Lighthouse Hotel : Annual Report for the year ended 31st March 2024

Rooted in timeless familial values of passion, humility, and tenacity that define Jetwing Hotels, our abodes of authentic Sri Lankan hospitality welcome you with a heartfelt Ayubowan, a signature greeting embodying the warm hospitality of Sri Lanka. To us, authentic hospitality lies in fostering a sense of belonging, characterized by an abundance of warmth and generosity. This ethos begins with our dedicated team, who eagerly welcome you to become the focal point of our attention, wherever you find yourself on our paradise island - always with a distinctly personal touch that is authentically Sri Lankan.

INDEX

Overview

About Us	03
Our Hotels	05
Financial Highlights	06
Chairman's Letter	08

Management Discussion and Analysis

Operating Environment	10
Group Financial Review	14
Sustainability Review	18

Stewardship

Risk Management	22
Corporate Governance	30
Board of Directors and their Profiles	35
Remuneration Committee Report	38
Audit Committee Report	39
Related Party Transactions Review Committee Report	40
Annual Report of the Board of Directors
on the Affairs of the Company	41
Statement of Directors' Responsibilities	46

Financial Reports

Independent Auditor's Report	48
Statement of Financial Position	52
Statement of Profit or Loss	53
Statement of Comprehensive Income	54
Statement of Changes in Equity	55
Statement of Cash Flows	57
Notes to the Financial Statements	58

Annexes

Related Companies which had Transactions with the Company	103
Names of the Directors of the Related Companies
which had Transactions	106
Information to Shareholders and Investors	108
Ten Year Summary	110
Real Estate Holdings of the Group	112
Recurrent Related Party Transactions	113
Corporate Information	114
Notice of Meeting	115
Form of Proxy	117

ABOUT US

Nestled along Sri Lanka's breathtaking southern coastal belt, The Lighthouse Hotel PLC boasts a portfolio of three unique properties that are sure to leave you captivated. Each of our resorts are steeped in its own unique charm, offering a quintessentially Sri Lankan experience that is truly unforgettable.

The iconic landmark of Galle, Jetwing Lighthouse, is the flagship resort in the portfolio, from the inspired vision of Jetwing's founder, Herbert Cooray, to the boundless ingenuity of renowned architect, Geoffrey Bawa. Alongside Jetwing Lighthouse, the company also owns and operates Jetwing Kurulubedda - a quaint resort that perfectly blends with its natural surroundings, comprising of two private Dwellings with Plunge Pool and four Deluxe Rooms. Additionally, it also includes the trendy, easy-goingselect-service Hotel J Unawatuna, the perfect combination of adventure and affordability, without a compromise on comfort and excitement.

Jetwing Lighthouse, a space where hospitality and architecture finds its timeless expression.

The Verandah, embraced by the gentle breeze of the Indian Ocean, its name is inspired by the welcoming cobblestone terrace alongside an elevated lawn overlooking the sea. Recognized as one of Geoffrey Bawa's favoured corners of Jetwing Lighthouse, the enchanting ambience here stands as one of the most defining spaces of our home.

5

JETWING LIGHTHOUSE

One of Geoffrey Bawa's finest masterpieces, Jetwing Lighthouse stands atop a rocky promontory. Its open spaces embrace tropical modernism, offering 85 Luxury Rooms, including 5 Themed Suites, each featuring private balconies with stunning views. Guests can enjoy 24-hour room service, and access to a host of modern facilities and spa treatments. Culinary delights abound, with a variety of dining options to choose from as well.

JETWING KURULUBEDDA

Designed to harmoniously blend in with the surrounding nature, Jetwing Kurulubedda is an intimate boutique sanctuary nestled in Galle. Home to two private Dwellings with a Plunge Pool and four Deluxe Rooms - each fitted with contemporary essentials, this haven offers absolute tranquillity and serenity for a refreshing escape amidst the greenery. The open-air restaurant by the edge of the pool offers authentic local specialties. For a distinct dining experience, the Signature Dining experiences allow for dining amidst the welcoming greenery - on the deck of the pool, the terrace of your room, or in the tranquility of the garden.

HOTEL J - UNAWATUNA

Situated a short walk away from the Unawatuna beach, Hotel J Unawatuna is the perfect getaway to sun, sand, sea, jungle and adventure. Surrounded by several local attractions, Hotel J features 31 rooms and 5 dormitories, with an all-day restaurant that offers a colourful selection of local and international culinary delights.

The Lighthouse Hotel PLC | Annual Report 2023/24

Overview	6

Financial Highlights

Performance for the year ended 31 March		2024	2023
Revenue	LKR '000	1,360,170	731,240
Earnings before interest, tax, depreciation & amortisation (EBITDA)	LKR '000	399,274	85,290
Profit/(Loss) before tax	LKR '000	264,122	(105,639)
Profit/(Loss) after tax	LKR '000	175,885	(119,537)
Earnings/(Loss) per share	LKR	3.82	(2.60)
Return on Equity	%	6	(4)
Financial Position as at 31 March	LKR '000	3,994,176	3,838,534
Total Assets
Total Debt	LKR '000	243,509	394,822
Total Equity	LKR '000	2,930,283	2,774,402
Number of shares in issue	No. 000s	46,000	46,000
Net Assets per share	LKR	63.70	60.31
Debt/Equity	%	8	14
Debt/Total Assets	%	6	10
Current Ratio		0.87:1	0.44:1
Quick Asset Ratio		0.81:1	0.37:1
Market/Shareholder information
Market price per share as at 31 March	LKR	37.90	27.30
Market Capitalisation	LKR '000	1,743,400	1,255,800
Value added for the year ended 31 March	LKR '000	88,237	13,897
To Government as Income Tax
To Employees	LKR '000	248,996	168,987
To Shareholders	LKR '000	-	-

The Lighthouse Hotel PLC | Annual Report 2023/24

7	Overview

Financial Highlights Contd.

Revenue

Profit/ (Loss) after Tax

Earnings/ (Loss) per Share

Room Nights Occupied

The Lighthouse Hotel PLC | Annual Report 2023/24

Chairman's Letter

To the shareholders and well-wishers of The Lighthouse Hotel PLC Ayubowan (may you live long),

Last year, my statement began with the famous saying "when the going gets tough, the tough get going." Today, as I write this letter, I thank and praise God for gracing our country with peace and stability, enabling your company to achieve record results after four years of hardship.

As a pioneering hospitality company in Sri Lanka, Jetwing has constantly challenged norms and wandered into uncharted territories to bring out the best results for all our stakeholders. At the start of the financial year, your company's flagship hotel - Jetwing Lighthouse, Galle -faced immense pressure to conform to the all-inclusive (AI) model that became ubiquitous along the south coast, as it catered to select markets of which operators were offering many incentives, including guaranteed occupancies and upfront payments. We took the tough decision at the time to align with our values and focus on our primary source markets and community-focused business model. Ever since the 1990s, Jetwing has resisted the AI business model across our properties in Sri Lanka, starting with Negombo, emphasising on the principle that tourism must benefit everyone, and not only a few hotels and travel agencies. Destinations like Negombo and Galle, among others, are booming with many world-class restaurants and other tourism-related services that are driven by local entrepreneurs. While empowering local communities, this model also makes each city a thriving and sought-after destination in a consumer-driven market. Thankfully, the results showed positive outcomes from the decision taken, and I am proud of the young marketing and sales team of your company's managing agents that gave us the courage to take the narrow path, and the operational team at the hotel for delivering Jetwing's legendary authentic Sri Lankan hospitality.

The tough decisions taken, along with the increase in positive sentiments for travel to Sri Lanka towards the latter part of the calendar year, allowed your company to perform better than expected at the start of the financial year. Revenue for the year increased by 86% to LKR. 1.36 billion, resulting in a 350% increase in Profit Before Tax to LKR. 264.1 million. Despite the increased tax rates on hospitality establishments, your company earned a Net Profit of LKR. 175.8 million, reflecting a 247% increase from the previous year. I am also pleased to mention that your company was able to compensate its hardworking team by paying a bonus of 3 months to all associates, coupled with an average monthly service charge of LKR. 46,500/- which was paid in full to 188 associates. As a policy, Jetwing strives to pay 100% service

charge to as many associates as possible, resulting in most of our team members remaining faithful to the organisation for most of their careers. Your company also contributed LKR. 214 million to the local economy in the region, in the form of supplier payments, primarily for food. The Lighthouse Hotel PLC has historically paid out maximum dividends to our shareholders, while continuing to care for the hotel property and all stakeholders of the business and investing in new properties. As we return to profitability, I am happy that we have delivered on our promise from the previous year, of providing dividends to you once more.

The Jetwing Sustainability strategy encompasses the 6-pillared approach of the group to incorporate innovative solutions to foster holistic business practices that take care of both the environment and people. Your company's properties are prime examples of sustainable hotels and I encourage you to learn more about the initiatives taken to create a positive impact - you may do so by checking the sustainability section of the hotel's website as well as visiting the property and engaging in the daily sustainability tours.

As all of you know, Sri Lanka recovered well as a country and as a tourism destination. We are grateful to His Excellency President Ranil Wickremasinghe and Minister Harin Fernando, along with the leadership and teams of all tourism authorities, for working closely with the private sector and forging a path for recovery and growth. As we were flying smoothly towards our cruising altitude, we were recently met with clear-air turbulence by the unforeseen introduction of visa processing by a foreign private entity. While many countries are easing border controls to boost their tourist arrivals, especially regional competitors such as Thailand, it is not the time to add further constraints in the form of increased visa fees, with no revenue and benefit to the country. This is not only a concern for stakeholders of the tourism industry, but we as Sri Lankan citizens must all be alarmed by this decision and its inevitable repercussions. I strongly urge the leadership of the country to revise their decision at once, in the interest of all Sri Lankans and foreign visitors to our island.

Many attempts have been made recently to launch a consumer-focused destination marketing campaign, but we are yet to see it in action. The Sri Lankan Tourism Promotions Bureau (SLTPB) must utilise the funds contributed by the industry in the form of the tourism development levy