April 2001


Rank and Points Comparison

  99/00  98/99     99/00 98/99
1 1 John Keells Holdings    6.77  5.80
2 2 National Development Bank  5.08  5.76
3 4 Hatton National Bank    4.99  5.04
4 9 Commercial Bank  4.68  2.76
5 10 Distilleries Company of Sri Lanka   4.34  2.08
6 7 Caltex Lubricants Lanka   4.24  3.75
7 3 Ceylon Tobacco Company      3.69 5.32
8 - Nestlé    3.46    2.79
9 5 Hayleys    3.38   3.88
10 6 DFCC Bank      2.60 3.82


Business Today, once again takes pleasure in presenting the 10 outstanding performers of Corporate Sri Lanka. This latest scorecard is primarily based on the financial performance of Sri Lanka’s private sector for the year 1999/2000. The ranking is a reflection of the qualities and attributes that have come to be accepted by people advocating good management practices in today’s business world. Business Today feels privileged to foster a process of recognizing these sound management practices and to influence good corporate governance in Sri Lanka’s corporate sector.

This year too, many fought closely, but unfortunately only the TOP 10 are reported. The vigor of the private sector was clearly demonstrated in the exercise, and this sends out the signal that there are many players in the private sector who are capable of potentially clinching a place on the list. The entrance of companies to the TOP 10 list over the last five years validates this possibility. The TOP 10 performers this year would certainly be proud of their performance whilst those aspiring to make it to the list, should be inspired and encouraged by the new names that have entered the list in the last four years. Companies that lost their positions on the TOP 10 already know what it takes to excel and would certainly be determined to return to the list in the future.

The criteria established during the last five years in consultation with experts were used to measure the performance of the private sector. The only new financial measure introduced this year is Value Added per Employee replacing Profit per Employee. The introduction of this factor was motivated by the need to influence the private sector to focus on value addition and productivity as a way to achieving future sustainable growth. The weights applied to the two qualitative factors in the list of criteria are marginal, so that the credibility of the ranking, primarily based on published information, is protected.

The criteria used for the ranking are; Sales Turnover, Growth in Sales Turnover, Profitability, Growth in Profitability, Return on Equity, Earnings per Share, Value Added per Employee, Market Capitalization, Value of Shares Transacted, Value Addition, Social Responsibility and Quality of Products or Services. Social Responsibility and Quality of Products or Services were surveyed through focus groups representing a cross-section of interest groups. As in the past, weights used are not disclosed for proprietary reasons. Business Today however wishes to announce that weights were assigned to the criteria mentioned above after due consideration to significance of the criteria and ensuring all business sectors are fairly represented. Weights were applied uniformly with no prejudice.

This year’s list brought few real surprises. Only one new company entered the TOP 10 — Nestlé, the consumer food giant, coming in at number eight.

But what a year it was for repeat winner John Keells Holdings (JKH) — on a point scale of one to ten used for the evaluation, JKH emerged on top of the list, standing tall for the third year in a row. The main reason for JKH’s success could be attributed to its relative size and profitability. This in turn has been made possible largely due to JKH’s ability to maintain, if not grow market share in the Group’s existing business sectors, coupled with its known wisdom in identifying opportunities and agility in moving into potential growth sectors of the country. JKH over the years has proved beyond doubt that it has the business capability to build and sustain a conglomerate that shareholders, management and staff can be proud of, against the backdrop of a rapidly changing business environment.

National Development Bank (NDB) achieved second position for a third consecutive year, although falling well behind John Keells Holdings in relation to the overall score. NDB’s success over the years, since its privatization has been attributed to its ability to maintain a razor sharp focus in its selected business sectors, its strength to hold and grow market position in a changing business environment and strong leadership. NDB is also a company that believes that a good reputation — even though it may not directly appear in the Balance Sheet, a favorable image has an impact on the bottom-line, and has invested heavily in building a good reputation.

Hatton National Bank (HNB) once again ensured its presence among the top performers in the country by moving up one place to be among the top three. In terms of market position in the banking sector, HNB remains the most dominant player among the private financial institutions. An outstanding achievement that warrants commendation is the respect HNB maintains for its commitment to uplift the rural sector and towards expanding its services to the rural people. HNB has undertaken this quest with passion and an unmatched sense of urgency.

Commercial Bank came in fourth, moving from a previous ninth position it held in the TOP 10. Commercial Bank has a well-established client base and business strategy that has contributed to the bank’s strong financial performance. More importantly, Commercial Bank enjoys an unrivalled reputation among banks for its IT prowess and ever-reliable ATM network around the country.

Distilleries, the company with the spirit, gained five positions in the TOP 10 list this year demonstrating its vigor and will to grow. Distilleries’ prominent position in the market is not one bestowed upon it, but a position earned through continuous improvement in quality, benchmarked against world standards. This has made Distilleries the brand by choice for most of its products in the market. The company’s commitment to quality undoubtedly places it alongside world-class producers of alcoholic beverages. Although Distilleries fell behind in performance in relation to other top performers last year, this year the company demonstrated its ability to turn opportunities into accomplishments and move up to the fifth position in the TOP 10 list of Business Today.

Caltex Lubricants Lanka, number six among the TOP 10, has a strong market position, a strong corporate image, a range of world-class products and visionary leadership. It is these characteristics that could be identified as key to the lubricant company’s success and presence in the list of the elite group of 10.

This year, CTC moved down in its ranking to the seventh position largely attributed to a drop in value addition and a rising cost of living in the country. The tobacco anti-lobby too may have hindered the company’s marketing activities. CTC is the only manufacturing company that has consistently found a place on Business Today’s TOP 10 list over the last five years, mainly due to its commitment to excellence and dedication to high performance standards.

The new player in the TOP 10 list this year is the multinational consumer giant, Nestlé — a company with a strong market position in the malted milk foods segment, a reputation for quality products and a dedication to business decision-making linked with respect for people, community and environment.

Hayleys, a key player in Sri Lanka’s corporate community, much respected for its stature, stability and contribution to the development of the private sector of the country, continued its presence among the top performers. The downward movement in the ranking of this giant could perhaps be attributed to an uncertain business environment.

DFCC Bank, the blue-chip that has over the years played a pivotal role in developing the financial sector beyond the traditional banking services in Sri Lanka, once again ensured a slot among the TOP 10. DFCC, in order to remain a visible and vibrant entity in the country, has undertaken a business effectiveness program and is in the process of restructuring and consolidating its operations.

Similar to last year, the pattern of half of the TOP 10 performers representing the financial sector repeated itself this year as well, manifesting the attractiveness of this sector in the country. Manufacturing companies among the TOP 10 performers primarily met demand for established products in existing markets. Business conglomerates representing a minority faction of the group of 10 ensured their places within the list assisted by size and profitability generated through strategic diversification and due to their ability to adjust their businesses to meet the demands of the local market.

Selecting 10 winners out of a large population of a vibrant and competitive private sector is no easy task. Many competed intensively, and with the slightest shift in focus the result could have been dramatic. The single-minded purpose of the robust evaluation process adopted by Business Today is to select its TOP 10 winners. In meeting this cause, Business Today takes pleasure in shining the light on Sri Lankan companies on voyage to placing Sri Lanka on the world business map.

In conclusion, doing well in the Business Today TOP 10 comes as a result of two things; building a company that shareholders or owners, management and staff can be proud of; and ensuring that customers know about that pride.

The Business Today TOP 10 companies have been selected on the basis of their Financial Performance by Dinesh Weerakkody MBA (UK), ACMA, Adv. Dip. BA (UK), MSIHRM, MSIPS, and Keith Bernard MBA (UK), MA-Economics (Colombo), FCMA, Dip.M.,MCIM., as per analysis made by KPMG Corporate Finance.

Business Today thanks Dinesh Weerakkody, Keith Bernard and Shiron Gooneratne - Chartered Accountant, for their voluntary contribution to make ‘Business Today TOP 10’ a reality for the fifth consecutive year.


Business Today TOP 10 Analysis

The Highest Revenue Earners

The top four places remain unchanged from the previous year. Distilleries Company and Nestlé were the two new entrants to the TOP 10 of this category, replacing Seylan Bank and Chemical Industries.


Growth in Turnover

Although Lion Brewery has recorded the highest growth in Turnover, the year under review was the beer industry’s worst in over a decade. This is reflected by the fall in Profit after Tax of Lion Brewery by 55%. This state of affairs is a result of the excise duty increase imposed on the beer industry in November 1998. James Finlay recorded a 23% increase in its turnover and was in second place in this category. However its profitability has declined significantly by 255%, thus showing a Net Loss after Tax of Rs106 million. This was mainly due to the magnitude of the losses incurred by the plantation sector.


The top three positions remained the same as the previous year. However, if the gain on the sale of Eagle Insurance Company were taken into account, Ceylon Tobacco Company would replace John Keells, with a Net Profit after Tax of Rs1,498 million. Although NDB, Hayleys, and DFCC Bank have made it to the TOP 10, they have shown negative growth rates in profitability. Nestlé has been the only new entrant to this category replacing Sampath Bank.


Growth in Profitability

Aitken Spence Hotel Managements recorded the highest growth in profitability, closely followed by John Keells. It should be noted that the Growth in Profitability on average has been low compared to the previous year. (In the TOP 10 in this category.) Caltex Lubricants Lanka which recorded a 105% increase in its Net Profit after Tax in the previous year, did not show such vibrant results in the current ranking.


Earnings per Share

The previous year’s leader, Carson Cumberbatch did not make it to the TOP 10 this year, as it did not meet the requirement of being in the top one hundred shares traded on the Colombo Stock Exchange. Dipped Products too did not make it to the TOP 10. Aitken Spence and Hayleys replaced these.


Return on Equity

Nestlé has taken up first place from Caltex Lubricants Lanka. This has been achieved as a result of a considerable increase of 23% from last year.
Aitken Spence Hotel Managements, HNB, Commercial Bank and Maskeliya Plantations are the new entrants to this category, replacing Singer Sri Lanka, Dipped Products, Sampath Bank and Ceylon Cold Stores.


Market Capitalization

John Keells is outstanding in this category, having a Market Capitalization almost double that of Ceylon Tobacco Company, which is in second place. All of the companies that made it to the TOP 10 in the previous year made it to the TOP 10 for the current ranking.


Value Addition

Distilleries Company of Sri Lanka has taken the number one slot in this category, displacing Ceylon Tobacco Company which has not made it to the TOP 10 this ranking. Nestlé, Caltex Lubricants Lanka and Dipped Products were the new entrants to this category replacing Ceylon Tobacco Company, Seylan Bank and Carson Cumberbatch.

Value Added per Employee

This year we replaced Profit per Employee with Value Added per Employee to encourage the private sector to focus more on value addition. Distilleries Company topped this category. Interestingly, out of the 10 companies that made it to the final TOP 10 list, only Distilleries, Caltex, NDB, DFCC, Nestlé and Commercial Bank got ranked in this category.


Responsibility to The Community and Environment (Social Responsibility)

Once again the social responsibility category was based on data obtained from Annual Reports and subsequent cross-referencing through a survey to identify those companies that are responsive to the community, pay attention to environmental protection and demonstrate to the public that social responsibility is part and parcel of their management philosophy.

Hatton National Bank, the most dominant private commercial bank in Sri Lanka took over the top slot from Sampath Bank. HNB’s success in this category has been attributed to its commitment to invest and develop the rural banking sector and for its efforts to improve the quality of life in the rural sector.

NDB and Seylan were ranked second and third for its commitment towards serving their communities in which they operate. Notable new entrants into this category are Nestlé and Commercial Bank, both observe the highest legal, ethical and moral standards. CTC and Caltex Lubricants, number seven and nine, work cooperatively with civic and Government agencies to improve the environments in which they operate. JKH and DFCC, number six and ten, were also recognized for demonstrating their commitment to corporate responsibility.

Business Today, salutes the 10 companies for their exemplary corporate citizenship.


Quality of Products or Services

Like last year, this year also we surveyed people to compile Business Today’s list of companies that are obsessed with quick product delivery, keenly focused on their customers and always looking to see what they can do to make customers’ lives easier or save them money.

In our survey, respondents also focused on companies that promote a culture that impels employees to deliver top notch service to customers and also companies that care passionately about what their customers think of their products and services and are willing to adapt to customer preferences.

Nestlé, the malted food giant, was ranked number one by the survey respondents for the overall quality of its products. John Keells Group and HNB were ranked second and third respectively for its product quality, value and innovative services. Commercial Bank and Aitken Spence Hotels were recognized for their overall product value, Distilleries for its commitment to improve the quality of its products and Caltex Lubricants for its world class brands. Finally, Sampath Bank and Central Finance were recognized for their constant search for innovation to offer a superior product to the consumer on a regular basis.



 1.   The ranking is based on group figures.
 2.   The Turnover represents net turnover, which is calculated by deducting Turnover Tax and National Security Levy from Gross Turnover.
 3.   Profitability is represented by Net Profit after Tax.
 4.   Return on Equity is arrived at, by dividing Net Profit after Tax and minority interest by the opening share capital and reserves.
 5.   Earnings per Share has been calculated by dividing profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue.
 6.   Dividends per Share represents gross dividends (portion of profits inclusive of tax withheld, distributed to shareholders) divided by the number of ordinary shares issued.
 7.   The December 31st Market Capitalization has been used.
 8.   The gain from discontinued operations on both Asian Hotels and Ceylon Tobacco Company has not been taken into account for the purpose of ranking.
 9.   Profit per Employee has been arrived at by dividing Net Profit after Tax, by the number of employees.
10.  Value Added per Employee has been arrived at by dividing the value added by the number of employees.

  1. The accuracy of the number of employees is subject to the information obtained by the respective companies.