“To be recognized as the premier property management Company in Sri Lanka which provides an excellent service to its tenants”.
“We are dedicated to controlling costs while maintaining the highest levels of satisfaction and comfort to our tenants by responding to their unique requirements and special requests. We listen to them, and then develop a plan and structure that fits their goals, budgets and needs. We immaculately upkeep our properties to the highest quality standards by deploying our team of highly trained professionals”.
It gives me great pleasure to welcome you, on behalf of the Board of Directors of Seylan Developments PLC, to the twenty-third Annual General Meeting. I am pleased to present you the Annual Report and the audited financial statements for the year ended 31st December 2014. The financial year recorded an enhanced performance reflecting a growth of 442% in after tax profits. The Board has recommended a dividend of 50 cents per share for the financial year 2014, for approval of the shareholders at the Annual General Meeting.
The Sri Lankan economy recorded a growth of 7.7% during the first three quarters of 2014. Increased domestic economic activities and growth momentum further contributed resulting in a remarkable annual real GDP growth rate of 7.8% towards the end of the year. Year on year inflation continued a single digit for a considerable period declining to 2.1% in December 2014. While the core inflation recorded at 3.3%. This is for the longest period that both year on year inflation and core inflation have continuously remained at single digit levels after the economy liberalized. Some changes in government policy and ways of doing business was evident in the past presidential election era accompanied by an emphasis on good governance and a corruption free society. The ensuing changes in the business outlook and is explored to augur well for the future of the Company. Even though, there was an increase in the rentable space in the market, the Company took the initiative to ensure 100% occupancy in the apartment tower. The Company terminated the lease agreement with Ceylinco Hotels Limited (Raja Bojun) from 31st March 2014 and this space was taken up by the parent Company to Seylan Bank Plc. Certain renovations were made to the vacated premises which was rented to the Parent Company from August 1st 2014.
As at 1st of January 2014, the Board consisted of six non-executive Directors of whom two were independent. Mr. R.Nadarajah, an Executive Director of Seylan Bank PLC and represented the parent Company as Chairman of Seylan Developments PLC, resigned from Seylan Bank PLC on reaching the age of 70 years on 8th May 2014 and also from Seylan developments PLC from that date. I was elected as Chairman w.e.f. 30th May 2104 by the Board members. Presently the Board consists of five directors and all are non-executive and have wide knowledge and experience in the financial, banking, engineering and commercial sectors.
Rental income which is the main source of income for the Company recorded a marginal decline by Rs.1.01 Mn, declining from 168.17 in 2013 to Rs. 167.16 Mn in 2014, mainly due to loss of income in the east tower, during the period of change of tenants. Expenses on premises, equipment and establishment increased from Rs.42.36 Mn in 2013 to Rs.55.29 Mn in 2014 mainly due to face-lift work undertaken at Seylan Towers. Administration expenses decreased by Rs. 30 Mn during the year under review compared to previous year due the provisions made for doubtful receivables (Rs. 16.1 Mn) and provisions of Rs. 12.3 Mn made on Corporate Guarantee given to Peoples’ Bank on credit facilities obtained by Ceylinco Packaging Ltd in previously. This resulted in the operating profit before changes in fair value of investment properties increasing from Rs.64.71 Mn in 2013 to 78.38 Mn in 2014. The net finance income too improved from Rs.31.36 Mn in 2013 to Rs.35.39 Mn in 2014. Since the Company reports Investment Properties at the fair value in accordance with the Accounting Standards and Accounting Policy, a loss of Rs.176.07 Mn was made in the Income Statement for the year 2013 whereas a gain of Rs.12.99 Mn was made in the Income Statement for the year 2014. With the fair value gain on investment properties the Company recorded a profit before tax of Rs126.77Mn in 2014 compared to Loss Rs.79.99 Mn in 2013. The tax for the year 2013 was a reversal of Rs.98.41Mn mainly due to diminution in value of investment properties whereas the tax for the year 2014 was a charge of Rs.26.96Mn, resulting in the after tax profits increasing from Rs.18.41Mn in 2013 to Rs.99.81Mn in 2014, resulting in increase of 442%
Sri Lanka’s economy is expected to grow at a higher pace compared to the last two years with the enhanced contribution from all sectors of economy. The domestic inflation is expected to remain in single digit. The Company has completed the face lift plan to the east tower at a cost of Rs: 22 million partly funded by the parent Company. The Company is implementing a maintenance and repair exercise to be completed within six months. It is expected that the improvements will enhance the value of the building. Our Company has already drawn strategic development plans for short and long term. In the short term plans the Company had commenced to construct properties in holiday destinations and renting same for mainly employees of Seylan Bank and undertake maintenance and modernising of buildings owned by Seylan Bank. The long term plan includes, to recover investments in several troubled projects which are non-earning through legal action (already initiated) and which hopefully will facilitate the reversal of impairment provisions made. The Company also has plans to embark on an energy efficiency system with a view to reduce the electricity consumption considerably. Negotiations are under way with the selected service provider to commence the project in March 2015 to be completed by Aug 2015.
Appointed as Chairman of Seylan Developments PLC on 30th May 2014. Mr. KapilaPrasannaAriyaratne is the General Manager / CEO of Seylan Bank PLC. He commenced his banking career in 1984 and counts over 30 years of banking experience. He has held responsible positions at several international banks both locally and overseas as well as with local state and private sector banks. He is also a Director of Lanka Financial Services Bureau Ltd, Lanka Clear (Pvt) Ltd and Institute of Bankers of Sri Lanka. Mr. KapilaAriyaratne holds a first class honours degree from the University of Colombo.
Appointed as a Director of Seylan Developments PLC on 11th September 2009. Mr. Palihawadana joined Seylan Bank PLC in 1999 as Chief Manager/Chief Dealer. He is overall in-charge of Treasury Dealing activities of Seylan Bank PLC. He held positions of Assistant General Manager/Chief Dealer. At present he holds the position of Deputy General Manager - Treasury, Head of Primary Dealer Unit and Gold Investment Unit. He counts over 41 years experience in the banking industry out of which 31 years in treasury dealing activities.
He has served at Bank of Ceylon, Colombo and London branches before joining Seylan Bank PLC.
Mr. Palihawadana holds a Bachelor of Science (B.Sc) degree from the university of colombo.
Appointed, as an Independent Non-Executive Director, of Seylan Developments PLC, from 3rd February 2011. Mr. Saravanapavan brings in more than 34 year experience in the financial and banking sectors. After completing the 3 years period of article ship, he served as an Accountant at LB Finance for almost five years. Then, he served at Bank of Ceylon in various capacities of Internal Audit officer, Accounting Officer and finally as Financial Accountant for seventeen years before accepting an overseas assignment. He served as Manager Administration & Finance at First Cayman Bank, at Cayman Island, a British Colony, for five years. On his return to Sri Lanka, he served at Seylan Bank PLC, as Chief Manager Finance for six years before retiring in 2006. He worked on special assignments at First Capital Limited for 6 months period and at The Finance Limited for a period of 18 months. He is a senior lecturer at the Institute of Bankers Sri Lanka, coaching students for the Diploma course in Banking and the Diploma course in Credit Administration. He is also a resource person of the Skills Development Centre of Seylan Bank PLC.
Mr. Saravanapavan is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka and holds a Bachelor of Science degree from University of Ceylon.
Appointed as a Director of Seylan Developments PLC on 30th November 2012. Ramesh Jayasekara is currently the Chief Financial Officer of Seylan Bank Plc and a Director of Seylan Developments Plc. Prior to Ramesh taking over as CFO, he was the Deputy Regional Financial Controller for BNP Paribas, Middle East Region – (Bahrain, Saudi Arabia, Kuwait, Qatar, Dubai, Abu Dhabi & Cyprus) based in Bahrain. He has over 16 years of Banking, Financial Management & Audit experience. Prior to this Ramesh worked at HSBC Sri Lanka as Resident Manager – Finance & Planning (PFS) and at KPMG Sri Lanka as an Audit Manager. Ramesh holds a first class honours degree from the University of Colombo. He is an Associate Member of the Institute of Chartered Accountants of Sri Lanka, an Associate Member of the Chartered Institute of Marketing UK and an Associate Member of the Certified Management Accountants of Sri Lanka.
Appointed as an Independent Non-Executive Director of Seylan Developments PLC on 11th January 2016
After a distinguished career spanning 21 years at Hatton National Bank PLC, MrPiyalHennayake retired on 31 December 2015. He was the Deputy General Manager – Services of Hatton National Bank PLC and the CEO/Director of its real estate subsidiary Sithma Development Pvt Limited. He joined Eco Power Group as the Head of Overseas Operations from 1st January 2016.
He headed HNB Project Finance Division since 1995 and developed it to be a major player in the banking industry. As the Assistant General Manager, Zone III he led one third of the Branch Network in 2004 & 2005. He was the Portfolio Manager of Lanka Ventures Limited from 1992 to 1995 until he joined HNB. After passing out from the University of Moratuwa he joined CECB as a Civil Engineer in February 1983 and worked in Hydropower projects such as Randenigala, Canyon and other infrastructure projects. He is an accomplished professional with 33 years of professional experience.
Starting as a Civil Engineering graduate of the University of Moratuwa, he later obtained Post Graduate Diploma in Construction Management from the same University. He received MBA in Management of Technology from the Asian Institute of Technology, Bangkok, Thailand in 1992. A Chartered Engineer and a Corporate Member of the Institution of Engineers Sri Lanka he served as the President of the Association of Professional Bankers Sri Lanka in 2014/2015. He is also a Graduate Member of Sri Lanka Institute of Directors.
He served as a visiting lecturer in the Universities of Peradeniya&Moratuwa and currently a visiting lecturer in Management of Technology for MBA in MOT in University of Moratuwa.