operators and a company listed on the Hong Kong Stock Exchange- was the sole bidder to design, build and operate the South Container Terminal development project at the Port of Colombo. Negotiations with the government of Sri Lanka are now at an advanced stage and are expected to reach a successful conclusion during the coming year. Beyond our shores, the maritime sector continues to entrench itself on the African continent; our scope widened during the year with the award of a ship planning contract involving several South African ports, in addition to the existing port efficiency enhancement operations. The integrated logistics segment enjoyed a successful year, during which it also made several investments in expanding its container freight station and warehousing facilities. This organic growth has set the segment on a strong footing to fast forward its activities in the coming year, as an improved business climate and easing global recession enable an increase of rates and greater volumes.

The freight forwarding segment had a very challenging year with profitability in certain business lines declining which was offset through the exceptional contribution made by the express and supply chain segments. As economic activity accelerates in the North and East the segment’s strong credentials of superior terrain knowledge and its experience in the region even during the war years, has made it a preferred choice for those seeking reliable distribution solutions in these areas. The European Commission’s proposal to temporarily withdraw the GSP+ preferential tariff benefits is of much concern to the Group, given the exposure of its Freight and Cargo segments to the apparel, tile and ceramic industries which would be affected. We are hopeful that the government will take necessary steps to prevent the removal of GSP+ thereby preventing any adverse impact on the economy.

Strategic Investments

While our power segment has performed well given the constraints in the industry, we do observe that growth potential in Sri Lanka seems limited in the immediate future. We are disappointed that despite a government policy of awarding all power projects to private sector independent power producers, no such projects have been initiated over the past 5 years. In light of these developments, we are of the view that the time is appropriate for us to venture overseas and utilise our expertise in the region. In addition, the Group continues to pursue green energy projects and other alternative sources. We have already commenced a 2.5 MW hydropower project in Matale and are developing a wind power plant.

Returns from our plantations companies have been disappointing with heavy pressure on their bottom lines due to a wage increase that took retrospective effect. It is important that to be truly competitive, the industry must be allowed to be driven more by market dynamics than by socio-political influence. The effects of global warming are a growing concern, as changing weather patterns have created havoc with traditional plantation schedules. In addition to its tea and rubber bases, the Group is forging ahead with its palm oil segment, which is likely to deliver a healthy rate of return in the long term. The Group’s venture into the palm oil segment has already yielded very encouraging returns. Shortly after the year end we divested our stake in Hayleys Plantation Services Ltd, the holding Companyof Talawakelle Teas Estates PLC, to the Hayleys Group who were the managing agents in keeping with our policy of only owning companies in which we have control of management.

The printing segment which has made several enhancements to its technology and capacity, consolidated its strengths during the year. The segment concentrated on high-end printing jobs to complement its packaging and enhanced its marketing activities. A capacity utilisation study was carried out to identify where greater volumes could be achieved. The segment has also recognised the fact that its present location and plant do not facilitate long term expansion plans and is therefore considering alternatives for relocation. The apparel segment enjoyed a successful year as major buyers returned with a substantial volume of orders. The segment renegotiated prices and improved production efficiencies which enabled it to achieve an encouraging performance. The segment’s current customer profile consists mostly of US buyers and it is therefore unlikely to face the brunt of a GSP+ withdrawal.


The inward money remittance business recorded an excellent growth in volumes although its profitability declined due to global trends. We are optimistic that the year ahead will show an improvement. The North and East which attract large volumes of remittances from Europe and North America have seen increased funds being sent through formal channels with the end of the war. Our expansion plans in the coming year will therefore focus on the newly opened regions. The Group has seen vast benefits from operation and maintenance (O&M) services provided to the power generation segment, with all three power plants generating significant cost savings. The O&M segment focuses on achieving a high degree of reliability through enhanced technical and operational support. Since this segment is now established and experienced, it is seeking opportunities to make its services available to third parties both locally and overseas.

Our OTIS elevator agency has consistently bettered its performances year on year, a trend that continued this year. The segment’s maintenance contracts comprise a major revenue stream while it is poised to benefit from a boom in small and medium-scale construction projects that are expected in the country.

The Lloyds insurance agency showed steady growth and is optimistic of exploiting the opportunities presented through the impending North and East development. The insurance brokering arm has successfully commenced servicing niche clientele outside the Group.

Internal Strengths

The financial shared services centre launched last year, has made significant progress – with the majority of Group companies now under its umbrella. The synergies of shared services have enabled the Group to achieve cost and operational efficiencies. The centralised division has also enabled greater visibility of subsidiary activities at the corporate centre. Relevant activities in the rest of the subsidiary companies, including overseas operations, will be taken over by the centre during the coming year. The Group continues to focus on modernising its IT infrastructure and systems; we will constantly seek ways of speeding up group-wide reporting by means of automation and technology. As we fast forward our activities in the coming year, priority will be given to an IT strategic plan geared towards creating a paperless office and an improved management information system. Fundamentally, the strategy would integrate more robust IT security controls and an effective disaster recovery plan. In order to further strengthen our internal control systems, Aitken Spence will also fine tune its internal audit function which would focus on strengthening systems and processes.

I am proud to note that Aitken Spence did not have a requirement to downsize its operations over the past two years. Moreover, we have persisted with providing ample training and educational assistance to our employees, to ensure their personal and professional development. Today, we have been vindicated as our pool of talent is equipped and eager to deliver the results we seek. I believe that the environment created in our new premises “Aitken Spence Tower II” has also had a positive influence on employee morale. During the year, the majority of the Group’s Colombo-based operations took up residence at the modern, spacious building which has been designed to be environmentally sustainable and built to world class standards. The Group made a number of strides this year in order to further institutionalise its commitment to sustainable development. We developed an integrated sustainability policy that facilitates the achievement of Millennium Development Goals and the principles of the UN Global Compact. As part of the commitment enshrined in the policy, the Group will include the Global Reporting Initiative’s (GRI) sustainability reporting framework in its Annual Reports from this edition onwards. It is noteworthy that the integrated sustainability policy and its implementation, including the application of the GRI Framework, have been driven exclusively by internal expertise.


During the year, two key members of the management board resigned from the services of the Company, I wish to place on record the yeomen contributions made by Mr. Chethiya Perera who, as the CEO of the Adaaran chain of resorts played a major role in building the Maldivian resort sector and Mr. Indrajit Abeywardene who headed the printing sector of the Group and served the Company for over thirty years. We wish them all success. I warmly welcome Mr. Vipula Gunatilleka as the Chief Corporate Officer who joined us during the year, bringing with him solid corporate credentials. I must place on record my appreciation of my colleagues on the Board, whose input has been valuable to me and my management team. Our many stakeholders – customers, business partners, suppliers and communities – have placed their faith in Aitken Spence during good times and bad; their confidence in us is indeed heartening to note and rewarding. Above all, I extend my sincere gratitude to the members of the Aitken Spence team – who have faced one of the most challenging years with an undying spirit and commitment to win. Driven by a shared vision, our employees have amply demonstrated that collective action can and will empower them to reach higher goals. I look ahead with anticipation to the current year which promises to be an exciting one at Aitken Spence as we fast forward our expansion and lead the country’s emergence into a new era of economic strength.

For more infomation on the Groups performance for 2009/2010, click:

Annual Report – Message from Our Deputy Chairman – 15 June 2010

Creating Sustainable Value – Deputy Chairman/MD: J M S Brito

15 Jun

The 2009/10 Sustainability Report gives an introduction to our management approach to corporate sustainability and the substantial progress made by the Group and by individual strategic business units’ [SBUs] in employee and community engagement and environmental management.

We live in times of major global challenges, such as climate change, resource scarcity, globalisation, financial crises, shifting centres of power and increasing income inequality. How we face these challenges, now, will fundamentally shape the society, the environment and the economy of the future.

Our endurance and success for over 140 years has been characterized as much by the unswerving integrity in how we conduct our businesses, as much as by the pioneering sprit and the operational excellence that set us apart.

With the launch of the Group’s corporate sustainability policy, this year has marked a leap in how we approach corporate citizenship. Whilst we retain our ethical values fundamental to our business, we have embraced sustainable development with concerted effort to proactively ensure our long-term viability, profitability and integrity. This holistic approach looks beyond issues to address at all aspects of corporate sustainability in order to create sustainable value to our stakeholders.

Conducting initiatives which comprehensively look at how sustainably we do business across our diverse portfolio is not an easy task; but it is something which we have embarked on with the firm conviction that sustainable business is the business of the future.

Aitken Spence is becoming an increasingly global company, that brings with it responsibilities which we are keen to fulfil. We are committed to protect and promote the principles of the United Nations Global Compact. An indication of our progress in embedding the principles is outlined in the index on page 77. We have integrated the Global Reporting Initiative’s [GRI] framework for sustainability reporting at Level C in this report, with the objective of moving to Level B next year.

The company appreciates the leadership and commitment of the Sustainability Team and the respective sustainability committees set up in each SBU in our effort to create sustainable value and a sustainable business.

For more information on Aitken Spence Group sustainability, click here:

Sustainability Report – 15 June 2010

Aitken Spence Team Gets Ready for the Culinary World Cup 2010

14 Jun

Heritance Ahungalla and Heritance Kandalama celebrated their jubilant win in the recently concluded 13th annual Sri Lankan Chefs Guild Culinary Art Competition by selecting the most outstanding winners of the competition to participate in the Food and Hotel Asia (FHA) 2010 held in Singapore from 20th to 23rd April 2010.
The FHA Culinary Challenge, held once every two years, is hailed as Asia’s largest and world’s third largest culinary competition and exhibition. A platform for recognizing true culinary talents, the competition symbolizes the pinnacle of excellence as hundreds of practitioners in the food & beverage industry worldwide gather to prove their mettle. It is a celebration of culinary talents from all over the world, with participation from almost 500 chefs from 22 countries and regions this year.
As such, it was with delight that the team from Heritance Ahungalla and Heritance Kandalama participated in this prestigious event in preparation for the forthcoming Culinary World Cup which will be held in Luxemburg later on this year.  The Heritance Hotels and Resorts culinary team has been invited to team up with the Golden Horse Shoe Culinary team from Canada.
Aitken Spence Hotels has had tremendous success in the World Culinary Cup in the past with its Group Skills Development Chef, master chef Dimuthu Kumarasinghe bringing glory and pride to Sri Lanka and to Aitken Spence by securing 9 Gold Medals at the Culinary World Cup 2004 and Culinary Olympics 2006 creating history as the 1st individual to win 9 Gold medals at a World Cup competition. Chef Dimuthu’s accomplishments not only brings credit and fame to Sri Lanka, but also reflect on Aitken Spence Hotels, who have encouraged him and given him the opportunity to develop his talents, to innovate and to create.
The Aitken Spence Hotels culinary team who participated in the Food and Hotel Asia (FHA) Culinary Challenge comprised of Chef Pradeep Fonseka [Pasty Chef, Heritance Ahungalla], H E Indika Danusha [Demi Chef De Partie, Heritance Ahungalla], H Nuwan Prasanga Silva [Demi Chef De Partie, Heritance Ahungalla], S Mahendra Samarathunga [Chef De Partie, Heritance Kandalama] and Chamara Dilshan de Silva [Management Trainee, Heritance Kandalama].
The ability to send a team of Sri Lankan champion culinary artists to the highest world competition is testament to the strong training culture prevalent in Aitken Spence, which allows new and young talent to grow.

Aitken Spence Hotels, which operates an award-winning chain of hotels and resorts  in four countries in South Asia and the Middle East has steadily gained fame for its exquisite food and culinary art. Over a period of time the reputation gained in this specialisation has helped to position the chain of hotels as one the best in the region.

Media Release – 12 June 2010

Workshop on Waste Resource Management for World Environment Day

8 Jun

To mark the World Environment Day, which fell on the 5th of June, Aitken Spence organised a workshop on managing ‘waste resources’ for our contracted janitorial staff and several staff members from Group Security Division: waste resource management looks at converting waste into a useful resource without letting it become garbage.

Literature on this topic has been communicated to the executive staff on many occasions since the initiative to establish Environmental Management Systems within the subsidiaries (SBUs) was launched in January 2008. Following an initial training on waste segregation given to our janitorial staff in early parts of 2009, this programme was conducted as a follow-up workshop to increase awareness amongst all levels of staff on how to treat waste as a resource to ensure the longevity of our efforts.

Aitken Spence Property Development Ltd., and Group Security collaborated with Aitken Spence for this programme and 47 staff members were sensitised on the matter.

What is waste resource management?

Garbage is forming formidable mountains within Colombo city limits itself and landfill is becoming a prominent issue in Sri Lanka for which no inexpensive solutions are available to us. It hinders development efforts, obstructs aesthetic value, destroys bio-diversity and creates risk to the health and welfare of our communities.

Aitken Spence PLC attempted to convert waste into a resource without letting it become garbage by utilising the 7Rs. This concept was designed and introduced by our in-house consultant Mr. Ravi De Silva and has been very successfully implemented at Aitken Spence Hotels in Sri Lanka. It is now being implemented across the Group companies.

The 7Rs;

Reject Reject products, services, techniques, methods which cause significant environmental damage and that you can do without (Ex: Plastic, Polythene)
Reduce Reduce your energy, water and resource usage
Reuse Reuse what you have used to reduce impact
Reclaim If you cannot reuse 100% use whatever part that can be reclaimed.
Replace Replace products, services, methods with more environmentally friendly alternatives. (Ex: replace polythene bags with bio degradable bags, replace plastic files with cardboard files, replace vehicular transport with bicycles, walking or vehicle-pooling)
Repair Repair broken items without purchasing new items
Recycle Recycle products which cannot be reused as a whole

TNT’s support in ‘Ending child hunger’

7 Jun

TNT, the renowned Air Express Delivery  company once again joined hands with the United Nations World Food Programme (UNWFP) to provide local assistance to the UNWFP‘s global fund raising initiative ‘Walk the World’.

This year’s awareness building theme was the ‘hunger train’ which was unique in comparison to other awareness building strategies adopted across the globe by UNWFP. TNT’s assistance in organizing the train for UNWFP reaffirms TNT local commitment to WFP efforts to ending child hunger in Sri Lanka.

‘Walk the World’ is a global initiative to raise funds for UNWFP’s school feeding program which was initiated by TNT employees’ way back in 2004. By providing a midday meal to students, TNT and the UNWFP hopes to increase attendance in schools as well as improve learning through the old adage “a healthy body equals a healthy mind”. UNWFP and TNT believe that these efforts lay the foundation for a healthy workforce that would build a bright future.

In the year 2002, TNT CEO Peter Bakker and former United Nations World Food Programme (UNWFP) Executive Director James Morris entered a ground breaking partnership to support UNWFP to end global hunger. The partnership resulted in TNT becoming the biggest corporate partner of UNWFP. Being a specialist in logistics and transportation, TNT was in a position to provide it’s expertise to UNWFP to make a life saving difference by ‘getting aid to the right person at the right time’.

At present, UNWFP provides midday meals to students considered as under nourished in several areas of the island. UNWFP’s challenge is to find local donors for this worthwhile project that ensures sustainability through consistent involvement of local donor partners.
Speaking on the occasion, TNT Country Manager Mr. Jerome Brohier stated that TNT initiated ‘Walk the World in 2003 & this is the eighth consecutive year TNT employees are engaged in building awareness on the UNWFP’s main objective to end global hunger under the theme ”End Hunger, Walk the world”. The walks also helped to create awareness on the WFP’s School feeding initiative. TNT employees & their friends in Sri Lanka raised Rs. 913,000 for local school feeding through these walks in the past.

As a response to the Tsunami in 2004 which devastated parts of the island, TNT provided 35 trucks to distribute Aid across the country in addition to an Airbus A300 full of Aid relief flown in directly from Europe. It has been a wonderful experience to be partners with an organization whose sole aim is to eradicate global hunger.

Media Release – 07 June 2010