2021 Annual Report

Window of
Opportunity...
Annual Report 2021
2 F Airport and Aviation Services (Sri Lanka) (Private) Limited
OO
PR
Annual Report 2021
Contents
3 Vision & Mission FINANCIAL REPORTS
6 Financial Highlights 81 Report of the Auditor General on the Financial
7 Performance Highlights Statements
8 Organizational Structure 86 Statement of Comprehensive Income
9 Year at a Glance 87 Statement of Financial Position
10 Chairman’s Message 88 Statement of Changes in Equity
14 Leadership Team 89 Statement of Cash Flows
19 Senior Management Team 90 Notes to the Financial Statements
24 Report of the Board of Directors on the Affairs 118 Connectivity and Dimensions
of the Company Corporate Information (Inner Back Cover)
30 Report of the Audit and Management
Committee (AMC)
34 Management Discussion and Analysis
46 Sustainability Management
50 Financial Review
56 Management of Human Capital
64 Risk Management
71 Corporate Governance
...to Global
Potential
As the pandemic raged on, taking its toll on a worldwide scale, the aviation
industry faced a steep obstacle in finding ways to keep passengers connected
to the world in safe and effective ways within the year under review. Our
role in facilitating more arrivals while securing the borders, resulted in the
adoption of safety measures and guidelines, which not only protected those
who wished to experience the best of the country but also those who played
a vital role in ensuring the smooth functioning of the airport. While the
gradual reopening of the travel industry poses its own unique challenges, we
believe that our ability to adapt and adopt innovation, and our continuing
progress in creating new experiences to enhance visitor engagement will help
us remain competitive as an acclaimed travel hub, opening up the window of
opportunity in achieving our global potential.
2 Airport and Aviation Services (Sri Lanka) (Private) Limited
Annual Report 2021
Annual Report 2021
VISION
“Friendliest aviation partner in global connectivity
towards a sustainable economy.”
MISSION
“To provide competitive, safe aviation services and
superlative guest experience with best practices
and latest technology to ensure stakeholder
satisfaction.”
OPENING UP
Annual Report 2021
A WORLD OF
POSSIBILITY FOR
TRAVELLERS
Annual Report 2021
Annual Report 2021
Financial Highlights

2021 2020 2021/2020 2019 2020/2019
LKR. Mn LKR. Mn +/- % LKR. Mn +/- %
Profit & Loss

Turnover 7,879 8,011 -2% 25,693 -69%
Operating expenses before depreciation 9,006 9,768 -8% 10,649 -8%
EBITDA (1,176) (1,805) 35% 15,012 -100%

Depreciation of fixed assets 2,648 2,854 -7% 2,841 0%
Net Finance costs / (Income) (2,815) (878) +100% (3,018) -71%
Profit Before Taxation (961) (3,733) 74% 15,222 -100%
Income Tax 1,123 (1,228) -100% 4,226 -100%
Profit After Taxation (2,084) (2,504) 17% 10,996 -100%
Profit/(Loss) attributable to equity shareholders (2,084) (2,504) 17% 10,996 -100%

Cash Flows
Dividends - - - 500 -100%
Cash and Cash Equivalents as at December 31st 413 826 -50% 2,480 -67%
Total Capital Expenditure for the year 22,960 2,169 +100% 4,068 -47%

Financial Position
Shareholders Fund as at December 31st 41,314 36,983 12% 39,231 -6%
Total Carrying Amount of Non-Current
Assets as at December 31 st 79,414 55,571 43% 55,300 0.5%
Total Current Asset as at December 31 st 47,430 47,645 0% 52,975 -10%
Total Current Liabilities as at December 31st 7,927 6,202 28% 7,323 -15%
Prior year figures have been re-arranged whenever necessary to conform to the current year’s presentation.
-100% or +100% indicates the variances more than 100%
All figures are subject to rounding differences
Annual Report 2021
Performance Highlights

2021 2020 2019 2018 2017
Operating Highlights
International Flight Movements Nos. 21,204 20,881 62,195 67,351 62,850
Passenger Movements* Nos. 1,505,479 2,375,056 9,958,688 10,884,028 9,957,502
Cargo Movements** M.T. 241,506 150,075 259,089 279,559 274,044
Overflying Movements Nos. 9,339 16,370 45,674 43,804 39,413
Total number of Employees as
at December 31st Nos. 3,985 4,098 4,182 3,836 3,908

Highlights in Ratios
Return on Equity % (5) (7) 28 19 37
Profit before tax to total net revenue % (12) (47) 59 36 52
Profit before tax to shareholders fund % (2) (10) 39 37 47
Total Revenue to total Assets Times 0.06 0.08 0.24 0.29 0.24
Total assets per Employee LKR’000 31,830 25,187 25,891 26,286 22,267
Total staff cost per employee
- Per Annum LKR’000 1,881 1,811 1,944 1,947 1,644
Total cost per Flight Movement LKR’000 574 738 235 318 202
Revenue per Passenger Movement LKR 5,234 3,373 2,580 2,640 2,085
Profit after tax per Passenger Movement LKR (1,384) (1,054) 1,104 488 875
Aircraft Movements per Employee Nos. 5 5 15 18 16
Passengers per Aircraft Nos. 71 114 160 162 158
Passengers per Employee Nos. 378 580 2,381 2,837 2,548
Return on Equity % (5) (7) 28 19 37
Profit before tax to total net revenue % (12) (47) 59 36 52
Profit before tax to shareholders fund % (2) (10) 39 37 47
Total Revenue to total Assets Times 0.06 0.08 0.24 0.29 0.24
Total assets per Employee LKR’000 31,830 25,187 25,891 26,286 22,267
Total staff cost per employee
- Per Annum LKR’000 1,881 1,811 1,944 1,947 1,644
Total cost per Flight Movement LKR’000 574 738 235 318 202
Revenue per Passenger Movement LKR 5,234 3,373 2,580 2,640 2,085
Profit after tax per Passenger Movement LKR (1,384) (1,054) 1,104 488 875
Aircraft Movements per Employee Nos. 5 5 15 18 16
Passengers per Aircraft Nos. 71 114 160 162 158
Passengers per Employee Nos. 378 580 2,381 2,837 2,548

Gearing Ratio % 39 19 13 20 35
Return on Total Assets % (2) (2) 10 5 10
Net profit Ratio % (26) (31) 43 18 42

Capital Productivity Index Times 0.00 0.10 0.25 0.29 0.24
Earning Per Share LKR (10,417) (12,522) 54,979 26,566 43,574
Current Ratio Times 5.98 7.68 7.23 3.49 2.78
Total Income to Total Expenditure Times 0.92 0.76 2.04 1.49 1.85
* Passenger movements include Arrival, Departure, Transfer and Transit excluding domestic passengers.
** Cargo movements include Export, Import and Transshipment excluding Domestic Cargo & Air mails.
Annual Report 2021
Organizational Structure
Board of Directors
Chairman/CEO
Vice Chairman Information Technology Division
Finance Division
Mechanical Engineering Division
Internal Audit & Quality Assurance Division

Supply Chain Management Division
Security Services Division

Human Resources Division
Commercial & Properties Division

Civil Engineering (Planning & Design) Division
Civil Engineering (Maintenance) Division Legal Division
Architecture, Landscaping & Interior Design Airport Management Division

Division
Fire & Rescue Services Division Civil Aviation Training Division
Electronics & Air Navigational Engineering

Electrical Engineering Division Division
Safety Unit Air Navigation Services Division
Project Division
Strategic Management Division
Marketing & Corporate Communications Division
Cargo & Air Freight Management Division
Intelligence & Security Operations Division

Annual Report 2021
Year at a Glance
1,505,479 9,339
International Passenger Movements Overflying Movements
21,204 241,506 MT
International Aircraft Movements Cargo
LKR 7,386 Mn LKR 2,083 Mn

Turnover Net loss after tax
3,985 974 Employees

No. of employees No. of Training Opportunities
Annual Report 2021
Chairman’s Message
Annual Report 2021
I am delighted to share the annual report of Airport and Keeping passenger and employees safe was of utmost
Aviation Services (Sri Lanka) (Private) Limited (AASL) for importance during the pandemic. AASL imposed
2021, a year marked by challenges as well as a number restrictions on inbound passengers from high risk
of developments, bringing to mind the phrase “Survival countries that recorded sudden spikes of COVID-19
of the Fittest”. The slow recovery from COVID-19 and the infections. Voluntary vaccination drives were introduced
emergence of a number of COVID-19 variants around the to employees of AASL and other related institutions as a
world resulted in the snail pace recovery of the aviation precautionary and safety measure. Under this, over 4,100
industry and as a result in 2021 AASL recorded its lowest employees were administered with the second dose of the
revenue in recent years. COVID-19 vaccine, while eligible employees were given
the booster jab in November 2021.
AASL revenue for 2021 fell by 2% to LKR 7.38 Bn
compared to LKR 7.51 Bn last year. This is a 71% Employees were encouraged to adhere to COVID-19
decrease compared to the pre-COVID-19 revenue of LKR safety guidelines including maintaining of social distancing
25.65Bn in 2019. AASL’s overflying income also remained protocols. The Company also adopted work from home as
low and reported a decline of 27% YOY due to the and when required to avoid the spread of the virus among
continued travel restrictions imposed by many countries. staff members.
A significant decline of 37% in passenger movements
caused revenue from embarkation levy to reduce by 35% Steering the Business
from LKR 1.5Bn to LKR 0.9Bn. The proactive steps taken by AASL greatly contributed
to keep the business afloat throughout the year. Sri
In 2021, AASL achieved a milestone by improving air Lanka’s successful vaccination drive against COVID-19
traffic statistics of MRIA (Mattala Rajapaksa International and Sri Lanka’s reputation worldwide as a renowned
Airport) substantially with a recorded highest number of travel destination helped the speedy arrival of tourists
aircraft movements and passenger movements since its immediately after travel restrictions were eased.
inception.
Promoting Sri Lanka as a niche health tourism destination
I am pleased to share that AASL took steps to recover a by drawing attention to Sri Lanka’s legacy of “Hela-
long outstanding debt from the national carrier as per an Vedakama” (Ayurvedic medicine) has been a driving factor
agreed settlement plan through effective negotiations. in promoting Sri Lanka over other tourist destinations.
Challenges Faced During the Year The need of world-wide travelers to engage in cross
The aviation sector continued to face a number of border travel for many reasons such as leisure, business,
challenges in addition to the direct impact of COVID-19. MICE (meetings, incentives, conferences and exhibitions),
These included the declining market conditions, the to visit friends and relatives (VFR), medical and
disruption of economic activities as a result of the pilgrim purposes has kept the potential of the industry
pandemic’s effect on almost all sectors of the economy, unblemished and able to contribute towards industry
airlines adapting cost effective operations, closure of growth.
adjacent flight information region (FIR) which affected the
overflying movements, and declined passenger movements AASL’s main strategy during 2021 was the recovery
affecting commercial contracts operated at airports. from the disrupted demand. AASL negotiated with
airlines for the resumption of flight operations and
Managing COVID-19 and Related Challenges revisited all commercial contracts with lease partners
AASL took a number of steps to reassure passengers (concessionaires) who occupied a rented space in our
about precautions taken to reduce health risks due passenger and cargo terminals to ensure that pricing
to COVID-19. This included accreditations and terms were consistent with passenger movement.
recommendations by the Airports Council International
(ACI), International Civil Aviation Organization (ICAO) AASL efforts were rewarded by the latter quarter of
and Council Aviation Recovery Task Force (CART). 2021 with 4 airlines resuming operations to BIA. We also
The accreditations were received by Bandaranaike secured 97% of commercial contracts which were initially
International Airport (BIA) on 11th January and by MRIA presented pre-COVID, while 22 number of new contracts
on 30th June 2021. were also signed during the year.
Annual Report 2021
Chairman’s Message
Substantial concessions were given to concessionaires
from 2020 and the gradual increases in flight and
passenger movement in 2021 protected existing
concessionaires as well as to achieve a win-win situation
by sharing the financial pressure amongst partners.
Recovery of Sri Lanka’s Opportunities and Initiatives

A number of opportunities to promote tourism in Sri Lanka
tourism sector supported arose during the year, encouraging efforts to develop and
restore the domestic tourism industry. Sri Lanka being
with identified market named a favored tourist destination and being located
in the highest aviation movement region presented
segments for each airport opportunity for AASL to promote its services. Branding Sri
Lanka as a destination for wellness tourism, a fast growing
and its niche offer is our global niche, provided opportunity to promote Sri Lanka
as a sought after niche tourist destination.
future aspiration. The
Prospects in the domestic aviation sector included
strategy involves market growing demand for sightseeing and long distance flights
during the second half of 2021. This benefitted AASL by
stabilization for BIA, renting out the hangar space and by generating revenue
from landing and parking flight movements. Additionally,
market growth for MRIA, increasing regional demand for aviation training and the
recommencement of scheduled airlines during the fourth
new market entry for quarter of 2021 was an encouraging turn of events for
AASL.
CIAR and JIA, driving a
During the year, initiatives were taken to promote MRIA
boom in domestic aviation as an exotic tourist destination, resulting in 12 airlines
commencing flights to/from MRIA in 2021. A joint
within the country’s air promotion was carried out by AASL in partnership with
domestic airlines in a bid to encourage domestic aviation.
strips. The materialization The Civil Aviation Training Centre was rebranded as the Sri
Lanka Airport and Aviation Academy to promote Sri Lanka
of this strategy needs as an aviation training center, a step towards establishing
the training arm of AASL as an accredited aviation training
to be optimized within institute by ICAO.
the available window of Future Strategy

Recovery of Sri Lanka’s tourism sector supported with
opportunity, which will in identified market segments for each airport and its niche
offer is our future aspiration. The strategy involves market
turn have a positive effect on stabilization for BIA, market growth for MRIA, new market
entry for Colombo International Airport (CIAR) and Jaffna
other opportunities. Internation Aitport (JIA) driving a boom in domestic
aviation within the country’s air strips. The materialization
of this strategy needs to be optimized within the available
window of opportunity, which will in turn have a positive
effect on other opportunities.
Annual Report 2021
The positive outlook for tourism and the aviation sector in

Sri Lanka relies on the country maintaining a conducive
environment for tourism, and the steady decline of the
threat of COVID-19.
Appreciations
Firstly, I would like to thank the entire workforce and all
stakeholders for the commendable, dedicated and loyal
support extended to AASL in continuing this essential
service of aviation despite the threat of COVID-19.
I wish to extend my gratitude to the Board of Directors

for actively driving an effective strategy to overcome
the challenges, and the senior management for their
commitment towards realizing our corporate strategy.
My sincere thanks to the Cabinet Minister, the State

Minister in charge of AASL, line ministry, Civil Aviation
Authority, Tourism Development Authority and Tourism
Promotion Bureau for their guidance and cooperation in
relevant administrative and policy functions.
A special thank you to the airlines who have continued to

fly into Sri Lanka and all agencies housed at our airports
for their trust and confidence in us.
Maj. Gen. (Rtd) G A Chandrasiri RWP USP VSV ndc psc

Chairman
10th June 2022

Annual Report 2021
Leadership Team
Seated Left to Right
Ms. D A De Livera - Non-Executive Director | Maj. Gen. (Rtd.) G A Chandrasiri RWP USP VSV ndc psc - Chairman
Mr. R Sooriyaarachchi - Vice Chairman
Standing Left to Right
Eng. U S Manchanayake - Non-Executive Director | Mr. R A P Wijerathnasekera - Non-Executive Director

Mr. G A A Priyantha - Non-Executive Director / Treasury Representative
Annual Report 2021
Mr. D A P Weeratna, PC - Non-Executive Director | Mr. A S Warushahennadige - Non-Executive Director

Ms. V L Udugampola, AAL - Company Secretary
Mr. S Sumanasekara - Non-Executive Director | Mr. W M G Rashantha - Non-Executive Director

Mr. A H S Gunawardena - Ministry Observer
Not in the picture

Mr. C Vitharena - Non-Executive Director
Annual Report 2021
Leadership Team
Major General G A Chandrasiri RWP USP VSV ndc psc Prior to being appointed as the Vice-Chairman of AASL,
Chairman Mr. Rajeewasiri functioned as the Chairman of Puttalam
Major General G A Chandrasiri was appointed as the Salt Limited during 2010-2015. He has also served as
Chairman of AASL in December 2019 and since then the Chairman of the Cooperative Rural Bank Union Ltd
serves as the Chairman as well as the Chief Executive – Gampaha, during 2011-2015. Presently, he also serves
Officer at AASL. He chaired board sub-committees as the Vice Chairman of Cooplife Insurance Company
on Strategic Planning and Management, Financial Ltd since 2022 and holds directorship positions at
Management, and Revenue Generation at AASL during Cooperative Insurance Company Ltd since 2016 and
2021. Road Development Authority from 2007 – 2010.
He also serves in the Board of Bank of Ceylon PLC as

an independent non-executive director. He holds an Mr. S Sumanasekara
illustrious military career of 35 years, in a number of Non-Executive Director
key command and staff appointments in the Sri Lanka Mr. Shehan Sumanasekara, is a member of the board
Army including Chief of Staff of the Sri Lanka Army, of AASL since December 2019. Being a commercially
Principal Staff Officer at the Joint Operations Command rated pilot, he brings in a wealth of experience and
Headquarters and Regimental Commander of the Sri technical knowledge required to identify opportunities and
Lanka Army Special Forces, Commander of the Security current demands in the aviation industry. His diversified
Forces Headquarters, Jaffna, Military Security Co- experience covers industries such as aviation, oil and gas,
ordinator to HE the President, and Competent Authority shipping and logistics, coal, chemicals and bituminous
for the resettlement of internally displaced people in product manufacturing.
the Northern Province in the aftermath of war. He is
recipient of the prestigious awards of recognition such He is also the Managing Director/CEO of Mclloyds
as Rana Wickrama Padakkama (RWP), Vishishta Sewa Holdings and holds Directorships in three other diversified
Vibushanaya (VSV) and Uththama Sewa Padakkama organizations. Mr. Sumanasekara holds a Masters Degree
(USP). He also served as the Governor of the Northern in Business Administration from the University of Wales
Province from 2009 to 2015. (UK) and holds a commercial pilot license from Federal
Aviation Authority (FAA) USA.
He graduated from the National Defense College, India
and Defense Services Command and Staff College, Over the years, he has contributed to the group of
Bangladesh. He also served as a member of the National companies which he manages and represents, with
Task Force for Prevention of COVID-19 outbreak as well unprecedented growth in business and expansion of
as a member of the Post-COVID Tourism Revival Task services and supply chain management.
Force during recent times.
Mr. Sumanasekara also chairs the “Jana Sahana
Padanama”, an NGO assisting communities to uplift
Mr. R Sooriyaarachchi quality of life, and seeks to transform the lives of many
Vice Chairman children in Sri Lanka by various initiatives to achieve
Mr. Rajeewasiri Sooriyaarachchi was appointed as Vice- equality in education.
Chairman of AASL in December, 2019 and serves as
the only full-time Executive Director of AASL next to the He was appointed by the Board as the Director in charge
Chairman. He brings over 30 years of experience and of MRIA and also as the director in-charge of Operations
extensive knowledge in the fields of insurance, consumer in all airports during the tenure at AASL. He also chaired
electronics and international business administration. the Commercial and Properties Board Sub-Committee
Since his appointment, he played a pivotal role in during 2021 prior to its reconstitution as the Revenue
overseeing administrative and operational functions of Generation Board Sub-committee.
all airports under AASL. He was also the Chairman of
the AASL HR and Remuneration Board sub-committee
member. He works closely with key local and international Mr. A S Warushahennadige
industry stakeholders, whilst acting as media spokesman Non-Executive Director
of AASL. Mr. Aruna Warushahennadige, is a member of the board
of AASL since December 2019. He is an experienced
Chairman/Executive Director with extensive experience
in the capital markets industry, airport operations,
Annual Report 2021
international airlines management, market planning, Government’s Provincial Administration Procedures and
branding, and aviation strategy development. Citizen Participation Development Committee and Justice
of Peace for All Island.
Mr. Warushahennadige holds a Master of Science (MSc)
degree in International Marketing from London South Eng. Manchanayake holds a Master of Business
Bank University. He was appointed by the board of AASL Administration from Preston University of USA. He is
to oversee all Aviation Projects during the tenure at AASL. also a member of the Institution of Engineers, Sri Lanka
specialized in electrical power engineering and also holds
a Diploma in Electrical Power Engineering Technology
Ms. D A De Livera from the University of Moratuwa, Sri Lanka.
Non-Executive Director
Ms. Deirdre De Livera is a member of the board of AASL
since December 2019. She brings decades of experience Mr. W M G Rashantha
as a seasoned professional in the field of travel and Non-Executive Director
aviation management. Ms. Livera was appointed by the Mr. Gihan Rashantha is a Member of the board of AASL
board of AASL as the director in charge of CIAR and since February 2021.
domestic airports. She acted as the Chairperson for the
Risk Management Board Sub-committee as well as the Mr. Rashantha is the Founder and Managing Director of a
Commercial Plan for T2 Board Sub-committee during the multi-faceted export organization and possesses a wealth
tenure at AASL. of experience in the field of international gem trade. At
present, he is also the Coordinating Secretary to the Hon.
Commencing her career in 1986, Ms. Livera played an State Minister of Aviation and Export Zones Development.
integral part in setting up operations of Japan Airlines in
Sri Lanka, and since then has come a long way in the field Mr. Rashantha is a graduate of the Minnesota State
of aviation and management. She has held key positions University in the United States of America.
at Japan Airlines, Thai International, Jetwing Travels and
Jetwing Air Services covering operational and marketing
functions. Mr. R A P Wijerathnasekera
During her stint at Jetwing Air Services, she was the Mr. R A P Wijerathnasekera is a member of the board
Country Manager of multiple airlines such as Sahara India of AASL since December 2019. He has more than 25
Airlines, Malev Hungarian Airlines, Tap Air Portugal, Iberia, years of experience working in the public sector as area
and Lauda Air, giving her a vast amount of experience and manager, coordinating secretary and private secretary to
knowledge in the aviation industry around the globe. ministers of local governments and cabinet ministers.
Presently, he also serves as the Private Secretary to the

Eng. U S Manchanayake Hon. Minister of Export Development and Investment
Non-Executive Director Promotion, Tourism and Aviation since the year 2020.
Eng. Manchanayake is a member of the board of
AASL since December 2019. He counts over 26 years Mr. Wijerathnasekera, holds a Bachelor of Science
of experience in the telecommunication industry as a (Business Studies) from the University of Sabaragamuwa
technical and engineering professional with extensive and a Master of Science (Service Management) from the
experience in project management. He acted as the University of Colombo.
Chairman of the Digital Infrastructure and IT board sub
Committee of AASL during 2021, as appointed by the
board. Mr. D A P Weeratna, PC
Currently, he serves as the CEO Designate for Sri Lanka Mr. D A P Weeratna, PC, is a member of the board of
Telecom - Digital Info Services (Pvt) Limited. He served AASL. Mr. Weeratna possesses a broader experience
as Deputy General Manager of Sri Lanka Telecom PLC serving in the boards of a few state-owned entities such
for more than eight years, holding responsibilities in the as Lanka Phosphates Ltd., Foreign Employment Agency
fields of telecommunications network expansion and and National Housing Development Authority. He also
penetrate voice, broadband, and data services island- served as a committee member of Criminal Law Reforms
wide. Eng. Manchanayake is also an active member of Committee under the Ministry of Justice.
Annual Report 2021
Leadership Team
He has been an Unofficial Magistrate for the last 20 years positions at different ministries and government entities
and a Justice of Peace for the whole island since 1985. where he gained a vast array of experience. During his
Presently, he holds the position of member of the Bar appointment as a Director (SLAS I) at the Department
Council for the Bar Association of Sri Lanka for the last of National Budget, Ministry of Finance & Planning,
10 years. As a law expert, he has authored more than a he represented the Treasury on the boards of many
dozen books in relation to law. state-owned entities such as State Pharmaceutical
Manufacturing Corporation, National Engineering
Research and Development, Land Reclamations
Mr. G A A Priyantha Commission, Coconut Cultivation Board, and State
Non-Executive Director / Treasury Representative Engineering Corporation.
Mr. G A A Priyantha was appointed as a member of the
Board of AASL since June 2021. He also serves as the Presently, he functions as Additional Secretary (Admin
Chairman of Audit & Management Committee of the and Aviation) of the State Ministry of Aviation and Export
company. He has over 18 years of experience in the Zones Development. Mr. Gunawardena also has served
Ministry of Finance having served in many positions as the Acting Chairman of AASL and CAASL for a short
including Assistant Director of both the Department period during 2019 and 2020 respectively.
of Management Services and Department of Public
Enterprises. Mr. Gunawardena holds a B.A in Economics and a Post
Graduate Diploma in Economic Development from the
Mr. Priyantha has also served as the Director of the University of Colombo. He also completed his MA in
Department of Public Finance and Department of Economics from the same university and is presently
Fiscal Policy. Currently he serves as Additional Director reading for his MBA.
General (Acting) of the Ministry of Finance. He has also
served as Board Director of many public enterprises and
government companies since 2005. Mr. C Vitharena
Mr. Priyantha holds a Master’s Degree in Development Mr. Chandika Vitharena serves as a member of the AASL
Studies from the University of Colombo and a Bachelor board since December 2019. He counts over 30 years of
of Science (B.Sc.) Degree in Management from the experience and brings in expertise in product strategy,
University of Sri Jayewardenepura. sales and channel development, finance, and human
resource.
Mr. A H S Gunawardena Presently Mr. Vitharena also functions as the Chief

Ministry Observer Executive Officer of Mobitel (Pvt) Ltd. and has helmed
Mr. A H S Gunawardena is a Ministry Observer of the the company to become one of the most profitable and
board of AASL since December 2019. Having started his successful mobile service operators in the country. He
career as an SLAS officer, Mr. Gunawardena counts more has progressed through the roles as Sales Manager
than 24 years of experience in the public sector. and Senior General Manager in the telecommunication
industry before his appointment as the CEO.
He was first appointed as an Assistant Director (SLAS II/II)
at the Ministry of Plan Implementation and Parliamentary He holds a B.A. (Honours) Degree in Political Science from
Affairs in 1998 and progressed through holding senior the University of Delhi, India.
Annual Report 2021
Senior Management Team

1 2 3
4 5 6
7 8 9
Annual Report 2021
Senior Management Team

10 11 12
13 14 15
16 17 18
Annual Report 2021
19 20 21
22
1. G Withanage-Head of Civil Engineering (Planning & Design) | 2. H S Hettiarachchi-Head of Airport Management

3. J A M D S S Abeywardena-Head of Finance | 4. A I B Karunaratne-Head of Projects | 5. M Ratnasinghe (Mrs) -Head of Legal
6. H P L Sirimanne-Head of Supply Chain Management | 7. K D Y Chandanie (Mrs) -Head of Strategic Management
8. U M Weerawardena-Head of Electrical Engineering | 9. J M De Croos Rubin-Head of Architecture, Landscaping & Interior Design
10. U J Lokuarachchi-Head of Information Technology | 11. U S Jagoda-Head of Civil Engineering (Maintenance)
12. Wing Cdr. (Rtd.) S M D Wijesooriya-Head of Fire & Rescue Services
13. S S De Silva-Head of Marketing & Corporate Communication | 14. M K P Tennage (Mrs)-Head of Internal Audit & Quality Assurance
15. J K Rathninda-Head of Electronics & Air Navigational Engineering | 16. N C Abeywardena-Head of Air Navigation Services
17. R W L B Medawewa-Head of Cargo And Air Freight Management | 18. D J U Purasinghe-Head of Commercial & Properties
19. Major Gen.(Rtd) A P Pallawela RWP RSP-Head of Security Services
20. Lt. Col. (Rtd.) K H C Kumarasinghe-Head of Intelligence & Security Ops. – All Airports
21. S P Palagama-Actg.-Head of Mechanical Engineering | 22. S D A S Nishantha-Company Medical Officer
Not in the picture

H A A K M Seneviratne-Head of Civil Aviation Training | M C G Mahipala (Mrs) -Head of Human Resources
Annual Report 2021
MAKING TRAVEL
Annual Report 2021
EASIER AND SAFER

WITH INNOVATION
Annual Report 2021
Report of the Board of Directors on the Affairs of

the Company
We are pleased to present our Report together with The Board of Directors continuously monitors operational
the audited financial statements for the year ended 31 performance through key performance indicators with the
December 2021. The details set out herein, provide the view of achieving the AASL’s vision, “Friendliest aviation
pertinent information required by the Companies Act No.7 partner in global connectivity towards a sustainable
of 2007 and are guided by best Accounting Practices. economy”.
Through the concise presentation of this Report, we have
ensured the material disclosures are well addressed to the 4. Financial Statements
shareholders to have an appreciation of the state of the The Financial Statements of the Company, duly signed by
company’s affairs and any changes during the accounting two Directors on behalf of the Board are given on pages
period. 81 to 117.
1. About the Company 5. Accounting Policies and Changes During the Year
Airport and Aviation Services (Sri Lanka) (Private) Limited The company prepared the financial statements in
(AASL) is a company fully owned by the Government of compliance with Sri Lanka Accounting Standards
Sri Lanka, with statutory powers to manage and develop (SLFRSs/LKASs). Significant accounting policies adopted
civil airports in Sri Lanka. in preparation of financial statements of the company are
given on pages 90 to 101. The Board of Directors wishes
2. Principal Activities to confirm that there were no changes to the accounting
The principal operational activities of AASL continued to policies adopted by the company during the period under
accomplish its role as the sole statutory service provider review.
of the following aeronautical services under the powers
vested through Civil Aviation Act No. 14 of 2010, Gazette 6. Directors’ Responsibility for Financial Statements
on 04 November 2010: The Companies Act No. 7 of 2007 requires the Directors
to prepare and present Financial Statements for each
2.1 The development, operation, and maintenance of financial year to reflect true and fair view of its state of
the Bandaranaike International Airport (BIA), Mattala affairs. The Directors are of the view that these Financial
Rajapakse International Airport (MRIA), Colombo Statements appearing on pages 81 to 117 have been
International Airport Ratmalana (CIAR), Batticaloa prepared in compliance with the requirements of Sri Lanka
International Airport (BTIA), and Jaffna International Accounting Standards, Companies Act, Accounting and
Airport (JIA). Auditing Standards Act No. 15 of 1995 and other financial
reporting regulatory requirements.
2.2 The provision and maintenance of search, rescue and
firefighting services and aviation security services at 7. Independent Auditors, Auditor’s Report and
the above aerodromes. Remuneration
As per the 19th amendment enacted on 15 May 2015
2.3 The provision of air traffic services, aeronautical to the article 154 of the Constitution, Auditor General
information services, aeronautical communication is empowered to carry out audits of all Government
services, and provision of aeronautical aids for enterprises registered under any written law and the
communication, navigation, surveillance, ensuring the Companies Act No.7 of 2007. In compliance with this
safety and security of all aircraft and passengers within direction, audit of AASL for the year 2021 was carried out
the Colombo FIR. by the Auditor General.
3. Review of Operations The Independent Auditors’ Report on the financial

A review of financial and operational performance, during statements of the company is given on pages 81 to 85 of
the year ended 31 December 2021 and future business this report. The audit fee for the year ended 31 December
development of the AASL is illustrated in the Chairman’s 2021 was LKR 1,200,000 (2020: LKR 1,793,000) and there
Message (Page 10 to 13), Management Discussion and were no other fees paid to the auditors for audit related
Analysis (Page 34 to 45), and the Financial Overview (Page services and non-audit services. As far as the Directors
50 to 55) of the Annual Report. These reports together are aware the auditors do not have any relationship other
with the audited financial statements of the company than that of an auditor with the company.
reflect the respective state of affairs which form an integral
part of the Annual Report of the Board of Directors.
Annual Report 2021
8. Internal Controls and Key Internal Control due to fixed assets revaluation reserve. Accordingly, total
Processes equity recorded was LKR 41 billion as of 31 December
The Board of Directors of the Company has taken 2021 as against LKR 37 billion recorded a year ago.
reasonable steps to safeguard its assets to prevent The movement in equity of the company is shown in the
and detect frauds and any other irregularities. For this Statement of Changes in Equity on page 88.
purpose, the Directors have instituted effective and
comprehensive systems of internal controls for identifying, 9.4 Dividends
recording, evaluating, and managing significant risks During the year under review, company did not declare
faced by the company throughout the year and it is being dividends.
regularly reviewed by the Board of Directors.
9.5 Donation
This comprises of internal reviews, internal audit and the In the year 2021, the Company made donations worth of
whole system of financial and other controls required to LKR 20,047,158 (in 2019: LKR 410,290)
carry on the operations in an orderly manner, safeguard the
assets, prevent and detect frauds and other irregularities, 9.6 Capital Expenditure
and secure, as far as practicable, the accuracy and During the year under review, Company incurred LKR
reliability of the records. The Audit and Management 23.0 billion as capital expenditure compared with LKR
Committee (AMC) regularly review internal control 2.1 billion in 2020. Investment on Property Plant and
issues identified by the company’s Internal Auditors, the Equipment and Intangible assets are illustrated in notes
Government Auditors, and regulatory authorities. The number 11 and 12 of Notes to the Financial Statements.
Management evaluates the adequacy of the internal control
system. 9.7 Contribution to Government
AASL continued to provide infrastructure and other
9. Income Statement and the Financial Position of the necessary facilities required for other Government
Company authorities such as Sri Lanka Air Force, Sri Lanka
9.1 Revenue Customs, Sri Lankan Airlines, etc. for them to provide
Revenue generated by the company for the year 2021 is related service within the airport. These transactions
LKR 7.9 billion (2020: LKR 8.01 billion) which is a slight and account balances are disclosed under Related
reduction, equivalent to 1.6% with compared to the Party transactions in note 32 of Notes to the Financial
previous year. An analysis of company revenue based on Statements on page 116.
business segments is disclosed in note 5 to the financial
statements on page 102. The contribution to the Government indirectly through the
payment of taxes during the past 3 years is illustrated in
9.2 Operating Results the table below;
The company reported an operating loss amounting to
LKR 3.8 billion for the year ended 2021. This is a 18%
LKR Million
improvement when compared to the operating loss of LKR
4.6 billion recorded a year ago. Year Dividend VAT Income PAYE
Tax
The company recorded a net loss of LKR 2.1 billion for the
2019 500 1,543 6,579 112
year 2021 compared to the net loss of LKR 2.5 billion in
2020. This loss reduction is attributable to net exchange 2020 - 207 1,618 7
gain and reduction in operational expenses. 2021 - 117 15 6
9.3 Reserves
The reserves of the company comprises of share capital,
other reserves, and retained earnings. Despite net losses
for the year, Company’s reserves reported an increment
Annual Report 2021

the Company
9.8 Investments
Rupee value of investment portfolio depleted by LKR 2.3 billion at the end of the year, of which details are tabulated
below.
As at 31.12.2021 (LKR Million) As at 31.12.2020 (LKR Million)
Treasury Bills/Bonds 20 420

Short term bank deposits 41,515 41,933
Investments in debentures 4,088 5,638
Long-term bank deposits 1,267 1,170
46,890 49,161
9.9 Stated Capital

The share capital of the company appeared in the financial statements comprised of Ordinary Shares of LKR 100/- each.
The shareholding as of 31 December 2021 was as follows:
Held by No of shares Value (LKR)
Secretary to the Treasury 200,000 20,000,000

Secretary - Ministry of Tourism & Aviation 1 100
Director General of Civil Aviation 1 100
200,002 20,000,200
9.10 Events After Reporting Period

There have been no material events occurring after the Statement of Financial Position date that requires adjustments to
or disclosure in the financial statements as mentioned in note 33 to the financial statements on page 117.
9.11 Going Concern

After making diligent inquiries, embracing the normal forecasting process, and considering future prospects and risk
potential, the Directors consider that AASL has adequate resources and committed borrowing facilities to continue in
operational existence for the foreseeable future. Consequently, all Financial Statements have been prepared based on
Going Concern basis.
9.12 Contingencies and Commitments

The details of contingent liabilities are disclosed in note 29 to the financial statements on page 115.
10. Information of the Board of Directors and Board Sub-Committees

10.1 Directorate
The appointment of the Chairman (Article 79) and Non-Executive Directors (Article 82) have been done as per the terms
of respective clauses of the Articles of Association of AASL.
Annual Report 2021
10.2 Details of the Present Directors who held office at the end of the Financial Year 2021
Membership in Committees
Appointment
Independent
Date of
T2 Com9
HR&RC3
Name Position
PM&M8
SP&M5
DI&IT7
RMC2
AMC1
RGC4
FM6
Maj.Gen. (Rtd) G A Chairman 12.12.2019 Yes No No No Yes* Yes* Yes* No No Yes**
Chandrasiri RWP
USP VSV ndc psc
R Sooriyaarachchi Vice-Chairman 06.12.2019 Yes No No Yes* Yes Yes No No No No
ASC Non-Executive 12.12.2019 Yes No No Yes Yes Yes No Yes Yes Yes
Warushahennadige Director
S N Sumanasekara Non-Executive 12.12.2019 Yes No No No Yes Yes No No No Yes

Director
Eng. S M A U S Non-Executive 12.12.2019 Yes Yes Yes No Yes Yes Yes Yes* Yes* Yes
Manchanayake Director
C P Vitharena Non-Executive 31.12.2019 Yes No No No Yes No No No No No

Director
D A De Livera Non-Executive 31.12.2019 Yes No Yes* No Yes Yes Yes Yes No Yes*
Director
RAP Non-Executive 31.12.2019 Yes No Yes Yes No No No No Yes No
Wijerathnasekara Director
W M Gihan Non-Executive 05.02.2021 Yes No No No No No No No No No
Rashantha Director
G A Ajith Priyantha Non-Executive 11.06.2021 No Yes* No No No No No Yes No No
Director /
Treasury
Representative
D A P Weeratne PC Non-Executive 02.03.2020 Yes Yes No Yes No No No No No No
Director
AHS The Observer 31.12.2019 Yes No No Yes No No No No No No
Gunawardhana from State
Ministry of
Aviation &
Export Zones
Development
1. Audit & Management Sub-Committee * Chairman

2. Risk Management Sub-Committee **Overall in Charge
3. Human Resources & Revenue Generation Sub-Committee
4. Revenue Generation Sub-Committee
5. Strategic Planning & Management Sub-Committee
6. Financial Management Sub-Committee
7. Digital Infrastructure & IT Sub-Committee
8. Project Monitoring & Management Sub-Committee
9. Sub-Committee for Development of Commercial Plan of T2
Annual Report 2021

the Company
10.3 Details of the Directors who resigned during the year 2021
Name Position Date of Appointment Date of Resignation
R M A Ratnayake Director/Treasury Representative 16.01.2020 27.04.2021
10.4 Board Meetings and Attendance

The attendance of the individual directors at board meetings and committee meetings during the year 2021 are as follows
T2 Com9
HR&RC3
PM&M8
SP&M5
DI&IT7
Name Position Board
RMC2
AMC1
RGC4
FM6
Maj.Gen. (Rtd) G A Chairman 13/13 n.a. n.a n.a. 09/09 07/08 07/07 n.a. n.a. 4/12
Chandrasiri RWP
USP VSV ndc psc
R Sooriyaarachchi Vice-Chairman 13/13 n.a n.a 02/02 06/09 02/08 00/07 n.a. n.a. n.a.
ASC Non-Executive 13/13 n.a n.a 02/02 08/09 07/08 00/07 06/06 n.a. 7/12
Warushahennadige Director
S N Sumanasekara Non-Executive 13/13 n.a n.a n.a. 08/09 07/08 00/07 n.a. n.a. 5/12
Director
Eng. S M A U S Non-Executive 13/13 06/06 09/10 n.a. 06/09 06/08 04/07 06/06 01/01 3/12
Manchanayake Director
C P Vitharena Non-Executive 02/13 n.a n.a n.a. 00/09 n.a. n.a. n.a. n.a. n.a.
Director
D A De Livera Non-Executive 13/13 n.a 10/10 n.a. 08/09 08/08 05/07 06/06 00/01 12/12
Director
RAP Non-Executive 13/13 n.a 05/10 n.a. n.a. n.a. n.a. n.a. 00/01 n.a.
Wijerathnasekara Director
W M Gihan Non-Executive 12/13 n.a n.a n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Rashantha Director
R M A Ratnayake Non-Executive 02/13 01/06 n.a n.a. n.a. n.a. n.a. n.a. n.a. n.a.
(Retired on 27 Apr Director / Treasury
2021) Representative
G A Ajith Priyantha Non-Executive 08/13 05/06 n.a n.a. n.a. n.a. n.a. 05/06 n.a. n.a.
(Appointed on 11 Jun Director / Treasury
2021) Representative
D A P Weeratne PC Non-Executive 13/13 04/06 n.a 00/02 01/09 n.a. n.a. n.a. n.a. n.a.
Director
A H S Gunawardhana The Observer from 13/13 n.a n.a 02/02 n.a. n.a. n.a. n.a. n.a. n.a.
State Ministry
of Aviation &
Export Zones
Development
Annual Report 2021
10.5 Disclosure of Directors dealing in Shares or 13. Compliance with Laws and Regulations
Debentures To the best of knowledge and belief of the Board of
No shares or debentures are held by any of the Directors. Directors, the Company has not engaged in any activity,
which contravenes laws and regulations of the country.
10.6 Directors’ Interest in Contracts and Proposed
Contracts 14. Annual General Meeting
No Director was directly or indirectly interested in The Annual General Meeting will be held at the Board
contracts or proposed contracts connected to the Room of AASL, on 30th June 2022 at 10:00 a.m.
company’s business during the year under review.
15. Acknowledgement
10.7 Directors’ Remuneration and Other Benefits The Board of Directors takes pride in congratulating the
The Company has paid LKR 11.3 million as Directors’ Management team for completing another financial year of
emoluments for the year 2021. (2020 – LKR 6.6 million) the company amidst challenges. It was a challenging year
There were two Executive Directors at the end of the for the aviation sector due to subsequent waves of the
year who were paid LKR 2.2 million during the year as Covid pandemic and resulting travel restrictions across
remuneration. This included all financial benefits namely the globe. We place on record, our special gratitude to the
Directors’ allowances, EPF, ETF, bonus, reimbursement of Ministry of Tourism and other institutions, those continued
entertainment expenses, telephone, and other allowances. to assist the company at this juncture being stakeholder
Non-Executive Directors were paid an amount of LKR and the regulator of the company.
9.1 million during the year, being the cost of traveling and
Directors’ fees for attending Board meetings. Further, we would like to express our sincere appreciation
and gratitude to all stakeholders involved and contributed
11. Corporate Governance towards continued operations of the company, including
The Board of Directors is committed to maintaining our customers for the continuous trust placed on us. Last
an effective Corporate Governance Framework and but not least, our gratitude goes to all AASL staff for their
implementing systems and structures required to ensure continued commitment, integrity, and hard work extended
best practices in Corporate Governance and their effective during this unprecedented challenging year.
implementation.
By Order of the Board
12. Statutory Payments
The Directors confirm that to the best of their knowledge,
all taxes, duties, and levies payable by the company, all
contributions, levies, and taxes payable on behalf of and
in respect of the employees of the company and all other Maj. Gen. (Rtd.) G A Chandrasiri RWP USP VSV
known statutory dues as were due and payable by the ndc psc
company at the statement of financial position date have Chairman
been paid or, where relevant provided for.
10th June 2022
Annual Report 2021
Report of the Audit and Management

Committee (AMC)
The primary role of the AMC is to assist the Board of Terms of Reference (TOR)
Directors (Board) in fulfilling its oversight responsibilities. During the financial year, AMC assisted the Board in
The AMC is appointed by and responsible to the Board. fulfilling its general oversight of financial reporting, system
of internal controls and functions relating to internal
The Composition of the Audit and Management and external audit. The AMC focuses on the following
Committee (AMC) objectives in discharging its responsibilities as per TOR
The Audit and Management Committee appointed by approved by the Board of Directors.
Board of Directors comprises three (03) Independent 1. Determine the scope and the responsibilities of the
Non-Executive Directors who conduct committee Internal Audit Division.
proceedings in accordance with the Committee’s Terms of 2. Review and approve the Annual Audit Plan and the
Reference (TOR) approved by the Board of Directors. The work programme. Annual Audit Plan to be prepared
Committee’s composition during the year under review by the Internal Auditor in consultation with the Auditor
was as follows: General (External Auditor).
3. Review and evaluate the internal control systems for
Committee Member Member since Position all the activities of the entity.
4. Liaise with External Auditors and follow up on AG’s
1. Mr. G A A Priyantha- 29.06.2021 Chairman
Management Letter and the Management’s response
Treasury Representative
to the same.
2. Eng. S M A U S 12.12.2019 Member 5. Review of preliminary internal financial statements
Manchanayake including budget review reports.
3. Mr. D A P Weeratne PC 23.10.2020 Member 6. Review of annual financial statements for compliance
of accounting standards and financial reporting
4. Mr. R M A Rathnayake 16.01.2020 & Chairman standards.
resigned on 7. Interaction with the Internal Auditors and External
27.04.2021 Auditors.
8. Ensure that the Senior Management staff are familiar
Meetings with the statutory and other rules and regulations and
The AMC met on Six (06) occasions during the year 2021. review their compliance of statutory and other rules
The attendance by the Committee members of AMC is and regulations.
given below. 9. Review Internal Auditors’ report/ queries regularly and
ensure prompt action taken by each Head of Divisions
Name of the Director Number of Committee on short comings pointed out.
meetings attended 10. Review External Auditors’ report/ queries and take
Mr. G A A Priyantha 05 corrective measures as may be required to avoid
repetition.
Eng. S M A U S 06 11. Review the implementation of recommendations of the
Manchanayake Committee on Public Enterprises (COPE) and monitor
Mr. D A P Weeratne PC 04 actions/ ratifications on them from time to time.
12. Review the continuing impartiality of the Internal
Mr. R M A Rathnayake 01
Auditors and their effectiveness.
13. Review the Internal/ External Audit Reports,
The proceedings of the AMC meetings were recorded by
Management Letters and the recommendations of
the Company Secretary, functioning as the Secretary to the
COPE and help the Board to take remedial actions.
AMC and minutes of AMC meetings were circulated to the
14. Assist the Board to introduce and implement adequate
Board of Directors at the next most practicable meeting.
internal control system.
15. Meet at least once in three months and report its
Mandate and Role
recommendations to the Board of Directors soon
The AMC recognized the mandate provided by the
thereafter, along with the minutes of the meeting to
Section 41 of National Audit Act No. 19 of 2018 and the
facilitate taking corrective measures.
Guidelines on Corporate Governance for State owned
Enterprises issued by Department of Public Enterprises in
Financial Reporting
discharging its responsibilities.
The Committee reviewed the effectiveness of the
Financial Reporting System in place in order to ensure
Annual Report 2021
reliability of information provided to the stakeholders with impartiality, proficiency and due professional care.
during the reporting period. The Committee assisted The AMC monitored and reviewed the scope, resources,
the Board of Directors to discharge their responsibility extent and effectiveness of the activities of IA&QA
for the preparation of true and fair financial statements Division.
in accordance with the books of account and Sri Lanka
Accounting Standards. The Committee reviewed the The AMC reviewed, assessed and approved the Annual
adequacy and effectiveness of the internal control system Internal Audit Plan for the year 2022. The AMC also
and procedures to provide reasonable assurance that all reviewed and monitored management’s responsiveness to
transactions are accurately and completely recorded in the significant audit findings and recommendations of the
the books of account. The Committee reviewed interim Internal Audit.
financial statements prepared on monthly basis together
with supporting information that included significant External Audit
assumptions and judgments made in the preparation and As per the Article 154 of the Constitution, the Auditor
presentation of financial statements. Also Committee General has been empowered to carry out the external
reviewed draft financial statements prepared for the year audit of AASL. Accordingly, the Auditor General acts as
ended 31 December 2021, Draft Budget prepared for the the External Auditor of the Company for the year ended
year 2021 before submitting them to the Board. 31 December 2021. AMC closely liaises with External
Auditor who is responsible for expressing an opinion on
Having assessed the prevailing Internal Control systems the conformity of the financial statements with the
and procedures, the committee is of the view that Sri Lanka Accounting Standards.
adequate controls and procedures are in place to provide
reasonable assurance that the financial position of the The External Auditor as an independent observer
company is well monitored and accurately reported. was invited for all AMC meetings, which enabled the
committee to bear their views and discuss their insights
Internal Controls on regulatory and compliance requirements and control or
The AMC assessed the effectiveness of Internal Control procedural weaknesses if any.
over financial reporting for the year ended 31 December
2021.This process assessed the adequacy and Good Governance
effectiveness of the Internal Controls in order to mitigate The AMC could contribute immensely to promote the
various risks and to ensure compliance with laws and Good Governance, proactive culture in AASL by educating
regulations. The AMC ensures that appropriate action is the importance and necessity to follow the regulatory
taken by the Management on the recommendations of the requirements such as PED circulars etc.
Head of IA&QA to improve the effectiveness of the Internal
Control systems of AASL. The basis of Internal Control Conclusion
framework enables the Board of Directors to pursue its In its exertion, the Audit and Management Committee has
functions and take necessary measures. sought to balance independent oversight of the AASL’s
businesses with the support and guidance to the Board
Internal Audit of Directors to fulfill their obligations and responsibilities
The Internal Audit (IA) function is an independent and in relation to financial reporting processes, adequacy
objective assurance function which supports AASL in and effectiveness of internal control systems, external
improving its overall control framework. The IA function audit and AASL’s process for monitoring compliance
contributes to the maintenance of systematic and with laws and regulations. The Committee believes that
disciplined approach to evaluate and improve the design there are many reasons for the Audit and Management
and effectiveness of AASL’s Risk Management, Control Committee to be confident that it has carried out its
and Governance processes. duties successfully and to a high standard during the year,
thereby helping to enrich the value of the Company.
The AMC ensured that Internal Audit function is
independent of the control of those who are responsible
for actually carrying out the financial and accounting
operations of AASL, as well as those who are engaged in
the execution of schemes and projects or performance of G A A Priyantha
works and services rendered by AASL in line with Good Chairman – Audit and Management Committee (AMC)
Corporate Governance practices and that it is performed
10th June 2022
Annual Report 2021
33
HELPING VISITORS
Airport and Aviation Services (Sri Lanka) (Private) Limited
Annual Report 2021
EXPLORE WITH
THE BEST IN
TECHNOLOGY
Annual Report 2021
Management
Discussion and Analysis
FY 2021 as a snap-shot
The financial year 2021 tested our mettle in facing continuous challenges brought up by the outbreak from
the previous year as demand for air transport and international travel headed South due to travel restrictions,
border closures, lockdowns and fear of spread of the virus. As a result, traditional airport revenue sources
could not generate revenues as much as they did before. However, our country’s relative recovery from the
pandemic gave birth to hope by the fourth quarter of 2021 earlier than we expected. AASL ended up with a
shrunk net loss of LKR 1.1 billion in 2021 with a LKR 574 million marginal operating profit reported in fourth
quarter, by contracting the previously reported highest ever net loss of LKR 2.1 billion in 2020.
The company’s effort to ensure operational and business continuity to sustain in the long run is elaborated in
this review.
Key Performance Highlights of AASL in FY 2021
Passenger movements Aircraft movements Overflying movements Cargo (MT)

37%
43%
(International) (International) (International) (International)
1,505,479 21,204 9,339 241,506

1%
1%
Annual Report 2021
Overview of the Industry Despite Omicron disruptions, air travel continued to pick
Global Context up until the end of the year as more markets reopened
According to the latest International Civil Aviation due to vaccination efforts. Industry-wide Revenue
Organization (ICAO) economic impact analysis of Passenger Kilometers (RPKs) in 2021 increased to
COVID-19 on civil aviation, global passenger traffic 41.6% up from 34.2% in 2020, however still down 45.1%
recovered marginally in 2021 with 2.3 billion passengers compared with Pre-COVID period in December 2019.
worldwide or 49% below pre-pandemic (2019) levels,
however up from the 60% decrease witnessed in 2020. Sri Lankan Context
Sri Lankan economy recorded a positive growth of 3.7%
During the same time period, airline seat capacity in 2021 compared with the decline of 3.6% in 2020. In
increased by 20% globally, outpacing increases in contrast to 2020, international passenger movements in
passenger demand. In 2021, the global passenger load our airports and overflying movements decreased by 37%
factor was 68%, down from 82% in 2019, and airlines and 43% respectively in 2021, while international aircraft
worldwide lost US$ 324 billion, down from US$ 372 billion movements and cargo movements remained same.
in 2020.
Impact of Macro-economic Factors
Due to a substantial increase in COVID-19 infections in A multitude of factors in the macro-economy negatively
the first quarter of 2021, the global aviation traffic recovery impacted the airport and aviation operations in Sri Lanka
rate slowed. In the second and third quarters, the situation in FY 2021. The major factors include:
stabilized marginally, owing to growing vaccination rates
4 Demand for international travel and tourism
and corresponding relaxation of travel restrictions in
Airport business is primarily driven by demand for
several parts of the world during peak travel season.
international air travel. Therefore, all aeronautical revenues
However, with the emergence of the Omicron variant in
and most of the non-aeronautical revenues depend on
the fourth quarter, this upward tendency suddenly ceased.
the demand for air travel. A significant portion of the
passengers using the airport are tourists (25% – 40%).
Annual Report 2021
Management
Due to the pandemic, air travel decreased drastically Re-stabilization of Flight Network
around the world affecting the global and domestic Prior to Covid-19, over 30 scheduled airlines connected
airports and the aviation industry as a whole. through Sri Lanka’s airports and certain airlines completely
dropped from the list in 2020. In 2021, many airlines
4 Exchange rate fluctuation confirmed the recommencement of scheduled flights
Approximately 50% of AASL earnings are in foreign starting from lower weekly frequencies with an expected
currencies. Depreciation of the Sri Lanka Rupees against gradual increase. IndiGo, Swiss International, Vistara and
foreign currencies improved revenue significantly. This LOT Polish resumed operations during Q4. Further, two
includes investments denominated in USD and their new airlines commenced operating from/to BIA. Air France
interest earning. On the other hand, the depreciation of commenced operations on the route Paris to Colombo
the rupee badly affected foreign debt obligations and via Male and Air Astana the flag carrier of Kazakhstan
payment of loan instalments. However, the benefit was commenced scheduled operations to BIA from December
minimal as majority of AASL’s loans are in Japanese Yen 2021.
(JPY) which did not fluctuate much during the year.
By bringing back strategic airline partners who enjoyed
4 Employment grandfather rights from the inception of our main
Employment levels of economies directly affect international gateway, on the back of tireless efforts by
international travel. With the pandemic affecting income the country, the flight network was re-established. AASL
and employment, most travelers limited their overseas made an effort to negotiate with airlines by attending
travel. Sri Lankan business organizations also canceled airline forums such as ‘Air Service World Congress -
foreign training for staff, participation in business Forum 2021’ held in Dubai and ‘World Routes Promotional
conferences, seminars, and Sri Lankan migrant workers Event – 2021’ held virtually. The KPI on positive airlines
also had restricted movements. These had an unfavorable moves to commence negotiations, recommencement,
impact on air travel and airport revenues. and increase in flight frequencies started moving upwards
significantly though these efforts flourishing country’s
4 Interest rates hopes on tourism and aviation.
While interest rates remained relatively stable throughout
the year, AASL was not in anyway exposed to lending rates Airports and the air-traffic statistics in the limelight
as the company did not obtain new loans during the year. When the nation tries to achieve the lost glory in tourism
On the other hand, the company’s interest income was not due to the unprecedented impact of the pandemic, the
affected either due to volatility in interest rates during 2021. inbound tourism numbers along with all air traffic statistics
namely aircraft movements, passenger movements and
Remained Resilient and Persistent cargo movements of airports under AASL’s purview were
AASL took swift actions to remain resilient and persistent. in the limelight of all concerned. This was mainly due to
AASL optimized opprtunities of the macro-economic tourism and aviation accounts for 12% of the country’s
situation that prevailed during the year under unfavorable GDP and is the third largest foreign income earner for the
market conditions and macro-economic factors. country.
Water Canon welcome for ‘Air Astana’ Official celebration of resumed ‘Swiss International’
Annual Report 2021
BIA
BIA Passenger Movements Being a challenging year, BIA handled only a total
’000 of 24,336 Aircraft movements of comprising 20,607
1,000 international aircraft movements and 3,729 domestic
aircraft movements. In 2021, BIA was used by 1,472,506
1,200
international passengers and 127 domestic passengers.
800
The total cargo handled by BIA was 200,138 MT. Apart
from cargo movements, all other air traffic statistics
600 of BIA showed a reduction compared to the previous
year. Accordingly, aircraft movements and passenger
400
movements have reduced by 2% and 37% respectively.
200
However, cargo movements have increased by 33%
against 2020.
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec MRIA
Amidst the COVID-19 global pandemic, MRIA recorded
2017 2018 2019 2020 2021
the highest number of passenger arrivals in 2021 since its
inception in 2013. This was recorded in a back-drop where
the national carrier Srilankan Airlines was not flying to MRIA
since 2015 due to its restructuring efforts. MRIA handled a
MRIA Passenger Movements
total of 722 aircraft movements and out of which 584 were
7,000 international aircraft movements while facilitating for 32,957
6,000
passenger movements. 41 MT of cargo were handled
during this period
5,000
4,000 MRIA was the selected airport by AASL to conduct the

pilot project at the end of 2020 under the tourism bio-
3,000
bubble concept. With successful proof of implementation,
2,000 MRIA gathered momentum in in-bound tourism which
compliemented our destination marketing efforts.
1,000
0 CIAR
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec When BIA and MRIA were connected to the globe as
the country’s two international gateways, CIAR served
2017 2018 2019 2020 2021
as a preferred choice of the niche market – International
Corporate Jets. While serving as the country’s key
domestic airport in promoting domestic aviation CIAR
facilitated training flights of all types. It handled a total
CIAR Passenger Movements of 22,043 aircraft movements (including training flights)
facilitating 3,011 passenger movements during the
140
year 2021. Training flights only operated by the pilots
120 were significant and contributes to increase the aircraft
numbers with only single passenger addition per aircraft
100
into passenger numbers.
80
60
Jaffna International Airport
Following the COVID-19 outbreak, no international
40 operations were carried out at JIA during the year under
20 review as per a policy decision taken by Government of Sri
Lanka (GoSL). AS a result JIA handled only 32 domestic
0
movements with 110 passengers on board during the year
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2021.
2017 2018 2019 2020 2021
Annual Report 2021
Management
Batticaloa International Airport When the airlines shifted its gears into a complete cost
As per the business plans of AASL for all airports, BTIA focus after the pandemic, AASL took steps in offering
will continue to serve as a domestic airport since its concessions for both MRIA and CIAR by waiving off
reopening in 2018. In 2021, BTIA facilitated 258 aircraft both landing and parking fees and embarkation levy to
movements and 1,082 passenger movements. Both CIAR provide some cushion for the coffers of airlines while the
& BTIA require further service facilities and infrastructure passengers were relieved through low ticket prices. The
to meet the standards of BIA and MRIA. market development was the aim which is vital in the long
run to achieve ROI.
Survival of the fittest
AASL had to temporarily put on hold growth plans Ancillary Income became key
identified in our business plans due to the external When many airports in the world were posting losses
adverse environment. Hence, ‘Survival of the Fittest” was due to no runway success resulted by the Covid, AASL
the prime aim in sustaining in the long run. Addressing concentrated on ancillary sources of revenue within the
stakeholder expectations and value creation, while framework of airports business as airports are meant
concentrating on secondary revenue sources other than to do the airport business and there is least room for
the international passenger and aircraft movements were business diversification.
the main focus in our survival mantra.
Domestic aviation to unleash its potential
Change in the stakeholders’ value proposition AASL tied up with domestic carriers in promoting Sri
With the sudden slip in passenger numbers which was Lanka’s domestic airports as well as famous tourist hot-
spanning for over a year, AASL continued to offer the spots by carrying out joint marketing campaigns with them
rebates to our concessionaires in terms of concession while providing necessary Infrastructure, hanger facilities
and rental fees in a bid to share the financial burden and the services. Domestic aviation was a strong segment
faced by them which are the two out of five top revenue in aviation in Sri Lanka in the 1970’s prior to the ethnic war
components of AASL. with the LTTE and the potential is yet to unleash.
Floor Plan expansion discussion at site at CIAR Taxiway refurbishment at CIAR

Annual Report 2021
4 Setting up a Ground-handling arm AASL trained 30 existing staff and newly hired 08 staff
By going in line with the statutory powers vested with with expertise during the year 2021. The Capital assets
AASL in providing ground handling services at MRIA, acquisition was not required as the major portion of the
CIAR, JIA and BTIA subject to necessary regulatory equipment was available under AASL’s possession while
approvals as per the extraordinary gazette notification some were hirable at a low fee.
No 1922/4 dated 07 July 2015 and also the extraordinary
gazette notification No 2144/64 dated 11 October 2019, 4 Strengthening the company’s training arm
AASL established a new ground handling unit at CIAR as The Civil Aviation Training Centre and the training arm of AASL
the initial step with the primary aim of building up a pool was rebranded as the “Sri Lanka Airport & Aviation Academy”
of human resources by understanding the time taken in (SLAAA) in 2021 as it already equipped with all amenities
the learning curve. required to be listed as an academy at national level
Srilankan Airlines was the only service provider in 4 Foreign ties by SLAAA
international ground handling in Sri Lanka and the existing The Diploma in Aviation Studies conducted by the
pricing rates are to be brought down to make it attractive SLAAA has been recognized by the prestigious Massey
for the Low Cost Carriers (LCCs) as well as for the University of New Zealand for credit transfer to gain lateral
international Corporate Jets and Private Jets segments. entry to the second year of the university’s Bachelor of
Understanding that, change in pricing as a crucial Aviation degree programme enabling the students who
requirement of the industry to move on in the long-run and successfully complete the Diploma can directly enroll for
also giving due consideration on the requirement to have the second year of the 3-year degree at Massey. An MoU
a Contingency Plan for Ground Handling given the on- was signed in November 2021. This provides a savings
going business restructuring plans of the national carrier, for the students by way of tuition fees and overseas living
were the top-most reasons why AASL decided to venture expenses for one year while saving foreign currency for
into ground handling operations. the country as well.
Awarding the ground handling training completion Plaque opening marking the rebranding of CATC
certificates
Annual Report 2021
Management
4 Non-aviation events
In a bid to popularize the airport as a choice among travelers preferably of domestic travelers and also as a mode in
earning additional revenue, AASL commenced renting out the location of CIAR for photography, fashion shows and alike
events.
Asia star gala 31st Night
Domestic Aviation Promotion Give Aways
Back to the Future

In order to make our future ready in the competitive market place, AASL continued to carry out capital projects which are
mission critical. Most of these capital expenditure will have a longer pay-back periods, while the customers and all users
of the airports will be immediately benefitted through comfort, reliability and safety.
New Capacity additions

4 Second Terminal (T2) Project of BIA
The second terminal project of BIA is moving ahead with the Package A work which is the passenger terminal and
associated works with a progress of 3% at the end of the year (targeted progress was 4%). The scheduled construction
period is 36 months and the construction commenced on 15th December, 2020. This project is funded by a loan from
Japan Incorporation Construction Agency and the total estimated cost of the project is JPY 41,554 million (LKR 35,136
million).
Annual Report 2021
T2 Package A Construction Work
The Package B which is the construction of remote apron and taxiways completed during the year under review and
declared open for airlines on 25th of November 2021.
Expected capacity / facility enhancement with the T2 (Package A and Package B projects) in comparison with T1 are;
Total
Enhancement type Existing Terminal (T1) Package A & B (T2)
(after completion of T2)
Floor area 90,000 m2 185,900 m2 275,900 m2

Check-in counters 53 Nos. 96 Nos. 149 Nos.
Emigration counters 21 Nos. 32 Nos. 53 Nos.
Immigration counters 27 Nos. 56 Nos. 83 Nos.
Airside security control positions 8 Positions at Pier No. 1 20 Positions at pier 30 Positions
and 2 Positions at bus No. 2 and 3
gate
Contact gates 8 Nos. 16 Nos. 24 Nos.
Bus gate 6 Nos. 10 Nos. 16 Nos.
Airline lounges 4 Nos. 6 Nos. 10 Nos.
Baggage claim carousal 6 Nos. 7 Nos. 13 Nos.
Baggage make-up carousal 3 Nos. 7 Nos. 10 Nos.
Aircraft parking stands 26 Nos. 23 – 28 Nos. 49 – 54 Nos.
Passenger handling capacity 6 million p.a. 9 million p.a. 16 million p.a.
4 Construction of the Import Cargo Terminal

This will enhance cargo handling capacity of BIA by 150,000 MT per annum to increase the total handling capacity up
to 400,000 MT. The project started in January 2021 and showed a progress of 24% by end of 2021. It is expected to be
completed in January 2023. The total cost of the project is LKR 2.6 billion.
Annual Report 2021
Management
Remodelling and Restructuring 4 Relocation of Emigration Area
As a solution for over-capacity that was experienced during Relocation of emigration area saw a 98% progress as
the pre-pandemic era, in 2021 AASL continued to carry out of end of the year which is aimed at adding 23 new
certain projects in the existing Passenger Terminal Building emigration counters with the aim of facilitating for
(PTB) at BIA to effectively utilize the existing capacity while faster clearance procedures by reducing the delays in
enhancing the Level of Service (LoS). overcrowding situations.
4 Refurbishment of “Araliya” Lounge 4 New Immigration Hall and Electronic Mall with
As part of the lounges upgrade project which happens in bonded facilities
a phase out manner, refurbishment of the “Araliya” lounge Construction of new immigration hall and electronic mall
was completed in February, 2021. The company spent at arrival at BIA reached 56% progress which includes a
LKR 202 million for this project. The new facility is spacious refurbishment of existing 1st floor duty free shop area with
with comfortable and ample seating, soothing ambience the shifting of shops to the 2nd floor to accommodate
and better-quality access to airport customer service, re-arranged emigration hall with additional space. Total
providing much valued comforts to weary travelers seeking project values are LKR 472 million, and LKR 430 million
a hassle-free transiting and boarding experience. BIA respectively.
facilitates its esteemed partner airlines by accommodating
the expectations of high-value business passengers, by The construction of a bonded warehouse with 25 bond
hosting them in its top-class Araliya lounge. spaces where electronic mall operators can store goods
at the port of entry until they are ready for distribution also
was in progress with 88% progress by end of 2021. The
company spent LKR 120 million on this project.
Ground breaking ceremony of the Import Cargo Terminal Work in progress of Import Cargo Terminal
Refurbished Araliya Lounge Relocated Emigration Area

Annual Report 2021
Technological Improvements 4 Aeronautical Information Management System

Several new technological introductions were made and (AIM)
upgrading were done in existing technologies with the aim New AIM System was introduced to improve the
of supporting the business operations. aeronautical information services at the cost of LKR 750
million. The project had achieved a progress of 92%
4 ERP Phase I progress at the end of 2021.
As per the company’s plan to introduce a fully-fledged
ERP system, AASL completed the phase 1 of the project 4 Air Traffic Management System (ATM)
during the year 2021, which covered finance and supply New ATM System was established with 85% progress
chain modules. The phase II of the project is presently by end of 2021 for the purpose of improving air traffic
being carried out by obtaining the service of an external control operations and the cost was LKR 965 million.
consultancy company to identify information requirements This is a life-cycle replacement done by replacing the old
and to prepare Request For Proposals (RFP) accordingly. Terminal Radar Data Processing System (TRDPS) and the
The cost of the Phase 1 project is LKR 180 million new ATM system comprising of numerous technological
approximately. advancements such as integrating the ground-based
ADS-B surveillance system with provision for the addition
With the implementation of ERP Phase I - supply chain and of several multiple surveillance data inputs such as Mode-S
finance modules, quicker approval cycle times, less paper- RADAR and WAM, consisting of standby systems ensuring
work, better inventory tracking and planning, availability of dual redundancy and also a bypass system with a third
analyzed information are the key visible benefits. level of redundancy to be used in a failure of operational
system. Standalone position delivered with the new
4 Board Governance Process system assures standalone ATM capabilities improving
A digitalized board governance solution was rolled out the serviceability and the reliability of the system to 100%.
in 2021 after a completion of a successful trial period in Apart from that it has an offline test system which can be
2020. Board members and the company secretary as well used for the hardware testing and software upgrade testing
as the invitees got benefited with this digitalized solution without interfering with the operational ATM system.
through significant time savings, traceability and tracking
facilities related to decisions, ability to make collaborative 4 Voice Communication Switching System (VCSS)
decisions with all party consensus, minimum paper usage, Project
efficient document management and archiving etc. The Voice Communication Switching System project
started its on-site activities in the end 2021 and has
4 POS System reached its final stage of completion with parallel
AASL introduced a Point of Sales (POS) system for duty operations in Area Control Center at CIAR and BIA. This
free shops operated at BIA by deploying a software will provide ATC user-friendly Human Machine Interfaces
developed by the IT team of AASL, in order to provide (HMI) for all radio and telephone conversations with pilots
passengers and shop operators with better and and other control centers. Voice over Internet Protocol
convenient service while assuring transparency of all
(VoIP) communication has been achieved through the
transactions.
newly implemented VCSS increasing the reliability
and efficiency of the system. VoIP compatibility tests
4 Launching Google Indoor Maps
with extended range VHF communication system at
Google Indoor Maps which is accessible on smart phones
Piduruthalagala Radar and Communication center, were
and tabs on both Apple and Android devices was launched
successfully completed and connectivity was established.
at BIA in April 2021, becoming the first indoor facility to
enable this feature in Sri Lanka. Google Indoor Maps puts
4 Standalone Automatic Weather Observation
yet another resource in the hands of passengers and
System (AWOS) Installation at JIA
visitors for finding out many possibilities available to them
AWOS is one of the critical systems providing ground
before they start their journey or arrive at the airport.
level weather data to aircraft. New system is capable
of providing highly accurate data on wind speed, wind
Passengers and visitors at BIA can access detailed digital
direction, barometric pressure, humidity and temperature
floor plans of the Departure, Transit and Arrival Terminals
information to pilots to operate smoothly. This project was
with just a few easy swipes on smart phones or tabs. Sri
funded by the Civil Aviation Authority of Sri Lanka and the
Lankan Airlines as the authorized ground handler of BIA
installation process was carried out by AASL.
and AASL as the airport operator took on this project in
order to make the passengers’ journey more rewarding.
Annual Report 2021
Management
4 Digitalized Health Declaration Forms
AASL introduced an online health declaration system to
reduce the usage of physical form filling and encourage
the passengers to opt into an online platform reducing the
physical contact and passenger processing time.
4 Airports Digitalization Pilot Project

As part of our digitalization efforts "Smart Check-in",
"e-Gates", "All-in-One App" and "Web-based passenger
assistance/information services" have been identified and
pilot projects of the same will be implemented in 2022. State
Ministry of Digital Technology and Enterprise Development
together with Information and Communication Technology
Agency (ICTA) will provide the necessary support services
and monitoring of the project activities.
Future Note
The strategic focus for the upcoming year would be on
recovery. For the recovery and restart of the grounded
aviation industry, it is imperative for passengers and
airport users to feel confident that their well-being
is ensured. With the relative speed of recovery from
COVID-19 outbreak, Sri Lanka gained the confidence of
the general public and travelers around the world.
Strategic recovery would bring a sizeable amount of

foreign currency into the country. Unfavorable economic
conditions in the country are challenges in future that
would need to be addressed to grow the confidence of
international tourists traveling to Sri Lanka.
Getting ready for T2 operations is expected to be a major

concern in the coming years. As the commencement of
the operations will require great collaborative efforts with
stakeholders and also some strategic moves in marketing,
human capital development, formulation of commercial
plans and selection of the most viable business model,
operational readiness and transformation; few working
committees have been formed with the members of the
Board of Directors and Senior Management Team in
order to adopt the most sound implementation plans. The
present terminal (T1) refurbishment plans are also in cards
Artist view of T2
to match the standards of T2.
Annual Report 2021
Annual Report 2021
Sustainability Management
Annual Report 2021
AASL Sustainability policy 4 200 trees located in the airport premises with high
AASL reiterated its commitment to environmental environmental value were root balled to replant
sustainability by promoting greater long-term sustainability at AASL’s lagoon land and another 200 trees
for employees and all stakeholders, with longer term approximately have been earmarked to be preserved
benefits with a healthier operation. AASL concentrates on onsite without cutting them down for construction
04 areas namely emission control, minimizing the carbon purposes. Apart from this preservation plan, new
footprint, supporting the regeneration of natural resources, tree plantation activities have been initiated by AASL
and eliminating barriers that hinder human sustainability. together with BIA development projects.
Emission Control Supporting the Regeneration of Natural Resources

The Company continuously evaluates all substances AASL has accepted the challenge to ease the dependency
discharged or released to the natural surroundings thereby on natural resources by seeking alternative resources
minimizing emissions and controlling the greenhouse effect. to meet corporate needs thereby effectively supporting
4 Sewerage Treatment Plant - control the toxicity levels regeneration efforts.
of effluents discharged to the environment
4 Incinerator and waste management - AASL’s waste Water conservation - Over 50%, approximately 1,200 m3 of
management facility is a state-of-the-art solid waste the total 2,200 m3 of the daily drinking water requirement
disposal incinerator that was commissioned under the at the BIA is met by water from the bore wells drilled on
Environmental Protection License (EPL) issued by the the premises.
Central Environmental Authority (CEA).
Eliminating barriers that hinder human sustainability
Minimizing the Carbon Footprint 4 Assistance in tertiary education in Sri Lanka
AASL’s energy management practices were applied The company provides training to undergraduates
through a range of smart, sustainable solutions. of Sri Lankan Universities, diploma holders and
4 Existing buildings were refitted with energy efficient industrial trainees in various disciplines including IT,
lighting, lighting control and motor control systems finance, electronics, mechanical engineering, general
(eg: T5 fluorescent fittings, C-Bus control system, administration, transport and logistics management and
drives for AHUs’, PAUs’). automobile engineering.
4 Integration of the new chiller systems with the existing
building management system for chillers 4 LKR 10 million to support COVID-19 patient
4 Use of ballasts and bulbs during remodelling projects treatment
4 Upgrading building air-handling units with variable AASL donated LKR 10 million for the purchase of a
speed drives and soft start controls PCR testing machine and equipment to meet the urgent
4 Introduction of solar heaters for hot water systems medical requirement of the District General Hospital,
4 Optimizing the use of natural lighting with skylights Hambantota.
and the dimming regulators
4 Usage of motion sensors, occupancy sensors in the 4 New traffic plan to ease-off congestion in and
passenger terminal building around BIA
4 Power factor corrections, key tag activated master With a view to easing-off traffic congestion around
switches at the transit hotel, change over from hot Katunayake, the company took steps to construct 660m
cupboards to microwave ovens for warming of food in length, four-lane dual road from Averiwatta junction
resulting in an energy saving to BOI entrance including junction improvements.
4 Use of pedestal fans after office hours and during The project was jointly funded by AASL and Road
weekends in the office area without the use of air Development Authority (RDA). AASL spent LKR 900
conditioners million out of company funds. This was implemented
as an environmentally support project as it contributes
to reduce carbon emissions generated by heavy traffic
congestion.
Annual Report 2021
Annual Report 2021
We facilitate
tourism and other
local industries...
Annual Report 2021
FINANCIAL REVIEW
Revenue Finance income Operational Loss
7,879 LKR Mn 3,321 LKR Mn 3,776 LKR Mn

(2020 LKR 8,011 million) (2020 LKR 3,665 million) (2020 LKR 4,611 million)
Loss After Tax Assets
2,084 LKR Mn 126,844 LKR Mn

(2020 LKR 2,504 million) (2020 LKR 103,216 million)
Annual Report 2021
The financial year ended 31 Cargo operations were the least impacted business segment due to the
December 2021, AASL, managed pandemic. Cargo movements grew significantly during 2021, with the
to dwindle its operational losses exception of months when import and export requirements fell due to lower
caused by the COVID-19 pandemic production or lockdown status.
in the previous years. While lower
passenger and airline arrivals AASL was cautious in proceeding with planned projects and was compelled to
hampered forecast of growth targets, cancel and postpone a number of projects due to financial limitations caused
the Company maintained its revenue by the pandemic led financial crunch.
similar to 2020 but closed the year
on a positive note as borders and Revenue
air travel recommenced during the AASL’s conventional revenue streams were inactive for most part of the
latter part of the year supported by year due to boarder closures and lockdown. However with the vaccination
the global vaccination drive. This drive setting in globally and lifting of travel restrictions, the revenue streams
resulted in reporting an operational improved and recorded LKR 7,879 million. Of this, LKR 2,299 million was
profit for the fourth quarter despite from aeronautical operations while non-aeronautical revenue being LKR 5,087
the overall performance of the year million. Other incomes recorded LKR 493 million.
being negative.
Being an industry that is dependent Major Aeronautical Revenue Major Non-aeronautical Revenue
on and influenced by global socio- 4 Landing & Parking income 4 Embarkation Levy
economic conditions, the year’s 4 Overflying income 4 Concession
slow global recovery, economic 4 Aerobridge income 4 Rental
and health concerns negatively
impacted the business operations The company recorded Aeronautical Revenue of LKR 2,299 million during the
in 2021. However, compared with year under review, which is almost same as aeronautical revenue recorded in
2020, the financial year under review 2020.
experienced an upward trend in the
Company’s main business activities
LKR Bn
in the latter part of the year.
35
30
25
20
15
10
Aeronautical Revenues
5 Non-Aeronautical Revenues
0 Other Income
2017 2018 2019 2020 2021
Behavior of Air Traffic Movements
Description 2021 2020 2019 2018 2017
International passenger 1,505,479 2,375,056 9,958,688 10,884,028 9,957,502

Movement
International Aircraft Movement 21,204 20,881 62,195 67,351 62,850
Overflying Movement 9,339 16,370 45,674 43,804 39,413
Cargo Movement 241,506 MT 150,075 MT 259,089 MT 279,559 MT 274,044 MT
Annual Report 2021
Financial Review
Movements
The company recorded a loss before
LKR Bn (‘000)
6 80 tax of LKR 961 million in 2021. The
company’s loss after tax for the year
70
5 was LKR 2,084 million.
60
LKR Bn
4
50 15
3 40
10
30
2
5
20
1
10 0
0 0
(5)
2017 2018 2019 2020 2021
(10)
Landing & Parking Income Domestic Landing & Parking Income
Overflying Income International Flight Movements (15)
Aerobridge Income Overflying Movements 2020 2021
Revenue Income Tax

Non-Aeronautical Revenues reported LKR 5,087million for the year under OPEX Operating Profit
review, a decrease of LKR 399 million, which is equivalent to 7% when Net Finance Income
compared with 2020. Even though, other categories of non-aeronautical
revenue increased Embarkation Levy and Rental income decreased at a higher Operating Expenses
AASL’s operating expenses for
rate due to drop in passenger movements and rental concessions given to duty
the period reduced to LKR 11,655
free tenants during the year.
million in 2021 from LKR 12,622
million in the previous year, which
Passenger
LKR Bn
is a 8% change. While several cost
Movements (Million)
25 12 management efforts were in place to
minimize operational expenditure, the
10 main contributor to the decreased
20
operational expenses was the
8 reversal of bad debt provisions by
15
LKR 1,244 million. Depreciation
6 expense and provision for gratuity
10 were also decreased by LKR
4
207 million and LKR 196 million
5
2
respectively
0 0
2017 2018 2019 2020 2021
Embarkation Levy Rental

Concession Passenger Movements
Other Non-Aeronautical
Profitability
The Company’s profitability grew during the year under review in terms of 2021
reduced operational losses. Operational loss has decreased by 18% to LKR
3,776 million from LKR 4,611 million reported in the previous year. Increased
2020
exchange gains from the USD strengthening against the LKR supported the 2021 2020
recovery of operational losses over last year. Staff Costs 64% 59%
Provision for Debtors Impairment -5% 5%
Repair & Maintenance 3% 2%
Electricity 7% 6%
Depreciation & Amortization 23% 23%
Other Expenses 8% 5%
Annual Report 2021
Net Finance Cost/Income FINANCIAL POSITION

Irrespective of the decrease of finance income by 9%, Net finance income has Assets
been increased by 221% to LKR 2,815 million from LKR 878 million as a result The company’s financial position
of net exchange gain of LKR 634 million on conversions of foreign currency as of 31 December 2021 was
loans and deposits which was a loss of LKR 1,497 million in 2020. LKR 126,844 million, compared to
The Sri Lanka Rupee depreciated against USD while appreciated against JPY LKR 103,216 million at the beginning
during 2021. As a result, the conversion gain on fixed deposits denominated of the period. Accordingly, total
in USD went up to LKR 2,775 million from LKR 771 million in the year under asset balance grew up by LKR
review. However, exchange loss on loan conversion dropped to LKR 2,141 23,628 million, when compared to
million in 2021 from LKR 2,268 million recorded in the previous year. This the amounts at the beginning of the
is explained by the fact that the Company’s loan portfolio consists of loans year. The main reason being increase
denominated in JPY as well which depreciated against LKR during the year. in capital work in progress due to
Phase II stage 2 construction work
and addition of PPE during the year.
LKR Bn
10 LKR Bn
8 140
6 120
37%
4
100
46%
2
0 80
63%
(2) 60
(4)
54%
40
(6)
20
(8)
2017 2018 2019 2020 2021 0
2020 2021
Finance Income Finance Cost Net Finance Income
Non- Current Assets Current Assets
Exchange Rate Gains
Sri Lanka Rupee depreciated by 7% year on year and escalated to LKR 203 Liabilities
USD (Selling rate) at the end of the year 2021. Despite Central Bank efforts Total liability increased by LKR
to stabilize the rupee against the dollar, the selling rates of Sri Lanka Rupee 19,297 million and it is purely
against US Dollar continued to depreciate as export earnings and worker explained by the loan disbursements
remittances coming into the country through commercial banks decreased on behalf of Phase II project.
after Central Bank fixed the LKR against the USD to avoid further depreciation
of the rupee. But it was noted that LKR appreciated against JPY and EUR by LKR Bn
4% & 0.2% respectively. 90 86
80
USD or Euro JPY
Rate Rate 70 66
240 1.90 60
1.80 50
220
40
1.70
200 30
1.60 20
180
1.50 10
160 0
1.40
2020 2021
140 1.30
Total Liabilities Exchange Loss/(Gain)
120 1.20 Loans Debentures
2017 2018 2019 2020 2021
USD EUR JPY

Annual Report 2021
Financial Review
Working Capital
At the end of the year under review, AASL’s current assets and liabilities were
LKR 47,430 million and LKR 7,927 million, respectively, leaving a Net Working
Capital Balance of LKR 39,503 million. Compared to the previous year, there Shareholder
has been 5% decrease in working capital due to decrement in short term
investments and cash & cash equivalents by LKR 831 million and increment of funds and equity
short-term loan obligations by LKR 550 million. accounted for
LKR Bn
60
33% of the
company’s total
50
assets base of
40
LKR 126,844
30
million
20
10
0
2017 2018 2019 2020 2021
Current Assets Current Liabilities Working Capital
Debt and Capital Structure Cash Flow

The overall borrowings of the company as of 31 December, 2021 were LKR Cash & cash equivalents at the end
68.7 billion, 34% up from the previous year. of the period reduced by 50%, to
LKR 413 million. This was due to
The Company made capital repayments of foreign loans and local loans totaling partial withdrawal of investments in
to LKR 4,289 million and LKR 133 million respectively. During the year, a foreign treasury bills to meet short term cash
currency loan disbursements of LKR 19,833 million on account of “Phase II Stage flow requirements.
2 Project” was received and no local loans were obtained.
During the year under review,
Shareholder funds and equity accounted for 33% of the company’s total assets operating activities resulted in a net
base of LKR 126,844 million as of 31 December, 2021, while non-current cash outflow of LKR 715 million,
liabilities accounted for 61% and current liabilities accounted for 6%. against cash outflow of LKR 2,116
When compared to the beginning of the year, there was no significant change million in 2020.
in the company’s capital structure.
In comparison to the value of 1.38 at the end of the previous year, the debt-to- When compared to the net cash
equity ratio was 1.66 at the end of the current year. outflow of LKR 1,654 million of the
previous year, the Company had a
Ratio net cash outflow of LKR 413 million.
LKR Bn
140 2.50
120
2.00
100
80 1.50
60 1.00
40
0.50
20
0 0
2017 2018 2019 2020 2021
Equity Current Liabilities Non-Current Liabilities Debt / Equity Ratio

Annual Report 2021
Capital Management
2021 2020
The primary goal of the company’s
strategy on capital management is Total borrowings 68,724,683,990 51,172,796,305
to maintain a solid capital structure Less: cash and cash equivalents (Note 17) (413,045,010) (826,225,883)
and healthy capital ratios in order to
sustain its operations and maximize Less: Short term bank deposits (41,515,132,946) 41,932,637,264)
shareholder value. The company Net debt 26,796,506,034 8,413,933,157
keeps track of capital utilization Total equity 41,314,321,699 36,982,901,554
using its total gearing ratio as
Total capital 68,110,827,732 45,396,834,712
depicted below.
Gearing ratio 39% 19%
Even though there was a net loss of LKR 2,084 million during the year,
shareholder funds have increased by 12% to LKR 41,314 million from LKR
36,982 million. Main reason for this increase was revaluation reserve of LKR
5,766 million resulted from building valuation.
STATEMENT OF VALUE ADDITION
Amounts in LKR ‘000

2021 2020
Revenue 7,386,170 7,776,338

Other Income 492,782 234,400
Finance Income 3,321,110 3,665,085
Gain arising on changes in
Actuarial assumption 667,426 377,899
11,867,489 12,053,722
Administration Establishment &
Marketing Expenses (1,509,513) (2,345,566)
Value Addition 10,357,976 9,708,155

Distribution of Value Added % %

To Employees Remuneration & Benefits 7,496,875 72% 7,421,979 76%
To the Government Taxes - 0% - 0%
To Share Holders Dividends - 0% - 0%
To the Providers of Debt Capital Interest 1,140,366 11% 1,289,674 13%
Retained within the business Depreciation & Amortization 2,648,419 26% 2,853,960 29%
Retained within the business Reserves (927,685) -20% (1,857,458) -19%
10,357,976 100% 9,708,155 100%
LKR Bn
8
(2)
(4)
Remuneration & Benefits Taxes Dividends Interest Depreciation & Reserves
(To Employees) (To the Government) (To Shareholders) (To the Providers of Amortization (Retained (Retained within the
Debt Capital) within the business) business)
2021 2020
Annual Report 2021
Management of Human Capital
Human capital is the most important factor in AASL’s earning potential and long-term viability, which
we have fully embraced. AASL human resources strategy is established and focused on attracting,
selecting, motivating, developing, and retaining the best talent and professionals.
Our human capital management has allowed employees to contribute effectively to the overall
corporate direction as well as to achieve organizational goals and objectives. This includes but is not
limited to recruitment & hiring, Performance Management, Training & Development and Welfare.
AASL’s human capital has over the years been motivated to learn, adapt, innovate, and provide a
creative drive that to ensure the organization’s long-term success. As one of the most respected
organizations in the public sector, AASL has attracted best talent in aviation in general disciplines in
Sri Lanka.
Annual Report 2021
Human Capital Profile

AASL has a diverse team of 3,985 (As end of 2021) employees who contribute to the sustainable growth of the company
through consistent delivery and creation of shared value.
Aspect Measure Year

2021 2020 2019
Team Strength No. of employees 3,985 4,098 4,182

Employee attrition ratio Employee turnover as a percentage of average employees (%) 4.1 3.4 3.1
Gender distribution Female employees as a percentage of total employees (%) 22 21 21
Age distribution Percentage of employees below 40 years of age (%) 48 68 51
Knowledge and skills Average training hours per employee 35 9 12
development

Distribution of the employees into various categories are depicted below:
S/No Category No. of Employees
1 Executives 376
2 Supervisors/Technical Officers 262
3 Clerical and Allied 686
4 Skilled and Semi-Skilled Workers 2,093
5 Minor Employees and Unskilled 560
Executives 9%
6 Casual and Trainees 8 Supervisors/Technical Officers 7%
Clerical and Allied 17%
Total 3,985
Skilled and Semi-Skilled Workers 53%
Minor Employees and Unskilled 14%
Employee Recruitment and Retention Casual and Trainees 0%
During the year under review, AASL managed to absorb talent from different
sources as depicted below.
Oder Type No.
1. External Recruitment 72
2. Internal Recruitment 29
3. Fix Cadre Promotion 99
4. Line Promotion 316
Total 516
External Recruitment 14%

Internal Recruitment 6%
Fix Cadre Promotion 19%
Line Promotion 61%
Annual Report 2021

Method of Recruiting, Retaining and Promoting Employee Value Creation
The Company gives significant importance to attract fresh Nurturing Talent
talent, retain and motivate existing talent whilst fostering In consultation with the supervisor, training needs of
employee productivity and satisfaction, thereby creating employees are identified at the point of setting their KPIs
value for both the employee and the organisation. and development goals in the periodic performance
evaluation form. These are analyzed and added into
The Human Resources (HR) Division continuously the separate lists collated by the HR division for annual
monitors its employee retention and turnover and seeks training needs identification. Based on the data collated,
to address staff requirements. The HR Division adopts the HR division develops customized and generic training
a comprehensive promotion, recruitment and selection and skills development programs with the identification of
method in order to acquire the best talent and to place local and international training sessions
them in suitable career paths.
Bridging the Business Vacuum
Online Recruitment Tests AASL continuously navigated the business to ensure
For the first time in AASL’s history, an online examination that the internal business structure is ‘fool-proof’ to face
was conducted for external candidates selection. SLAAA business challenges. If any gaps in the responsibilities
successfully conducted this online selection test for assigned by the divisions hinder the competitive edge,
external candidates in September 2021 for recruitments necessary structural changes are carried out in line with
of “Air Traffic Safety Electronics Engineering Officers”. A the business strategy to fill those business vacuums.
mock test was held for the benefit of the applicants since New positions are created to fill such identified vacuums.
it was a novel experience for many of them. Cargo and Air Freight Management Division created in
2021 was the most recent such a move.
The entire test platform was developed by the Electronics
Engineering Training wing of the SLAAA and was External candidates were selected in the event that the
administered using the hosting infrastructure provided and best-fit candidates were not found internally in filling key
supported by the IT Division. positions of the newly created divisions.
CATD officials monitoring the Online Examination

Annual Report 2021
AASL Employee Performance Evaluation and
2,812
3,000
recognition
Performance management system aims to improve the 2,500
performance of the staff focusing on the achievement of
goals and objectives of the company. 2,000
Performance results are linked to the training and
1,500
development opportunities, career development
opportunities and also to the succession planning 1,000
652
process to determine performance gaps, training needs,
259
promotions and rewards. 500
80
75
8
6
0
The total number of 3,071 employees were appraised
Granted
Not Granted
Not Eligible
Suspension
through the performance management system and
granted annual increments based on the performance
during 2021.
1800 PMDS
4 Celebration of International Day of Air Traffic Controllers at AASL

The International Day of Air Traffic Controllers was celebrated at AASL on 25th October 2021 as a tribute to the services
rendered by air traffic controllers who work day and night to make air travel safe. Sri Lankan airspace is one of the
safest in the world. October 20th of each year, marks the anniversary of IFATCA (International Federation of Air Traffic
Controllers’ Association), which was founded on the same day in 1961.
The webinar conducted in parallel to the Air Traffic

Controllers Day
Employee Development
AASL continued to invest in training & development despite the challenges faced during the pandemic, in order to ensure
that employees gained the required knowledge to unleash their potential.
During the year, AASL conducted a total of 34,442 training hours with the participation of 974 staff members. In keeping
with the ‘new normal’, 90% of training hours were conducted using virtual training platforms with strict adherence to
health guidelines. SLAAA made a saving of LKR 600 million approximately by providing training for AASL employees
during the year, which otherwise would have spent on external training.
The objective of training was not limited to improving work related skills, it extended to personality development,
emotional stability and physical fitness maintenance which correlate with tasks related skills.
Annual Report 2021

4 Surveillance Control Course on the New ATC Simulator
The Air Traffic Services Training Wing of SLAAA conducted its first surveillance control training programme using the new
Adacel MaxSim 3D Simulator for a group of six air traffic controllers in September 2021.
This is the second surveillance control training conducted in Sri Lanka. The first was in 2007 on SLAAA’s old simulator.
Surveillance control rating marks the zenith of professional development for air traffic controllers. Three senior air traffic
controllers with wide experience who had retired from services were recruited on contract basis and attached to SLAAA as
instructors to assist the Chief Instructor of the Air Traffic Services Training Wing of the Academy.
4 Rapid Deployment Team under Aviation Security

In view of managing unruly and violent passengers as immediately as possible without compromising or disturbing other
passengers, a team was trained with unarmed skills such as Marshal Arts and Karate to strengthen aviation security. This
is a new introduction to airport operations and they are deployed at BIA passenger terminals a round the clock.
Employee Health and Safety

AASL placed significant emphasis on ensuring a safe
working environment for all employees and took steps
to ensure that health and safety concerns are prioritized
and addressed. With the outbreak of the pandemic,
the aviation industry was one of the worst affected and
exposed. AASL took rigorous actions as to address this
situation:
4 Established a steering committee to work proactively
and promptly in COVID-19 related matters.
4 Safety gear worth Rs. 3.2 million per month were
provided to all appropriate employees keeping in line
with government safety guidelines.
4 A total of over 16,000 doses of COVID-19 vaccines
were administered to employees of AASL and the
employees who work for other agencies housed at the
airports, janitors, porters and construction contractor
staff.
4 Free of charge RAT/ PCR tests facilities & intermediary
centres were organized for the employees with
symptoms.
Annual Report 2021
4 Granted special paid leave, welfare reliefs and Care Centre facilities at private and government hospitals for infected
employees
4 Introduced Work from Home (WFH) and facilitated employees with required equipment to continue with WFH
arrangements.
4 Daily cadre deployment adjustments were also carried out by adhering to one third or half of staff deployment out of
the total strength at a given time by taking into consideration of the requirement for physical presence and area of
residence along with Covid lock-down areas.
Employee Welfare and Satisfaction

With the aim of improving work-life balance amongst the staff, employee welfare facilities were initiated. These include
facilities and services provided in addition to remunerations.
Benefit Schemes for AASL Employees

AASL understands the importance of having attractive benefits for our employees. The Company endowed a host of
benefits to enhance staff satisfaction levels. Corporate medical scheme, staff loan scheme, staff transport services,
personal accident insurance policy, holiday bungalow facilities are some of the measures AASL continued to provide at a
toll of approximately LKR 415 million per annum.
Capturing the Brand Value

AASL is recognized as a most sought after employer in the state sector and was awarded prestigious awards and
accolades in the business field. The brand image helps us in attracting talent and reducing attrition.
Job Security
AASL adopted a ‘zero lay-off’ policy during the year amidst financial challenges, considering that ‘job security’ creates
mental stabilization for employees to perform better. This was implemented at a time when airlines and airports around
the world adopted staff retrenchment as a cost saving strategy.
Brain Champs
In order to keep employees current on AASL’s business affairs and on industry trends and news, the ‘Brain Champs’ quiz
session was organized by AASL 2021. The session was carried out monthly and was conducted on an online platform.
The winners were declared within 24 hours. From the eight quiz sessions conduced, 48 winners were rewarded with
appreciation tokens and certificates, while the highest achievers were awarded a domestic flight tour sponsored by a
domestic airline partner.
Joy ride experience for Brain Champs winners Winners and the Committee of Brain Champs Awards
Annual Report 2021

Uplifting Sporting Activities
AASL develops skills and team building of employees by encouraging them to engage in sports such as Cricket,
Volleyball, Basketball, Elle, Swimming, Football, Hockey and Badminton. The Sports Club of the company launched
several sports development activities for its members throughout the year.
AASL’s team participated in the Mercantile Tournaments in many sporting events and won several accolades.
Winners of the Mercantile Badminton tournament
Future Outlook for Human Capital

4 Aspirations mapping
Employee aspirations are identified through performance evaluation forms and promotion interviews. They are captured
in company strategic efforts by aligning them with corporate aspirations.
4 Skills and competency mapping to reach the next level of business maturity
AASL believes that next level of business maturity can be achieved by enhancing BIA’s handling capacity by 1.5 times
times using cutting edge technology features. In order to make employees ‘future ready’ to take on the challenge of
handling passenger terminal the skill gaps are being identified and required programs are being crafted to bridge the gap.
4 Succession planning
A comprehensive succession planning program is being developed by identifying all key positions for succession
development. This will include cross-functional transfers and promotions. This will need to meet the responsibilities, skills
and competencies between next level and level of employment.
4 Man-power planning
In order to better harness the potential of existing employees, AASL attempts to maintain the same cadre without
additional cadre positions in the next few years.
Window of Opportunities for Employees

The second terminal will create an exciting window of opportunities for existing employees as well as for candidates
who are looking for a carrier in aviation, under the direct employment of AASL as well as under other stakeholders, as
multiplying the capacity means multiplying many front-office and back-office functions in entire aviation value chain.
Annual Report 2021
Annual Report 2021
Risk Management
Risk management is critical for a company in defining its 4 Volatility of the Tourism Industry
objectives for the future. Effective risk management is Aviation is heavily dependent on global economic
an essential component of our decision-making process condition as well as on tourism which is a highly fragile
to achieve a strong Sri Lankan experience among industry. Post-pandemic global economy is at its recovery
international passengers on a daily basis. stage which slowed the recovery of aviation sector.
Priorities as well as expectations of tourists and travelers
We are responsible for managing and developing five have changed since the emergence of the pandemic, and
international airports: BIA, MRIA, JIA, CIAR and BTIA meeting those expectations have become challenging.
as the statutory service provider for the Government of These expectations require adjustments to the processes
Sri Lanka (GoSL). Accordingly, AASL is exposed to a and procedures at the airports. High concentration on
variety of risks that threaten not only the organization’s health and safety requirements compromised passenger
operational and financial performance, but also the comfort.
country’s image.
4 Increasing Operational Costs
AASL's Risk Management approach was created to Increasing fuel prices globally as well as domestically has
improve the organization's ability to achieve its corporate increased the cost for airlines due to escalations in their
objectives. The Board is responsible for the success of operational costs. This adversely affects airport operations
AASL's Risk Management process as this procedure through low passenger volumes due to high ticket prices.
demonstrates its relevance as one of the major pillars of At the same time, airlines are increasingly demanding for
the corporate governance framework. price concessions from airport operators.
AASL aimed at achieving the followings through its Risk 4 Rapidly Changing Technology
Management: Changing technology demands that airport operators
4 Recognize and assess a variety of risks. include smart features in airports. This intensifies the
4 Minimize and/or wipe out dangerous threats while competition among airports requiring airport operators
taking advantage of new opportunities in the corporate to invest more on new technology. Contactless airport
environment. operations with no/minimum human involvement have
4 Supports efficient utilization of Company’s resources. become a tough target to achieve.
4 Successfully manage the risk communication within
the company. 4 Environmental Impacts
4 Do justice to the real owners of AASL, the general Airport operations have a sizeable impact on the
public by contributing to the company’s survival and environment. While airlines are responsible for carbon
long-term growth. emission of aircraft, airports also have a role to play in
this regard. Airports should increasingly concentrate
Main challenges in Aviation Operations on optimizing the air route structure to assure least fuel
4 High Maintenance Cost consumption with minimum carbon footprint in mind.
Having a large fixed cost in maintaining the airport
infrastructure compared to low percentage of variable Sound pollution is another challenge that airport operators
costs in the cost structure. have to face. Airport operations generate loud noises
disturbing people and animals living in the surrounding
4 Limited Business Diversification environment. Therefore, operations are scheduled to
The room for business diversification is quite low ensure minimum disturbance to the communities and
in aviation, compared to other industries. This puts species in the environment.
enormous pressure on our top-line as well as the bottom-
line, especially in a situation such as the COVID-19 Airports generate a considerable quantity of waste that
pandemic. needs to be disposed properly. Ensuring this is done in
keeping with environment guidelines and best practices
4 Ensuring Facilities are Up-to-Date is of great value to AASL. We have received certifications
Being a service driven industry, it is of utmost importance from the Central Environment Authority and other
to assure a comfortable and superior guest experience regulatory institutions confirming our environmentally
for all airport users. Towards this, airport facilities and friendly waste management practices.
infrastructure are required to be maintained on par with
that of other international airports in the region.
Annual Report 2021
Long-term Challenges and Mitigation Measures on ground activities as well as within the Colombo FIR
Adapting to evolving technology, ensuring sustainability, through the air routes restructuring.
capacity management and attracting talented work force
are challenges that we foresee as challenges that AASL The Asian region accounts for one third of the world’s
would face in the long term. passenger kilometers. This volume is expected to grow
once the industry recovers from the pandemic’s impacts.
Technological advancement is a continuous process that Being within the high-volume region, Sri Lanka would
must keep up with evolving technology advancements. also benefit from the increase in passenger traffic. Apart
Use of contactless passenger processing by using bio- from process changes and technology advancements,
metric recognition systems, self-check-in and bag drops, dealing with post-pandemic customer needs, providing
self-boarding gates and mobile payments are expected personalized services and identifying the customer
to increase in future. Therefore, it is vital to make these preferences based on demographic factors will be a huge
facilities available at our airports too. These projects are challenge in the long run. Negotiations are underway
to be implemented within the next five years. However, with relevant stakeholders to develop a single common
they do pose cyber-security risks which needs to be database as a first step towards introducing a CRM
addressed. (Customer Relationship Management) process.
The world is becoming more and more environmentally AASL is also in the process of introducing a fully-fledged
conscious. This demands airports to achieve carbon ERP system within AASL to improve efficiency levels of
neutrality in future. Accordingly, we would be required internal business processes which would lead to increase
to define carbon emission reduction targets for next the satisfaction levels of all stakeholders.
few decades. It is identified as one of the Sustainable
Development Goals (SDG) in AASL corporate targets. In addition, during the development of AASL corporate
Strategies are developed to minimize carbon emission plans, projects are prioritized taking into consideration the
above challenges.
AASL Risk Management Framework
Risk identification involves perceiving hazards, identifying failures and recognizing

1. Identify Risk Areas adverse consequences. It also involves capitalizing on positive deviations arisen
due to changes in external environment, meaning recognizing opportunities in the
external environment to converting them into increased revenue.
Risk assessment intends to provide Management with a view of events that could
2. Assess Risks
impact the achievement of objectives.
Based on risk identification and its impact on the business, decisions are taken as
3. Evaluate and Select Risk
to whether each specific risk should be accepted or treated by comparing it with
Responses
the risk profile.
4. Implement Risk Management Risk management techniques include risk reporting, risk treatment, residual
Techniques reporting and monitoring.
Once the risk has been mitigated to an acceptable level, the risk needs to be
5. Re-evaluate the Risks
tracked to ensure the continued control of the risk.
Annual Report 2021
Risk Management
Implementation of the Risk Management Framework participation of all stakeholders housed at the airports.
Having recognized the importance of appropriate risk During these, Airlines Operators Committee (AOC) discuss
management, the overall risk management responsibility issues faced in operations, Aviation Security Committee
is placed with the strategic management division of AASL discusses security threats and potential risks faced by
and therefore responsible for taking steps to introduce the airlines and passengers, etc. These mechanisms deal
and maintain suitable risk management mechanism with operational risk aspects of the organization which are
within the company to ensure that no hindrance is met addressed through interaction with external stakeholders.
in achieving strategic objectives of the company. The
external and internal business environment is assessed Risk Forecasting
using tools such as SWOT, PESTEEL and Porter’s 5 forces Risk forecasting plays a significant role in identifying the
in identifying the risk factors in achieving objectives. This potential risks. During the last few years, AASL mostly
is conducted in consultation with all divisions, all levels relied on the forecast/region or country outlook for
by adopting both top-down and bottom-up approaches aviation sector published by aviation professional bodies
with the motto of “Risk Management is everyone’s such as Airport Council International (ACI) and Internal
responsibility’. Air Transport Association in view of dealing with the
uncertainties of demand in aviation and tourism. The time
Risk Management Committee (RMC) period of risk forecasting of the company depends on the
At AASL, a separate board sub-committee called the time horizon of the corporate plan which is prepared for a
Risk Management Committee (RMC) has been formed to period of 3 years.
oversee the risk management function.
Employee participation across all levels is obtained at this
The Risk Register is used predominantly in identifying the stage through bottom-up and top-down communication
probability and severity of the risks. It is updated by every methods. Risk identification is regarded as routine in the
division along with proposed mitigation techniques and strategic planning process and employee contribution is
centrally monitored by the Strategic Management division. encouraged.
Any untreated risk and associated issues are escalated to
the RMC. AASL identifies risks which includes the followings:
4 Strategic and Operational risk
RMC meetings are held with all divisions at AASL monthly 4 Human Resource risk
to discuss operational, tactical and strategic risks which 4 Safety, Security & Health risk
are critical and find the best suited mitigation techniques. 4 Financial risks
At these meetings, a few selected areas of risks are 4 Reputation risk
included in the agenda so that risks of those areas could 4 Legal risk
be discussed effectively. However, participants are always
encouraged to discuss timely, crucial risks without being Risk Assessment
restricted to the agenda. Certain strategic risks, human Risks are evaluated considering two factors;
resource management risks and technology related risks 1) The possibility (or probability) of risks materializing
are evaluated through other board sub-committees too. 2) Severity of the impact of those risks
This helps to strengthen the mitigation technique by
looking at the cause and the impact from every possible Both the above are given scores ranging from 1 to
aspect. 5 where 1 indicates least possibility or severity as
appropriate while 5 indicating the highest. Then, the score
Further, aerodrome safety matters are looked after by assigned for the possibility and the impact are multiplied
Safety Management Unit of the company. This is carried by each other to obtain the product. These values range
out in accordance with the guidelines (Annex 19) issued from 1 – 25 and they are placed in the right zones of the
by International Civil Aviation Organization. The other risk assessment matrix. The values towards 25 indicates
mechanisms available are the Facilitation Committee crucial risks requiring urgent attention and more robust
Meetings which happens on a quarterly basis with the mechanism to mitigate them.
Annual Report 2021
Risk Assessment Matrix
IMPACT
Risk Matrix Insignificant Minor Medium High Extreme
1 2 3 4 5
Rare 1 1 2 3 4 5
Unlikely 2 2 4 6 8 10
PROBABILITY
Possible 3 3 6 9 12 15
Likely 4 4 8 12 16 20
Almost
5 5 10 15 20 25
Certain
Assessing the probability and impact is mostly a qualitative judgement where the respective divisions with professional
expertise is involved in. On the other hand, there are certain risks such as financial risks, of which probability and / or
impact is/are assessed quantitatively considering past patterns of similar occurrences and computing the impact in
monetary terms.
We have defined certain KPIs according to some risks identified and captured. In addition to mearing financial
performance, we measure performance of the company in relation to customer satisfaction, employee satisfaction,
aircraft related accidents and incidents. This helped us identify possible risks in these areas and analyze them for
appropriate actions to overcome them.
Risk Risk Description Mitigants
Strategic & Threats in the external business Internal and external environment of the business is scanned
operational environments and internal and position appraisal is carried out on annual basis when the
risks weaknesses may prevent the corporate plan is prepared.
Company achieving its goals.
On the other hand, opportunities
could emerge in the business
environment which the company
should capitalize on.
Human Employee Safety and Health All safety materials, PPE was provided by understanding the
resource risks owing to the pandemic as nature of the job.
well as the engagement and The quarantine facilities, fully vaccination programs were arranged
motivation were the top most for all AASL employees during this period.
challenges in HR during the The employees’ special contribution were appreciated by way of
commendation letters.
year under review.
A quiz session named “Brain Champs” and global aviation news
bulletin called “Aviation Market watch” were running on full swing
to keep the employees more current.
The agile working mechanisms were introduced and trained.
Annual Report 2021
Risk Management
Safety, Being a highly regulated Risks in airport operations are largely mitigated by complying with
security & industry, basically airport the relevant guidelines issued by local and international guidelines
health risks operations are carried out in (CAASL and ICAO).
compliance with local and
international regulations. There All the projects are carried out in adherence with the safety policies
are guidelines covering all key and procedures and theAll contractors and external service
aspects of airport operations providers who engage in the projects also should follow them.
such as aerodrome operations,
aviation security, aeronautical
information services, safety
management, transportation of
dangerous goods and air traffic
service etc.
Financial Risks Exchange risk Maintaining foreign currency denominated earnings and
Being an international investments help us mitigate translation and transaction risks at
operation, AASL is exposed large.
to foreign exchange risks. The
company has foreign currency
denominated borrowings where
rupees depreciation poses a
threat to us.
Interest rate risk The company’s investment portfolio is comprised of both short
AASL is exposed to risk of and long-term investments where any change in interest rates
change in interest rates. could be adopted to.
Commodity prices risk Suppliers are contracted for reasonable duration as such the price
Most of the purchases is guaranteed.
were procured according to
government procurement
guidelines thus, cost is one of
the key aspects in selecting
suppliers.
Credit risk Airlines were contracted to pay us within the stipulated credit
The company offers specific period by imposing default interest on the invoice amounts, if
credit period for airlines while delayed.
others are on cash basis.
Rentals and concessions payments of shop operators happen as
per the contract agreements with them.
Relevant clauses are included in the contract agreements to
minimize default risk.
Liquidity and cash flow risk AASL has accumulated its earning over the years and significant
This refers to the ability to portion of it has been invested in liquid assets. In a situation where
the risk of defaulting debt the company could not generate sufficient cash by its normal
obligation and risk of not business operations, the difference could be financed with these
having sufficient cash for daily liquid assets.
operations.
On the other hand, these retained earnings would improve lenders
confidence in case when company applies for external financing.
Annual Report 2021
Reputation We consider marketing by word Through the CMS (Complaint Management System), we attempt
Risk of mouth/viral marketing as the to understand the areas and the root causes of customer
most powerful tool required in dissatisfaction and corrective actions are taken for the complaints
managing the reputation received.
All official social media pages were actively monitored, updated

and responded to avoid spreading of false / fake news and
information about the company.
Especially, during the year under review, when adjusting the

services after the pandemic to address the health and safety
requirements in the passenger processing, AASL took utmost
care in filling whatever the gaps in the services by providing
both physical and human resources without even demarcating
who should be responsible for what. This led to some trade-off
situations in our capacity to undertake the service delivery, but still
the client satisfaction was assured.
Legal Risks Legal risk refers to the Legal division is involved in drafting and scrutinizing all legal
possibility of financial or correspondence of the company (i.e., bidding documents and
reputation damages to the agreements etc.) that the company entered into with contractors,
Company due to operating with suppliers and various types of service providers.
reckless indifference to law, This helps the company to have robust agreements with other
misunderstanding law and how stakeholders which would ultimately mitigate not only legal risk
it applies but also other risks such as credit risks, HR risks, operational and
strategic risks etc.
Legal division advised the top management on non-routine

compliance requirement to avoid risk of legal action being taken
against the company.
Annual Report 2021
Risk Management
Contribution of Risk Management to AASL Success The Asia Pacific region to which Sri Lanka belongs is
The adopted process in risk management explained predicted to recover faster in the post-pandemic. If the
above have provided the following benefits: country’s tourist offer is attractive and if overall product is
4 Time taken for mitigation actions was minimized. considered as ‘value for money’, Sri Lanka could possibly
4 The whole company was engaged in risk identification recover faster than expected by the aviation bodies for the
and adopting mitigation steps. region and surpassing the counter-rivals.
4 Company was aware of any untreated risks at any
given time due to the Risk Register maintenance. Future of Corporate Risk Management
With a view to further strengthening risk management
One of the KPIs of managing operational risks is safety mechanisms and instilling a robust risk culture within
incidents and accidents reported on ground and/or on air. AASL, we are planning to obtain a certificate of
AASL has maintained nearly zero incidents and accidents compliance for ISO 31000: Risk Management. This has
during the last few years. As a result, there were no already been initiated with the assistance of a volunteer
significant safety audit findings / queries. This reflected external consultant and is expected to obtain compliance
the effectiveness of our operational risk management certificate within next 2 – 3 years.
mechanism.
The number of complaints was another KPI, where we

analyze the service delivery standard in operations.
There was a clear drop in number of complaints received
from all sources during the period, even after factoring
in low passenger volumes in the post-COVID period.
Causes of both incidents/accidents and complaints were
analyzed for improvements to operational targets of the
organization. Customer satisfaction and safety which
were the two CSFs of AASL had been positively impacted
through this risk management process.
Future of Aviation Sector

The pre-covid growth rates projections made by the
industry has not realized during the last two years due to
the Covid-19 pandemic conditions. However, travelers
worldwide will commence flying to catch up on the travels
that had to forgo during lockdowns which is referred
as ‘revenge tourism’ is expected by bringing back the
fortunes to the global airport industry.
Annual Report 2021
Corporate Governance
Governance Structure of Airport & Aviation Services (Sri Lanka) (Private) Limited
Shareholder
The Government of Sri Lanka
Auditor
Auditor General Regulators
Board of Directors
Main Board
Board Appointed Sub-Committees
Human Strategic Digital,

Audit & Risk Revenue Financial
Resource & Planning and Infrastructure
Management Management Generation Management
Remuneration Management and IT
Internal Audit
Compliance
Chief Executive Officer
Risk Management
Corporate Management
Air Navigation Services Legal Airport Management
Civil Engineering (Maintenance) Civil Aviation Training Cargo & Air Freight Management
Finance Civil Engineering (P&D) Commercial & Properties
Architecture, Landscaping & Interior Marketing & Corporate Electronics & Air Navigational
Design Communications Engineering
Human Resources Fire & Rescue Services Internal Audit & Quality Assurance
Strategic Management Mechanical Engineering Security Services
Supply Chain Management Project Information Technology
Electrical Engineering Medical Services Intelligence & Security Operations
Safety
Appointment Flow Reporting Flow Dialogues Administrative flow

* At AASL, the Chairman plays a dual role as Chairman and CEO.
Annual Report 2021
1. Overview Participation
For the past 38 years, AASL has dedicated itself to 4 Directors need to be more actively involved in the
ensure a strong governance structure that aids proper strategic decision-making process of the corporation.
management of day-to-day business tasks as well as 4 Employee participation
the company's long-term performance, whilst providing
the direction and governance required to steer the Transparency
company’s business operations. An effective governance 4 Ensure timely, accurate disclosure on all material
framework is critical in assisting the leadership in matters, including the financial situation, performance,
better understanding their oversight responsibilities. ownership, and corporate governance.
The framework includes features that help with good
governance as well as strategies for dealing with The Board of Directors is responsible to the shareholders
governance risks. A good corporate governance and other stakeholders for the sustainable delivery of the
framework offers a solid framework for assessing how goals, operational performance, and financial performance
management responsibilities align with the board's through the efficient use of resources and maintain ethical
oversight responsibilities towards creating value for standards. This report demonstrates in detail, how AASL
stakeholders. has embraced and complied with, all the mandatory
provisions of the Companies Act No. 7 of 2007, Code
The corporate governance framework plays a key of Best Practice on Corporate Governance 2017 of the
role in mitigating the Agency Problem, which arises Institute of Chartered Accountants of Sri Lanka, and
from potential conflicts of interest. Excellent corporate the Public Enterprises Guidelines for Good Governance
governance is a critical component for a company's issued by the Department of Public Enterprises, Ministry
integrity, accountability and efficiency. of Finance under the category “A” Commercial Public
Enterprises.
AASL has pledged to establish and implement effective
governance structures and industry best practices to 2. The Board
protect and grow shareholder value. AASL acknowledges The Board’s key responsibilities include:
that strong Corporate Governance is a continuous 4 Providing direction and guidance to the company in
process, and it reaffirms the commitment to uphold the formulation of the sustainable, high-level, medium,
the highest standards of corporate governance in the and long-term strategies which are aimed at promoting
best interests of all stakeholders within the Corporate the long-term success of the company.
Governance Framework. The AASL Corporate 4 Ensuring operations are carried within the scope of the
Governance Framework is based on the basic values of Enterprise Risk Management Framework.
fairness, accountability, responsibility, participation, and 4 Monitoring systems of governance and compliance.
transparency, all of which are vital for the development,
enhancement, and maintenance of a sustainable business In carrying out its responsibilities, the Board promotes a
model. culture of openness, productive dialogue and constructive
dissent, ensuring an environment that facilitates employee
Fairness empowerment and engagement and creates value to
4 Protect shareholders’ rights. all stakeholders. The Board encourages and sets the
4 Treat all shareholders including minorities, equitably. tone at the top by promoting professional standards
4 Provide effective redress for violations. and corporate values that cascade down to Senior
Management and other employees of the company.
Accountability
4 Ensure that Management is accountable to the Board. 3. Board Meetings and Attendance
4 Ensure that the Board is accountable to shareholders. The Board meetings are scheduled by providing adequate
notice to enable the Directors and Management to
Responsibility prepare all the key and strategic information required for
4 Must strive to channel the self-interests of Managers, deliberation in the meetings. The Directors are provided
Directors, and the Advisors upon whom they rely, into with the Agenda and Board papers at least seven days
alignment with corporate, shareholder, and public before each meeting giving them adequate time to study
interests. the contents.
Annual Report 2021
A professional and methodical approach is practiced in conducting the meetings with pre-allocation of time for each
agenda item to ensure all aspects are duly discussed and addressed to arrive at the appropriate decision. Heads of the
Divisions attend the Board meetings by invitation as and when required to present additional information and provide
further clarity to the Board.
Thirteen Board meetings were convened during the year and the attendance of the Board members are as follows:
Name of the Board Member Position Attendance
Maj.Gen. (Rtd.) G A Chandrasiri Chairman 13/13

RWP USP VSV ndc psc
Mr. R Sooriyaarachchi Vice-Chairman 13/13

Mr. A S C Warushahennadige Non- Executive Director 13/13
Mr. S N Sumanasekara Non- Executive Director 13/13
Eng. S M A U S Manchanayake Non- Executive Director 13/13
Ms. D A De Livera Non- Executive Director 13/13

Mr. C P Vitharena Non- Executive Director 02/13
Mr. R A P Wijerathnasekara Non- Executive Director 13/13
Mr. D A P Weeratna PC Non- Executive Director 13/13
Mr. Gihan Rashantha Non- Executive Director 12/13
Mr. G A Ajith Priyantha Non- Executive Director/Treasury Representative 08/13
Mr. A H S Gunawardhana The observer from State Ministry of Aviation & Export 13/13
Zones Development
Resigned
Mr. R M A Ratnayake Non- Executive Director/Treasury Representative 02/13
4. Our Approach and Commitment

AASL is a fully Government owned company and its Board is responsible to the Government for the strategic guidance
and oversight of the company through good governance.
The Board is responsible for taking appropriate business decisions within a framework of effective accountability and
transparency in the process of meeting our core objective of maximizing value for our stakeholders.
Roles and Responsibilities of the Board

Organizational Stewardship
Strategy and Planning, Risk, Leadership, Corporate Performance, Ethics, Compliance, Stakeholder Engagements,
Resources
Dynamics
Values, Decision Making, Behaviour, Employee Talents
Framework
Preferences, Contract Rules, Committees, Processes
Environment
Economy, Regulations, Business Practices, Currency Fluctuations, Legal environment
Annual Report 2021
Board Stewardship attitude towards Management. Providing objective
Recruitment, Orientation, Education, Evaluation, independent judgment is at the core of the Board’s
Succession Planning oversight role.
The Company is guided by the Corporate Governance All Directors have independent and joint access in respect
Regulatory Framework recommended by the Department of both internal and external information of the company.
of Public Enterprises and the Ministry of Finance. This The Company Secretary ensures that Board procedures
Governance Framework is underpinned by five core are followed and guidance on legal requirements are
principles. provided regarding Board proceedings.
a) Leadership and Direction In addition, the Secretary circulates the notices of Board
b) Transparency and Integrity Meetings, Minutes of meetings, and Board papers
c) Accountability to the Government as its key together with other relevant documents with adequate
shareholder information to enable the Board to make informed
d) Recognizing the legitimate interests of stakeholders decisions. Follow-up on actions on Board decisions are
e) Timely and balanced disclosure principle also executed by the Secretary.
5. Leadership and Direction 6. Matters Reserved for The Leadership of The Board
The company’s business and operations are managed Include:
under the supervision of the Board, which consists of The Company has in place a well-structured Corporate
members with experience and knowledge in the areas of Governance Framework which has been adopted across
business management and finance governance appointed all business units and is integral in maintaining and
by the Minister of Tourism and Aviation in line with enhancing sustainable shareholder value.
reference to the Articles of Association. The Chairman,
who leads the Corporate Governance policies of the a) Providing the vision and the direction for the company
organization and is responsible for providing leadership to based on its specific mission built up within the
the Board, is appointed by the Minister, whilst inculcating scope of the provisions in Civil Aviation Act No 14 of
good governance and ensuring effectiveness. The 2010 and how best it could serve the interests of the
Chairman also ensures constructive working relations are Government and other stakeholders.
maintained between the Executive and Non-Executive b) Ensuring that legal requirements are fulfilled and the
members of the Board. The Chairman with the assistance company operates in accordance with the provisions
of the Board Secretary ensures that: of the Companies Act No. 7 of 2007 and Articles of
Association.
a) Board procedures are followed c) Framing different types of policies including Risk
b) Information is disseminated promptly to the Board Management in order to achieve optimum returns
and benefits to the Government and other key
The Board of Directors executes a statutory responsibility stakeholders.
in the stewardship of the company on behalf of the d) Reviewing public policy objectives periodically and
Government and its stakeholders. Their principal functions providing strategic direction to formulate long- term
are: goals and objectives for future growth.
e) Guaranteeing adequate accountability by delegating
a) To lead the company towards achieving its vision. responsibility.
b) To oversee the management, operations, and
performance of the company as a whole. 7. Matters Reserved for The Board in This Capacity
Include:
The Board comprises of 11 Directors, of which 10 are The main purposes of the Board, in brief, are that directly
Non-Executive Directors and 01 is an Executive Director comes under their purview are:
and the majority of the Board comprises Non-Executive
Directors of high repute as per requirements of the Code. a) Assess the overall direction and implement the
This Board composition reflects the independence of strategy of the business.
Management, in both fact and appearance. That is not b) Fiduciary duty towards protecting stakeholder
only on Directors’ individual relationships, personal, interests.
employment or business but also on the Board’s overall
Annual Report 2021
c) Monitor and evaluate the performance of the Senior information. Accordingly, they must be overseen and
Management through Management Information reports evaluated effectively by the Audit Committee at least
ensuring that the company is on track in its operations. quarterly. The AASL’s line Ministry, the Ministry of Tourism
d) Ensure effectiveness of governance practices. & Aviation and the General Treasury need the assurance
e) Implement a framework for risk assessment and that the AASL’s audit functions are effective and have
management, including internal controls among been robustly evaluated. The scope of the evaluations
others. should encompass all relevant issues including:
f) Ensure that Board policies are executed in the same
spirit as it was framed and in the best interests of the 4 Quality of work undertaken during the evaluation
institution and the public at large. period.
g) Take remedial action without delays to ensure that 4 Calibre and experience of audit personnel.
goals are met if results are not in line with desired 4 The appropriateness of its reporting line in respect of
expectations. Government and Internal Audit.
h) Appoint competent personnel as Managers and
ensuring that there is adequate delegation of authority The Audit and Management Committee had regularly
amongst the Senior Management. reviewed the existing systems and procedures and on
i) Attend Committee on Public Enterprises (COPE) observing any deviations had submitted suggestions to
meetings and Parliamentary Consultative Committee improve the existing systems to the Board of Directors
(PCC) meetings or delegating the authority for the for its approval from time to time. The Committee also
same towards Senior Management when and where had reviewed the queries raised by the Auditor-General
necessary. and Internal Auditors and the replies given by the relevant
divisions to ensure corrective measures taken are
8. The Role of The Audit and Management Committee adequate and effective to eliminate the associated risks.
(AMC) In Corporate Governance Aspects
8.1 Audit Management Committee 8.2 Transparency and Integrity
The Audit and Management Committee (AMC) was formed Transparency, in a business or governance context, is
in terms of PED/12 Para 7:4:1 to assist the Governing honesty and openness. Transparency and accountability
Council in the supervision of the affairs of AASL and to are generally considered the two main pillars of good
ensure the integrity of the company financial statements corporate governance. Integrity is doing the right thing
and the procedures of the AASL. even when no one else is around. It is the ability to act
with honesty and be consistent in whatever it is a person
The role of the Audit and Management Committee is to is doing based on moral values.
assist the Board in fulfilling its oversight responsibilities
in relation to the integrity of the financial statements of The Audit and Management Committee has regularly
the company, the internal control and risk management monitored and reviewed the organizational culture and
systems of the company and its compliance with legal practices to identify and safeguard the integrity of the
and regulatory requirements, the External Auditors’ company’s financial reporting which demands enhanced
performance, qualifications and independence and the governance, accountability, and transparency. The entire
adequacy and performance of the Internal Audit function, procurement process is one of the important activities
undertaken by the company. of the company based on the guidelines issued by
the Department of Public Finance of the Treasury and
The scope of functions and responsibilities are adequately provides a fully transparent procedure when acquiring
set out in the TOR of the committee which has been goods and services.
approved by the Board and is reviewed annually. The
Audit and Management Committee has reviewed the 8.3 Internal Audit
financial statements to ensure their conformity and AMC is assisted by the AASL Internal Audit and Quality
compliance to the Government regulations covering Assurance (IA & QA) Division. The Head of IA & QA acts
accounting and financial activities, Administrative as a Convener to the AMC and report to the Chairman.
Regulations (AR), Financial Regulations (FR) and AASL The main focus of the IA & QA Division is to conduct an
regulations. independent review on the overall prevailing system of
internal control by evaluating the adequacy, integrity,
The external and internal audit functions play a vital role and effectiveness of internal controls while ensuring
in contributing to the integrity of the audited financial that standards of quality for certain areas of the airport
Annual Report 2021
services are satisfactorily met and make appropriate 9.3 Parliamentary Sectoral Oversight Committee
recommendation to the Management to strengthen the As per the resolution of Parliament adopted on 19
internal controls. The Internal Audit regularly reported December 2015 AASL comes under the Sectoral
to the Chairman on the adequacy and effectiveness of Oversight Committee on Transport and Communication.
internal controls and compliance with laws and regulations The main purpose of the committee is to evaluate and
and established policies and procedures of the company. monitor the overall project progress, performance, and
The Internal Audit includes: any other special matters. Sectoral Oversight Committee
chaired by an opposition Member of Parliament in order to
a) Review of the prevailing system of internal control. maintain the objectivity in the entire process.
b) Ensure that major decisions undertaken by the Board
of Directors are implemented effectively. 9.4 Minister of Finance / General Treasury
c) Evaluating and making recommendations on risk The Minister of Finance or the General Treasury on
assessment over Management decisions and activities his behalf is responsible for financial discipline in the
under the purview of each division of the AASL, to the public sector, including public enterprises. A Treasury
AMC, and the Chairman of AASL. representative is appointed to the Board to monitor
d) Making observations on risk assessment by External performance, ensure compliance with statutes, rules and
Auditors in respect of systems and controls. regulations, etc. and to report on any matters of concern
e) Ad hoc and periodic Financial Reviews for Income and to the Minister. Mr. G A Ajith Priyantha, the Treasury
Expenditure and its recognition as well as reporting. Representative, performed this function during the year
f) Undertaking quality audits regarding selected airport under review.
facilities and airport services.
g) Review of procurement procedures in compliance The responsibility for monitoring the financial management
with the National Procurement Agency applicable and control of Public Enterprises lies in the hands of the
procurement guidelines. Department of Public Enterprises (DPE), General Treasury.
9. Accountability to The Government as The Key 9.5 Ministry of Transport and Civil Aviation
Shareholder of AASL The Secretary of the Ministry of Tourism and Aviation
As a fully Government owned business undertaking, and the Chief Accounting Officer is accountable to
accountability to the Government is exercised through the the Government for the financial administration and
line Ministry by AASL using the following mechanism: management of the company and in this capacity regularly
reviews the following matters with the Board during the
9.1 Parliament year.
Annual Reports of the company should be tabled in
Parliament within 150 days from the end of the financial a) Corporate Plan and Budgets
year as per the Treasury Circular PE/PF 21 dated 24 May b) Physical and Financial performance of the Capital
2002 for review. Projects undertaken in the current year
c) Audit Deliverables including Management Letter and
9.2 Committee on Public Enterprises (COPE) Financial Performance of the year as a whole
The Parliamentary Committee on Public Enterprises d) Matters arising from meetings of the COPE or any
(COPE) is empowered to review the performance of other Statutory/Regulatory institution
the company and to assess the extent to which the
company achieves performance targets and fulfils 9.6 Ministry of Tourism and Aviation
social responsibilities. When summoned by the COPE, The Ministry of Tourism and Aviation was established on
the Chairman, Directors and Senior Managers together 10th December 2019 under the extraordinary gazette No.
with the Secretary to the Ministry of Tourism & Aviation, 2153/12. Among the main objectives of the establishment
the Chief Accounting Officer should be present at the of a dedicated Ministry in charge of the tourism and
reviews, to respond to any queries and matters of concern aviation sectors are making available an appropriate policy
regarding the activities of the company. and regulatory framework, ensure robust infrastructure
development and aviation, promoting of destination Sri
Lanka, and exercise administrative and financial overview
over institutions gazette under the Ministry.
Annual Report 2021
10. Recognize the Legitimate Interests of Stakeholders 11. Timely and Balanced Disclosures
Stakeholder value is enhanced when an entity treats Providing timely, accurate information with required
the stakeholders well, meets the expectations in growth coverage of depth and breadth for prudent decision
and has a reputation towards civic responsibility and making is the crust of our information disclosures
legal compliance. Stakeholder value is known as a internally as well as externally. The company’s established
management method that focuses on maximizing policies and procedures ensure compliance with the
the interests of a company’s stakeholders (including disclosure requirements of all laws and regulations,
shareholders, clients, workers and the community) as its including the circulars stipulated in the Department of
prime objective. The goal of this approach is to maximize Public Enterprises of the General Treasury and Sri Lanka
the stakeholders’ value by implementing policies, which Financial Reporting Standards (SLFRSs/LKASs).
enhance cost control while raising the quality of the
organization’s products, improve the skills and morale of AASL maintains effective and candid communication
the company’s employees and secure the advancement with the stakeholders to help stockholders understand
of the community from where the organization gathers the business, risk profile, financial condition, operating
resources and sustenance. In light of that, the company performance and trends of the corporation. Many periodic
recognizes the legal and other obligations to all legitimate and ad hoc reports and analysed information are provided
stakeholders including the Government and other affiliated as a practice and on demand. The employees are updated
constituencies who have an interest over AASL’s affairs, with the true position of corporate operations and financial
employees, users of the airport (airlines, passengers and performance. The company Intranet serves the purpose
the business community who run their businesses inside of information dissemination enhancement to employees.
the airport) suppliers and other service providers and the AASL contributes to public policy dialogue whenever there
community as a whole. These obligations are best viewed is a development, enactment and revision of the laws
as part of the paramount duty to optimize long-term and regulations that impact our business and affect the
stakeholder value. community in which we operate.
It demonstrates its commitment to appropriate corporate 12. The Company Secretary

practices, which comprise of the following areas: The Company Secretary plays a vital role in ensuring
that the Board procedures are followed and regularly
a) Due diligence by the Board and Management to the reviewed. In addition to maintaining Board minutes and
regulatory framework. Board records, the Board Secretary provides support
b) Fulfilling the responsibilities of the Government, acting in ensuring that the Board receives timely and accurate
as the statutory service provider of airport operations. information in addition to advice relating to corporate
c) Promptly meeting obligations to creditors and financial governance matters, Board procedures and applicable
institutions. rules and regulations during the year. All concerns raised
d) Consistently meeting obligations in relation to fair and wished to be recorded have been documented in
trading and ensuring a level playing field when dealing sufficient detail by the Secretary.
with suppliers and other service providers.
e) Ensuring ethical business practices affecting the The Company Secretary is primarily responsible to ensure
community. compliance with applicable statutory, new regulations
f) Carrying out all operations and activities as stipulated and is the interface between the Management and the
by law and following best practices as appropriate. regulatory authorities for governance matters.
g) Non-discriminatory treatment of all airport users.
h) Treat employees fairly, respectfully, and equitably.
Annual Report 2021
MAINTAINING Annual Report 2021
STRICT
REGULATIONS
Annual Report 2021
FINANCIAL REPORTS
81 Report of the Auditor General on the Financial Statements
86 Statement of Comprehensive Income
87 Statement of Financial Position
88 Statement of Changes in Equity
89 Statement of Cash Flows
90 Notes to the Financial Statements
Annual Report 2021
Report of the Auditor General on the Financial Statements
Chairman
Airport and Aviation Services (Sri Lanka) (Private) Limited
Report of the Auditor General on the Financial Statements and Other Legal and Regulatory Requirements of
the Airport and Aviation Services (Sri Lanka) (Private) Limited for the year ended 31 December 2021 in terms of
Section 12 of the National Audit Act, No. 19 of 2018.
1. Financial Statements
1.1 Opinion
The audit of the financial statements of the Airport and Aviation Services (Sri Lanka) (Private) Limited (“Company”) for the
year ended 31 December 2021 comprising the statement of financial position as at 31 December 2021 and the statement
of comprehensive income, statement of changes in equity and cash flow statement for the year then ended, and notes
to the financial statements, including a summary of significant accounting policies, was carried out under my direction
in pursuance of provisions in Article 154(1) of the Constitution of the Democratic Socialist Republic of Sri Lanka read in
conjunction with provisions of the National Audit Act No. 19 of 2018. My report to Parliament in pursuance of provisions
in Article 154 (6) of the Constitution will be tabled in due course.
In my opinion, the accompanying financial statements give a true and fair view of the financial position of the Company
as at 31 December 2021, and of its financial performance and its cash flows for the year then ended in accordance with
Sri Lanka Accounting Standards.
1.2 Basis for Opinion

I conducted my audit in accordance with Sri Lanka Auditing Standards (SLAuSs). My responsibilities, under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my
report. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
1.3 Emphasis of Matter

I draw attention to Note 2.1.1 to the financial statements which explains the basis for amalgamating the financial
statements of the Company with the Government Grant for Capital Expenditure (Voted Fund) and the Retained Revenue
Fund. Based on the Cabinet decision dated 17 August 2005, the Secretary to the Treasury has directed the Company
on 09 February 2006 by his letter No.PE/GOCO/1/1 to value the land and building of airport presently owned by the
Government and other movable and immovable assets held by the Company and taking over the liabilities relating to
Airport Development then serviced by the Government of Sri Lanka and issue of shares to the Government of Sri Lanka
for the net assets value.
Further, on the request of the Company on the implementation of above cabinet decision, Attorney General had advised
to take a fresh Cabinet approval by his letter dated 08 February 2010, as it involves inter alia, transfer of lands and
buildings of the airport(s) and all other movable and immovable assets presently owned by the Civil Aviation Authority
and the Government of Sri Lanka respectively. However, no action had been taken by the Company to obtain a fresh
Cabinet decision up to date.
Moreover , by the gazette notification of Minister of Transport and Civil Aviation dated 21 December 2017 under the
Civil Aviation Authority Act No.34 of 2002, the Minister have vested and transferred Katunayake Airport, Ratmalana
Airport, Land, Buildings and structures of Civil Aviation Training Centre at Rathmalana, The Aeronautical Communication
Transmission Station at Attidiya, Radio Navigational Aids at Gampaha and Pamunugama, Radar Station at
Annual Report 2021
Pidurutalagala, Holiday Bungalow at Nuwara Eliya and Anuradhapura Land of 0.125 hectares to Civil Aviation Authority
of Sri Lanka. Therefore, the ownership of lands and buildings used by the Company was doubtful in audit. However, only
buildings of the Bandaranaike International Airport had been re-valued during the year under review and no action had
been taken to complete the valuation and issue shares to Government of Sri Lanka to date.
My opinion is not modified in respect of this matter.
1.4 Other information included in the Company’s 2021 Annual Report.

The other information comprises the information included in the Company’s 2021 Annual Report but does not include
the financial statements and my auditor’s report thereon, which I have obtained prior to the date of this auditor’s report.
Management is responsible for the other information.
My opinion on the financial statements does not cover the other information and I do not express any form of assurance
conclusion thereon.
In connection with my audit of the financial statements, my responsibility is to read the other information identified above
and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my
knowledge obtained in the audit or otherwise appears to be materially misstated.
If based on the work I have performed on the other information that I have obtained prior to the date of this auditor’s
report, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have
nothing to report in this regard.
1.5 Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with
Sri Lanka Accounting Standards, and for such internal control as management determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
As per Section 16(1) of the National Audit Act No. 19 of 2018, the Company is required to maintain proper books and
records of all its income, expenditure, assets and liabilities, to enable annual and periodic financial statements to be
prepared of the Company.
1.6 Auditor’s Responsibilities for the Audit of the Financial Statements

My objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Sri Lanka
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Annual Report 2021
As part of an audit in accordance with Sri Lanka Auditing Standards, I exercise professional judgment and maintain
professional scepticism throughout the audit. I also:
4 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
4 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
4 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
4 Conclude on the appropriateness of the management’s use of the going concern basis of accounting and based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If I conclude that a material uncertainty
exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up
to the date of my auditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
4 Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
I communicate with those charged with governance regarding, among other matters, significant audit findings, including
any significant deficiencies in internal control that I identify during my audit.
2. Report on Other Legal and Regulatory Requirements

2.1 National Audit Act, No. 19 of 2018 and Companies Act, No. 7 of 2007 include specific provisions for following
requirements.
2.1.1 I have obtained all the information and explanation that required for the audit and as far as appears from my
examination, proper accounting records have been kept by the Company as per the requirement of section 163 (2)
(d) of the Companies Act, No. 7 of 2007 and section 12 (a) of the National Audit Act, No. 19 of 2018.
2.1.2 The financial statements of the Company comply with the requirement of section 151 of the Companies Act, No. 07
of 2007.
2.1.3 The financial statements presented is consistent with the preceding year as per the requirement of section 6 (1)
(d) (iii) of the National Audit Act, No. 19 of 2018.
2.1.4 The financial statements presented includes all the recommendations made by me in the previous year as per the
requirement of section 6 (1) (d) (iv) of the National Audit Act, No. 19 of 2018.
Annual Report 2021
2.2 Based on the procedures performed and evidence obtained was limited to matters that are material, nothing
has come to my attention;
2.2.1 to state that any member of the governing body of the Company has any direct or indirect interest in any contract
entered into by the Company which are out of the normal cause of business as per the requirement of section 12
(d) of the National Audit Act, No. 19 of 2018.
2.2.2 to state that the Company has not complied with any applicable written law, general and special directions issued
by the governing body of the Company as per the requirement of section 12 (f) of the National Audit Act, No. 19 of
2018 except for ;
Reference to law/ direction Description

Section 14 of the Civil Aviation Act, No.14 of A Master Plan on establishment or expansion of aerodromes had not
2010 been prepared by the Company and had not obtained the approval
from Civil Aviation Authority of Sri Lanka up to 31 December 2021.

2.2.3 to state that the Company has not performed according to its powers, functions and duties as per the requirement
of section 12 (g) of the National Audit Act, No. 19 of 2018
2.2.4 to state that the resources of the Company had not been procured and utilized economically, efficiently and
effectively within the time frames and in compliance with the applicable laws as per the requirement of section 12
(h) of the National Audit Act, No. 19 of 2018
2.5 Other Matters

(a) The Company had entered into two agreements with Japan International Cooperation Agency for funding of 74,397
Japanese Yen million for Phase II Stage 02 of Bandaranaike International Airport Development Project on dates of
28 March 2012 and 24 March 2016. However, the contract value equivalent to the 82 per cent of the funding value
had been awarded on 04 March 2020 with a huge delay. Further, the Company had paid a sum of Rs.359.5 million
equivalents to 250.5 Japanese Yen million from 20 April 2013 to 20 April 2022 including a sum of Rs.31.5 million
equivalent to 14.8 Japanese Yen million for the year under review to the Japan International Cooperation Agency as
commitment fee due to under-utilization of funds. Changing the roof design of new terminal building had been caused
for the delaying of the project.
(b) No action had been taken to recover the outstanding debtor balance over 365 days from Sri Lankan Airlines for
Landing & Parking charges and Aerobridge Charges, Rental & other charges amounting to Rs.1,413.5 million as at
the end of year under review and it was 35 per cent from the total trade debtors over 365 days of AASL.
(c) It was observed that the operating cost of the MRIA in the year 2021 was Rs.2.02 billion and it was 21 times higher
than the operating Income. Net Loss after tax for the year under review was Rs.4.44 billion and Cumulative net losses
after tax from year 2017 to 2021 were Rs.20.59 billion. Although the expected annual passenger capacity of the
Mattala Airport was around one million, the total number of passengers during the last five years was only 91,747 and
total flight movements of last five years were 2,396. Accordingly, it was observed that a total cost of Rs.36,564 million
equivalent to USD 247.7 million which was incurred for the construction of this airport was not effectively used.
Further, a sum of Rs.2,610 million had been paid by AASL as the annual loan instalment including interest for the debt
of USD 190 million obtained for the above construction.
Annual Report 2021
(d) Colombo International Airport, Rathmalana had incurred continuous losses and cumulative loss from 2017 to 2021
was amounting to Rs.1,693.66 million including the loss for the year under review of Rs.461.08 million. In the year
2020 and 2021 aircrafts movements were only 13 per year and the passenger movements were around 60 and 28
respectively.
(e) Jaffna International Airport had inaugurated on 17 October 2019. There were only 142 aircrafts movements and 4,441
number of passenger movements recorded from inception and continuous losses incurred for last 03 consecutive
years. No revenue had been earned in the year 2021 and an expenditure of Rs.40.74 million had been incurred.
(f) Batticaloa International Airport had reopened to civilian operation on 25 March 2018. No revenue was earned and
only Rs.74.64 million had been incurred as expenditure for last four years. The Civil Aviation Authority had spent
Rs.38.4 million on the Construction of a new passenger terminal building and Rs.482.78 million on the construction
of Runway and also the State Ministry of Aviation and Export Zones Development had incurred a sum of Rs.53.61
million for final payments of construction of Runway.
As per the comments received from the Chairman of the Company, government of Sri Lanka has taken a decision for
the operation of Jaffna International Airport, Batticaloa International Airport, Mattala Rajapaksha International Airport
and upgrading the operations of Colombo International Airport (Rathmalana) as international civil airports under the
administration of the Company.
W.P.C. Wickramarathne
Auditor General
Annual Report 2021
Statement of Comprehensive Income

(All amounts in Sri Lankan Rupees)
Year ended 31 December Note 2021 2020
7,386,170,394 7,776,338,256
Revenue 5
Other Income 6 492,782,034 234,399,549

7,878,952,428 8,010,737,805
Administration and Establishment Expenses 7 (11,654,806,923) (12,621,505,398)
Operating (Loss)/Profit (3,775,854,496) (4,610,767,594)
Finance Income 3,321,110,256 3,665,084,725

Finance Cost (506,142,527) (2,787,071,806)
Net Finance (Cost) / Income 8 2,814,967,729 878,012,919
(Loss)/Profit Before Tax (960,886,767) (3,732,754,675)
Income Tax Expenses 9 (1,122,614,992) 1,228,325,046
(Loss)/Profit for the Year (2,083,501,758) (2,504,429,629)
Basic (Loss)/Earning Per Share 10 (10,417) (12,522)
Other Comprehensive Income

Gain/(loss) Arising From Changes In Assumptions on
Computing Retirement Benefit Obligations 23 878,191,927 497,235,788
Deferred Tax on Actuarial Gain / (loss) 13 (210,766,063) (119,336,589)
Total Other Comprehensive Income 667,425,865 377,899,199

Total Comprehensive Income for the Year (1,416,075,894) (2,126,530,430)
The notes on pages 90 to 117 form an integral part of these financial statements.
Annual Report 2021
Statement of Financial Position

As at December 31 Note 2021 2020
ASSETS
Non-Current Assets
Property, Plant and Equipment 11 41,624,923,625 37,892,565,842
Capital Work in Progress 11 30,459,475,504 8,781,032,278
Intangible Assets 12 21,835,257 40,239,429
Deferred Tax Assets 13 1,878,384,291 1,967,973,553
73,984,618,678 48,681,811,103
Long Term Investments

Long Term loans 12,788,500 -
Investment in Debentures 14 4,088,300,000 5,638,300,000
Long Term Bank Deposits 1,266,678,125 1,169,874,563
Loans to Company Officers 16.1 61,602,205 81,019,448
Current Assets
Inventories 15 808,185,284 837,088,722
Trade and Other Receivables 16 3,845,984,745 3,215,746,028
Income Tax Receivable 26 848,093,206 833,368,210
Short Term Bank Deposits 41,515,132,946 41,932,637,264
Cash and Cash Equivalents 17 413,045,010 826,225,883
47,430,441,191 47,645,066,108
Total Assets 126,844,428,699 103,216,071,222
EQUITY AND LIABILITIES

Capital and Reserves
Stated Capital 18 20,000,200 20,000,200
Reserves 19 6,846,183,247 1,077,266,769
Retained Earnings 20 34,448,138,251 35,885,634,586
41,314,321,698 36,982,901,555
Non-Current Liabilities
Borrowings 21 60,435,353,759 43,433,321,775
Debentures 22 4,000,000,000 4,000,000,000
Retirement Benefit Obligation 23 4,837,739,167 5,482,533,223
Deferred Tax Liability 13 7,373,210,258 6,129,418,466
Deferred Government Grants 24 956,671,370 986,349,954
77,602,974,554 60,031,623,418
Current Liabilities
Trade and Other Payables 25 3,637,802,214 2,462,071,718
Borrowings 21 4,289,330,231 3,739,474,530
7,927,132,445 6,201,546,248
Total Liabilities 85,530,106,999 66,233,169,666
Total Equity and Liabilities 126,844,428,699 103,216,071,222
The Board of Directors are responsible for the preparation and presentation I certify that these financial statements have been
of these Financial Statements. These Financial Statements were authorised prepared in compliance with the requirements of
by the Board of Directors on 31st May 2022. the Companies Act, No. 07 of 2007.
Chairman Director Head of Finance

Annual Report 2021
Statement of Changes in Equity

Note Stated Other Retained Total

Capital Reserves Earnings
Balance as at 1 January 2020 20,000,200 1,067,076,769 38,143,580,281 39,230,657,251
Prior Year Adjustments - - (121,225,264) (121,225,264)

(Loss)/Profit for the Year - - (2,504,429,629) (2,504,429,629)

Actuarial Loss on Post Employment - - 497,235,788 497,235,788
Benefit Obligations
Deferred Tax on Actuarial Gain - - (119,336,589) (119,336,589)
Other Comprehensive Income - - 377,899,199 377,899,199

Net of Tax
Total Comprehensive Income - - (2,126,530,430)
(2,126,530,430)
Prior Year Adjustments - - - -
Dividend Paid 28 - - - -
Transfer to Reserve Account - 10,190,000 (10,190,000) -
Balance as at 31 December 2020 20,000,200 1,077,266,769 35,885,634,586 36,982,901,554
Balance as at 1 January 2021 20,000,200 1,077,266,769 35,885,634,586 36,982,901,554
Prior Year Adjustments - - (18,920,440) (18,920,440)
(Loss)/Profit for the Year - - (2,083,501,758) (2,083,501,758)

Actuarial Gain on Post Employment - - 878,191,927 878,191,927
Benefit Obligations
Deferred Tax on Actuarial Gain - - (210,766,063) (210,766,063)
Other Comprehensive Income - - 667,425,865 667,425,865

Net of Tax
Total Comprehensive Income - - (1,416,075,894)
(1,416,075,894)
Dividend Paid 28 - - - -
FA Revaluation Reserve - 5,766,416,478 - 5,766,416,478
Transfer to Reserve Account - 2,500,000 (2,500,000) -
Balance at 31 December 2021 20,000,200 6,846,183,247 34,448,138,251 41,314,321,699

Annual Report 2021
Statement of Cash Flows

Year ended 31 December Note 2021 2020
Cash Flows from Operating Activities

(Loss)/Profit Before Income Tax Expenses (960,886,767) (3,732,754,675)
Adjustment for :
Depreciation 11 2,630,042,901 2,820,686,229
Amortization of Intangible Assets 12 18,376,125 16,599,094
Prior Year Depreciation/Amortization Adjustment 11-12 13,631,930 58,885,481
Adjustments for Revaluation /Transfer 11 512,203,484 -
Assets Written Off 11-12 167,229,653 -
Exchange (Gain) / Loss on Loans Conversion 21 2,141,205,420 2,268,147,704
Exchange (Gain) / Loss on Fixed Deposits Conversion 21 (2,775,429,116) (770,750,076)
Income from Investment 8 (3,301,121,938) (3,681,564,853)
(Profit)/Loss on Sales of Property, Plant and Equipment 9,754,246 (39,386,993)
Prior Year Adjustments 20 (18,920,458) (124,200,415)
Amortization of Deferred Government Grants 24 (48,656,180) (47,694,302)
Finance Cost 8 1,140,366,223 1,289,674,178
Provision for Retirement Benefit Plan 23 716,345,888 912,386,047
Operating Profit Before Working Capital Changes 244,141,411 (1,029,972,581)
(Increase)/ Decrease in Inventories 28,903,438 123,936,517
(Increase)/ Decrease in Trade and Other Receivables (525,569,111) 2,442,334,045
(Increase)/ Decrease in Trade and Other Payables 1,204,329,621 (275,084,982)
Cash Generated From Operations 951,805,359 1,261,212,999
Defined Benefit Plan Costs Paid 23 (482,947,999) (417,090,045)

Interest Paid (1,168,965,347) (1,341,907,020)
Income Tax Paid 26 (14,724,996) (1,617,818,533)
Net Cash (Used in)/Generated from Operating Activities (714,832,983) (2,115,602,600)
Cash Flows From Investing Activities

Acquisition of Property, Plant and Equipment 11 (22,960,368,432) (2,140,848,433)
Acquisition of Intangible Assets 12 - (27,720,585)
Investment in Debentures 14 1,550,000,000 -
Net (Investments)/Withdrawals in Bank Deposists 3,096,129,871 1,052,597,268
Loan Given to Sport Club (12,788,500) -
Proceeds From Sale of Property, Plant and Equipment 2,127,330 39,387,040
Interest Received 3,196,452,332 4,173,071,721
Staff Loans Granted (101,513,352) (124,931,128)
Staff Loans Receipt 120,930,596 146,013,692
Net Cash generated from Investing Activities (15,109,030,155) 3,117,569,574
Cash Flows from Financing Activities

Loan Receipt 21 19,833,345,828 1,083,791,280
Loan Repayment (Local) 21 (133,333,334) -
Loan Repayment (Foreign) 21 (4,289,330,231) (3,739,474,532)
Net Cash (Used in)/Generated from Financing Activities 15,410,682,264 (2,655,683,251)
Net (Decrease)/Increase in Cash and Cash Equivalents

(413,180,873) (1,653,716,277)
Cash and Cash Equivalents at the Beginning of the Year 17 826,225,883 2,479,942,157
Cash and Cash Equivalents at the End of the Year 17 413,045,010 826,225,883
Annual Report 2021
Notes to the Financial Statements

(In the notes all amounts are shown in Sri Lankan Rupees unless otherwise stated)
1. Corporate Information 2.1.1 Amalgamation

1.1 General These financial statements present the amalgamated
Airport and Aviation Services (Sri Lanka) (Private) position of the Company including:
Limited (“Company”) is a private limited company
incorporated and domiciled in Sri Lanka. The registered a) the Voted Fund representing the government grants
office of the Company is located at Bandaranaike for capital expenditure; and
International Airport, Katunayake. b) the Retained Revenue Fund,
1.2 Principal Activities and Nature of Operations Which were prepared and presented separately up to
During the year, the principal activities of the Company the year 2011 pending an opinion from the Attorney
were management of airports at internationally General.
accepted standards, provision of air navigational
services for inbound aircraft and aircraft flying through The Attorney General’s opinion was sought by the Civil
the Sri Lanka Flight Information Region (FIR) and Aviation Authority based on a request made by the
providing other necessary facilities to the users of the Company to the Ministry of Aviation to initiate action to
airports. commence the statutory amendments mentioned under
paragraph 3.5 of the Cabinet Memorandum given in the
1.3 Date of Authorization for Issue Cabinet approval dated 17 August 2005 to amalgamate
The financial statements of Airport and Aviation the assets and liabilities of the airport with those of
Services (Sri Lanka) (Private) Limited for the year the Company along with the necessary legislative
ended 31 December 2021 were authorised for issue in amendments.
accordance with a resolution of the Board of Directors
on 31st May 2022. The necessity for the above Cabinet approval was
due to the ownership of only part of the assets held
by the former Airport Authority been transferred
2. Summary of Significant Accounting Policies to the Company in 1983 with the formation of the
The principal accounting policies adopted in the Company and dissolution of the Airport Authority with
preparation of these financial statements are set out the remaining assets and liabilities been held and
below. These policies have been consistently applied to accounted under the voted and the retained revenue
all the years presented, unless otherwise stated. funds.
2.1 Basis of Preparation The Board of Directors of the Company on 28 June

The financial statements have been prepared in 2013 approved the amalgamation in order to comply
accordance with and comply with Sri Lanka Accounting with the Sri Lanka Accounting Standards (SLFRS/
Standards (SLFRSs/LKAS). The financial statements are LKAS), on the basis that the Company in engaging in its
prepared under the historical cost basis, as modified principal activities deriving economic benefits from the
by fair valuation of certain financial assets and liabilities use of the assets recorded in the two funds and also
and present value of defined benefit obligations. accounting for obligations on debt servicing without
recording the related liability, thus deviating from
The preparation of financial statements in conformity fundamental accounting concepts.
with SLFRSs requires the use of certain critical
accounting estimates. It also requires management 2.1.2 Statement of Compliance
to exercise their judgment in the process of applying The Board of Directors is responsible for the preparation
the Company’s accounting policies. The areas where and presentation of the Financial Statements of the
assumptions and estimates are significant to the Company as per the provisions of the Companies Act
financial statements are disclosed in Note 4. and the SLFRSs/LKAS.
These financial statements are presented in Sri The statement of financial position, statements of
Lanka Rupees. The preparation and presentation of comprehensive income, changes in equity and cash
these financial statements is in compliance with the flows, together with accounting policies and notes,
Companies Act. No 07 of 2007. (“Financial Statements”) of the Company as at 31
December 2021 and for the year then ended together
Annual Report 2021
with the comparative information are comply with the 2.1.7 Materiality and Aggregation
Sri Lanka Accounting Standards (SLFRS/LKAS) laid Each material class of similar items is presented
down by The Institute of Chartered Accountants of Sri separately in the Financial Statements. Items of
Lanka and in compliance with the requirements of the dissimilar nature or function are presented separately
Companies Act. unless they are immaterial as permitted by the Sri
Lanka Accounting Standard-LKAS 1 on ‘Presentation of
These Standards are listed at www.casrilanka.com. Financial Statements’.
2.1.3 Comparative Information 2.1.8 Use of Judgments and Estimates

The accounting policies have been consistently applied The preparation of the Financial Statements of the
to all the years presented, unless otherwise stated. Company require the conformity with SLFRSs and
management to make judgments, estimates and
2.1.4 Basis of Measurement assumptions that affect the application of Accounting
The Financial Statements of the Company have been Policies and the reported amounts of assets, liabilities,
prepared on the historical cost basis except for the income and expenses. Actual results may differ from
following material items in the Statement of Financial these estimates. Estimates and underlying assumptions
Position: are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised prospectively
Investment Property - Fair Value when necessary.
Short Term Investments classified as fair value through
profit or loss - Fair Value 2.1.9 Going Concern
Net Defined Benefit Liability - Liability is recognised as The Management has made an assessment of its
the present value of the Defined Benefit Obligations ability to continue as a going concern and is satisfied
plus unrecognized actuarial gains, less unrecognised that it has the resources to continue in business for
past service cost and unrecognised actuarial Losses the foreseeable future. Furthermore, management
is not aware of any material uncertainties that may
2.1.5 Functional and Presentation Currency cast significant doubt upon the Company’s ability to
Items included in the Financial Statements of the continue as a going concern. Therefore, the Financial
Company are measured using the currency of the Statements continue to be prepared on a going concern
primary economic environment in which the Company basis.
operates (the Functional Currency). These Financial
Statements are presented in Sri Lankan Rupees, the 2.1.10 Financial Instruments
Company’s Functional and Presentation Currency. A financial instrument is any contract that gives rise to
There was no change in the Company’s Presentation a financial asset of one entity and financial liability or
and Functional Currency during the year under review. equity instrument of another entity.
2.1.6 Presentation of Financial Statements 2.1.11 Deferred Tax Assets

The assets and liabilities of the Company presented Deferred tax assets are recognized in respect of tax
in its Statement of Financial Position are grouped by losses to the extent that it is probable that future
nature and listed in an order that reflects their relative taxable profits will be available against which such
liquidity and maturity pattern. No adjustments have tax losses can be utilised. Assumptions are made to
been made for inflationary factors affecting the Financial determine the amount of deferred tax assets that can
Statements. Financial Assets and Financial Liabilities be recognised, based upon the likely timing and level of
are offset and the net amount reported in the Statement future taxable profits, together with future tax-planning
of Financial Position only when there is a legally strategies.
enforceable right to offset the recognised amounts
and there is an intention to settle on a net basis, or to 2.1.12 Changes in Accounting Policy and Disclosures
realise the assets and settle permitted by an Accounting New and amended standards and interpretations
Standard or Interpretation, and as specifically disclosed Several Amendments to accounting standards are
in the Accounting Policies of the Company. effective for annual periods beginning after 1 January
2021.However these amendments have no significant
impact over the Company’s financial statements.
Annual Report 2021

Amendments to SLFRS 9 & LKAS 39– Interest Rate 2.1.13 Effect of COVID 19 on the Business and
Benchmark Reform (Phase 1 & 2) Operations
The amendments to SLFRS 9 & LKAS 39 provide With ongoing COVID-19 pandemic situation and the
a number of reliefs, which apply to all hedging consequent business and movement restrictions,
relationships that are directly affected by interest rate the Company’s operations were adversely affected
benchmark reform. A hedging relationship is affected from the mid of of the month March 2020.During this
if the reform gives rise to uncertainty about the timing financial period total aircraft movements and passenger
and/or amount of benchmark-based cash flows of the movements have been decreased by 66% and 76%
hedged item or the hedging instrument. compared with the financial year 2019.During this
period Company experienced significant exchange loss
Amendments to SLFRS 16 COVID-19 Related Rent on translation of foreign currencies in to local currency
Concessions due to depreciation of LKR against major foreign
The amendments provide relief to lessees from applying currencies.
SLFRS 16 guidance on lease modification accounting
for rent concessions arising as a direct consequence However Company was able to manage this situation
of the COVID-19 Pandemic. As a practical expedient, during the year 2021.Operating loss was gradually
a lessee may elect not to assess whether a Covid-19 decreased up to LKR 3,503.8Million from LKR
related rent concession from a lessor is a lease 4,610.8Million in 2021.Both aircraft movements and
modification. A lessee that makes this election passenger movements have been increased by 2% and
accounts for any change in lease payments resulting 37% compared with the year 2020.
from Covid-19 related rent concession the same way
it would account for the change under SLFRS16, if the The management is confident of increasing strong
change were not a lease modification. revenue sources and strict follow up actions on debtors
to finance the adverse effect to the cash flow, ability to
Amendments to LKAS 16 - Property, Plant and secure supplies, expected revenue streams, credit and
Equipment: Proceeds before Intended Use collection management practices and ability to defer
CA Sri Lanka adopted amendments to LKAS16- non-essential capital expenditure. With the relaxation
Property, Plant and Equipment — Proceeds before of movement restrictions and gradual restoration of
Intended Use, which prohibits entities deducting from business activities, the company is expected to return
the cost of an item of property, plant and equipment, to its normal level of activities from the beginning of
any proceeds from selling items produced while the year 2022. After due consideration of risks and
bringing that asset to the location and condition likelihood of outcomes, the Board of Directors is
necessary for it to be capable of operating in the satisfied that the Company has adequate liquidity and
manner intended by management. Instead, an entity business plans to continue to operate the business and
recognises the proceeds from selling such items, and mitigate the risks.
the costs of producing those items, in profit or loss.
2.2 Foreign Currency Translation
Amendments to LKAS 37 - Onerous Contracts – (a) Functional and Presentation Currency
Costs of Fulfilling a Contract Items included in the financial statements are
CA Sri Lanka adopted amendments to LKAS 37 to measured using the currency of the primary economic
specify which costs an entity needs to include when environment in which the Company operates (‘the
assessing whether a contract is onerous or loss- functional currency’). The financial statements
making. The amendments apply a “directly related cost are presented in Sri Lankan Rupees, which is the
approach”. The costs that relate directly to a contract Company’s functional and presentation currency.
to provide goods or services include both incremental
costs and an allocation of costs directly related to (b) Transactions and Balances
contract activities. General and administrative costs do Foreign currency transactions are translated into the
not relate directly to a contract and are excluded unless functional currency using the exchange rates at the
they are explicitly chargeable to the counterparty under dates of the transactions. Foreign exchange gains
the contract. and losses resulting from the settlement of such
transactions and from the translation of monetary
Annual Report 2021
assets and liabilities denominated in foreign currencies amounts in the financial statements. However, deferred
at year end exchange rates are generally recognised in tax liabilities are not recognized if they arise from the
comprehensive income. They are deferred in equity if initial recognition of goodwill; deferred income tax is not
they relate to qualifying cash flow hedges and qualifying accounted for if it arises from initial recognition of an
net investment hedges or are attributable to part of the asset or liability in a transaction other than a business
net investment in a foreign operation. combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred
Foreign exchange gains and losses that relate to income tax is determined using tax rates (and laws)
borrowings and cash and cash equivalents are that have been enacted or substantially enacted by the
presented in the Statement of Comprehensive Income Statement of Financial Position date and are expected
within ‘finance income or cost’. All other foreign to apply when the related deferred income tax asset is
exchange gains and losses are presented in the realized or the deferred income tax liability is settled.
Statement of Comprehensive Income within ‘other
(losses)/gains – net’. Deferred income tax assets are recognized only to the
extent that it is probable that future taxable profit will be
Non-monetary items that are measured at fair value in available against which the temporary differences can
a foreign currency are translated using the exchange be utilized.
rates at the date when the fair value was determined.
Translation differences on assets and liabilities carried Deferred income tax assets and liabilities are offset
at fair value are reported as part of the fair value when there is a legally enforceable right to offset current
gain or loss. For example, translation differences on tax assets against current tax liabilities and when the
non-monetary assets and liabilities such as equities deferred income tax assets and liabilities relate to income
held at fair value through comprehensive income are taxes levied by the same taxation authority.
recognised in comprehensive income as part of the
fair value gain or loss and translation differences on 2.4 Inventories
non-monetary assets such as equities classified as Inventories are stated at the lower of cost or net
at fair value through other comprehensive income are realizable value after making due allowances for
recognised in other comprehensive income. obsolete and slow moving items.
2.3 Current and Deferred Income Tax Spare parts and consumables for fire equipment
The tax expense for the period comprises current and brought before 31 December 2003 are valued based on
deferred tax. Tax is recognized in the Statement of a valuation and thereafter on weighted average basis.
Comprehensive Income, except to the extent that it
relates to items recognized in other comprehensive The cost incurred in bringing inventories to its present
income or directly in equity. In this case, the tax is also location and conditions are accounted using the
recognized in other comprehensive income or directly weighted average basis other than fuel which is valued
in equity, respectively. The current income tax charge at First-in, First-out (FIFO) basis.
is calculated on the basis of the tax laws enacted or
substantively enacted at the Statement of Financial Company has made allowances for all inventories which
Position date. are non-moving for more than 10 years.
Management periodically evaluates positions taken in 2.5 Trade and Other Receivables
tax returns with respect to situations in which applicable Trade receivables are initially recognized at fair value
tax regulation is subject to interpretation. It establishes and subsequently measured at amortized cost using the
provisions where appropriate on the basis of amounts effective interest method, less provision for impairment.
expected to be paid to the tax authorities.
Other receivables are recognized at cost less
Deferred income tax is recognized, using the liability allowances for bad and doubtful receivables.
method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying 2.6 Cash and Cash Equivalents
Cash and cash equivalents are defined as cash in
hand, demand deposits and short term highly liquid
Annual Report 2021

investments, readily convertible to known amounts The useful lives of the assets are estimated as follows:
of cash and subject to insignificant risk of changes in
value.
Buildings Over 50 Years
For the purpose of cash flow statement, cash and cash Plant and Machinery Between 04 to 20
equivalents consist of cash in hand and deposits in Years
banks net of outstanding bank overdrafts. Investments Motor Vehicles Between 04 to 15
with short maturities i.e. three months or less from the Years
date of acquisition are also treated as cash equivalents.
Furniture, Fittings and Office Over 08 Years
2.7 Property, Plant and Equipment Equipment
All property, plant and equipment is initially recorded Communication and Between 05 to 10
at cost and stated at historical cost less accumulated Navigation Equipment Years
depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items Other Equipment Over 08 Years
and also includes the initial estimate of the costs of Airport Infrastructure Between 08 to 50
dismantling and removing the item and restoring the Years
site on which it is located, the obligation for which
an entity incurs either when the item is acquired or An asset’s carrying amount is written down immediately
as a consequence of having used the item during a to its recoverable amount if the asset carrying amount is
particular period for purposes other than to produce greater than its estimated recoverable amount.
inventories during that period.
When each major inspection is performed, its cost is
The cost of self-constructed assets includes the cost of recognized in the carrying amount of the plant and
materials, direct labor and an appropriate proportion of equipment as a replacement if the recognition criteria
production overheads. are satisfied.
Subsequent costs are included in the asset’s An item of property, plant and equipment is
carrying amount or recognized as a separate asset, derecognized upon disposal or when no future
as appropriate, only when it is probable that future economic benefits are expected from its use or
economic benefit associated with the item will flow to disposal. Any gain or loss arising on de-recognition
the Company and the cost of the item can be measured of the asset (calculated as the difference between the
reliably. The carrying amount of the replaced part is net disposal proceeds and the carrying amount of the
derecognized. All repairs and maintenance costs are asset) is included in the Statement of Comprehensive
charged to Statement of Comprehensive Income during Income in the year the asset is de-recognized.
the financial period in which they are incurred.
The asset’s residual values, useful lives and methods of
Cost of long term capital projects are carried forward in depreciation are reviewed, and adjusted if appropriate,
capital projects work- in - progress until the projects are at each financial year end.
completed and the related assets are available for use.
Gains and losses on disposals are determined by
Depreciation begins when an item of property, plant and comparing the proceeds with the carrying amount and
equipment is available for use and will continue until it is are recognized within other income / (losses) net, in the
derecognized, even if during that period the item is idle. statement of comprehensive income.
Each part of an item of property, plant and equipment
with a cost that is significant in relation to the total cost Impairment of property, plant and equipment
of the item shall be depreciated separately. Land is not The carrying value of property, plant and equipment
depreciated. Depreciation on other assets is calculated is reviewed for impairment when events or changes in
using the straight line method to allocate their costs to circumstances indicate the carrying value may not be
their residual values over their estimated useful lives. recoverable. If any such indication exists and where
the carrying values exceed the estimated recoverable
amount the assets are written down to their recoverable
Annual Report 2021
amount. Impairment losses are recognized in the Investment income earned on the temporary investment
Statement of Comprehensive Income unless it reverses of specific borrowings pending their expenditure on
a previous revaluation surplus for the same asset. qualifying assets is deducted from the borrowing costs
eligible for capitalization. All other borrowing costs are
2.8 Stated Capital recognized in profit or loss in the period in which they
Ordinary shares are classified as equity. are incurred.
2.9 Trade Payables 2.12 Provisions

Trade payables are obligations to pay for goods or Provisions are recognized when the Company has a
services that have been acquired in the ordinary course present legal or constructive obligation as a result of a
of business from suppliers. past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
Liabilities classified as trade and other payables in the obligation and a reliable estimate can be made of
the Statement of Financial Position are those which the amount of the obligation. If the effect of the time
fall due for payment on demand or within one year value of money is material, provisions are determined
from the Statement of Financial Position date. Items by discounting the expected future cash flows at a pre-
classified as non-current liabilities are those which fall tax rate that reflects current market assessments of the
due for payment beyond a period of one year from the time value of money and, where appropriate, the risks
Statement of Financial Position date. specific to the liability. Where discounting is used, the
increase in the provision due to the passage of time is
Trade payables are recognized initially at the transaction recognized as an interest expense.
price and subsequently measured at amortized cost
using the effective interest method. 2.13 Retirement Benefit Obligations
(a) Defined Benefit Plan
2.10 Borrowings A defined contribution plan is a pension plan under
Borrowings are recognized initially at fair value, which the company pays fixed contributions into
net of transaction costs incurred. Borrowings are a separate entity. The company has no legal or
subsequently stated at amortized cost; any difference constructive obligations to pay further contributions
between the proceeds (net of transaction costs) and if the fund does not hold sufficient assets to pay all
the redemption value is recognized in the statement employees the benefits relating to employee service in
of comprehensive income over the period of the the current and prior periods. A defined benefit plan is a
borrowings using the effective interest method. pension plan that is not a defined contribution plan.
Fees paid on the establishment of loan facilities are Typically defined benefit plans define an amount
recognized as transaction costs of the loan to the extent of pension benefit that an employee will receive on
that it is probable that some or all of the facilities will be retirement, usually dependent on one or more factors
drawn down. In this case, the fee is deferred until the such as age, years of service and compensation.
draw-down occurs. To the extent there is no evidence
that it is probable that some or all of the facilities will be The liability recognised in the Statement of Financial
drawn down, the fee is capitalized as a pre-payment for Position in respect of defined benefit pension plans is
liquidity services and amortized over the period of the the present value of the defined benefit obligation at
facility to which it relates. the end of the reporting period less the fair value of
plan assets. The defined benefit obligation is calculated
2.11 Borrowing Costs annually by independent actuaries using the actuarial
General and specific borrowing costs directly valuation. The present value of the defined benefit
attributable to the acquisition, construction or obligation is determined by discounting the estimated
production of qualifying assets, which are assets that future cash outflows using interest rates of high-quality
necessarily take substantial period of time to get ready corporate bonds that are denominated in the currency
for their intended use, are added to the cost of those in which the benefits will be paid, and that have terms
assets, until such time as the assets are substantially to maturity approximating to the terms of the related
ready for their intended use. pension obligation. In countries where there is no deep
Annual Report 2021

market in such bonds, the market rates on government asset’s contractual cash flow characteristics and the
bonds are used. Company’s business model for managing them.
The company has obtained an independent actuary (a) Amortised Cost

valuation services for the year for the computation of The asset is measured at the amount recognized at
defined benefit obligation. initial recognition minus principal repayments, plus or
minus the cumulative amortization of any difference
Actuarial gains and losses arising from experience between that initial amount and the maturity amount,
adjustments and changes in actuarial assumptions are and any loss allowance. Interest income is calculated
charged or credited to equity in other comprehensive using the effective interest method and is recognized
income in the period in which they arise. in profit and loss. Changes in fair value are recognized
in profit and loss when the asset is derecognized or
(b) Defined Contribution Plans reclassified.
All employees of the company in Sri Lanka are
members of the Employees’ Provident Fund and (b) Fair Value through Other Comprehensive Income
Employees’ Trust Fund, to which the Company Loans and receivables - Interest revenue, impairment
contributes 12% and 3% respectively, of such gains and losses, and a portion of foreign exchange
employees’ basic or consolidated wage or salary. gains and losses, are recognized in profit and loss
on the same basis as for Amortized Cost assets.
2.14 Grants and Subsidies Changes in fair value are recognized initially in Other
The monetary grants related to assets are recognized as Comprehensive Income (OCI). When the asset is
cost and deferred in the Statement of Financial Position derecognized or reclassified, changes in fair value
and credited to the Statement of Comprehensive previously recognized in OCI and accumulated in equity
Income over the useful life of the asset. are reclassified to profit and loss on a basis that always
results in an asset measured at fair value through other
2.15 Impairment of Non-Financial Assets comprehensive income (FVOCI) having the same effect
Assets that have an indefinite useful life - for example, on profit and loss as if it were measured at Amortized
goodwill or intangible assets not ready to use - are Cost.
not subject to amortization and are tested annually for
impairment. Assets that are subject to amortization are Investments in equity instruments - Dividends are
reviewed for impairment whenever events or changes recognized when the entity’s right to receive payment
in circumstances indicate that the carrying amount may is established, it is probable the economic benefits will
not be recoverable. flow to the entity and the amount can be measured
reliably. Dividends are recognized in profit and loss
An impairment loss is recognized for the amount unless they clearly represent recovery of a part of the
by which the asset’s carrying amount exceeds its cost of the investment, in which case they are included
recoverable amount. The recoverable amount is the in OCI. Changes in fair value are recognized in OCI and
higher of an asset’s fair value less costs to sell and are never recycled to profit and loss, even if the asset is
value in use. For the purposes of assessing impairment, sold or impaired
assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash-generating (c) Fair Value through Profit or Loss
units). Non-financial assets other than goodwill that Assets that do not meet the criteria for amortised cost
suffered impairment are reviewed for possible reversal or fair value through other comprehensive income
of the impairment at each reporting date. (FVOCI) are measured at fair value through profit or loss
(FVPL)
2.16 Financial Assets
2.16.1 Classification 2.16.2 Recognition and Measurement
The Company classifies its financial assets in the Regular purchases and sales of financial assets are
following categories: Amortised cost, at fair value recognized on the trade-date - the date on which
through profit or loss and fair value through other the company commits to purchase or sell the asset.
comprehensive income. The classification of financial Investments are initially recognized at fair value plus
assets at initial recognition depends on the financial transaction costs for all financial assets not carried
Annual Report 2021
at fair value through profit or loss. Financial assets financial difficulties, default or delinquency in interest
carried at fair value through profit or losses are initially or principle payment, the probability that they will enter
recognized at fair value, and transaction costs are bankruptcy or other financial reorganization, and where
expensed in the Statement of Comprehensive Income. observable data indicate that there is a measurable
Financial assets are derecognized when the rights to decrease in the estimated future cash flows, such as
receive cash flows from the investments have expired or changes in arrears or economic conditions that co-
have been transferred and the company has transferred relate with defaults.
substantially all risks and rewards of ownership.
SLFRS 9 requires to record expected credit losses on
Gains or losses arising from changes in the fair value all of its debt securities, loans and trade receivables,
of the ‘financial assets at fair value through profit either on a 12-month or lifetime basis. Loss allowance
or loss’ category are presented in the Statement of for trade receivables is always measured at an amount
Comprehensive Income within other gains/(losses) - net, equal to lifetime Expected Credit Loss (ECL).When
in the period in which they arise. determining whether the credit risk of a financial asset
has increased significantly since initial recognition
Dividend income from financial assets at fair value and when estimating ECLs, the Company considers
through profit or loss is recognized in the Statement of reasonable and supportable information that is relevant
Comprehensive Income as part of other income when and available without undue cost or effort. This includes
the company’s right to receive payments is established. both quantitative and qualitative information and
analysis, based on the Company’s historical experience
Changes in the fair value of monetary and non- and informed credit assessment and including
monetary securities classified as available for sale are forward-looking information. The Company assumes
recognized in other comprehensive income. that the credit risk on a financial asset has increased
significantly if it is more than 365 days past due.
2.17 Offsetting Financial Instruments
Financial assets and liabilities are offset and the net 2.19 Financial Liabilities
amount reported in the Statement of Financial Position The Company’s financial liabilities include trade and
when there is a legally enforceable right to offset the other payables, bank loans and other borrowings
recognised amounts and there is an intention to settle and unfavorable currency forward contract. All other
on a net basis or realize the asset and settle the liability financial liabilities except for financial liabilities at fair
simultaneously. The legally enforceable right must not value through profit or loss are recognized initially
be contingent on future events and must be enforceable at their fair values and subsequently measured at
in the normal course of business and in the event of amortized cost, using the effective interest method,
default, insolvency or bankruptcy of the company or the unless the effect of discounting would be insignificant,
counterparty. in which case they are stated at cost.
2.18 Impairment of Financial Assets 2.20 Revenue Recognition

The company assesses at the end of each reporting Revenue is recognized to the extent that it is probable
period whether there is objective evidence that a that the economic benefits will flow to the Company
financial asset or group of financial assets is impaired. A and the revenue and associated costs incurred or
financial asset or a group of financial assets is impaired to be incurred can be reliably measured. Revenue is
and impairment losses are incurred only if there is measured at the fair value of the consideration received
objective evidence of impairment as a result of one or or receivable net of trade discounts and sales taxes.
more events that occurred after the initial recognition of The following specific criteria are used for the purpose
the asset (a ‘loss event’) and that loss event (or events) of recognition of revenue.
has an impact on the estimated future cash flows of the
financial asset or group of financial assets that can be (a) Rendering of Services
reliably estimated. Revenue from rendering of services is recognized in the
accounting period in which the services are rendered or
Evidence of impairment may include indications that the performed.
debtors or a group of debtors is experiencing significant
Annual Report 2021

(b) Interest
Interest Income is recognized as the interest accrues unless collectability is in doubt.
(c) Rental Income

Rental income is recognised as specified in the rental agreements on an accrual basis.
(d) Franchise Fee and Concessions

Franchise fees and concessions are recognized on an accrual basis in accordance with the substance of the
relevant agreement and recognised on an accrual basis.
(e) Landing & Parking Income International / Domestic

Landing and parking income is based on the maximum take off weight (MTOW), subject to a minimum charge and
parking duration in the apron of the airport and recognised on an accrual basis.
(f) Overflying Income

Overflying income is calculated based on the MTOW of aircraft and recognised on an accrual basis.
(g) Aerobridge Charges

Aerobridge income is calculated based on usage time of aerobridge and type of aircraft. Income is recognised on an
accrual basis.
(h) Embarkation Levy

Embarkation levy is collected by Civil Aviation Authority of Sri Lanka as per the Finance Act and USD 9.75 is
remitted to AASL. Revenue is recognised on cash basis.
(i) Entry Permit Fees, Parking Fees (Vehicles), Paging Board

Revenue is collected and recognised on cash basis
(j) Others
Lounge income is recognised on cash and accrual basis depending on the payment method.
Incinerator income is recognise on accrual basis.
Other income sources is recognized on cash and accrual basis depending on the payment method.
3. Financial Risk Management

3.1 Financial Risk Factors
The company’s activities expose it to a variety of financial risk: market risk (including foreign currency risk, cash flow
and fair value interest rate risk), credit risk and liquidity risk.
(a) Market Risk

(i) Foreign Exchange Risk
The company is sensitive to the fluctuations in exchange rates and is principally exposed to fluctuations in the
value of the Sri Lanka Rupee (LKR) against the United States Dollar (USD), Euro, and Japanese Yen. The company’s
functional currency is LKR in which most of the transactions are denominated, and most of other currencies are
considered foreign currencies for loan repayment purposes. Certain trade and other receivables and trade and other
payables are denominated in foreign currencies.
Annual Report 2021
The Company’s financial statements which are presented in Sri Lankan Rupees, are affected by foreign exchange
fluctuations through both translation risk and transaction risk. Changes in foreign currency exchange rates may
affect the company’s profits or losses. For example weakening of the Sri Lanka Rupee against the United Stated
Dollar can have adverse effects on the company’s profitability through its impact on repayment of loans taken by
foreign currencies through Department of Treasury.
The table below shows the Company’s sensitivity to reasonable possible change in exchange rate of LKR against
USD, Euro and Japanese Yen assessed by the Company, while all other variables are held constant. The USD
and Japanese Yen are the major currencies in which Company’s financial instruments are denominated after the
Company’s presentation and document currency - LKR. The impact of the movement in exchange rates of USD,
Euro and Japanese Yen on profit are given in the table below.
Sensitivity of the exchange rate of USD against LKR

2021 2020
Increase/ (Decrease) Increase/ (Decrease)
in profit (LKR) in profit (LKR)
10 % appreciation/ depreciation (2020 - 10%) of the USD (212,157,236) (90,301,302)

Sensitivity of the exchange rate of Euro against LKR

2021 2020
Increase/ (Decrease) Increase/ (Decrease)
10 % appreciation/ depreciation (2020 - 10%) of the Euro (34,882) (1,212,899)

Sensitivity of the exchange rate of Japanese Yen against LKR

2021 2020
Increase/(Decrease) Increase/ (Decrease)
10 % appreciation/ depreciation (2020 - 10%) of the Yen (1,928,424) (135,300,569)

(ii) Cash flow and fair value interest rate risk

The Company’s interest rate risk arises from long term borrowings denominated in USD, Euro, and Japanese Yen.
These are issued at fixed rates and thus it mitigates the cash flow interest rate risks on borrowings. This will further
mitigated by the cash held at variable rates. Borrowings issued at fixed rates expose the company to fair value
interest rate risk.
The Company has considered movements in these interest rates over the last years and has concluded that the
movement in interest rates is not deemed to have a material effect on equity.
Annual Report 2021

(b) Credit risk

The credit risk arises from trade and other receivables from outside parties.
(c) Liquidity risk

Cash ﬂow forecasting is performed by the finance division. The finance division monitors rolling forecasts of the
Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes
into consideration the Company’s debt ﬁnancing plans, covenant compliance, compliance with internal Statement
of Financial Position ratio targets and, if applicable external regulatory or legal requirements - for example, currency
restrictions.
Surplus cash held by the company over and above balance required for working capital management are invested in
short term government securities to mitigate the liquidity risk.
3.2 Capital Risk Management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may
adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets
to reduce debt. The company assesses solvency prior to declaration of dividend to maintain the dividend ratio.
Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is
calculated as total debt divided by total capital. Debt is calculated as total borrowings including “current and non-
current borrowings” as shown in the Statement of Financial Position. Total capital is calculated as “equity” as shown
in the Statement of Financial Position.
The gearing ratio as at 31 December 2021 and 31 December 2020were as follows:
Company
2021 2020
Total borrowings (Note 21 & Note 22) 68,724,683,990 51,172,796,305

Less: cash and cash equivalents (Note 17) (413,045,010) (826,225,883)
Less: Short term bank deposits (41,515,132,946) (41,932,637,264)
Net debt 26,796,506,034 8,413,933,157
Total equity 41,314,321,699 36,982,901,554
Total capital 68,110,827,732 45,396,834,712
Gearing ratio 39% 19%
The above loan wholly consists of loans obtained through General Treasury for the development of Airports
under sovereign guarantee, Debenture issued for the settlement of outstanding balance of Contractor of Mattala
Rajapakse International Airport and a loan obtained from Bank of Ceylon. The fair value of borrowings equals their
carrying amount as the impact of discounting is not significant.
3.3 Fair Value Estimation

The Company had no financial instruments measured at fair value.
Annual Report 2021
4. Critical Accounting Estimates and Judgments

Estimates and judgments are continually evaluated and
are based on historical experience and other factors,
including expectations of future events that are believed
to be reasonable under the circumstances.
Critical Accounting Estimates and Assumptions
The Company makes estimates and assumptions

concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions that
have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within
the next financial year are outlined below:
(a) Defined Benefit Plan - Gratuity

The present value of the defined benefit plan depends
on a number of factors that are determined on an
actuarial basis using a number of assumptions. The
assumptions used in determining the net cost (income)
for defined benefit plan include the discount rate.
Any changes in these assumptions will impact the
carrying amount of defined benefit plan. The Company
determines the appropriate discount rate at the end of
each year. This is the interest rate that should be used
to determine the present value of estimated future
cash outflows expected to be required to settle the
defined benefit obligations. Other key assumptions for
defined benefit plan are based in part on current market
conditions. Additional information is disclosed in Note
23.
(b) Provisions
The Company recognizes provisions when it has a
present legal or constructive obligation arising as
a result of a past event, and it is probable that an
outflow of economic benefits will be required to settle
the obligation and a reliable estimate can be made.
The recording of provisions requires the application
of judgments about the ultimate resolution of these
obligations. As a result, provisions are reviewed at each
Statement of Financial Position date and adjusted to
reflect the company’s current best estimate.
Annual Report 2021

5 Revenue
2021 2020
Aeronautical 2,299,185,952 2,290,647,423

Non-Aeronautical 5,086,984,442 5,485,690,833
7,386,170,394 7,776,338,256
Aeronautical Revenue
Landing & Parking Income 1,750,806,076 1,500,221,037
Overflying Income 408,101,087 643,836,873
Aerobridge Income 122,565,087 135,934,318
Domestic Landing & Parking Income 17,713,702 10,655,196
2,299,185,952 2,290,647,423
Non-Aeronautical Revenue
Embarkation Levy 967,956,431 1,476,062,613
Concession 2,066,932,441 1,735,552,229
Rental 936,033,523 1,355,027,377
Entry Permits 65,592,333 55,100,696
Fuel Througput Chargers 92,509,170 71,971,286
Franchise Fee on Ground Handling - SLA 230,334,668 208,643,495
Franchise Fee - SLCS 104,985,871 93,794,022
Parking Fees - Vehicles 75,998,637 16,730,001
Domestic Ground Handling CIAR / BIA 14,779,186 10,910,788
Other Non-Aeronautical Income 531,862,182 461,898,326
5,086,984,442 5,485,690,833
Total Aeronautical and Non-Aeronautical Revenue 7,386,170,394 7,776,338,256
6 Other Income
2021 2020
Amortization of Government Grant 48,656,180 47,694,299

Operating Profit from Fuel Filling Station (Note 6.1) 36,154,500 33,398,740
Net Foreign Exchange (Gain)/ Loss on Transactions/ Translations 407,971,354 153,306,510
492,782,034 234,399,549
Other Income Comprises Exchange Gain on Operating Activities and Miscellaneous Income.
6.1 Operating Profit from Fuel Filling Station

2021 2020
Sales 1,315,341,235 1,112,421,737

Less: Cost of Sales (1,279,186,735) (1,079,022,997)
Gross Profit 36,154,500 33,398,740
Annual Report 2021
7 Administration and Establishment Expenses

2021 2020
Directors’ Emoluments 11,307,484 6,603,688

Staff Cost 6,040,068,058 5,776,645,144
Defined Contribution Plan Costs 729,153,624 726,344,066
Defined Benefit Plan Costs 716,345,888 912,386,047
Auditor’s Remuneration 1,200,000 1,793,000
Depreciation (Note 11) 2,630,042,901 2,837,361,089
Amortization (Note 12) 18,376,125 16,599,094
Provision for Debtors Impairment (600,581,521) 643,481,376
Repair and Maintenance 354,388,479 265,981,053
Electricity Expenses 783,986,227 745,128,175
Legal Fees 1,238,213 1,760,010
Donations 20,047,158 410,290
Other Expenses 949,234,287 687,012,366
11,654,806,923 12,621,505,398
8 Net Finance (Cost) / Income

2021 2020
8.1 Finance Income

Interest on Treasury Bills/Bonds under Repurchase Agreements 11,753,814 66,511,166
Interest on USD Fixed Deposits 2,400,420,883 2,040,821,780
Interest on Rupee Fixed Deposits 295,772,911 896,290,215
Interest on Debenture 593,174,330 677,941,692
Interest on Staff Loans 10,497,967 7,720,729
IFRS Interest on Staff Loan 9,490,351 (24,200,857)
3,321,110,256 3,665,084,725
8.2 Finance Cost

2021 2020
Loan Interest (1,140,366,223) (1,289,674,178)

Exchange Gain / (Loss) on Loans Conversion (2,141,205,420) (2,268,147,704)
Exchange Gain / (Loss) on Fixed Deposits Conversion 2,775,429,116 770,750,076
(506,142,527) (2,787,071,806)
Net Finance (Cost) / Income 2,814,967,729 878,012,919
Annual Report 2021

9 Income Tax Expense

The major components of Income Tax Expense for the year ended 31 December 2021 are as follows :
2021 2020
Current Income Tax

Current Tax Charge -
Income Tax - -
Deferred Income Tax
Charge / (Reversal) in respect of Deferred Taxation (Note 13) 1,122,614,992 (1,228,325,046)
Total Tax Expense 1,122,614,992 (1,228,325,046)
The tax on the Company’s profit before tax differs from the theoretical amount that would arise using basic tax rate
(24%) applicable to profits of the company as follows :
2021 2020
(Loss)/Profit Before Tax (960,886,767) (3,732,754,675)
Tax calculated at the effective tax rate of 24% - -

Tax effect on Expenses not deductible for tax - -
Tax effect on Expenses/Income deductible for tax - -
Tax losses for which no Deferred Income Tax Asset was recognised 1,122,614,992 (1,228,325,046)
Total Tax Expense 1,122,614,992 (1,228,325,046)
10 Basic (Loss)/Earnings per Share

Basic (Loss)/Earnings per share is calculated by dividing the net (loss)/profit for the year attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding during the year. The weighted average
number of ordinary shares outstanding during the year and the previous year are adjusted for events that have
changed the number of ordinary shares outstanding, without a corresponding change in the resources such as a
bonus issue.
The following reflects the income and share data used in the Basic Earnings per Share computation.
2021 2020
Net (Loss)/Profit attributable to Shareholders - LKR (2,083,501,758) (2,504,429,629)

Weighted average number of Ordinary Shares in Issue 200,002 200,002
Basic (Loss)/Earning per Share - LKR (10,417) (12,522)
Annual Report 2021
11 Property, Plant and Equipment

(i) Land and building includes land amounting to LKR.935,934,901 as at 31 December 2021 (2020 -
LKR.964,479,791) which is located at Katunayake.
(ii) The construction of second International Airport at Mattala (MRIA) which commenced operations in March 2013
had been constructed on a land leased out by the Government of Sri Lanka on a 99 year lease period. The base
payments on the lease fall due after a grace period of 50 years from 2011. A total asset value of LKR 19 Billion
relating to MRIA is included in the amalgamated Property, Plant & Equipment as at 31.12.2021.
(iii) Part of the buildings of the Katunayake airport are constructed on Government land.
(iv) Property, Plant and Equipment includes fully depreciated assets amounting to LKR 19,133,666,346 (2020 -LKR
14,007,811,776). Value of fully depreciated assets has been reduced during year 2021 due to written off some
assets belonged to Voted funds.
“As per the Extraordinary Gazette Notification bearing No.2050/38 dated 21.12.2017, the Minister In Charge of
the subject of the Civil Aviation has made an order in transferring and vesting the Aerodromes and aeronautical
facilities in the Civil Aviation Authority of Sri Lanka.(CAASL) When going through the aforesaid sequence of
events, it is presumed that from the inception, AASL has been in use and control of immovable properties
vested in the Director General of CAASL (DGCAASL), holding immovable properties vested in the DGCAASL
or Withholding immovable properties with the permission of CAASL has never held title to such properties.
Therefore, the above Gazette notification merely a demonstration of a mechanism of the ownership of immovable
properties which are being used by AASL and which is a continuation of previous scenarios.”
Valuation of Building
During the year under review,The buildings of Bandaranayake Intenation Airport have been revalued by Government
Valuation Department. This valuation had been carried out for the purpose of disclosing the market value of
buildings owned by the Company.
Fair value is determined by reference to market-based evidence of transaction prices for similar properties.
Valuations are based on open market prices, adjusted for any difference in the nature, location or condition of the
specific property. These valuation techniques that are appropriate in the circumstances and for which sufficient
data is available to measure fair value, maximising the use of relevant observable inputs and minimizing the use of
unobservable inputs.
The changes in fair value recognised in other comprehensive income and in the statement of equity. The valuer
has used valuation techniques such as market values and discounted cash flow methods where there was lack of
comparable market data available based on the nature of the property.
Annual Report 2021

11. Property, plant and equipment

As at 1 January 2020 Land & Bulidings Plant and Motor vehicle Furniture,
machinery Fittings & Office
Equipments
Cost 17,870,765,653 5,424,670,039 1,768,227,894 1,168,424,803

Accumulated depreciation (4,685,110,325) (4,500,113,936) (1,221,907,512) (1,041,867,873)
Provision for doubtful projects
Closing net book amount 13,185,655,328 924,556,104 546,320,382 126,556,930
Year ended 31 December 2020

Opening net book amount 13,185,655,328 924,556,104 546,320,382 126,556,930
Additions 191,093,993 184,057,206 140,909,286 47,392,399
Donation - - 1,415,000 -
Adjustments- cost
- Accumulated depreciation (1,023,285) (1,259,246) - (398,025)
Transfers - cost (46,166,384) (146,768,417) 1,805,063 (5,401,913)
- Accumulated depreciation 15,471,724 147,903,136 (1,805,063) 5,264,048
Written off - cost - - - -
- Accumulated depreciation - - - -
Disposals - cost - - (29,904,413) -
- Accumulated depreciation - - 29,904,366 -
Depreciation charge (Note 7) (341,411,481) (211,518,474) (95,185,339) (65,285,981)
As at 31 December 2020
Cost 18,015,693,263 5,461,958,829 1,882,452,830 1,210,415,290
Provision for doubtful projects
Year ended 31 December 2021

Opening net book amount 13,003,619,895 896,970,308 593,459,282 108,127,459
Additions 2,117,085 505,783,322 59,603,281 77,483,139
Donation - - 18,977,595 -
Adjustments- cost
- Accumulated depreciation 3,862,495 (32,254,460) 1,751,840 34,679
Disposals - cost (10,171,444) - (1,751,840) (851,726)
- Accumulated depreciation 41,729 - 851,705
Written off - cost (153,187,156) (1,495,004) (9,527,078) (48,448,861)
- Accumulated depreciation 151,346 1,427,698 9,527,078 48,402,794
Transfers - cost (3,743,893,089) - - (2,617,304)
- Accumulated depreciation 3,744,255,671 - - 2,617,041
Revaluation -Cost 5,827,922,820 - -
- Accumulated depreciation
Depreciation charge (Note 7) (472,681,611) (258,231,419) (101,819,918) (45,467,214)
Closing net book amount 18,202,037,741 1,112,200,446 570,220,240 140,131,711
As at 31 December 2021
Cost 19,938,481,480 5,966,247,147 1,949,754,788 1,235,980,538
Provision for doubtful projects - - - -
Closing net book amount 18,202,037,741 1,112,200,446 570,220,240 140,131,711
Annual Report 2021
Communication Other Equipment Airport Capital Work In Total

& Navigation Infrasturcture Progress
Equipment
8,607,281,993 1,432,444,675 36,403,680,971 7,544,657,151 80,220,153,180

(7,288,096,502) (1,065,239,231) (13,001,593,131) - (32,803,928,511)
(6,197,854) (6,197,854)
1,319,185,490 367,205,444 23,402,087,840 7,538,459,297 47,410,026,815
1,319,185,490 367,205,444 23,402,087,840 7,538,459,297 47,410,026,815

187,660,164 142,202,251 21,635,049 1,636,235,869 2,551,186,218
- - - - 1,415,000
(24,438,820) (23,121,351) (7,765,122) - (58,005,849)

19,291,081 (6,684,129) 167,249,801 (393,662,888) (410,337,785)
1,575,970 6,732,931 (158,467,886) - 16,674,860
- - (830,045,097) - (830,045,097)
- - 830,045,094 - 830,045,094
- - - - (29,904,413)
- - - - 29,904,366
(369,208,597) (101,100,502) (1,653,650,713) - (2,837,361,088)
1,134,065,288 385,234,643 21,771,088,967 8,781,032,278 46,673,598,120
8,814,233,238 1,567,962,796 35,762,520,725 8,787,230,132 81,502,467,103

(7,680,167,950) (1,182,728,154) (13,991,431,757) - (34,822,671,129)
(6,197,854) (6,197,854)
1,134,065,288 385,234,643 21,771,088,967 8,781,032,278 46,673,598,120
1,134,065,288 385,234,643 21,771,088,967 8,781,032,278 46,673,598,120

23,977,381 72,792,323 31,840,970 22,186,770,931 22,960,368,432
- - - - 18,977,595
(79,066) 39,557 4,664,024 - (21,980,931)

- - - - (12,775,010)
- - - - 893,434
(4,213,419) (34,493,071) (5,652,388) - (257,016,977)
4,162,386 34,493,071 - 98,164,373
1,985,424 (62,505,579) (577,193,950) (508,327,704) (4,892,552,201)
(4,447,089) 64,967,468 572,955,627 - 4,380,348,717
(1,525) (61,504,816) 5,766,416,479
-
(308,801,571) (156,315,763) (1,286,725,405) - (2,630,042,901)
846,649,335 304,211,123 20,449,473,030 30,459,475,504 72,084,399,129
8,835,982,624 1,543,754,944 35,150,010,541 30,465,673,358 105,085,885,420

(7,989,333,289) (1,239,543,821) (14,700,537,511) - (32,995,288,437)
- - - (6,197,854) (6,197,854)
846,649,335 304,211,123 20,449,473,030 30,459,475,504 72,084,399,129
Annual Report 2021

12 Intangible Assets
2021 2020
At the beginning of the Year

Cost 135,129,553 107,408,968
Accumulated depreciation (94,890,124) (77,411,398)
40,239,429 29,997,570
Movement during the year

Opening Net Book Amount 40,239,429 29,997,570
Additions - 27,720,585
Prior Year Amortisation Adjustment 8,349,000 (879,632)
Written off/Trasfer- Cost (14,222,583) 16,674,876
Written off/Trasfer- Depreciation 5,845,534 (16,674,876)
Amortisation during the year (18,376,125) (16,599,094)
Closing Net Book Amount 21,835,257 40,239,429
At the end of the Year

Cost 120,906,971 135,129,553
Accumulated Depreciation (99,071,714) (94,890,124)
Closing Net Book Amount 21,835,257 40,239,429
The useful lives of the software assets are estimated as 4 years
13 Deferred Income Tax

Statement of Statement of
Financial Position Comprehensive Income
2021 2020 2021 2020
Deferred Tax Liability on:

Accelerated Tax Depreciation 7,373,210,258 6,129,418,466 1,243,791,792 (1,260,384,131)
7,373,210,258 6,129,418,466 1,243,791,792 (1,260,384,131)
Deferred Tax Assets on:

Defined Benefit Plan 1,161,057,403 1,315,807,969 154,750,566 219,844,471
Provision for Inventory & Debtors 487,725,759 629,568,927 141,843,168 (76,876,133)
Deferred Government Grants 229,601,129 22,596,657 (207,004,472) 8,427,337

1,878,384,291 1,967,973,553 89,589,262 151,395,675

Deferred Income Tax on Actuarial Gain/(Loss) on Defined Benefit Plan (210,766,063) (119,336,589)
Deferred Income Tax Charge/ (Credit) (Note 9) 1,122,614,992 (1,228,325,046)
Deferred Income Tax Assets and Liabilities are offset when there is a legally enforceable right to offset current
tax against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The Net
Deferred Tax amount is as follows;
Deferred Tax Asset 1,878,384,291 1,967,973,553

Deferred Tax Liability (7,373,210,258) (6,129,418,466)
Deferred Tax Asset (Net) (5,494,825,966) (4,161,444,912)
Annual Report 2021
14 Investment in Debentures
Investment in Debentures wholly consists of investment in 5 - 8 year Redeemable Debentures of Bank of Ceylon,
Sampath Bank, Rural Development Bank, Hatton National Bank & DFCC Bank. The carrying value of the investment,
held to maturity equals the fair value.
2021 2020
Debentures at weighted average rates of interest

6 month TB Rate + 1.25% 800,000,000 800,000,000
Debentures at Fixed Rate (11.25% - 15.50%) 3,288,300,000 4,838,300,000
4,088,300,000 5,638,300,000
Debenture date of issue and date of redemption are as follows ;
Date of Issue Date of Redemption Amount of Investment

2021 2020
08.10.2015 07.10.2023 800,000,000 800,000,000

25.10.2016 24.10.2021 - 750,000,000
25.10.2016 24.10.2023 50,000,000 50,000,000
16.03.2016 15.03.2021 - 300,000,000
10.06.2016 10.06.2021 - 500,000,000
31.03.2017 31.03.2022 800,000,000 800,000,000
03.04.2017 04.04.2022 150,000,000 150,000,000
27.12.2017 27.12.2022 340,000,000 340,000,000
15.03.2018 15.03.2023 449,000,000 449,000,000
29.03.2018 29.03.2025 445,000,000 445,000,000
10.09.2019 10.09.2024 800,000,000 800,000,000
23.09.2019 23.09.2026 254,300,000 254,300,000
4,088,300,000 5,638,300,000
Company placed debentures amounting to LKR 4,088.3 Million as at 31 December 2021 for creating the dedicated
fund to serve the Retirement Benefit Liabilities of the company.
15 Inventories
2021 2020
General 70,435,035 64,370,571

Electronics 89,702,907 74,337,118
Engineering 180,555,015 227,880,046
Fuel 25,354,064 15,898,574
Fire Equipment Spare Parts 17,547,678 20,163,425
Goods in Transit 516,323,637 507,077,989
Stocks -(Motor Spares) 38,990,070 -
Stock - Lounge 106,641 280,185
Inventory clearing Accounts (48,342,255)
890,672,792 910,007,908
Less : Allowance for Slow Moving Inventory (82,487,508) (72,919,186)
808,185,284 837,088,722
The General Inventory includes painting items, stationeries, staff uniform and other hardware items, etc..
Annual Report 2021

16 Trade and Other Receivables

2021 2020
Trade Debtors 4,080,253,763 4,222,977,895

Less: Impairment of Trade Receivables (1,949,703,156) (2,548,817,147)
2,130,550,607 1,674,160,748
Other Receivables 1,433,445,923 1,330,069,002

Advances and Prepayments 215,828,600 133,837,406
Less: Impairment of Other Receivables - (1,467,530)
1,649,274,523 1,462,438,878
Loans to Company Officers (Note 16.1) 66,159,615 79,146,402

66,159,615 79,146,402
3,845,984,745 3,215,746,028
Loans to Company Officers are receivable from employees in equal monthly installments over the loan period not
exceeding 4 years. Interest is charged on employee loans at a rate of 4.2% per annum. As per accounting policy
the employee loans are measured at amortized cost using the effective interest method of each reporting date. The
effective interest on employee loans was 11.5% in 2021 (2020: 8 %)
2021 2020
16.1 Loans to Company Officers

- Less than 1 year 66,159,615 79,146,402
- More than 1 year 61,602,205 81,019,448
127,761,820 160,165,850
17 Cash and Cash Equivalents

2021 2020
Treasury Bills/Bonds under Repurchase Agreements 20,098,830 420,106,413
Cash & Bank

Cash at Bank 391,598,780 405,005,971
Cash in Hand 1,347,400 1,113,500
392,946,180 406,119,471
Total Cash and Cash Equivalents for the purpose of Cash Flow Statement 413,045,010 826,225,883
18 Stated Capital
Number of Shares 2021 2020
Stated Capital 200,002 20,000,200 20,000,200

20,000,200 20,000,200
All issued shares are fully paid

Annual Report 2021
19 Reserves
2021 2020
Net Assets taken over from Airports Authority 892,726,769 892,726,769

FA Revaluation Reserve 5,766,416,478 -
Reserve for Lightning Damages to Property, Plant and Equipment and Inventory
187,040,000 184,540,000
6,846,183,247 1,077,266,769
The reserve consist of value of net assets transferred to the Company from the Airports Authority which was
dissolved upon the incorporation of the Company. LKR 187.04 Million transferred from retained earnings (5% of
annual asset additions of electronic, electrical, communication & other equipment) for fire damages to property plant
and equipment due to lightning with effect from 2013.
20 Retained Earnings
2021 2020
As at beginning of the year 35,885,634,588 38,143,580,282

Current year (Loss)/Profit (2,083,501,758) (2,504,429,629)
Prior Year Adjustments (18,920,440) (121,225,264)
Other Comprehensive Income / (Expenses) 667,425,865 377,899,199
Transfer to Reserve Account (2,500,000) (10,190,000)
Dividend paid during the year - -
As at end of the year 34,448,138,254 35,885,634,588
21 Borrowings
Borrowings represent both foreign loans and loans obtained from local commercial banks.
21.1 Foreign Loans

2021 2020
Loans
Balance at the beginning of the year 46,772,796,305 47,560,331,853
Loans obtained during the year 19,833,345,830 683,791,280
66,606,142,134 48,244,123,133
Loans settled during the year (4,289,330,231) (3,739,474,532)
Exchange (gain)/loss on translation 2,141,205,420 2,268,147,704
Balance at the end of the year 64,458,017,324 46,772,796,305
Annual Report 2021

21.2 Local Loans

2021 2020
Balance at the beginning of the year 400,000,000 -

Loans obtained during the year - 400,000,000
400,000,000 400,000,000
Loans settled during the year (133,333,334) -
Balance at the end of the year 266,666,666 400,000,000
Classification of Loans
Current Portion of Borrowings 4,289,330,231 3,739,474,530
Non - Current Portion of Borrowings 60,435,353,759 43,433,321,775
64,724,683,990 47,172,796,305
Maturity Analysis of the Borrowings

2021 2020
No Later than 1 year 4,289,330,231 3,739,474,530

Later than 1 year and no later than 5 years 15,257,601,250 15,390,934,584
Later than 5 years 45,177,752,509 28,042,387,191
The fair values are based on cash flows discounted using rates based on each of the following loans :
2021 2020
(%) (%)
United States Dollar (USD)

- Mattala Rajapakse International Airport 2.00 2.00
- Runway Overlay LIBOR + 2 LIBOR + 2
Japanese Yen
- BIA Development Project 1.80 1.80
- BIA Development Project Phase II Stage 1 0.75 0.75
- BIA Development Project Phase II Stage 2 0.20 0.20
Euro
- Modern RMA Air Traffic Control System - Tranche - 2 4.90 4.90
- Modern RMA Air Traffic Control System - Tranche - 3 2.10 2.10
LKR
- Bank Loan against Fixed Deposits 6.25 AER of FD+0.5
2021 2020
United States Dollar (USD) 140,097,017 156,015,989

Japanese Yen 20,197,240,766 9,302,888,849
Euro 288,522 393,964
Sri Lankan Rupee (LKR) 266,666,666 400,000,000
Annual Report 2021
22 Debentures
2021 2020
Issued Debentures 4,000,000,000 4,000,000,000

4,000,000,000 4,000,000,000
Company issued 40,000,000 guaranteed unlisted redeemable senior debentures at the rate of AWPLR+2.00% per
annum payable semi-annually at par value of LKR100/- each with a maturity period of 15 years to National Savings
Bank in May 2019 to raise LKR 4 Billion to settle outstanding payments to the China Harbour Engineering Company,
the contractor of Mattala Rajapakse International Airport.
23 Retirement Benefit Obligations

Movement in the liability recognized in the Statement of Financial Position is as follows:
2021 2020
As at beginning of the year 5,482,533,223 5,484,473,009

Prior year adjustments (18)
Current Service Cost 277,743,232 336,516,383
Interest Cost 438,602,656 575,869,664
Payments made during the year (482,947,999) (417,090,045)
(Gain)/Loss arising from changes in assumptions used (878,191,927) (497,235,788)
As at end of the year 4,837,739,167 5,482,533,223
The principle assumptions used in determining the cost of employee benefits using the projected unit credit method
to calculate the liability for Defined Benefit Obligations at year end. were:
2021 2020
Discount rate 11.50% 8.00%

Rate of future salary increases 1% - 11% 1% - 11%
Cost of Living Allowance increment rate 9.00% 4.50%
Rate of Staff Turnover 0.6% 0.6%
Retirement Age 62 years 60 years
The provision for Retirement Benefit Obligations for the year is based on the Actuarial Valuation carried out by
professionally qualified actuaries M/S Actuarial & Management Consultants (Pvt) Ltd as at 31st December 2021.
The liability for Defined Benefit Obligations is not externally funded.
24 Deferred Government Grant
Treasury Grant and Foreign Grant 2021 2020
At the beginning of the year 986,349,954 1,034,044,256

Received during the year 18,977,595 -
Prior Year Adjustment - -
Reversal of over Amortization/(Amortization) (48,656,180) (47,694,302)
At the end of the year 956,671,370 986,349,954
Company received a Grant of LKR 18,977,595 during the year 2021 in relation to motor vehicles from Japan This
was recorded during the year and amortization will be recorded over the useful life of those assets
Annual Report 2021

25 Trade and Other Payables

2021 2020
Trade Payable 298,780,902 1,258,146,501

Refundable Deposits 343,873,540 332,295,958
Other Payables 2,995,147,771 871,629,258
3,637,802,214 2,462,071,717
26 Income Tax (Receivable)/Payable

2021 2020
Balance at the beginning of the year (833,368,210) 786,010,474

Prior Year Adjustments (1,560,151)
Provisions for the year - -
Payments during the year (14,724,996) (1,617,818,533)
Balance at the end of the year (848,093,206) (833,368,210)
27 Financial Instruments by Category

(a) Financial Instruments
2021 2020
Financial Assets
Amortised Cost
Trade and other Receivables (Excluding prepayments, Advances) (Note 16) 3,563,996,530 3,002,762,220
Cash and Bank Balances (Note 17) 392,946,180 406,119,471
3,956,942,710 3,408,881,691
Investment in Debentures (Note 14) 4,088,300,000 5,638,300,000

Long term Bank Deposits 1,266,678,125 1,169,874,563
Investments in Treasury Bills/Bonds Repurchase (Note 17) 20,098,830 420,106,413
Short Term Bank Deposits 41,515,132,946 41,932,637,264
46,890,209,901 49,160,918,239
Financial Liabilities
Other Financial Liabilities
Borrowings (Note 21) 64,724,683,990 47,172,796,305
Debentures (Note 22) 4,000,000,000 4,000,000,000
Trade and Other Payables (excluding non financial liabilities) (Note 25) 3,637,802,214 2,462,071,717
72,362,486,204 53,634,868,022
Annual Report 2021
(b) Credit Quality by Class of Financial Assets

The credit quality of Financial Assets that are neither past due nor impaired can be assessed by reference to
external credit ratings (if available) or to historical information about counterparty default rates:
31 December 2021
Neither past due Past due but Individually Total
nor impaired not impaired impaired
Trade receivables (Note 16) 1,818,889,266 311,661,341 1,949,703,156 4,080,253,763

Loans to Company officers 127,761,820 - - 127,761,820
Total financial assets 1,946,651,086 311,661,341 1,949,703,156 4,208,015,583
31 December 2020
Neither past due Past due but Individually Total
nor impaired not impaired impaired
Trade Receivables (Note 16) 324,097,611 1,350,063,137 2,548,817,147 4,222,977,895

Loans to Company Officers 160,165,850 - - 160,165,850
Total Financial Assets 484,263,461 1,350,063,137 2,548,817,147 4,383,143,746
Cash at Bank and Short-Term Bank Deposits

2021 2020
AA+(lka) 43,173,409,851 43,507,517,797

Total 43,173,409,851 43,507,517,797
28 Dividend
No dividends were declared for the year 2021 & 2020.
29 Contingencies
The Company is the defendant in the following lawsuits filed against the Company. In the Directors’ opinion, after
taking appropriate legal advice, the outcome of these legal action will not give rise to any significant loss.
Members of two Taxi Associations have filed 134 cases against the Company demanding approximately LKR
62 Million for breach of contract. As per the judgment of Civil High Court of Negambo (Case No -WP/H/CCA/
NEG/31/2017 (F) and WP/H/CCA/NEG/35/2017 (F) ).The registrar has made a determination on one court case for
the compensation payable as Rs.276,116.52. This amount has to be applied in 80 cases as they belong to one Taxi
Association. However determination calculated by AASL is Rs.196,796.52. We will be supporting our position in
court on 3rd March 2022. If our determination is upheld the total payable for 80 cases shall be Rs.15,743,721.60. If
the determination of the Registrar is upheld the total payable for 80 cases shall be Rs.22,089,321.60.
A provision of Rs.12,060,000 was recorded in 2020 and action has been taken to increase the provision up to
Rs.22,089,321.60 as at 31.12.2021 by considering the above factors.
Other than the above, there were no material contingent liabilities outstanding at the Statement of Financial Position
date.
Annual Report 2021

30 Commitments
30.1 Capital Expenditure Commitments
2021 2020
Contracted but not provided for 21,678,443,226 1,242,572,981

Authorized by the Board, but not contracted for 304,926,793 7,087,492,019
21,983,370,019 8,330,065,000
30.2 Financial Commitments

There are no any other financial commitments other than those disclosed under Borrowings (Note 21 & 22).
31 Transactions with Key Management Personnel

2021 2020
Emoluments and Fees 11,307,484 6,603,688

11,307,484 6,603,688
The Board of Directors have been considered as Key Management Personnel of the Company.
32 Related Party Transactions

AASL as a fully owned Government Company , the following significant transactions have been carried out with
entities controlled by the Government in the ordinary course of business.
2021 2020
Name of the Entity Relationship Nature of the Transaction LKR Million LKR Million
Civil Aviation Authority Government Owned Embarkation levy Income 968 1,476
Sri Lankan Airlines - Do - Franchise Fee Income 230 1,293
Ceylon Petroleum Corporation - Do - Fuel Purchases 1,291 1,141
General Treasury - Do - Loan Repayments 1,092 1,005
Department of Inland Revenue - Do - Taxes 117 214
Central Bank of Sri Lanka - Do - EPF 583 580
Ceylon electricity board - Do - Electricity Payments 785 553
General Treasury - Do - Interest Payments 168 173
Sri Lankan Catering Ltd - Do - Franchise Fee Income 80 163
Employees Trust Fund Board - Do - ETF 146 145
Sri Lankan Catering Ltd - Do - Catering Services 24 128
Ceylon Petroleum Corporation - Do - Franchise Fee Income 92 84
Urban Council - Do - Rates Payments 59 59
Sri Lanka Insurance Corporation Ltd - Do - Insurance payments 38 52
Bank of Ceylon - Do - Rental Income 11 33
Board of Investment - Do - Water Chargers 31 31
Sri Lanka Telecom Plc - Do - Telephone chargers 15 28
People’s Bank - Do - Rental Income 5 10
Annual Report 2021
2021 2020
Name of the Entity Relationship Nature of the Transaction LKR Million LKR Million
Receivables
Bank of Ceylon Government Owned Investments 42,317 43,403
Sri Lankan Airlines - Do - Franchise Fee Income 31 3,199
Rural Development Bank - Do - Investments-Long Term 950 950
National Saving Bank - Do - Investments 465 419
Civil Aviation Authority - Do - Embarkation levy Income 417 131
Divisional Secretary Katana - Do - Deposit For Land Acquisition 13 13
Sri Lanka Air force - Do - Rental Income 10 10
Sri Lankan Catering Ltd - Do - Franchise Fee Income 51 8
Ceylon Petroleum Corporation - Do - Concession income 16 8
People’s Bank - Do - Investments - 500
Payables
Central Bank of Sri Lanka - Do - EPF 92 90
Ceylon Petroleum Corporation - Do - Fuel Deposit 54 54
Ceylon electricity board - Do - Electricity Deposit 47 47
Employees Trust Fund Board - Do - ETF 13 12
Sri Lankan Catering Ltd - Do - Purchases 58 6
Board of Investment - Do - Water Chargers 5 7
Sri Lanka Telecom Plc - Do - Telephone chargers 4 5
Limited disclosures have been made in accordance with LKAS 24 - “Related Party Disclosures” for transactions
that are individually significant because of their size and due to the impracticability of capturing and disclosure of all
transactions which have been carried out with all Government controlled / related entities.
Balances from / to entities controlled by the GOSL are included under Trade and Other Receivables / Payables and
Interest-Bearing Liabilities in the Statement of Financial Position.
33 Events after the reporting period

There have been no material events occurring after the Statement of Financial Position date that require adjustments
to or disclosure in the Financial Statements.
Annual Report 2021
Connectivity and Dimensions

Airlines Operated to BIA in 2021
IATA Code Airline IATA Code Airline

1 SU Aeroflot 24 QR Qatar Airways
2 G9 Air Arabia 25 OV Salam Air
3 AK Air Asia 26 SV Saudi Arabian Airlines
4 KC Air Astana 27 SQ Singapore Airlines
5 CA Air China 28 SG Spicejet Airlines
6 AF Air France 29 UL SriLankan Airlines
7 AI Air India 30 FD Thai AirAsia
8 UK Air Vistara 31 TG Thai Airways International
9 CX Cathay Pacific 32 TK Turkish Airlines
10 MU China Eastern
11 WK Edelweiss Airlines Airlines Operated to MRIA in 2021
12 EK Emirates IATA Code Airline
13 EY Etihad Airways 1 KC Air Astana
14 FZ Fly Dubai 2 G2 GullivAir
15 GF Gulf Air 3 6E IndiGo

4 Q2 Maldivian
16 6E IndiGo
5 NO Neos
17 J9 Jazeera Airways
6 Z2 Philippines AirAsia
18 KE Korean Airlines
7 QR Qatar Airways
19 KU Kuwait Airways
8 DV SCAT Airlines
20 LO LOT Polish Airlines
9 PQ SkyUp
21 MH Malaysian Airlines 10 SG Spice Jet
22 Q2 Maldivian 11 UL SriLankan Airlines
23 WY Oman Air 12 PS Ukraine International Airlines
International Airports
Airport name ICAO IATA General area Province Runway length

served
1 Bandaranaike International Airport VCBI CMB Colombo Western 3,350 m (10,990 ft)
2 Jaffna International Airport VCCJ JAF Jaffna Northern 1,400 m (4,593 ft)
3 Mattala Rajapaksa International Airport VCRI HRI Hambantota Southern 3,500 m (11,500 ft)
4 Colombo International Airport,Ratmalana VCCC RML Colombo Western 1,773 m (5,816 ft)
5 Batticaloa International Airport VCCB BTC Batticaloa Eastern 1,400 m (4,593 ft)
Source: Aeronautical Information Publication (AIP)
Domestic Airports
served
1 Ampara Airport VCCG ADP Ampara Eastern 1,097 m (3,599 ft)
2 Anuradhapura Airport VCCA ACJ Anuradhapura North 1,630 m (5,347 ft)
Central
Annual Report 2021

served
3 China Bay Airport VCCT TRR Trincomalee Eastern 2,168 m (7,864 ft)
4 Hingurakgoda Airport VCCH HIM Minneriya North 2,287 m (7,503 ft)
Central
5 Katukurunda Airport VCCN KTY Kalutara Western 1,006 m (3,199 ft)
6 Koggala Airport VCCK KCT Galle Southern 1,033 m (3,143 ft)
7 Sigiriya Airport VCCS GIU Dambulla Central 1,789 m (5,801 ft)
8 Vavuniya Airport VCCV Vavuniya Nothern 1,526 m (5,000 ft)
9 Weerawila Airport VCCW WRZ Hambantota Southern 1,225 m (4,019 ft)
Source: Aeronautical Information Publication (AIP)
Waterdromes
Waterdrome name IATA General area served Province
1 Arugam Bay Lagoon Waterdrome AYY Arugam Bay Eastern

2 Batticaloa Lagoon Waterdrome BTC Batticaloa Eastern
3 Bentota River Airport BJT Bentota Southern
4 Castlereigh Reservoir Waterdrome NUF Castlereigh Central
5 Diyawanna oya Waterdrome DWO Sri Jayawardhanapura Western
6 Dandugama Water Aerodrome DGM Colombo - Dandugama Western
7 Kalpitiya Waterdrome DBK Kalpitiya North Western
8 Kelani River-Peliyagoda Waterdrome KEZ Colombo - Peliyagoda Western
9 Koggala Lagoon Waterdrome KCT Koggala Southern
10 Lake Gregory Waterdrome NUA Nuwara Eliya Central
11 Mawella Lagoon Airport DIW Dikwella Southern
12 Polgolla Reservoir Waterdrome KDZ Kandy-Polgolla Central
13 Tissa Tank Waterdrome TTW Tissamaharama Southern
14 Victoria Dam Waterdrome KDW Kandy-Victoria Central
Source: Civil Aviation Authority
Helicopter Landing Sites

Heliport name AHLS Heliport name AHLS
Reference Reference
Kandy 5 Shalika Grounds, Narahenpita AHLS No 05
1 Asgiriya Police Ground -Kandy AHLS NR12 6 Open University Grounds, Nawala AHLS No 06
2 Bogambara Ground- Kandy AHLS NR13 7 “Devi Balika Vidyalaya Grounds, AHLS No 07
Colombo Colombo 8”
1 Kirulapana Grounds, Colombo 5. AHLS No 01 8 Cooray Park Grounds, Wellawatta AHLS No 08
2 “Janadhipathi Balika Vidyalaya Grounds, AHLS No 02 9 Golf Club, Colombo 8 AHLS No 09

Nawala East” 10 Campbell Park Grounds, Colombo 8 AHLS No 10
3 Cyril Mathive Ground, Kelaniya AHLS No 03 11 Waters’ Edge, Battaramulla AHLS No 11
4 University Grounds, Kelaniya AHLS No 04 12 MOD Helipad AHLS NR 14
Source: Aeronautical Information Services (AIS/HQ)

Corporate Information
Company Registration Number
PV 7931
Date of Incorporation
23 February 1982
Date of Re-registration
07 October 2008
Legal Form
Private Limited Company
Key Shareholders
4 Secretary to the Ministry of Treasury
4 Ministry of Tourism & Aviation
4 Director General of Civil Aviation
Regulator
4 Civil Aviation Authority of Sri Lanka
Empowered by
4 Civil Aviation Act No. 14 of 2010 (as amended)
4 Companies Act No. 07 of 2007 (as amended)
Registered Office
4 Bandaranaike International Airport, Katunayake
Other Locations of Operations

4 Mattala Rajapaksa International Airport, Mattala
4 Colombo International Airport, Ratmalana
4 Jaffna International Airport, Jaffna
4 Batticaloa International Airport, Batticaloa
4 Sri Lanka Airport & Aviation Academy (SLAAA), Ratmalana
4 HF Transmitting Station, Attidiya Road, Ratmalana
4 Radar & Communication Centre, Pidurutalagala Peak, Nuwara- Eliya
4 HF Receiving Station, Kandapola
4 ADS-B Receiving Station, Kilinochchi
4 ADS-B Receiving Station, Sooriyakanda
4 Microwave Repeaters Station, Nayabedda
Auditors
National Audit Office of Sri Lanka
Company Secretary
V L Udugampola (Ms)
Information Officers
M C G Mahipala (Ms)
M Ratnasinghe (Ms)
Bankers
Bank of Ceylon
4 F Airport and Aviation Services (Sri Lanka) (Private) Limited
OO
PR
Annual Report 2021

2021 Annual Report

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Window of

Profit & Loss

EBITDA (1,176) (1,805) 35% 15,012 -100%

Vice Chairman Information Technology Division

Internal Audit & Quality Assurance Division

Security Services Division

Commercial & Properties Division

Civil Engineering (Maintenance) Division Legal Division

Architecture, Landscaping & Interior Design Airport Management Division

Fire & Rescue Services Division Civil Aviation Training Division

Electronics & Air Navigational Engineering

Safety Unit Air Navigation Services Division

Strategic Management Division

Marketing & Corporate Communications Division

Cargo & Air Freight Management Division

Intelligence & Security Operations Division

LKR 7,386 Mn LKR 2,083 Mn

3,985 974 Employees

Recovery of Sri Lanka’s Opportunities and Initiatives

the available window of Future Strategy

The positive outlook for tourism and the aviation sector in

I wish to extend my gratitude to the Board of Directors

My sincere thanks to the Cabinet Minister, the State

A special thank you to the airlines who have continued to

Maj. Gen. (Rtd) G A Chandrasiri RWP USP VSV ndc psc

10th June 2022

Seated Left to Right

Standing Left to Right

Eng. U S Manchanayake - Non-Executive Director | Mr. R A P Wijerathnasekera - Non-Executive Director

Mr. D A P Weeratna, PC - Non-Executive Director | Mr. A S Warushahennadige - Non-Executive Director

Mr. S Sumanasekara - Non-Executive Director | Mr. W M G Rashantha - Non-Executive Director

Not in the picture

He also serves in the Board of Bank of Ceylon PLC as

Presently, he also serves as the Private Secretary to the

Mr. A H S Gunawardena Presently Mr. Vitharena also functions as the Chief

Senior Management Team

Senior Management Team

1. G Withanage-Head of Civil Engineering (Planning & Design) | 2. H S Hettiarachchi-Head of Airport Management

Not in the picture

EASIER AND SAFER

Report of the Board of Directors on the Affairs of

3. Review of Operations The Independent Auditors’ Report on the financial

Report of the Board of Directors on the Affairs of

As at 31.12.2021 (LKR Million) As at 31.12.2020 (LKR Million)

Treasury Bills/Bonds 20 420

9.9 Stated Capital

Held by No of shares Value (LKR)

Secretary to the Treasury 200,000 20,000,000

9.10 Events After Reporting Period

9.11 Going Concern

9.12 Contingencies and Commitments

10. Information of the Board of Directors and Board Sub-Committees

R Sooriyaarachchi Vice-Chairman 06.12.2019 Yes No No Yes* Yes Yes No No No No

S N Sumanasekara Non-Executive 12.12.2019 Yes No No No Yes Yes No No No Yes

C P Vitharena Non-Executive 31.12.2019 Yes No No No Yes No No No No No

1. Audit & Management Sub-Committee * Chairman

Report of the Board of Directors on the Affairs of

Name Position Date of Appointment Date of Resignation

R M A Ratnayake Director/Treasury Representative 16.01.2020 27.04.2021

10.4 Board Meetings and Attendance