Strategic Decesion Making and the Importance of Financial and Non-Finacial Information

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STRATEGIC DECESION MAKING AND THE IMPORTANCE OF FINANCIAL AND NON-FINACIAL INFORMATION

Contents

Executive Summary1
1Introduction to John Keells and its Leisure Business2
1.1Leisure Sector Financial profile for the financial year 2011/20124 1.2Nonfinancial information5
2Literature Review8
3Financial Analysis and Strategic Decision Making Process11 3.1Strategic Decision making process and Analysis involved11 3.2The financial and non-financial analysis of JKH Leisure sector12 4Evaluation and Synthesis of Decision Making Process16

5Conclusions and Recommendations18
6Post Report Reflection19
References20
Annexures21

Executive Summary

John Keells Holdings PLC (JKH) is Sri Lanka’s largest listed conglomerate in terms of market capitalization. Company has been able to mark its presence in all major industry spheres it operates including Transportation, Leisure, Property, Consumer Foods & Retail, Financial Services and Information Technology, among others. The objective of this report is to critically discuss whether financial information is likely to give a better indication of the likely future success of the business than non financial information. The objective will be achieved through a detailed study starting from identifying the strategic planning, controlling and decision making process of JKH Leisure sector, managed through John Keells Hotels (Pvt) Limited and, analyzing the extent of the use of financial and nonfinancial indicators, tools and information within the process. The analysis will be supported by the published literature on the use of financial and nonfinancial information in decision making with related examples. Related data will be gathered from the company web site, annual reports and the internal sources. Upon completion of the analysis areas to be improved will be highlighted with appropriate recommendations. The whole process is designed with the intention of enhancing the knowledge of application and usefulness of financial and nonfinancial information in the process of informed decision making.

1Introduction to John Keells and its Leisure Business
John Keells Holding (JKH) is the Sri Lanka’s largest capitalized company listed on Colombo Stock Exchange (CSE). It is an AAA (lka) credit rated company by Fitch Ratings Lanka Ltd. Currently the company interest in major business areas of Transportation, Leisure, Property, Consumer Foods & Retail, Financial Services and Information Technology. The origins of the company lies in a produce and exchange broking business started by two Englishmen, Edwin and George John, in Colombo, in the early 1870s. In October 1986 a newly incorporated John Keells Holdings Ltd. (JKH) acquired a controlling stake in John Keells Limited and obtained a quotation on the Colombo Stock Exchange amidst a heavily over-subscribe/d public share issue. The companies process of diversification today has resulted in a 70-member conglomerate. The parent firm, now known as John Keells PLC, became a public quoted company in 1974. Share information of the group

Source: JKH Aannual Report 2011/2012

JKH became the pioneering Sri Lankan company to be listed in a foreign country, through the issuance of Global Depository Receipts (GDRs), which are listed in the Luxemburg stock exchange. The Group’s investment philosophy is based on a positive outlook, bold approach, commitment to delivery and flexibility to change. (JKH Group Highlights, 2011/12) JKH is an active member of the United Nations Global Compact initiative and a full member of the World Economic Forum. The leisure sector is the JKH’s single largest net asset exposure. The sector operates locally and internationally via City Hotels, Sri Lankan Resorts, Maldivian Resorts, Destination Management and Hotel Management. Company owns two city hotels which represents 40% of...
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