Hemas Holdings recorded a Revenue of Rs. 23.6 Bn in 3Q

Hemas Holdings CEO's Review

It is a pleasure to present the results of your company for the nine months ending 31st December 2014. The Group recorded a revenue of Rs. 23.6Bn for the period, a growth of 19.5%. Key drivers of this growth were our Consumer, Healthcare and Leisure sectors. The consolidated operating profit for the period was Rs. 2.2Bn, recording a growth of 19.0%. Consolidated profits from continuing operations grew at 21.1% to post Rs. 1.5Bn. Underlying earnings growth of the core businesses adjusted for oneoff items stood at a healthy 46.0%. The key one-off items are the Rs 157Mn loss on the disposal of the Group’s stake in Hemas Power PLC and the capital gains recognised in the previous year of Rs. 364Mn from the land transfer of Peace Haven to PH Resorts, a joint venture company. However, consolidated earnings posted a decline of 21.5% to record Rs. 1.2Bn.

Our FMCG sector posted a revenue growth of 24.0% led by both volume and value growth seen in the personal care, personal wash and home care categories. During the quarter our personal wash brand, Velvet launched a new variant with the refreshing fragrance of Aloe and Kohomba, while our sanitary napkin brand Fems introduced a premium napkin to cater to increasing demand since its re-launch last year. Our revenue growth was also boosted by our operations in Bangladesh, which launching its own distribution network in November. Due to this excellent performance profitability grew by 32.9% for the period. 

The Healthcare sector achieved revenues of Rs. 10.1Bn, a growth of 14.2%, led by our Hospitals, which saw a steady build up in revenue at our third hospital in Thalawathugoda and good growth at JL Morison. The pharmaceutical business continued to be impacted by challenging market conditions that have prevailed since the end of 2013. The overall market contracted by 1% during the period ending October 2014. Notwithstanding the adverse circumstances the business posted a reasonable top-line growth, maintaining its market leadership position with a market share of 21% (Source: IMS). Our hospital in Wattala continued to strengthen its performance during the quarter with increased occupancy, additional services and the rapid expansion of our diagnostics business contributing to a growth in bottom-line. Our Hospital at Thalawathugoda posted a significant growth in revenue of 148% over last year winning the patronage of the local community. During the quarter our efforts at striving for excellence at our hospitals was rewarded with our Wattala hospital winning the runner up award for the healthcare category at the National Business Excellence Awards 2014 organised by the National Chamber of Commerce of Sri Lanka, while our Southern Hospital won the first place in the private hospital sector at the "Dhakshina Suwa Wiru Abhishekaya -2014" Award Ceremony, organised by the Provincial Director of Health Services - Southern province.

JL Morison performed well during the quarter posting a revenue growth of 44% over the previous year contributed to by the growth in healthcare and agro businesses. The upgrading of our manufacturing facility continued to improve the healthcare segment revenues during the quarter, while the sector’s investments in building its OTC and consumer portfolio boosted category revenue. JL Morison released “A Chronicle of J. L. Morison Son & Jones (Ceylon) PLC”, a coffee table book narrating its origins and development through the years, in commemoration of its Diamond Jubilee in December 2014. The book includes the origins, evolution and growth of J L Morison through troughs and peaks and is filled with anecdotal stories from long-standing employees and excerpts from Company documents which record the Company’s history over the past seven and half decades. We believe in building on this heritage in strengthening the company’s product portfolio. 

Our leisure sector posted a growth of 24.5% to post a revenue of Rs. 2.0Bn, largely attributable to the growth achieved by our hotel sector which recorded a top-line of Rs. 1.0Bn, a growth of 47%. The performance of the hotel sector reflects the impact of the closure of our Club Hotel Dolphin and Hotel Sigiriya for refurbishment during the corresponding period, last year. Our hotels are enjoying a reasonable winter season with the hotels posting an overall occupancy of 77% for the period, in comparison to 76% posted the previous year. 

The transportation sector revenue for the period stood at Rs. 1.1Bn, a growth of 22.6% while profitability grew at 19.6% to record Rs. 345Mn. Performance was largely driven by the increase in performance of the Maritime and Logistic segments, while our Aviation segment showed signs of recovery during the quarter. Our recent venture in Logistics, posted a good performance during the quarter with an increase in container handling, storage and haulage activities aiding the increase in both the sector top-line and bottom-line. 

During the quarter the Group divested its interest in its Power business to a consortium of buyers, consisting of NDB Capital Holdings PLC, ACL Cables PLC and Trydan Partners Private Ltd for a consideration of Rs. 1.7Bn, recognising a capital loss of Rs. 157Mn on its book value. The focus of the group is developing our core strengths in Wellness, Leisure and Mobility industries. 

As we head into the final quarter of the financial year, we are confident that our portfolio rationalisation and renewed focus on our core areas will yield us strong growth across our businesses as we look to maintain and build on our industry leading positions.

Steven Enderby CEO Colombo January 12, 2015

Sri Lankan stocks hit near 1-wk closing low; Keells dips

Feb 16 (Reuters) - Sri Lankan stocks closed lower to touch a near one-week low in thin trading on Monday as selling in market heavyweight John Keells Holdings Plc weighed on the index.

The main stock index, edged down 0.47 percent, or 34.76 points weaker, at 7,300.75, its lowest closing level since Feb. 10.

Turnover slumped to a three-week low of 612 million rupees, well below this year's daily average of 1.47 billion rupees.

"There is not much buying interest (in Keells) as investors were waiting for prices (of the stock) to come down further to collect," said Dimantha Mathew, manager, research at First Capital Equities (pvt) Ltd.

Shares in Bukit Darah Plc fell 4.22 percent, while conglomerate John Keells Holdings Plc fell 1.11 percent.

Foreign investors bought a net 35.7 million rupees ($268,825) worth of shares on Monday, extending their year to date net purchases to 1.58 billion rupees. The bourse saw net foreign inflows of 22.07 billion rupees in 2014.

The stock and foreign exchange markets will be closed on Tuesday for a Hindu religious holiday. Normal trading will resume on Wednesday.

($1 = 132.8000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

India signs nuclear pact with Sri Lanka, countering China

Sri Lankan President Maithripala Sirisena signed a deal with India to receive training for his country’s civilian nuclear program, a sign of improving ties as he looks to reduce the island nation’s dependence on China.

Mr Sirisena, on his first overseas tour since winning an election last month, hailed his country’s close relations with India in a joint briefing with Prime Minister Narendra Modi in New Delhi. Under the deal, India would provide knowledge and expertise to Sri Lanka as it seeks to build a nuclear plant.

“The bilateral agreement on civil nuclear cooperation is another demonstration of our mutual trust,” Mr Modi told reporters today (Feb 16).

“This is the first such agreement that Sri Lanka has signed. It opens new avenues for cooperation.”

India is one of the few countries with expertise in reactors suited to smaller power grids, and state-run Nuclear Power Corp. has previously expressed interest in exporting them. An international embargo placed on India over its atomic bomb tests in 1974 and 1998 was lifted seven years ago, allowing the nation to begin selling reactors overseas.

Mr Sirisena has promised to rebalance Sri Lanka’s foreign relations away from China. Officials under his predecessor, Mr Mahinda Rajapaksa, had rankled India by suggesting that Pakistan — whose reactors have mostly been built by Chinese companies — may help it build nuclear power plants. (Source – Today Online)

Keells hotels in the top slots in resort space

John Keells Hotels (KHL) competes in the number of 1 to 3 position in the Sri Lanka resort space with competition from Aitken Spence Hotel Holdings, privately owned Jetwing Hotels group and Amaya Leisure, a Softlogic Stockbrokers Report says.

Being a pioneer in Sri Lanka’s hospitality industry, KHL has the largest room portfolio in Sri Lanka and the group has refurbished most of its key properties, whilst adding 350 rooms in FY12-13, the report said.

“As future strategies, KHL announced plans to consolidate its overall branding strategy where all its existing resorts would be brought under the ‘Cinnamon’ brand during the coming years. Currently only four Sri Lankan properties are starred in the premium brand category. Therefore once consolidated the group would see all its properties in Sri Lanka and Maldives amounting to 1,336 rooms tagged under its Cinnamon brand,” the report said, adding that KHL has laid down plans to increase its capacity by adding two properties in Nuwara Eliya and Yala. KHL topline remained intact at Rs. 2.9 billion during 3QFY15 due to the Maldivian sector shouldering nearly 55 per cent of the group turnover dipping marginally. “However, the Sri Lankan sector revenue showed single digit growth which is 2.6 per cent year on year (YoY)) in 3QFY15. Both segments were adversely affected by external dilemmas where occupancies during the peak booking periods of November and December were impacted by the economic volatility in Russia and the continuing unrest in Ukraine. On the back of the marginal revenue growth, faster escalating overall costs and higher tax expense, KHL’s net earnings declined 7.6 per cent YoY to Rs.417.6 million in 3QFY15. Group tax expense rose amidst taxable profits declining due to the large increase in the Sri Lankan segment’s tax expense.”

The report said tourist arrivals to Sri Lanka grew some 13 per cent in 3QFY15, although the performance of the Sri Lankan resorts was impacted by the timing of the Presidential Election which was held in January 2015. Thus occupancies of the local segment dipped marginally from about 83 per cent in 3QFY14 to nearly 78 per cent in 3QFY15. Maldivian tourist arrivals for the quarter showed a marginal dip of 1 per cent although John Keells properties managed to sustain occupancies at +90 per cent (similar levels as 3QFY14) despite taking a marginal hit on their average room rates (-16 per cent YoY).

In 1-3QFY15 KHL Group revenue grew 6 per cent YoY to Rs. 9 billion due to the growth in both segments. Further aided by the large decline in net finance costs, net earnings saw a sharp increase of about 49 per cent YoY to Rs. 888.5 million. “The Sri Lankan segment saw sharp growth in profits amidst 1-3QFY14 recording a loss whilst Maldives shouldering nearly 74 per cent of group earnings grew about 3 per cent YoY.”
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Sri Lankan pump and dump offenders must be brought to book – Jafferjee

By Duruthu Edirimuni Chandrasekera


Sri Lankan investors who pump and dump on shares should be prosecuted with the same level of seriousness of other crimes such as burglary and theft, according to the CEO of a top broking firm.

Murtaza Jafferjee, CEO JB Stockbrokers told the Business Times that pumping and dumping exists (contrary to some irrational beliefs in the past) and that totally illegal.

“There’re two types of pump and dump – one is pump and dump on unsuspecting retailers; other is doing so on shares of fiduciary institutions such as the Employees Provident Fund (EPF) in connivance with officers within,” he said, highlighting that both these happened in the past at the Colombo Stock Market.

Probes of market manipulation and insider trading against 17 investors, brokers and institutions, including high-profile businessmen were nearing completion in August 2012 when some powerful investors complained to President Mahinda Rajapaksa regarding the then Securities and Exchange Commission (SEC) Chairman Thilak Karunaratne saying he was enforcing rules that were too rigid and not market-friendly. Mr. Karunaratne who resigned during this time after a losing battle to strengthen the regulatory process, has returned to the SEC with many saying that the investigations against past malpractices will be restarted.

Mr. Jafferjee noted that market manipulation including pump and dump are ‘not’ victimless’ crimes. “Pump and dump shouldn’t be confused with speculation. Speculators are those who bet on shares by predicting what prices they should be at in the future,” he reiterated. He added that volatility in a capital market is an undeniable factor where speculators will take directional bets on volatility. He said that in the past market abuse was 15 to 20 per cent of regulation, which was the most controlled and highlighted. “This is where the public has been harmed the most. There’s full trace and transactions are an electronic exchange. The exact identity can be traced.”

Mr. Jafferjee added that there’re manipulators in a share market, because the wrongdoers are exploiting inefficiency.

“If a market is liquid they can’t do it,” he said, adding that the first challenge in this backdrop is to increase the financial assets and introduce things such as short – selling which will drive transaction costs lower.

He also noted that shares are an under – owned asset class. “The challenge is to increase equity as an asset class.” According to Mr. Jafferjee it’s easier to regulate through competition than through regulatory enforcement. “The regulator has to ensure there’s sufficient competition.”

Further on regulation Mr. Jafferjee added that there should be a sufficient deterrent to counter malpractices and an element of seriousness.

He added that contrary to popular market belief, the capital market should have a fewer number of listed firms and a large number of investors followed, well run firms which will give a better breadth and depth to the market.

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Casino owner Perera fed up with taxes

Paying some 65 per cent in cumulative taxes for his casinos doesn’t seem to go down well anymore with Dhammika Perera, considered one of Sri Lanka’s biggest businessmen.

He will operate only two casinos out of the three casinos in the future, having decided to close down one of them in a restructuring exercise, sources close to the business tycoon said. “He has plans to continue with the casino situated at D.R. Wijewardene Mawatha in Colombo and he hasn’t decided which other one he will operate,” a source told the Business Times. He said that Mr. Perera pays more than 65 per cent in taxes for each casino which are considered as money spinners.

He added that Mr. Perera’s casinos staff some 2,000 employees and that it’s difficult to close two casinos at once. The decision to quit operations in one casino came about with the new government’s interim budget deciding to slap a special tax of Rs. 1 billion from casino owners for each of their gaming centres.

Also following suit is businessman Ravi Wijeratne who is considering closing one of the two casinos owned by him, the sources said.
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100 acres of Touchwood properties void

By Sunimalee Dias

About 100 acres of Touchwood Investments property allegedly sold to at least six persons would be considered void or invalid under the Companies Act, the company’s liquidator said last week.

Touchwood Investments Liquidator Sudath Kumar has identified about 100 acres of land that was transferred to six persons that would be invalid since it had taken place during the voidable period of within one year of filing the winding up case in the Comercial High Court.

In this regard, Mr. Kumar is expected to file a separate motion in court highlighting that they would prove it was transferred to the six parties during the voidable period under the Companies Act.

While some say that these properties were transferred to the individuals for a sum of money, these transactions need to be investigated, Mr. Kumar said.

It has also been ascertained that upto now the company has land assets amounting to a maximum of 50 acres from around the country.
Meanwhile, the liquidator closed the date for submission of applications as November 30, 2014 totalling 1800 from all parts of the country but late applications would also be allowed.

The first date of maturity of the sold properties under the Touchwood Investments would be 2018/19 for the Bomaragala estate, Mr. Kumar said.
In the meantime, Touchwood Investments is alleged to have invested illegally in properties in Thailand since Mr. Kumar noted they were unable to find any documents pertaining to obtaining approvals from the Sri Lanka Central Bank to do so.

In this regard, it would be a violation of the Exchange Control Act which would mean there was a legal barrier to prove the money had been taken from Sri Lanka for investments in Thailand.

Further, the Touchwood office in Hong Kong has also been under liquidation .
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Dicey taxes are bad signals for investors

By Duruthu Edirimuni Chandrasekera

The one-time tax on corporate profits in excess of Rs. 2 billion in FY 2013/14 which was imposed solely to help relieve the fiscal pressure of new President Maithripala Sirisena’s promises is a bad signal to the private sector as it creates uncertainty regarding the future outlook and direction of the government, analysts say.

Immediate fiscal pressure is expected as there is likely to be a mismatch between government revenue and expenses over the next three to six months, according to Purasisi Jinadasa, Chief Strategist, Capital Alliance Securities. He told the Business Times that the wording provided in the mini-budget indicates a blanket accusation across the board regarding unethical business practices (recently retracted, but still a concern).
The one-off super-gains tax, which is more of a stop-gap measure is expected to net in some Rs. 50 billion to the state coffers and limit the revenue loss. Individuals or corporates having made over Rs. 2 billion in profits during FY13/14 are to pay a one-off 25 per cent tax to the government.

“Such statements during a national budgetary speech are extremely disturbing and unprofessional. It points to a lack of foresight during the election process, as the measures announced are not sustainable and purely populist. All this brings a degree of apprehension, particularly amongst the investing community as it may lead to future arbitrary accusations in order to bridge the fiscal gap,” Mr. Jinadasa said. Given Sri Lanka is in need of a significant degree of private sector investment (local and foreign), Mr. Jinadasa said that this concern will have to be addressed in a more professional and transparent manner.

The single biggest effect will be on the 26 listed firms that are in the ‘two billion club’. Analysts say that policy backtracking like this has dangerous, long term consequences with investments.

“We believe such inconsistencies in policy (particularly with ones with retrospective effect) could send dangerous signals to the long term investors of Sri Lankan securities,” an analyst said. He added that the Finance Ministry will need to add more clarity into the legislative areas of administering the ‘super gain’ tax.

Political instability

Mr. Jinadasa said that such policies reflect the current political environment and certain policies may be viewed as temporary (to consolidate power in the forthcoming parliamentary elections). “The mini-budget is a very socialist agenda compared to policies of the previous regime. This raises further confusion as the current regime is composed of the UNP, a party known for progressive policies. The current composition of the government is very unstable. The coalition that won the elections in January comprises parties with highly differing platforms. The UNP is a pro-business party (Prime Minister), while Sirisena (President) comes from a more socialist party. Added to this dichotomy is minority representation from the TNA (Tamil) and SLMC (Muslim) and a Buddhist party (JHU). Such a mix of views does not point to any form of a stable political/policy environment,” he explained, adding that this issue re-emphasises the need for transparency and quick dissemination of new government policies to prevent shocks and unnecessary volatility while assuring the professional community that certain announcements are in order to consolidate power.
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Pharma companies to earn more.....

Sri Lanka's improvements in healthcare have created stronger commercial opportunities for drug makers in the country,which is also experiencing an epidemiological shift towards chronic diseases.

However, strong reliance on foreign aid as well as medicine price caps will limit increases in revenue earning opportunities, Sri Lanka Pharmaceuticals and Healthcare Report Q1 2015 of the Business Monitor International (BMI) says.

According to the report, Sri Lanka's Pharmaceutical Risk/Reward Index (RRI) score for Q1 2015 stands at 38.2 out of 100, making it the 17th most attractive pharmaceutical market in the Asia Pacific region.

In 2013 Sri Lanka has spent Rs. 67.7 billion (US$ 524 million) for pharmaceuticals and Rs. 75.09 billion (US$ 570 million) in 2014. For Healthcare in 2013 Sri Lanka has spent Rs. 261.04 billion (US$ 2.02 billion).

The amount has increased to Rs. 283.97 billion (US$ 2.16 billion) in 2014.
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ADAM investments lends to Bieco

The Board of Directors of Adam Investments PLC, ratified the lending of Rs. 151.02 million to Bieco Link Carbons (Pvt) Ltd at an annual interest rate of 8% per annum on November 26, 2014. The re- payment is due on demand.

A Bieco Link Carbons (Pvt) is a fully owned subsidiary of PCH Holdings PLC which is a subsidiary of Adam Investments PLC.

The said funds were utilized for settlement of Bieco Link Carbons (Pvt) Ltd liabilities at DFCC Vardhana Bank, in full. Accordingly, assets of the company including property, plant and machinery are now free of any encumbrances.

As per the Interim Financial Statements as at 30th September 2014, Property, Plant and Equipment value of PCH Holdings Plc were stated as Rs. 22.8 million due to removal of Bieco Link Carbons (Pvt) Ltd from its books.

Subsequent to the acquisition by Adam Investments Plc and reinstatement of Bieco Link Carbons (Pvt) Ltd to PCH Holdings Plc, a fresh valuation had been carried out to ascertain the fixed asset value of Bieco Link Carbons (Pvt) Ltd.

Accordingly, the fixed assets of Bieco Link Carbons (Pvt) Ltd have been valued at Rs. 532.0 million by a qualified valuer and this value will be reconstituted to the assets of PCH Holdings PLC on 31st December 2014 financial statements. Previous valuation datedAugust 28, 2011 recorded a value of Rs. 401.1 million.
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MTD Walkers ventures into infrastructure development support services

15th February 2015, Colombo:MTD Walkers PLC, one of Sri Lanka's most reputed and diversified holding business groups has further diversified its business interests by establishing a "new"strategic business unit (SBU);Walkers Equipment Limited. This new subsidiary of the company was incorporated for the primary purpose of conducting business activities as an Infrastructure Development Support Business (IDSB); to handle the distribution and maintenance of infrastructure development related machinery / equipment and allied products.

Walkers Equipment Limited was set up also taking into consideration the strategic and competitive advantage it offers to MTD Walkers PLC, which has under its umbrella both CML - MTD Construction Limited and Walkers Piling Limited, both of which are amongst the top five infrastructure developers in Sri Lanka. Both these companies are engaged in numerous infrastructure development projects in Sri Lanka and overseas.

Walkers Equipment Limited has acquired the franchisee rights for 'SANY' branded machinery and equipment and is the exclusive and sole distributor for 'SANY' in the territory of Sri Lanka and Maldives. 'SANY' is amongst the largest and most established manufacturers' of machinery and equipment in China with over 36 production facilities in China, USA, Germany and India and is also ranked amongst the top 10 global manufacturers of machinery and equipment.

"Walkers Equipment Limited has set itself lofty goals of becoming a full line supplier of construction machinery and equipment, as well as achieving market leadership for its product portfolio within the next five years of operation," said Yung Sheng Tsung, General Manager - Walkers Equipment Limited.
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Waters Edge to invest Rs. 9 bn for mixed development

Gaffor Building to be ready soon

Waters Edge will introduce a dedicated Kids play area mid this year in their crusade to provide more facilities to the guests.

Waters Edge General Manager, Rohan Fernandopulle. Pictures by Salliya Rupaisnghe

Waters Edge General Manager, Rohan Fernandopulle said that Waters Edge is not only confined to the rich but affordable to all. "We have multi cultural weddings this is now in high demand."

He said that The Water Residencies will be ready by two and half years adding more value to the present property. Under this mixed development project the proposed hotel with an investment of Rs 9 billion will consist of 250 rooms including suites and luxury apartments thus making the venue a one stop shop for Meeting Incentive Conference and Exhibitions (MICE).

Under this mixed development project, a shopping arcade too will be constructed. He said that in addition they will also invest on adding more space to the existing Ballroom which is in great demand.

Commenting on the profits of the Waters Edge he said that they are aiming at a Rs. one billion revenue for 2015. "Of this 70% will be from hosting banquets. Staff also had average Rs, 40,000 per month as Service Charge which has come in for high praise."

The 70 room city hotel being built in the 100 year old Gafoor Building which is to be completed next year too will be managed by Waters Edge.

"This will be a colonial type all suite hotel which will be priced for around US$ 200." It would have three fine dining restaurants, a pub, pool and many other facilities"

Poised on the edge of serene water ways and framed by luscious green pastures dovetailed with pools filled with exotic water lilies, "Waters Edge" elucidates a picturesque tranquility in the capital of Sri Lanka. "Although this expansive estate was once rooted as 'members only', today Waters Edge has something for everyone," said Fernandopulle; Dining at the hotel is a gourmet experience with several dining options to choose from. Pranzo, the hotels Italian restaurant offers mouthwatering authentic Italian cuisine. From authentic Italian pizza, delicious pasta with flavorful sauces to the restaurants very own homemade ice cream, makes Pranzo the perfect dining venue.

The recently opend Drive through bakery too is another major draw to the venue. Essentials ratifies as the hotels patisserie, featuring the popular "grab and go" concept, offering fresh breads, juices, delectable cakes and sweet treats.

"The Boardwalk, located away from the main property, provides guests with a breathtaking view of the lake and a "must see" for all visitors, offering a casual lounge experience, with a selection of mouth-watering tapas and mains" said Director Sales and Marketing Thilanka Muthukumarana.

Waters Edge' was honored to be the recipient of the '5 STAR' International Property Award as the 'BEST LEISURE DEVELOPMENT - SRI LANKA'. The award was a testament issued by INTERNATIONAL PROPERTY AWARDS, (UNITED KINGDOM) to excellence in the property field, and the very innovation and high standards demonstrated by the world's leading property professionals. It also won several other awards.
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Asian Alliance Insurance profit soars to Rs. 752 mn

Asian Alliance Insurance PLC (AAI) a part of the Softlogic Group posted a profit after tax fof Rs 752 million for the financial year ended December 2014. This is more than doubling the result for the previous year which was Rs 362 million.

The performance for 2014 is a reflection of the persistent execution of business goals that have enabled the Company to surpass industry standards and capture market share setting it up on a trajectory of exceptional profitability and stable growth.

The company has posted outstanding top line growth recording Gross Written Premium of Rs 4.8 billion for 2014, which is a growth of 17% compared to the previous year with Life Premiums increasing 21% to record Rs 3.0 billion and General Insurance Premiums increasing 11% to Rs 1.7 billion.

These growth rates are well above industry standards and confirm the success of the strategies that are being executed by the dedicated and talented team at Asian Alliance.

The results for 2014 also saw Net Earned Premium growing by 28% to Rs. 4.1 billion whilst Total Net Revenue increased by 44% to Rs 6.1 billion. Total Assets of the company surpassed the 10 billion mark to Rs 10.3 billion as at December 2014 and had increased by 38% from Rs 7.5 billion the previous year. Equity and Reserves of the Company also surged to reach Rs 2.5 billion increasing by 40% versus the previous year.
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HNB Assurance posts 20% increase in turnover, declares attractive dividends

HNB Assurance PLC has successfully completed its last year as a composite insurance company by recording a 20% growth in its turnover during the year ended 31st December 2014. Its General Insurance sector achieved a 25% growth in Gross Written Premium while the Life Insurance sector delivered a 16% growth. The Company was able to outperform the industry by a considerable margin in both markets improving its market share to 4% in General Insurance and 5% in Life Insurance.

While achieving a significant expansion in business volumes, the Company was able to achieve a 7% growth in Profit After Tax. This is the 10th successive year in which the Company has been able to deliver a growth, both in turnover and profits. In order to share the benefits of this exceptional performance with its shareholders, the Company has declared an attractive dividend of Rs. 3.75 per share which represents a 15% growth over the previous year.

Not forgetting the life policyholders of the Company, very attractive bonus and dividend rates have been declared to them in respect of the year ended 31st December 2014. Life policyholders with participating policies will be eligible for bonus declarations of up to Rs. 65 per 1000/- sum assured depending on the year of purchase while non-participating policyholders will receive a dividend of 8% on their policies.

The Company has also retained its Fitch rating of 'A (lka)' for Insurer Financial Strength and National Long Term Rating with a stable outlook. In compliance with the regulatory requirement to split the life and general insurance business into separate Legal entities, the Company established a fully owned subsidiary under the name of HNB General Insurance Limited and transferred its General Insurance business to this Company with effect from 1st January 2015.

HNB General Insurance Ltd which has now commenced business operations with a share capital of One Billion Rupees has already received an 'A (lka)' rating from Fitch for Insurer Financial Strength and National Long Term Rating with a stable outlook, on par with its parent company. HNB Assurance and HNB General Insurance Ltd have thus become the first pair of companies to obtain a rating after being segregated.

Commenting on above, Manjula de Silva Managing Director HNB Assurance and HNB General Insurance expressed his satisfaction on being able to complete the last year as a composite company on a high note setting a strong platform to launch a new era of rapid growth as two separate entities.
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