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The Department of Public Enterprises was re-established in 2002 to improve the performance
of Public Enterprises through close monitoring and implementing corporate governance practices.
This handbook on Financial Performance of Commercial Public Enterprises is the fourth of this kind
and the tenth publication of the Department since its re-establishment. Main purpose of this handbook
on Financial Performance is to improve the management information system as a tool for efficient and
effective management of the enterprises.
Handbook contains the mission, major activities and performance trend for the years 2001 to 2004 and 2005
budgeted figures together with brief comments on the performance in respect of each of the sixty five (65) Commercial Enterprises.
Performance trend includes actual and budgeted values obtained from the respective Institutions. Further, the handbook contains
comments on aggregate performance supported by Tables, showing sector wise analysis for the consecutive years 2003 and 2004 respectively.
It would be observed that there has been a remarkable improvement in performance of the Commercial Public Enterprises in the year 2004
compared to the previous year. While total revenue has increased by 21%, the net profit before tax has increased by 27%. Total cost of
employment of the Enterprises has increased marginally during the year with a slight drop in the number of employees. The capital expenditure
however has declined substantially during the year. This high performance could be attributed mainly to the performance of Central Bank
Sri Lanka. Return on total assets has improved from 2% to 3% during the year while the return on equity remained at 8%.
During the year the Government under its key reform initiatives emphasizing the importance of public enterprises management, identified
twelve (12) enterprises and brought them under the purview of Strategic Enterprise Management Agency (SEMA) with effect from August 2004.
The performance of Strategic Enterprises in this handbook covers only ten (10) enterprises (excluding Sri Lanka Central Transport Board
and Sri Lanka Railways). The performance of these enterprises is far from satisfactory during the year. Although the total revenue of
these Enterprises has gone up by 18% the net profits before tax have declined by 64%. However there has been an increase in the asset base
and equity. The effect of initiatives taken by SEMA to improve the performance of Strategic Enterprises could be seen only in the years to come.
The revenue generation of Non Strategic Commercial Enterprises (excluding Central Bank of Sri Lanka) has improved only by 4% during the year
while the profit before tax has declined by 2%. The performance of Central Bank of Sri Lanka has been excluded in this aggregate analysis to
avoid distortion.
The performance of the six (6) Development Banks has improved only marginally during the year. Total revenue although has improved by 16% during
the year the net profit before tax has increased only by 1%.
It is note worthy to mention the financial performance of the Central Bank of Sri Lanka during the year has improved tremendously.
While the total revenue has increased by 90%, net profit has increased by 139% during the year.
Overall performance of the sixty four (64) Commercial Public Enterprises excluding Central Bank of Sri Lanka however has deteriorated very
sharply during the year. Although the revenue has increased by 16% during the year, gross profits and net profits before tax have declined
by 4% and 44% respectively. However there has been a substantial build up in the asset base and the equity coupled with the increase in liabilities.
This publication would not have been a reality if not for the untiring effort and dedication of all the staff of this department and the
cooperation extended by the Public Enterprises themselves. I wish to express my sincere appreciation to the staff of this Department who
contributed immensely in compiling this information and making this publication a success. I also wish to express my gratitude to the Board of
Management and the Officials of all the Commercial Enterprises for their cooperation extended to my staff in performing this task.
V. Kanagasabapathy,
Director General
Department of Public Enterprises.
30th September 2005
Comments on Aggregate Performance
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