March 2005


1 Distilleries Company of Sri Lanka | 5.940

2 John Keells Holdings | 5.750

3 Sri Lanka Telecom | 5.075

4 Hatton National Bank | 4.160

5 Commercial Bank | 4.065

6 Ceylon Tobacco Company | 3.800

7 Aitken Spence & Company | 3.565

8 Hayleys | 3.060

9 DFCC | 2.910

10 Carson Cumberbatch & Company | 2.850

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, Keith Bernard MBA (UK), MA-Economics (Colombo), FCMA, Dip.M., MCIM., and Shiron Gooneratne ACA, CMA (Australia), MBA (UK). Business Today thanks Dinesh Weerakkody, Keith Bernard and Shiron Gooneratne for their voluntary contribution to make Business Today TOP 10 a reality.

Never fall in love with a stock, investment advisors say. It is wise counsel, but you could be forgiven for ignoring it if the objects of your affection were the stocks of the Business Today TOP 10 companies. If you had the foresight to invest in these ten companies -DCSL, JKH, SLT, HNB, Commercial Bank, CTC, Aitken Spence, Hayleys, DFCC and Carson Cumberbatch - you'd have a thoroughly diversified portfolio. You'd have financial services, consumer goods, insurance, hospitality, entertainment and IT. In their variety, the Business Today TOP 10 companies resemble the economy in some sense. So it takes pleasure for Business Today to present Sri Lanka's corporate all-star list for the financial year 2003/04. The latest scorecard is primarily based on the financial performance of Sri Lanka's private sector for the year 2003/04.

In today's challenging business environment, indispensable qualities like leadership, innovation, market value added, employee relations and corporate ethics 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.

This year too, many fought closely, but unfortunately only the TOP 10 are reported. The vigor of the ten ambitious companies was clearly demonstrated in this exercise, and this sends out a signal that there are players in the private sector who are capable of potentially clinching a place in the list and climbing up rapidly in the list.

The entrance of companies and the way they have reached the top levels in ranking 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 few years. Companies that lost their positions in 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 eight years in consultation with business analysts were used to measure the performance of the private sector. The criteria used for the ranking are: Turnover, Growth in Turnover, Profitability, Growth in Profitability, Return on Equity, Earnings Per Share, Value Added Per Employee, Market Capitalization, Value of Shares Transacted, Value Addition, Corporate Social Responsibility, Quality of Products and Services, and Employer of Choice. The latter three were surveyed through focus groups representing a cross-section of interest groups. 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.

As in the past, weights 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 the business sectors are fairly represented. Weights were applied uniformly with no prejudice.

This year's all-star list had two new companies - Sri Lanka Telecom and Carsons - entering the TOP 10 for the first time. The sheer size of SLT in terms of sales and profits has secured the company a position in TOP 10 at number three. The stellar performance of Carsons helped the company to enter the TOP 10 for the first time ever.
A scale of one to ten was used for the evaluation, Distilleries Company of Sri Lanka (DCSL) emerged at the top of the list edging out the best of the best of corporate Sri Lanka. This achievement is a testament of the foresight and business acumen of visionary Harry Jayawardena. Since he took the helm in 1992, Harry J has skillfully piloted the spirit super tanker through many acquisitions and a brand building exercise. Both company and boss have shown their mettle in a tough year. DCSL has now emerged as one of the largest conglomerates in Sri Lanka. The latest addition to the DCSL group is Sri Lanka Insurance (formerly Sri Lanka Insurance Corporation). Strategic investments by DCSL in effect have increased the overall profitability of the DCSL group. The size of the company with a diversified business portfolio in beverage, plantations, insurance, travel and tourism, cargo and logistics, and power generation, together with an overall impressive group performance, have secured DCSL the prized number one position in Business Today TOP 10.

John Keells Holdings (JKH), the darling of many investors and a three-time Business Today number one, dropped to the second position, behind DCSL. JKH still maintains its dominance in the TOP 10 at number two, mainly due to the size of the business and an excellent group performance. In fact, JKH has over the years proved beyond any doubt that it has the business capability to build and sustain a conglomerate that has pleased many a shareholder over the past decade, against a backdrop of a rapidly changing and challenging business environment. JKH's overall success can be attributed to its ability to identify opportunities and the agility to move into potentially lucrative sectors.

Sri Lanka Telecom (SLT), which has recorded the highest turnover and profits, has entered the TOP 10 at number three. Although the growth of the business is poor, SLT was able to occupy the third position mainly due to the size of the business and its dominance as a fixed line provider. NTT's influence over the years has also helped this giant to become more responsive and aggressive as any company in the TOP 10.

Hatton National Bank (HNB) came in at number four. HNB remains a very dominant and aggressive player in the financial sector. It has delivered an impressive performance with phenomenal growth rates during the year under review. It is an impressive comeback for HNB, which was number eight in the previous year's TOP 10, and looked to be on the way out of the TOP 10 list. An outstanding achievement of Rienzie and HNB that warrants commendation is the commitment HNB has displayed over the last decade to uplift the rural banking sector.

Commercial Bank came in fifth, dropping from second position the year before. The Bank has a well-established client base and business strategy that has contributed to its strong financial performance. More importantly, Commercial Bank enjoys an unrivalled reputation among banks for its IT powers and ever-expanding ATM network. Commercial Bank's strong performance and many accolades over the last decade are attributed to its Board and Chairman. The Board has made sure the bank made the right investments in technology and its people, in addition they have skippered Commercial aggressively into consumer banking, and the results are impressive. Commercial Bank ranks first on the Business Today list of the 10 best companies to work for.
At number six is Ceylon Tobacco Company (CTC), which once again ensured its presence among top performers in the country, consistently sustaining a place in the TOP 10. CTC is the only manufacturing company that has continuously found a place on the Business Today TOP 10 list over the last eight years, mainly due to its high performance standards, commitment to excellence and good employer relations.

Aitken Spence, a blue chip conglomerate skippered by Harry J, which entered the TOP 10 last year at number ten, has moved up to number seven this time. It has recorded an impressive performance for the year. It has also displayed its ability to be among top performing diversified companies in corporate Sri Lanka. Aitken Spence, unlike ever before, is now a good wealth creator, leaping past some of the best companies.

Hayleys, much respected for its stature is a company that is almost a century old. It has once again retained a position in the TOP 10 and is at number eight. Hayleys' success over the years has been attributed to its ability to maintain a razor sharp focus in its selected business sectors, and its willingness to invest and grow selected sectors in Sri Lanka and even abroad.

DFCC Bank, one of the premier development banks in the country has now moved into commercial banking by acquiring Merc Bank, and is this time number nine in our list. DFCC has over the years played a pivotal role in moving development banking beyond the traditional development banking services in Sri Lanka. DFCC is the only development bank to be in the TOP 10 this year.

Carsons, which entered TOP 10 for the first time at number ten, has had a great year. Carsons, a very diversified company, has a very strong offshore presence and this could be identified as the key factor that propelled the company for the first time ever into the elite group of ten.

In previous years, most of the Business Today TOP 10 performers represented the financial sector. However, this year, half of the TOP 10 companies represent diversified conglomerates, which have outnumbered some of the top banks like NDB and Seylan in the financial sector, perhaps due to shrinking banking spreads. Also the consistent presence of DCSL and CTC, the only two manufacturing companies to be in this list, perhaps tells us something about our social pattern.

Selecting ten winners out of a large population that comprise Sri Lanka's vibrant and competitive private sector is no easy task. Many competed intensely, and the slightest shift in focus in the result could have been dramatic. The single-minded purpose of the robust evaluation process adopted by Business Today is to select the best of the best.

In conclusion, in today's tough business environment, what makes the Business Today TOP 10 companies so great? It is attributes like leadership, good employer relations, super products, ingenuity, talent management, and corporate social responsibility that have helped these ten companies to chart a clear course through change and complexity.

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, Keith Bernard MBA (UK), MA-Economics (Colombo), FCMA, Dip.M., MCIM., and Shiron Gooneratne ACA, CMA (Australia), MBA (UK).
Business Today thanks Dinesh Weerakkody, Keith Bernard and Shiron Gooneratne for their voluntary contribution to make Business Today TOP 10 a reality.

Market Capitalization

The top three positions in this category are by newcomer SLT, followed by last year's leaders JKH and Commercial Bank.

Security Market Capitalization

Sri Lanka Telecom 35,545,642

John Keells Holdings 31,133,905

Commercial Bank 12,301,550

Responsibility to the Community and Environment
(Corporate Social Responsibility)

In Business Today, we believe that a business that makes nothing but profit is a poor kind of business. So this year we looked for companies that have struck partnerships with the government and community leaders to strengthen the communities with which they do business.
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 needs of the community, pay attention to environmental protection, and demonstrate to the public that social responsibility is part and parcel of their management philosophy.
Business Today salutes the ten companies ranked 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

As in previous years, this year too, 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.

Employer of Choice
(Sri Lanka's Top Work Places)

Like in Asia, companies in Sri Lanka are also cutting back, paring costs and laying off employees. Once guaranteed lifetime employment and rising salaries seen during the 1980s and 1990s in Sri Lanka are under siege. And yet, some companies dare to be different. Business Today is proud to present the only survey of the best employers in Sri Lanka. To compile the list we asked people to identify companies that excel in attracting, developing and retaining the best talent, and also companies that have leaders who nurture the development of other leaders at all levels of the organization.
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 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. The companies selected have demonstrated that most often they tried to do right by their employees, even during difficult times and have worked hard to treat their employees well. Our conclusion is that being a good employer pays and that a happy workforce can reward a company though better profits, better productivity and lower staff turnover.


1. The ranking is based on Group figures.
2. The Turnover represents Net Turnover, which is calculated by deducting Goods & Services / Turn-
over 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
average 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 December 31, 2003.
7. The Market Capitalization represents the average market value of the total issued shares of the
Company for the year.
8. Value Added Per Employee has been arrived at by dividing the Value Added by the number of
permanent employees for the financial year-end 2003/2004.
9. The amounts taken for Value Added represent published figures for the Group, for the year