Hotels Corp. bottom line less than resthouse profits

The modestly capitalised but asset rich Ceylon Hotels Corporation (CHC) has posted a profit of Rs. 19.1 million for the year ended December 31, 2000, up from Rs. 16.3 million a year earlier, despite its rest houses earning a profit of Rs. 30.3 million.

CHC which has an issued capital of Rs. 8.4 million, including Rs. 2.4 million in 6% preference shares, is the controlling shareholder of Kandy Hotels Company (1938) Limited, owners of the Queens Hotel in Kandy, and Associated Hotels Company Limited, owners of the Lihiniya Surf Hotel in Bentota.

Among the more profitable of the rest houses during the year under review were Kitulgala which earned a profit of Rs. 6.3 million, Tissamaharama (Rs. 6 million), Polonnaruwa (Rs. 4.4 million) and Ambepussa (Rs. 3.7 million).

The Corporation’s operating profit according to its profit and loss account was Rs. 4.5 million during the year under review, down from Rs. 8.9 million the previous year. But this was boosted by Rs. 11.3 million interest on fixed deposits and Rs. 1.8 million on the profit of the sale of shares/fixed assets.

CHC had declared and paid a 50% dividend on its Rs. 3 billion ordinary two-rupee shares.

The Auditor-General has noted that the financial results and the positions of the three subsidiary companies had not been consolidated with the CHC accounts as required by the Sri Lanka Accounting Standards.

Among the accounting deficiencies he has reported was that a Treasury grant of Rs. 2.2 million for the acquisition of land had been shown under capital reserves although the land had already been disposed of.

Further, interest income on Treasury Bills and Fixed Deposits had been over-stated by Rs. 2.7 million due to incorrect calculations and classifications. Disposal of a motor vehicle and acquisition of shares amounting to Rs. 2.5 million have not been shown in the accounts.

The directors of the Corporation are: Messrs. Asoka Fernando (Chairman - Resigned 15.01.2001), N. Bennet Cooray (Chairman - w.e.f. 19.01.2001), G. L. A. Ondaatjie, B. A. W. Marasinghe, Sanjeev Gardiner and D. P. Mendis.