March 2002


Business Today, once again takes pleasure in presenting the ten outstanding performers of Corporate Sri Lanka. With high-profile bankruptcies, the sins of Enron dominating the current international business news whilst the local economy is about to get a kick start it may be time for Business Today to present its annual list of Sri Lanka’s corporate all star list for the financial year 2000/2001. This latest scorecard is primarily based on the financial performance of Sri Lanka’s private sector for the year 2000/2001.

In today’s tough business environment, admirable qualities like leadership, innovation and corporate governance are more important than ever. Therefore 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 considers it a privilege 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 five years. Companies that lost their positions on the TOP 10 already know that admiration is as hard to hold, as it is to get.

The criteria established during the last six years in consultation with experts were used to measure the performance of the private sector. The only new qualitative measure introduced this year was Employer of Choice. The introduction of this factor was motivated by the need to recognize companies that have world class Human Resources practices and good management practices that has the capacity to attract, retain and motivate top talent. The weights applied to the three 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, Quality of Products or Services and Employer of Choice. Social Responsibility, Quality of Products or Services and Employer of Choice 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 report 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. Not a single new company entered the TOP 10. However they traded places. Last year’s top three lost their position due to sluggish performance.

What a year it was for Commercial Bank the Number 1 company in the Business Today TOP 10 list, it strengthened its position as Sri Lanka’s best-managed bank. So far Commercial Bank has been quicker to master the technology and deliver services in the most consumer friendly way. Commercial Bank last year was ranked number four and therefore its movement to the top of the list is a credit to its unassuming management team. Commercial Bank unlike any other bank in the TOP 10 has a well-balanced loan portfolio and a client base and that has contributed to the bank’s strong financial performance. Commercial Bank enjoys an unrivalled reputation among banks for its IT prowess and ever-reliable ATM network around the country.

Hayleys, finished up at Number 2 maintaining its key player status 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 upward movement in the ranking of this giant could perhaps be attributed to its ability to respond to opportunities in an uncertain business environment. Hayleys success 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. Hayleys is also a company that believes that a good reputation is an asset- 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.

Ceylon Tobacco Company at Number 3, once again ensured its presence among the top performers in the country by moving up. CTC is the only manufacturing company that has consistently found a place on Business Today’s TOP 10 list over the last six years, mainly due to its commitment to excellence and dedication to high performance standards and a company that believes that employees comes first.

Three times winner John Keells Holdings moved down to Number 4. The reasons for JKH moving down four places could be attributed to the poor performance of the hotels and financial services sector. JKH over the years has however 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.

In terms of market dominance in the banking sector, at Number 5 Hatton National Bank, remains the most dominant and aggressive player among the private financial institutions. An outstanding achievement that warrants commendation is HNB’s commitment to uplift the rural sector, compassion to the community and also towards expanding its services to the rural people. HNB has unlike any other financial institution has over the years undertaken this quest with passion and an unmatched sense of urgency.

Distilleries Company of Sri Lanka at Number 6 in the TOP 10 list demonstrates its resilience and its vigor to remain in the all stars list. 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 one place, the company demonstrated its ability to turn opportunities into accomplishments and has demonstrated tenacious consistency to remain in the TOP 10 list of Business Today once again.

 National Development Bank at Number 7 has moved down drastically in its ranking when compared with last year. NDB has in fact had a very difficult year like most other conglomerates in Sri Lanka due to poor business conditions that prevailed. NDB also saw its stock price jump down during the period under review.
Caltex Lubricants Lanka at Number 8 in the TOP 10, also moved down two positions. Caltex however has a strong market position, a strong corporate image, good management practices, a range of world-class products and strong leadership. It is these characteristics that could be identified as key to the lubricant company’s success and presence in the all stars list of 10.

The multinational consumer giant, Nestlé Lanka at Number 9 is a company with a strong market position in the malted milk foods segment, a world-class reputation for marketing quality products and has very good business practices. Nestle is also one of Sri Lanka’s most enduring companies.
DFCC Bank at Number 10, 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.

Similar to the previous years, the pattern of half of the Business Today 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, in today’s tough business environment admirable qualities like leadership, innovation, and fiscal responsibility are more important than ever. The companies in our all stars list have proved themselves in those areas and more.

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, Shiron Gooneratne - Chartered Accountant, and Bevani Tissera – BA (Hon), for their voluntary contribution to make ‘Business Today TOP 10’ a reality for the sixth consecutive year.


Business Today TOP 10 Analysis The Highest Revenue Earners

The top three places remain unchanged from the previous year. Seylan Bank and Sampath Bank were the two new entrants to the top ten of this category, replacing Central Finance and Ceylon Tobacco Company.

Seylan Bank’s turnover increased mainly due to net interest income increasing by Rs. 332.7 million, non interest income increasing by another Rs. 186.4 million and the net foreign exchange income increasing by Rs. 370.8 million.

Ceylon Tobacco Company (CTC) has been the only company in the top 25 companies subject to analysis that has seen a reduction in turnover from the previous year. This was mainly due to the effect of excise duty increases on CTC’s products during 2000, which has helped to fuel the fast growing illegal and untaxed cigarette market.

Growth in Turnover

Aitken Spence Hotel Holdings recorded the highest growth in turnover with a sharp increase of forty two percent from Rs. 1.2 billion to Rs. 1.7 billion. Meedhupparu Island Resort, Maldives, which came on stream in August 2000 contributed the most to this growth.

Sampath Bank recorded a thirty six percent growth in turnover and was in second place. The synchronization of technology and operations with a focus on profitability, which commenced in late 1999, achieved very successful results enabling the Bank to record the highest profits since commencement of it’s business.



Hayleys has topped this category, replacing John Keells Holdings (JKH). Profit after tax of Hayleys rose by fifty seven percent, helped largely by it’s export performances. Its operating profit grew by forty percent propelled mainly by the growth in coir, environment and plantation segments. Net profit after tax of JKH reduced by fourteen percent due largely to the losses in the IT sector and the revenue based taxes referred to as follows.

The removal of the exemption granted to tourism related companies from the Goods and Services Tax (GST) and the extension of the National Services Levy (NSL) to service oriented companies, combined with the increase in the NSL from 5.5% to 6.5% all took their toll. Inbound travel companies were not able to pass on the GST in its totality to the ultimate customer if they were to remain competitive and the resultant charge against profits was a sum of approximately Rs. 92 million. The liability to NSL of service-oriented companies during the year was Rs. 118 million. All of these had a direct impact on the gross profit of JKH for the year. Aitken Spence is the only new entrant to this category replacing Nestle.


Growth in Profitability

Asian Hotels recorded the highest growth in profitability, which was mainly due to the improved contributions from Crescat Developments Ltd., the fully owned subsidiary of Asian Hotels Corporation Ltd. Asian Hotels has been outstanding in this category with a growth in profitability above three hundred percent, whilst the other companies achieved growth below one hundred percent.

The highest growth in profitability in the previous year was 33% which is below all ten companies that made it to the ranking this year. Only Commercial Bank, Distilleries Company of Sri Lanka and Aitken Spence Hotel Holdings made it to the top ten in this ranking, out of the companies that made it last year.


Value of Shares Transacted

This year the Dividends per Share ranking was replaced with Value of Shares Transacted. The ranking has been based on 31st December values, obtained from the Colombo Stock Exchange. John Keells Holdings has been outstanding in this category; the total value of shares transacted, almost double that of Sampath Bank, which follows in second place.


Return on Equity

The first three positions remain unchanged from the previous year. Although the Return on Equity (ROE) of Nestle has reduced by approximately six percent from the previous year, it is almost double that of Caltex Lubricants Lanka which is in second place. Eagle Insurance, Haycarb, Sampath Bank and Dipped Products were the new entrants in to this category replacing Tokyo Cement, Colombo Dockyard, Aitken Spence Hotel Holdings Limited and Hatton National Bank.


Market Capitalization

The Market Capitalisation on average has decreased during this period as depicted in the graphical illustration. The market capitalisation of JKH has decreased by 31%, mainly due to the overall downturn in the country’s economy.
Ceylon Tobacco Company has been the only company that has recorded a gain in it’s market capitalisation, from the previous year, out of the companies that made it to the top ten in this category.


Value Addition

Ceylon Tobacco Company has topped this category recording a Value Addition of Rs. 24.6 Billion. However it should be noted that it’s largest value contribution has been to the Government, which is a staggering ninety three percent of total value addition. Distilleries Company of Sri Lanka which is in second place, also distributed seventy nine percent of it’s value addition to the state as taxes.


Value Added per Employee

Ceylon Tobacco Company is in first place in this category having a Value Added per Employee of more than six times of Distilleries Company of Sri Lanka, which is in second place.


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.

Seylan Bank, one of the most dominant private commercial bank in Sri Lanka took over the top slot from Hatton National Bank. Seylan Bank has created a strong reputation as a bank that is committed to improve the quality of life by taking a lead role in community activities.

Hatton National Bank 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 was ranked third for their commitment towards serving its communities in which they operate and also for supporting social projects. JKH and Ceylon Tobacco, number four and five, has always worked cooperatively with civic and Government agencies to improve the environments in which they operate and their efforts to support social causes. Notable new entrants into this category at number six and seven are Ceylinco Insurance and Eagle Insurance, both observed the highest legal, ethical and moral standards and support community activities. Sampath Bank, Caltex and Nestlé ranked number eight, nine and ten respectively, were also recognized for demonstrating their commitment to protect the environment. Business Today, salutes the 10 companies for their exemplary corporate citizenship and also believes that companies that respond positively and with commitment to address environmental and community issues by changing their business practices to address such challenges will be the leaders of the future.


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.

Commercial Bank was ranked number one by the survey respondents for the overall quality of its banking services and also for the reliability of its ATM network countrywide. CTC and Nestlé were ranked second and third respectively for its product quality and value. HNB and JKH were recognized for their effort to promote customer value and especially JKH for the quality of its Keells outlets, Distilleries for its commitment to improve the quality of its products and Caltex Lubricants for marketing world class brands. NDB for thinking outside the box and taking bold steps to provide innovative services. And finally, Sampath Bank and Seylan Bank were recognized for their constant search for innovation to offer superior banking products and services to the consumer on a regular basis.


Employer of Choice

This year we decided to survey people to identify companies that excel in attracting, developing and retaining top talent. The world of work is changing with flattening structures, less obvious career progression, even tougher targets to achieve with the new ways of working. Never has it been more important to focus on attracting and retaining the top talent the company has. Today, we all know that the leading organizations of the future will be Employers of Choice, attracting and retaining the very best people around.

Based on the survey results CTC the tobacco giant emerged as the top company in this category. Many people felt that CTC is a great place to work and that they offer better compensation and benefits and career advancement opportunities than any other company in Sri Lanka. NDB, Caltex and Commercial Bank was ranked second, third and fourth respectively for their ability to attract and retain good people and have HR processes that are powerfully motivating.

HNB and JKH were recognized for making recruitment a top priority and its ability to offer development opportunities for personal growth and learning.

DFCC Bank came in next for acting responsibly as an employer and Sampath Bank because of its ability to capture the imagination of its workers as well as their hearts and souls.

Finally, Hayleys was recognized simply for its huge corporate image as a top blue-chip and Seylan Bank for its presence countrywide and also as a company that has respect for its people.



1. The ranking is based on Group figures.
2. The Turnover represents Net Turnover, which is calculated by deducting Goods & Services / Turnover Tax, National Security Levy and Inter Group Sales from Gross Turnover.
3. Profitability is represented by Net Profit After Tax, before Exceptional Items and Minority Interest.
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. Value of Transactions represents the turnover from the number of shares traded at the Colombo Stock Exchange, for the year ended 31st December 2000.
7. The Market Capitalisation represents the market value of the total Share Capital of the Company as at 31st December 2000.
8. The Gain from Discontinued Operations has not been taken in to account for the purpose of ranking. This policy was applicable to both Asian Hotels and Ceylon Tobacco Company.
9. The Profit Per Employee has been arrived at by dividing Net Profit After Tax, by the number of permanent employees for the financial year-end 2000.
10. Value Added per employee has been arrived at by dividing the Value Added by the number of permanent employees for the financial year-end 2000.
11. The amounts taken for Value Added represent published figures for the Group, for the year 2000. Where ever information was not available, requests for same were made.
12. In our analysis, we have excluded Companies that incurred a Loss in the previous financial year (1999) for purposes of calculating the “Growth in Profitability”.