
01 Sri Lanka Telecom 8.000
02 Commercial Bank of Ceylon 6.250
03 John Keells Holdings 5.950
04 Ceylon Tobacco Company 5.025
05 Associated Electrical Corporation 4.650
06 Distilleries Company of Sri Lanka 3.900
07 Hatton National Bank 3.750
08 AitKen Spence & Company 2.750
09 Cargills (Ceylon) 1.900
10 Carson Cumberbatch 1.650
10 Sampath Bank 1.650
Business Today TOP 10
companies for the financial year 2008 – 2009
2008 – 2009 has been a year of reckoning. The Sri Lankan economy underwent a turbulent period with the global financial crisis, fluctuations in oil prices and the final stages of the high intensity conflict that ended in 2009. Through this period, the determined and the strong led the Sri Lankan private sector to great heights, whilst the weak were left behind. It is those Companies that strengthened the Sri Lankan economy that Business Today recognises in its TOP 10. Since 1998, Business Today has honoured the best corporate performers in Sri Lanka and its selection process has consistently identified the true corporate giants of Sri Lanka.
Ruptures that began surfacing in financial systems of the western world since the second half of 2007 signaling an impending crisis, led to a global financial meltdown in 2008. The crisis, the worst since the Great Depression of the 1930s, was triggered by the collapse of some of the world’s leading financial powerhouses, and the effects of the crisis now emaciating had its full impact on the world economy in 2008 and 2009. The world had intermittently experienced booms and busts in the preceding twenty-five years, but the crisis that blew-up in 2008 was a culmination of a super boom that had lasted over a prolonged period. Having enjoyed relatively stable conditions for some time, governments, businesses and people were not prepared for a crisis of this proportion, hence were taken unawares and rendered vulnerable. Although the crisis did not directly and severely affect Sri Lanka, depressed conditions, lower demand for goods and commodities and shrunk financial flows stifled economic growth and challenged our corporate sector.
Macro conditions in Sri Lanka during the year 2008 were less than desirable with inflation averaging above 20% and reaching a high 28.2% according to official reports. High interest rates and tight monetary controls restricted investments and the news of various financial scams caused ripples in the financial sector. The exacerbated efforts by the government to redeem the country from the scourge of war that plagued it for nearly three decades exerted great pressure on the fiscal front, but the budget deficit was managed and limited to 7% despite a decline in revenue and an increase in expenditure. The 6% GDP growth rate although falling short of the originally targeted 7% is commendable when viewed in light of global pressures and national priorities during the year.
Within the context setout above, sustaining and driving performance perhaps is a trait preserved by only the best and most daring businesses, and in Sri Lanka there are many examples of those who understand the art of remaining resilient, adapting and growing under trying conditions. The Business Today TOP 10 is a process to identify and recognise these torchbearers of Sri Lanka Inc, who in retrospection prove to be worthy of their place in the Business Today TOP 10 and continue to serve as beacons of corporate excellence and admiration.
Business Today true to its reputation as the magazine of the corporate world has since 1998 annually conducted its own survey of top corporate performers and recognized and honoured the best of the best. The survey is strictly based on published financial information of companies listed on the Colombo Stock Exchange.
Judged not by own assertion but by public perception the Business Today TOP 10 company ranking has earned its place in Sri Lanka’s business calendar as a judicious ranking of the top corporate performers in Sri Lanka. Encouraged by the trust in and enthusiasm towards the process by the business community and by those who matter, it is with great pleasure that Business Today presents its latest ranking of companies based on their financial performance in the year 2008/09.
As repeatedly observed in the past, competition for a position in the Business Today TOP 10 ranking is intense and closely contested. This is evident by the feedback received during the eleven years of the ranking. Companies that regularly secure a place in the list have done so by demonstrating an undying determination to sustain performance and by maintaining an unwavering focus on chosen strategy. The Business Today TOP 10 companies should be proud of their success, and those aspiring for a place in the list may find inspiration in and take a cue from the more recent entrants to the list. Companies who have claimed a place in the Business Today TOP 10 know what it takes to excel and will passionately protect or improve their position.
Business Today is guided by the principle of offering equal opportunity and a level playing field for all public quoted companies of acceptable and comparable size to seize a place in the ranking, the only condition being that they qualify and score well on the Business Today TOP 10 disclosed criteria.
Established financial criteria used for selecting the Business Today TOP 10 are; Sales Turnover, Growth in Sales Turnover, Profits, Growth in Profits, Return on Equity, Growth in Earnings per Share, Market Capitalisation, Value of Shares Transacted and Value Addition. It must be noted that a high and growing top line performance by any company although necessary is not sufficient to qualify as a Business Today TOP 10 performer; profitability is a key success factor and a critical measure for corporate performance.
As before, weights applied to the respective criteria are not disclosed due to proprietary reasons. Business Today assures that weights are assigned to the aforementioned criteria after due consideration of significance of criteria and ensuring all business and industry sectors are equitably represented. Weights are applied uniformly without prejudice.
A simple observation is that some business conglomerates that were once the icons and pride of corporate Sri Lanka and who had been in the Business Today TOP 10, have of late shown signs of fatigue. Their hesitance to respond to change and poor aptitude to ensure relevance in times of change are making them look more like bystanders on an expressway. Business Today hopes these conglomerates would soon get on the road and pick up their pace to lead Sri Lanka into the future.
It is by interesting coincidence that the latest Business Today TOP 10 ranking finds two companies obtaining identical scores to enter the list at number ten. Carson Cumberbatch and Sampath Bank are the two companies, and though practice and convention may suggest that only ten companies be selected, the tenth place is offered to both companies as they rightfully qualify to be within the Business Today TOP 10 scores for the year 2008/09.
As a rule of thumb the Business Today TOP 10 ranking could be viewed as a Vision Board of Corporate Sri Lanka. In a way it is a good barometer of the economy and a quick analysis of the Business Today TOP 10 list over the years provides a general view of the business trends in the country.
Prior to introducing the latest Business Today TOP 10 Companies, Business Today places on record its appreciation and admiration for those companies that have nurtured and shaped the Sri Lankan business landscape.
Sri Lanka Telecom after holding the second position in the Business Today TOP 10 ranking for two consecutive years moved up the ladder to claim the top position with a convincing lead in points. A little over a decade since privatisation, Sri Lanka Telecom has progressed from a one time State owned and managed bureaucratic institution to a modern dynamic Blue Chip on its way to setting the latest trends in ICT and leading Sri Lanka business beyond the country’s shores. As the lead telecom operator in the country Sri Lanka Telecom offers a complete range of services covering voice, mobile, broadband, Internet and data, and is unique in that it provides services to all other operators in the country.
In true characteristic of a company determined to leave its footprint on the global telecommunications landscape the company has aggressively invested in developing the telecommunication infrastructure within the country and in several regional and global initiatives. The payoff of these investments is evident from the position commanded by Sri Lanka Telecom as a business entity and its strength as a player in the Sri Lanka telecom sector.
In the absence of a Chief Executive Officer over the period of this review, the Chairperson gave strategic leadership, assumed the CEO functions and steered the company to success guided by the philosophy of “Strength and Resilience in Diversity”. Sri Lanka Telecom’s achievements truly deserve appreciation and applause particularly when considering the global, macro and industry conditions under which the company was forced to operate.
The company’s subsidiary Mobitel, a success story in its own right within the mobile telephony industry, contributed in no less measure to Sri Lanka Telecom’s outstanding performance during the year. Since becoming a fully owned subsidiary of Sri Lanka Telecom, Mobitel has with good foresight and efficacy emerged as a lead player in the mobile telephony space and led Sri Lanka in becoming the first in South Asia to adopt the latest 3.5G HSPA technology. During the year Mobitel reported a turnover in excess of Rs 12 billion and returned a Net Profit After Tax of Rs 1.2 billion.
As a major contributor to the development of telecom infrastructure in the county, since its privatisation in 1997, up to date Sri Lanka Telecom has invested over Rs 116 billion in this cause.
During the year Sri Lanka Telecom achieved a Group Turnover of 47 billion and posted an after tax profit of Rs 7.4 billion.
As the national telecom service provider Sri Lanka Telecom together with its mobile telephone service arm Mobitel, have built a credible reputation and a solid foundation that can be potentially used to make Sri Lanka a lead telecom centre in the region.
Commercial Bank of Ceylon, the globally respected, locally trusted name in commercial banking found its way up the ranking to number two from number four last year. The elevation in position was mainly a result of an overall strong performance by the bank in its operations in both Sri Lanka as well as Bangladesh.
Notwithstanding shrinking liquidity lines in the foreign currency market and tight domestic monetary controls, Commercial Bank reported sound profits from Corporate, Personal and Treasury operations. Commercial Bank reported a post tax profit of Rs 4.2 billion in 2008 compared to Rs 4.1 billion in 2007. The profit before tax was Rs 7.5 billion, an increase of 12.6% compared to the previous year. It must however be noted that the profit before tax is after charging Rs 692 million in payments made on account of hedging transactions and after recognising Rs 405.5 million in profits on sale of the Bank’s stake in shares of Commercial Leasing Company.
Having established itself as a lead name in the Sri Lanka banking sector and achieved a position of significant strength among banks in Sri Lanka with a network of 171 branches and 340 ATMs distributed around the country at present, Commercial Bank also has a subsidiary in Bangladesh and is a key player in the Bangladeshi banking sector.
John Keells Holdings, the number one company of the Business Today’s TOP 10 ranking last year slid two positions to number three in the current ranking. The transportation sector that had been the main profit generator of the group suffered a setback as a result of the Supreme Court judgment pertaining to the Lanka Marine Services (LMS) privatisation. It must have been a trying year in the history of the company, but the seasoned conglomerate with a capacity to meet the toughest threats, confronted the challenges head-on and reported a healthy turnover and profit and ensured a top position in the Business Today TOP 10. The Chairman of the John Keells Holdings Group in his message to the shareholders of the company stated “the fact that we have emerged relatively unscathed with a strong balance sheet and renewed focus is a testimony to the capability of the women and men of John Keells who have ‘what it takes’ to ensure JKH remains a superior creator of value for all the stakeholders.” Recognising human resource as critical to success and consciously investing substantially in the development of that resource has probably contributed in large measure to John Keells success thus far, and may well remain a durable source of strength in sustaining its position of excellence.
A constant top performer on the Business Today TOP 10 ranking,
John Keells Holdings has stood the test of time and proved time and again that it can and will remain a dominant corporate player. Business Today has previously identified the John Keells Group as a worthy benchmark for all progressive businesses in Sri Lanka, and we remain firm in that conviction.
In the year 2008/09 the John Keells Holdings reported an after profit tax of Rs 4.74 billion based on reported revenue of Rs 41.02 billion.
Transportation remained the chief contributor to the Group’s overall performance, despite the LMS setback. The sector, with an after tax profit of Rs 1.67 billion made up 34% of the group profitability. Last year in the Business Today TOP 10 review of John Keells Holdings we stated, “the significant impact of the transportation sector on the overall performance of the JKH Group presumably renders the company vulnerable to any material adversities in that sector, and this may come to bear in the ensuing year due to the contingency associated with the bunkering operation of the Group”. One year onwards that suspicion has proved valid, but John Keells Holdings must be credited for maintaining a stellar performance despite the loss of revenue and profits due to the LMS issue that occupied the business headlines over several weeks.
Post tax profit of the group’s leisure sector declined by 63% compared to the previous year. A profit after tax of Rs 128 million was reported for the sector but that is marginal by reason that the leisure sector represents the largest asset base in the group. Negative travel advisories on Sri Lanka by key European countries during the period adversely impacted on the sector and high utility and input costs coupled with escalating inflationary conditions reportedly worsened the situation. Closure of a property in the Maldivian sector to allow construction of a breakwater combined with high fuel costs and a slow down in the long haul travel had negatively affected the Maldivian segment of the leisure sector of the group.
Performance of the Group’s Property, Consumer Foods and Retail, Information Technology and Plantation sectors declined, but the Financial Services sector of the Group reported encouraging results. With the acquisition of Union Assurance Company shares held by Carson Cumberbatch by John Keells Holdings during the year, Union Assurance became a subsidiary of the company and a share of its profits helped improve the profitability of the financial services sector of the group.
John Keells Group has done Sri Lanka proud in the past, and though may be forced to encounter challenges as all large and small businesses do, the group is well set and poised to stay defiant and emerge stronger than before.
Ceylon Tobacco Company, a permanent fixture in the Business Today TOP 10 list since the origin of the ranking, was a noted absentee on the list last year. A super performer cannot be kept quiet for long, and true to form Ceylon Tobacco Company returns to the list of top corporate performers this year, and that too by securing for itself a place among the top half of the best performers, in fourth position.
The tobacco market in Sri Lanka is not a growth market. The counterfeit market and illegal imports had posed a major threat for a long period to the company, and in more recent times with state intervention that threat has been curtailed.
Under static market conditions any business must innovate to remain relevant and viable. Towards business sustenance the company had repositioned itself as a responsible player in the market and redefined its product mix and offer. On the cost side of the business Ceylon Tobacco Company having mastered the art of achieving operating efficiencies, managed costs with expert proficiency, and the result is a commendable performance in profitability and profit related indices.
The contribution by Ceylon Tobacco Company towards the state coffers cannot be discounted. During the year, whilst recording a strong overall performance, Ceylon Tobacco Company also reported a contribution of Rs 50 billion in the form of taxes and levies to the state and claimed a 2.1% contribution towards the national GDP.
Little is known of the great service performed by Ceylon Tobacco Company in the interest of larger society. The company’s Sustainable Agriculture Development Program (SADP) reportedly more than doubled in scope during the year with an increase from 1,600 families to 3,576 families. The intended outcome of the initiative is to raise the living standards of poverty stricken families through improved nutritional intake, self-sufficiency, women empowerment and higher disposable income. Encouraged by the progress of SAPD, the company has embarked on a similar but more elaborate CSR plan in the Eastern Province to support a further 4,000 families.
In the year 2008 Ceylon Tobacco Company reported a profit after tax of Rs 2.76 billion, an increase of Rs 867 million over the previous year, based on a Rs 54.8 billion sales turnover.
Associated Electrical Corporation, enters the Business Today TOP 10 under rather peculiar circumstances. A company with a focus on investing in Capital and Monetary Markets and Rental of Commercial Property, for most part of its existence operated below the business radar. During the year Associated Electric Corporation sold its 51% holding in Associated Motorways at a profit of Rs 4.3 billion. This single high yield transaction secures for it fifth place in the Business Today TOP 10.
It is highly unlikely that Associated Electric Corporation would return to the Business Today TOP 10 list in future, as on July 1, 2009 the shares of the company was removed from the official list of the Colombo Stock Exchange after the percentage of shares held by the public reduced to 1% as a result of a re-purchase of shares by the company.
Distilleries Company of Sri Lanka has slid three positions to number six this year. Distilleries Company of Sri Lanka, another privatisation success story as repeatedly referred to by Business Today, is today a major conglomerate with diverse interests spanning beverage, plantations, financial services, telecommunications and healthcare and through its associated companies logistics, infrastructure and leisure.
The consolidated turnover of the Distilleries Group for the year was Rs 40.8 billion and Group after tax profit was Rs 3.4 billion. The lower sales turnover and profit compared to last year can be attributed to the loss of the Group’s profitable subsidiary. The weaker performance of the DCSL Group during the year was also due to the poor performance of the Group’s telecommunication sector.
As leader of the local liquor segment in the country, the beverage sector performed credibly despite an overwhelming prevalence of illegal and illicit liquor in the local market. The Plantation Sector performed relatively well during the first three quarters of the year due to an internal crisis in Kenya and higher demand for leafy teas. A drastic drop in commodity prices in the world market during the last quarter adversely affected the sector, and high inflation, high input costs and rising labour tension negatively affected the sector. The Telecommunications sector of the Group performed poorly and this is a phenomenon that affected the entire telecom industry. With the entry of a new operator competition increased to a new level leading to price wars and heavy advertising and promotion costs. Despite the poor performance the company has committed new investments towards upgrading its telecom network and rolling out new products and services.
With new challenges emerging from within and outside the country, the Distilleries Group would be expected to deliver under pressure, and the entrepreneurial spirit of the Distilleries Group may well be put to test.
Hatton National Bank ranks at number seven this year. Hatton National Bank reported an after tax profit of Rs 3.2 billion during the year, supposedly the highest in its history of operations. This achievement merits recognition, as it is a reward for persistent growth under daunting global and domestic economic conditions that were compounded by global and domestic financial collapses and scams. Driven to outdo challenges and thrive under trying conditions, Hatton National Bank has maintained its will to succeed where others dread. A local bank with a distinct and credible reputation for strength and stability, Hatton National Bank has in the recent years embarked on a programme of upgrading and expansion. The Bank has a wide presence in the country through its network of branches and ATMs, and has a distinct reputation for expanding outside the traditional urban centres.
Hatton National Bank has ventured in to overseas markets where either a strong Sri Lankan diaspora is present or where opportunities are presented. The Bank ventured into Oman in alliance with a local partner with a focus on the remittance business covering the entire Pan Asia region. Hatton National Bank also obtained regulatory clearance during the year to operate two similar offshore operations in the UAE and Canada. Plans are underway to establish a presence in India and Bangladesh.
With a view to realising the synergies of two leading corporate giants from the financial sector, Hatton National Bank combined with DFCC Bank to set up an equal ownership joint venture. During the year Hatton National Bank divested its 100% and 50.1% shareholdings in HNB Stockbrokers and HNB Securities respectively, to the newly formed joint venture with DFCC Bank and in the process realised profits and dividends to the tune of Rs 475.5 million.
Hatton National Bank is known to follow sound lending practices and has shown in the past that it has the required asset strength to grow as well as cover against all exposure risks. Hatton National Bank will in all likelihood muster its strengths to hold and grow its stature specifically within the banking sector and generally within the Sri Lanka corporate sector.
Aitken Spence & Company, a lead player in the leisure sector, delivered excellent results during the year while other players in the sector struggled to come to terms with the prevailing conditions. The Aitken Spence Group posted a profit after tax of Rs 3.1 billion, a growth of 8.4% compared to the previous year. The reason for the above industry return is a result of a strategic decision to look for growth opportunities in the leisure sector outside the country. Aitken Spence has firmly established itself as a formidable player in its chosen sectors in the Maldives, South Africa, India and Oman.
As reported in the Chairman’s Statement, Positive performances in maritime transport, integrated logistics, power, printing and inward remittances helped grow the bottom line during the year while the returns from plantations and garments probably fell short of management expectations.
As a long-standing business conglomerate the Aitken Spence Group has stood as a tower of support to the corporate sector of the country and earned the respect of entrepreneurs, business leaders, governments and society at large. It has been a large employer of people and a breeding ground for top executive talent. Since its origins the Aitken Spence Group has evolved and shaped itself to remain competitive despite its growth in size. A striking difference between the Aitken Spence Group and some other conglomerates of its vintage is that, the Aitken Spence Group has shown a higher appetite for risk and an insatiable appetite for growth. These attributes have placed the group in good stead to take advantage of change and continue to be noticed as a giant in corporate Sri Lanka.
Cargills (Ceylon) entered the Business Today TOP 10 list a year ago at the tenth place and this year notched one place up to number nine. Having evolved from its original four department stores, Cargills (Ceylon) is today the fastest growing and largest retail chain in Sri Lanka. The company continues to invest in food and agriculture, and with the expansion of the retail outlets to 136 during the year, new opportunities were reportedly presented to more rural famers and entrepreneurs. The company is also actively participating in the revival of the Eastern Province with the opening of outlets in Batticaloa, Ampara and Trincomalee. At present Cargills has established its presence in 23 districts of the country.
Cargills (Ceylon) owns and operates its own manufacturing and distribution arm. The company also owns the KFC franchise in Sri Lanka, and it introduced the first KFC drive-thru in the South Asia region. During the year a full year of operation of Millers Distribution was brought under the fold of Cargills. An Island-wide reach and distribution capability of Millers is expected to help Cagills (Ceylon) further penetrate the market.
Turnover of the company during the year was Rs 16 billion and profit after tax was Rs 499 million.
Carson Cumberbatch, occupies 10th position together with Sampath Bank in the Business Today TOP 10 ranking. The company reported a post tax profit of Rs 2.95 billion during the year.
The plantation sector, which recorded a profit of Rs 1.9 billion, reportedly experienced widely fluctuating market conditions. Turnover in the plantation sector declined by 8% due to market volatility, and margins were squeezed by nearly 10% as a result of an escalating cost structure due to high input costs.
The Group’s brewery business reported a turnover growth of nearly 20% resulting from both volume and price gains. Profit resulting from the higher turnover could have been better if not for the high interest costs due to increased borrowings to finance capital expenditure for the proposed brewery operation in India.
The investment sector recorded an improved performance of Rs 1.2 billion resulting from the sale of several substantial minority holdings within the sector aimed at improving the bash resource base of the Group. The investment sector committed an equity infusion of Rs 262 million for a 15% stake in Durdens Medical and Surgical Hospital Limited.
Carson Cumberbatch, at company level recorded a profit of Rs 4 billion largely as a result of the sale of its investment in Union Assurance to John Keells Holdings. The company also divested its subsidiary stakes in the Malaysian Oil Palm companies, and this brought in a profit from sale of investment of Rs 4 billion.
The capital of the company increased to 96.268 million ordinary shares with a stated capital of Rs 1.118 billion as a result of a combined share split and capitalisation of reserves that increased the quantity of shares in issue by almost 16 times, thus enhancing the liquidity, affordability and tradability of the shares.
Sampath Bank, enters the Business Today TOP 10 ranking at tenth position together with Carson Cumberbatch. Led by a purpose to pursue and accomplish its goal of fulfilling the role of a national bank, in the truest sense of the words, Sampath Bank is fast adjusting under the astute direction of a successful entrepreneur and under the trusted leadership of a seasoned and expert banker to deliver banking solutions that fit the actual needs of the corporate and retail customer.
Since coming together the new management team of the bank lost no time in translating its plans to actions. Within a short period of time the bank has rolled out new products and is fast expanding its presence within the country true to its desire to fulfilling its role as a national bank.
During the year Sampath Bank reported a profit after tax of Rs 1.53 billion signifying a growth of 26.9% over that achieved in 2007.
Now that Sampath Bank has entered the Business Today TOP 10, its sustained performance and determination to build its growth momentum very likely secure for it a higher position in future Business Today TOP 10 rankings.
The Business Today TOP 10 companies have been selected on the basis of their financial performance by Keith Bernard, with assistance of KPMG Ford Rhodes, Thornton & Co.
Business Today thanks all past and present voluntary contributors for making the Business Today TOP 10 a reality.
Business Today TOP 10 winners 2007 – 2008, after receiving their awards from Chief Guest Defence Secretary Gotabaya Rajapaksa

L-R: Chairman and Managing Director of BT Options – Mathi K Parthipan, Keith Bernard of the Business Today TOP 10 analysis team, Rajan Brito – Deputy Chairman & Managing Director, Aitken Spence, Tilak de Zoysa – Chairman, Carson Cumberbatch, Harry Jayawardena – Chairman of Distilleries Company of Sri Lanka, Defence Secretary Gotabaya Rajapaksa, Susantha Ratnayake – Chairman, John Keells Holdings, Suresh Kumar – Managing Director, Lanka IOC, Amitha Gooneratne – Chief Executive Officer, Commercial Bank, Nihal Kekulawela – Chief Financial Officer, Hatton National Bank, Leisha De Silva Chandrasena – Chairperson, Sri Lanka Telecom, Ranjit Page – Chief Executive Officer, Cargills (Ceylon), Dr Hans Wijesuriya – Chief Executive Officer, Dialog Telekom and Dinesh Weerakkody, one of the architects of Business Today TOP 10





