The Inh - Aitken Spence · 2019-02-22 · Heritance Kandalama Being the strongest pioneer for the Eco-friendly resort, its quality and success are rewarded and recognized many times

The Inheritance – 2017/2018

1


2

Contents 1 EXECUTIVE SUMMARY ................................................................................................... 3

1.1 Statement from the Top Management ........................................................................ 3

1.2 Organizational Profile ................................................................................................. 4

1.3 Summary of Report /Risks & Opportunities .............................................................. 5

2 CORPORATE CONTEXT .................................................................................................. 15

2.1 Nature of business and activities /Main Products & Services .................................. 15

2.2 Products and Services ............................................................................................... 16

2.3 Major Markets and the Position of Heritance Kandalama in the Tourism Market .. 19

2.4 Organizational Structure ........................................................................................... 22

2.5 Geographic Spread and Scope of Activities............................................................... 23

3 REPORT PROFILE ........................................................................................................... 24

3.1 Reporting Period ....................................................................................................... 24

3.2 Reporting Scope ........................................................................................................ 24

3.3 Reporting Entity ........................................................................................................ 26

3.4 Boundaries and Limitations ...................................................................................... 26

3.5 Assurance .................................................................................................................. 26

4 CONTENT INDEX ............................................................................................................ 27

5 Stakeholder Engagement.................................................................................................. 31

6 MANAGEMENT APPROACH ........................................................................................ 333

7 PERFORMANCE INDICATORS .................................................................................... 355

7.1 economic performance indicators ........................................................................... 355

7.2 environmental perforamce indicators ..................................................................... 40

7.3 social performance indicators ................................................................................. 555

8 BIBLIOGRAPHY ............................................................................................................ 644


3

1 EXECUTIVE SUMMARY

1.1 Statement from the Top Management

Sustainability has emerged as an important component to our everyday lives, directly

shaping our daily activities – the products we purchase, the materials we recycle, and

our climate change, and many more. While its exact definition may vary, the concept

of sustainability is generally recognized as integrating the environmental, social and

economic aspects of our lives, and aims to strike a balance over the long term. As a

five-star rated Resort, Heritance Kandalama is following its best sustainable

practices on the process and assist clients in developing sustainable approaches to all

the challenges, over the past 25 years, and many more to continue in future.

Heritance Kandalama Being the strongest pioneer for the Eco-friendly resort, its

quality and success are rewarded and recognized many times by different

organizations worldwide.

I take most pride in the fact that as a resort we have taken lots of initiatives, actions,

methods and practices to influence more sustainable environment. Resort continued

to benchmark against the Green Globe 21, Earth Check Silver certification and

improvement system that assist the international travel and tourism industry to

attain sustainability. Through the implementation of productivity initiatives such as

7S, has enabled the resort to optimize its return to the nation. Over 55% of the

Heritance Kandalama staff originate and live within close approximately of the resort

and in border and we empower the people around the resort, in Kandalama and

Dambulla by sourcing and procuring a range of services and products for the resort.

I take this opportunity to thank all who have supported on continuing this

sustainable joinery any many more years to continue the same because we ‘Heritance

Kandalama’ believe that there’s no business if it’s not sustainable. In conclusion, I

would like to thank our Heritance Kandalama family of specialists for their great

work. They are dedicated to our achievements in sustainable way.

Heritance Kandalama is always continued to grow and uphold with sustainability

practices in current and future business.

Priyan Wijerathne General Manager


4

1.2 Organizational Profile

Heritance Kandalama believes in Development than the Growth, Sustainable

Development than Development.

Vision

To be the global leader in sustainable tourism which attracts intelligent stakeholders

to experience high quality eco luxury products and services.

Mission

To delight all stakeholders by practicing world class business ethics and values while

continually improving business viability through development of the human asset.

Objectives

1. Profitability

2. Cost Reduction

3. Efficiency Improvement

4. Environmental Stewardship

5. Societal Stewardship

6. Product Stewardship

Strategies

1. Product diversification

2. Value innovation

3. Discounts on volume

4. Customer database management and continual customer engagement


5

5. Identifying unique customer needs through their domestic servants, drivers

etc.

6. Effective vendor relation to maximize revenue and profits of both parties.

7. Embedding GP concepts to products and services

8. Sourcing of material from the local community

9. Realistic budgeting

Values

1. Character first in employment

2. Sustainability at any cost

3. Share smallest to the biggest benefit with community

4. Genuine stakeholder care

5. Overcome challenges through discipline

6. Transform problems and challenges in to opportunities

1.3 Summary of Report /Risks & Opportunities

This report consists of Heritance Kandalama’s business activities, up to which extent

the hotel operation is sustainable, how the risks are calculated, minimized and

recover over a period of time making least adverse impacts to its environment and

society. There are 50 criteria defined by the national green reporting system (NGRS)

of Sri Lanka and Heritance Kandalama is reporting under 50 criteria with maximum

available data and analyzed information. Graphs (bar, line) have been utilized to

make readers better understand on the matters trying to disclose by the organization.

The key impacts identified by the resort are quality of products and services, use of

energy, fresh water and disposal of solid and liquid waste and emissions by usage of

especially energy.

Main risks associated with the business are strategic, financial and operational. Since

the organization is located in an environmentally sensitive area, the management

pays a great attention on its adverse impacts to the environment. The opportunities

that are identified by the organization remain very similar to the Aitken Spence Hotel

Holdings Plc which is the mother company. However, the management strongly

believes that the environmentally friendly tourism will play a major role in the global

tourism market in order to give sustainable socio-economic benefits to an

organization and a country.


6

The risk management

With the end of the 30 year civil war in Sri Lanka and the stabilization of the impacts

of the global recession the world tourism industry continued in its path to recovery

which is highlighted by the major increase in inbound tourist arrivals throughout the

world. This represents an environment where opportunities for growth are immense.

Therefore Heritance Kandalama has identified the importance of adopting a

structured risk management approach which enables the resort to identify and

evaluate new growth opportunities and the risks involved.

The resort identifies three main categories of risk

Strategic risk

Risk associated with future business plans and strategies of the resort. These include

plans for improvement of quality and expansion of customer experience in

diversified areas.

Operational risk

Risk caused due to day to day business functions.

Financial Risk

Risk that the company may not have sufficient cash flows to meet financial

obligations.

Risk Management Structure

With the increasing number of avenues available for growth, the resort considers risk

management as an important tool when evaluating new projects. Risk awareness is

Risks

Identification

and Recovery


7

embedded in to our culture due to the well structured and disciplined approach to

risk management which aims to identify risks and implement mitigating strategies to

nullify the impact. The approach is depicted above in graphical form for the easy

understanding of its all stakeholders in taking decisions.

Strategic Risk

Business Risk Impact Risk Management Strategies Risk Rating

Failure to implement

strategic plans,

Revenue

improvement & cost

saving initiatives and

undertake profitable

investments.

Reduced revenue, cash

flow and profitability

Impedes future growth

Regular meetings are held by the

top management of the resort to

formalize future strategies and

plans and to revise and update

plans, taking in to consideration

the changing circumstances of the

tourism market and the product

offered by the Resort.

Medium

Socio-Economic,

Political &

Environmental Risk

Impact Risk Management Strategies Risk Rating

Risks relating to the

Political and

Economic climate

including decrease in

domestic and

international travel.

Lowering the

competitiveness of the

resort’s product

offering on the

national and

international market.

Reduction in revenue

and increase in cost

thereby reducing cash

flow and profitability.

Possible restrictions

on movement of

capital.

The resort works closely with

lobby groups, relevant authorities

and trade associations though

Aitken Spence Hotel Holdings

PLC to ensure that the best

interests of the tourism industry

are fulfilled at all times.

Medium

Risks from Natural or

Man-made disasters

Loss of assets resulting

in significant losses to

the group

Transferring risks to third parties

through insurance policies as far

as possible. The adequacy of

insurance covers are regularly

reviewed and adjusted when

necessary.

Appropriate contingency plans

and disaster management systems

are adopted to safeguard the

Medium


8

assets of the company.

Competitive Risk Impact Risk Management Strategies Risk Rating

Risks from

competitive actions

from existing market

participants and new

entrants

Reduced market share

and rates reducing

revenue, cash flow and

profitability

Increased promotional

expenditure

The Resort’s service excellence,

committed and award winning

staff, uniqueness of environment

related property, innovative

products and service

developments and the strength of

its brand name

Leveraging the Resort’s long-term

relationship with major tour

operators, development of

repetitive business from Sri

Lankan Customers and the

strength of the sister company in

the travel industry (Aitken Spence

Travels Ltd.) gives the group a

significant advantage over its

competitors.

Medium

Operational Risk

Reputation Risk Impact Risk Management Strategies Risk

Rating

Risks to the Resort’s

reputation and

Brand image

Decline in the

customer base

resulting in reduced

market share,

revenues, cash flow

and profitability.

Deterioration of

company image.

The hotel employs a well

defined quality assurance

system to ensure the highest

quality of service. At

operational level, systems are

in place to promptly address

any issues/complaints brought

about by the clients and to

take proactive steps to

mitigate similar occurrences in

the future

Regular training sessions are

held to train and educate staff

on quality standards and new

Medium


9

developments in the

hospitality industry ensuring

the quality of the hotel’s

products offering.

Deployment of an effective

compliance system, the resort

is committed to best

environmental practices to

ensure strict compliance with

local regulations and

maintains harmonious

relationships with the

localities in which the hotels

operate.

The top management ensures

that the company strictly

complies with all relevant laws

and codes of best practices and

is not involved in any

unethical business practices. A

code of Ethics Booklet is given

to all executives of the

company and they confirm

their acceptance of the same.

Fraud Risk Impact Risk Management Strategies

Risks from

breakdown of

internal controls,

processes and

procedures

Disruption to the

normal course of

operations.

Wastage of

management time

and resources

Regular reviews of the

effectiveness of internal

controls by the top

management and the

corporate audit department

carried out to ensure the

robustness of internal

controls.

External auditors are also

engaged to carryout internal

audit wherever necessary.

The Resort uses

Medium


10

comprehensive general &

specific reporting and

monitoring systems to identify

access and manage risks.

Operations Risk Impact Risk Management Strategies Risk

Rating

Risk of default by

debtors

Reduced cash flow

and profitability

Through the credit policies

and stringent controls to check

credit worthiness prior to

granting credit

Comprehensive systems are in

place to monitor and review

debtors. The resort conducts

excellent working capital

practices and take legal or

industrial action where

appropriate. Steps are taken to

obtain advances from travel

agents and tour operators

wherever possible.

Medium

Risks associated

with sourcing

inputs of the hotel

Law quality raw

materials could

adversely impact the

hotel’s brand image.

A specialized Central

Procurement Division and the

in house procurement

coordinator make sure lower

the risks by frequently

coordinating with local and

international suppliers.

Employee Risk Impact Risk Management Strategies Risk

Rating

Risk of not being

able to attract

employees with

good character,

high quality

Reduced

productivity and

stakeholder

satisfaction

Significant resources are

invested in strengthening the

hotel’s human capital through

the deployment of the latest

Human Resource Information

Systems, regular staff training

& development, succession

planning and fostering a

Medium


11

performance-based culture

Technology Risk Impact Risk Management Strategies Risk

Rating

Risks relating to

Information

Technology and

Security

Loss of revenue and

business

opportunities due to

outdated software

resulting in

reduction in cash

flow and

profitability.

Loss of key

confidential

information to

competitors


market share

Loss of data and

transactions

The resort has implemented

the latest in Property

Management and Reservation

software, along with the

Enterprise Resource Planning

software, facilitating faster,

more accurate information for

decision making. Regular

review of the systems and

upgrades where appropriate

Implementation of a

comprehensive IT policy

within the hotel, supported by

adequate systems and

controls, ensure the safety and

security of data. Contingency

plans are in place to mitigate

any short term loss on IT

services.

All employees are bound by

the code of conduct to

safeguard the group’s

information, irrespective of its

physical form.

A dedicated IT Manager is in

place to support all IT related

aspects of the resort.

Legal Risk Impact Risk Management Strategies Risk

Rating

Risk of legal actions

due to non

High cost of legal

and penalty fees

A comprehensive control

system is in place

Low


12

performance of

legal and statutory

requirements


profitability and

image.

supplemented by the

Accountant and cost

controller, Environment

Management Representative,

the HR Manager and the

corporate legal division are

acting to ensure all statutory,

legal and voluntary obligations

are met in all transactions

Financial Risk

Credit Risk Impact Risk Management Strategies Risk

Rating

Risks from high

operational gearing

Significantly reduced

cash flow and

profitability during low

occupancy periods.

The Resort’s cost structure has

design in such a way that a high

level of flexibility is employed to

mitigate the risks through rental

agreements, outsourcing

noncore operations.

Low

Foreign Exchange

Risk

Impact Risk Management Strategies Risk

Rating

Risks from adverse

exchange rate

fluctuations

Reduced cash flow and

profitability

Negotiation of room rates in

stronger currencies. Strong

counterparty backing and use of

sophisticated financial

instruments where appropriate.

Matching outflows with inflows

of the same currency to the

extent that is permitted by the

prevailing laws.

The treasury division of the

parent company monitors

exchange rates on a daily basis

and advices the Resort on best

rates to obtain from foreign

currency conversions

Considering the possibility of

contracting in local currency

Low


13

with Local Travel Agents instead

of foreign currency in order to

transfer the possible exchange

rate risk.

Interest Rate Risk Impact Risk Management Strategies Risk

Rating

Risks from adverse

interest rate

fluctuations

Reduced cash flow and

profitability

Entering in to loans with interest

rate caps mitigated his risk and

other instruments to minimize the

volatility of cash flows.

Working closely with the parent

company treasury department to

negotiate favourable terms and

conditions for loan facilities

obtained.

Mediu

m


14

Footprints and

Milestones - Heritance

Kandalama


15

2 CORPORATE CONTEXT

2.1 Nature of business and activities /Main Products & Services

The resort is a fully fledged fives star property, especially distributing the new

concept of eco luxury for the niche market of the national and international tourism.

The resort consist of 152 fully air-conditioned rooms with the breathtaking view of

Sigiriya Rock Fortress, Dambulla Cave Temple, the Kandalama Tank which dates

back to 17th century AD and the pristine forest which is the tail end of knuckles range,

Matale. The product was introduced to the market in the year 1994 after investing

more than LKR. 850 millions and was fully refurbished in the year 2005 spending

LKR. 650 millions to maintain the product quality and customer expectations. State

of the Art Conference Facility is the latest value addition to Heritance Kandalama.

The conference Centre has dedicated 5 breakup rooms, a dining room to be utilized

when a high profile, tight scheduled business meeting is taken place. It is

complemented with the latest audio visual, lighting and stage facilities. The exclusive

car park of the conference centre can accommodate more than 75 cars at a time. The

investment for the conference centre has amounted to LKR. 350,000,000. The resort

has 6 room categories, namely Superior, Luxury, Deluxe, Suite, Luxury Suite and

Royal suite to provide with a diversified range of intelligent luxury to its

stakeholders. Fully air-conditioned two restaurants, three bars, a coffee lounge and

an Arrival Lounge provide the customers the convenience of experiencing a variety of

food and beverage wrapped with the genuine local hospitality. The resort serves a

range of world class food products, mainly buffet meals which the price starts from

LKR.3,500. The other dining experiences that are offered to its customers spread

between LKR 16,100 and LKR. 64,400. Things like Dining at Deshamanya Geoffrey

Bawa’s table have gained a very high popularity amongst customers. Although the

food products are relatively expensive than the resort’s competitors, the pricing

strategy remains unchanged due to the value additions and continual quality

improvement in the whole process, thus gaining higher profit margins by its

operation.


16

Graph 01

2.2 Products and Services

The Global Perspective

WTTC’s latest Economic Impact Research shows that growth in world Travel &

Tourism was robust in 2018 despite many economic challenges. The total

contribution from Travel & Tourism to the world GDP by 10.4% in 2017/2018. This

was faster than growth of the world economy as whole. And also faster than many of

other industries. Tourism direct contribution to GDP in 2017/2018 was USD 2.57

trillion(3.2% of total GDP) and 2017 USD 2.31 Trillion and demonstrated a clear

growth of 11.25% and the industry directly supported 118 million jobs direct

employment opportunities which represents 3.8% total employment in the world .

When considering the total economic impact of direct, indirect and induced the

contribution was more than USD 8.2 trillion in the year 2017/2018 as against

7.61Trillion in the year 2016/2017. After a long downturn in the tourism market in

the world due to financial recession in developed world, the social unrest in Middle

East and some internal issues in Sri Lanka, economy gained a rapid upswing during

the period under review. Despite all the challenges, the International labour

Organization’s report on international tourism, expects global tourism to provide 413

million jobs by 2028.

The Local Perspective


17

Based on the information of Sri Lanka Tourism Development Authority’s statistical

data report, there have been 2,116,407 arrivals in 2017 and 2,333,796 in 2018 to Sri

Lanka showing a positive change of 10.3%. Heritance Kandalama during the same

period has welcomed 34,264 foreign tourists in 2017 and 37,027 in 2018 depicting a

positive change of 7.46% during the year 2018. In comparison to the year 2017 the

capture rate has been increased and demonstrate the higher level of customer

satisfaction.

Sri Lanka, for the first time in her history received more than 830,000 foreign

tourists to the country and has been estimated to contribute LKR. 60 billions to the

national economy. Heritance Kandalama also has made a remarkable contribution to

the national economy even though the hotel was partially closed for renovation and

for constructing a conference facility. It is noteworthy to analyze the local tourism

trends to understand, and direct the tourism business through the unlimited and

unexpected challenges to come. The graph 1 compares the similar period of 2017 and

2018 in order to understand the tourism trend. In contrast to 2017, year 2018 has

shown a very positive signs of arrivals with an overall positive change Which are

giving a clear understanding, the tourism in Sri Lanka is at a continuous upward

trend. (graph 2)

When comparing arrivals to Sri Lanka and Heritance Kandalama, it shows an

interesting contrast in the graph 2. The arrivals to Sri Lanka from the counties like

U.S.A,Saudi Arabia Denmark, Poland have shown very positive change whilst

Heritance Kandalama is gaining the attention of European, Middle east, American &

Australian.

Graph 1 - Percentage Change in Arrivals 2017-2018


18

Products at a Glance


19

2.3 Major Markets and the Position of Heritance Kandalama in the Tourism Market

Despite global and local challenges, the resort has been able to secure a strong

market condition capturing more than 26.6% of the national arrival to the resort

during the year 2018. The hotel served more Sri Lankans than the foreigners, as it

acclaims for attraction of local tourists. Heritance Kandalama, as always, has

attracted Sri Lankan tourists and has been continuing to sustain and improve the

contribution from Sri Lankans. As depicted in the graph 3 the Resort has entered to

the markets like Europe, Australia, Japan, and Emirates during the period under

review. Marketing through the web, in ways of search engine optimization, link

distribution, have contributed immensely towards entering to the new markets and

gaining higher level of revenue margins due to directly accessing consumers,

enhancing B to C business though the web. The change between the similar periods

of 2017 and 2018 demonstrates in the graph 4. Saudi Arabia, Denmark, Italy,

America have shown significant positive change during the period under review.

Graph 3

Market Presence of the Heritance Kandalama 2018 Graph 2

Graph 4


20

Occupancy and Percentage Change 2017/2018 Heritance Kandalama

Graph 4

The occupancy trend of the Resort has shown a significant positive change when

comparing the similar period of 2017 and even on monthly basis. In parallel to the

arrivals to Sri Lanka the arrivals to Heritance Kandalama shows a significant

difference whilst the resort has been demonstrating the highest ever occupancy

percentage (The percentage is calculated by considering the total number of rooms in

the inventory as 152 rooms) during the period under review.

The most important parameter to demonstrate the economic impact from tourism is

the revenue per occupied room and the graph 6 depicts as to how the resort have

increased its value in order to sell at a better price and gain more advantages to the

resort and Sri Lanka as a whole.

Graph 6


21

Major sites and operations (production places)

N/A

Name

Kandalama Hotels (PVT) Ltd.

Legality

Private Limited Company incorporated in March 27, 1992

Company registered number

PB -151 - PV


22

2.4 Organizational Structure


23

2.5 Geographic Spread and Scope of Activities

The Resort does not operate in different locations.


24

3 REPORT PROFILE

3.1 Reporting Period

This report covers the calendar year 2018 (From January– December) and

comparison is done as much as possible with the same period of 2017 in order to give

a proper understanding to the stakeholders of the organization.

3.2 Reporting Scope

The report covers the activities which affects significantly to economy, environment

and society to provide sufficient information to make effective decisions by the

stakeholders. Major concerns of the Management and the Board of Directors of the

mother company Aitken Spence Hotel Holdings PLC are extraction of Fresh water,

Use of Energy, Conservation of Bio Diversity, Emission of Carbon, disposal of Solid

and Liquid Waste.

The resort has its own EMS, FSMS,QMS and EnMS, certified by the ISO 14001, ISO

22000, National Five Star Rating and ISO 50001 respectively. Hence, the resort has

used to maintain day-to-day reports to support the above management systems and

on the other hand the mother company of Heritance Kandalama is reporting under

GRI level B, thus providing proper information is an inherent operation of the

organization. However, a better structure and customized formats were developed;

distributed to data owners gathered data and analyzed.

The achievements made in the reporting period (January – December 2018).

Name of the

Award

Awarding

authority Picture Achievement

Sri Lanka

Tourism Awards

2018

Sri Lanka Tourism

Development

Authority

The Best Host Hotel

Sustainable and Green

Practices


25

South Asian

Travel Award

2018

SATA Leading Eco Hotel/ Resort in

South Asia

Leading Eco Hotel/ Resort in

Sri Lanka

7S and HR

Excellence

Awards

2017

Aitken Spence

PLC

Winner -

Group 7S & HR Excellence

Award

Winner -

Group HR Excellence Award

Winner -

7S & HR Excellence Award -

Hotel Sector

Winner -HR Excellence

Award - Hotel Sector


26

3.3 Reporting Entity

This report covers all operations of Heritance Kandalama (Kandalama Hotels (Pvt)

Ltd.) which includes;

Front Office

Housekeeping

Food & Beverage

Maintenance & Engineering

Staff Village

Accounts & Sourcing

Human Resource

3.4 Boundaries and Limitations

This report covers the activities of whole organization, as an individual entity

although it has a mother company (Aitken Spence Hotel Holdings PLC) overlooking

the operation. The reporters have taken maximum care in covering total operation

and performance during the period under review.

3.5 Assurance

The information provided in the report has been internally assured to provide a set of

dependable data and information for its diversified stakeholders in order to take

effective decisions and forecast their future engagement with Heritance Kandalama.


27

4 CONTENT INDEX NGRS

No National Green Reporting System Indicator Page

1 Strategy & Executive Summary (1.1-1.2.1) 1-10

2 Corporate context (2.1-2.7) 15-23

3 Report Profile (3.1-3.5) 24-26

4 Content Index 27-30

5 Stakeholder Engagement (5.1-5.4) 31-32

6 Management Approach(6.1-6.4) 33-34

7 Performance Indicators 35

7.1 Economic Performance Indicators 35-39

ECON 1 Direct Economic Value Generated 35

ECON 2 Coverage of the Organization’s Defined Benefit Plan Obligations 37

ECON 3 Significant Financial Assistance received from the Government 37

ECON 4 Policy practices and Portion of Spending on Locally –Based Suppliers at Significant

38

ECON 5

Development and Impact of Infrastructure Investment and

Services Provided Primarily for Public Benefit through

Commercial, In-kind or Pro-bono Engagement. 38

ECON 6 Understanding and Describing Significant Indirect Economic

Impacts Including the Extent of Impacts 39

7.2 Environmental Performance Indicators 40-54

ENVT 1 Materials used by weight or volume 40

ENVT 2 Percentage of Materials used that are Recycled Materials 41

ENVT 3 Direct energy Consumption by Primary Energy Source 41

ENVT 4 Indirect Energy Consumption by Primary Energy Source 42

ENVT 5 Energy saved due to Conservation and Efficiency Improvements 42

ENVT 6

Initiatives to provide Energy-Efficient or Renewable Energy

based Products and Services and reductions in Energy

Requirements as a result of these Initiatives 42

ENVT 7 Initiatives to reduce indirect Energy Consumption and

Reductions achieved 43

ENVT 8 Total Water withdrawal by Source 44


28

ENVT 9 Water source significantly affected by Water usage 44

ENVT 10 Percentage of total Water usage that is Reused or Recycled 45

ENVT 11

Location and size of Land owned, Leased or Managed in or next

to Protected areas or areas of high Biodiversity value outside

protected area 45-46

ENVT 12 Description of significant impacts of Activities, Products and Services on Biodiversity in protected areas or areas of high Biodiversity value outside protected areas.

46

ENVT 13 Total direct and indirect GHG emissions by weight 46-49

ENVT 14 Initiatives to reduce Greenhouse Gas emissions and Reductions

achieved 50

ENVT 15 NO x SO x and other significant air emissions by type and weight 50

ENVT 16 Total waste Water discharge by quality of Effluent and Volume 51

ENVT 17 Total weight of waste by type and disposal method 52

ENVT 18 Total number and Volume of Significant Spills 52

ENVT 19

Weight of transported, exported or treated waste deemed

hazardous under the terms of the basel convention annex i,ii,iii

and viii and percentage of transported waste ship internationally 52

ENVT 20 Initiatives to mitigate environmental impacts of products and

services, and extent of impact mitigation 53

ENVT 21 Percentage of products sold and their packaging materials that

are reclaimed by category 53

ENVT 22

Monetary value of significant fines and total number of

non-monetary sanctions for non-compliance with environmental

laws and regulations 54

ENVT 23 Total environmental protection expenditures and investments by

type 54

ENVT 24 Promotion of best practices for Sustainability Production and

Consumption along the supply chain 54

7.3 Social Performance Indicators 55

SOCL 1 Total workforce by employment type, employment contract and

region 55

SOCL 2 Total number and Rate of Employee Turnover by age Group,

Gender and Region 56


29

SOCL 3 Benefits provided to full-time employees that are not provided to

temporary or part-time employees by major operations 57

SOCL 4

Percentage of total workforce represented in formal joint

management-worker health and safety committees that help

monitor and advance on occupational health and safety programs 58

SOCL 5 Rates of Injury, Occupational Diseases, Lost Days and

Absenteeism, and total Number of Work related Fatalities 58

SOCL 6

Education, Training, Counseling, Prevention and Risk-Control

Programs in place to assist Workforce Members, Their Families

or Community Members regarding Serious Diseases 59

SOCL 7 Average Hours of Training per Year per Employee by Employee Category

59

SOCL 8

Programs for Skills Management and Lifelong Learning that

Support the continued Employability of Employees and assist

them in Managing Career Endings 60

ENVT 9

Composition of Governance Bodies and breakdown of employees

per category according to Gender, Age Group and other

indicators of Diversity 61

SOCL 10 Public Policy Positions and participation in Public Policy

Development and Lobbying 61

SOCL 11 Total value of Financial and in-kind contributions to political

parties, politicians, and related institutions by Country. 61

SOCL 12

Monetary Value of Significant Fines and Total Number of

Non-Monetary Sanctions for Non-Compliance with Laws and

Regulations 61

SOCL 13

Total Number of Incidents of Non-Compliance with Regulations

and Voluntary Codes Concerning Health and Safety Impacts of

Products and Service During Their Life Cycle, by Type of

Outcomes.

62

SOCL 14

Type of Products and Services Information Required by

Procedures and Percentage of Significant Products and Services

Subject to Such Information Requirements. 62

SOCL 15


and Voluntary Codes Concerning Product and Service

Information and Labeling, by Type of Outcomes 62

SOCL 16 Practices Related to Customer Satisfaction, Including Results of

Surveys Measuring Customer Satisfaction 62


30

SOCL 17

Programs for Adherence to Laws, Standards, and Voluntary

Codes Related to Marketing Communications, Including

Advertising, Promotion and Sponsorship 63

SOCL 18


and Voluntary Codes Concerning Marketing Communications,

Including Advertising, Promotion and Sponsorship by Type of

Outcomes

63

SOCL 19

Monetary Value of Significant Fines for Noncompliance with

Laws and Regulations Concerning the Provision and Use of

Products and Services 63

SOCL 20

Life Cycle Stages in which Health and Safety impacts of Products

and Services are assessed for improvement and Percentage of

Significant Products and Service Categories subject to such

Procedures

63


31

5 Stakeholder Engagement

The Stakeholder Map

Connecting with varied stakeholders is a vital aspect of the Resort’s operations. As a

responsible business, the Resort understands that its actions will affect others and

that their actions in turn will reflect back upon the Resort. As a part of the process of

managing social and environmental sustainability, Heritnace Kandalama is

cognizant of the need to increase engagement with stakeholders, making itself more

open and more accountable to a wider range of interested parties. Thus, effective

stakeholder engagement assists the Resort to understand the current emerging

challenges faced by its stakeholders and in turn challenges the Resort to develop

mutually beneficial solutions. This process also entails communicating results

clearly, openly, and thoroughly, a critical criteria, as the Hotel’s business depends

upon credibility, and on the trust placed in the Resort by its stakeholders.

The table below endeavours to showcase the array of stakeholder groups engaged by

Heritance Kandalama and strives to outline the reasons for engaging with the

stakeholder and the engagement channels used.


32

Stakeholder(

What)

Basis(Why) Channel(How) Frequency

(When)

Suppliers To ensure that the Resort can maintain

predetermined standards of service

and to transpose the sustainability

ethics

Meetings /informal

discussions

Annually

/When visited

hotel.

Tour

operators/Tr

avel

Agents/Corp

orate

Customers

To ensure that the expected customers

are attracted and to keep the updated

with the new policies and procedures.

Meeting at their own

locations by the Marketing

Team

Every three

months

Guides/Driv

ers/Travel

Assistants

They provide information to clients to

keep them abreast of the hotel

Leaflets/Meetings/Through

tour operators

Daily

Schools Identified as the most important group

of people in order to pre arrange

employees to join

Visit schools, conduct

presentations, invite for site

visits

Monthly

/Daily

Universities

and Other

higher

educational

institutions

Provided abreast of knowledge by

training sessions and allowing them to

conduct project reports, assignments

and Thesis thereby improving the

potential knowledge base in the

economy

Visit universities and other

higher educational

institutions, help in

conducting assignment,

projects and writing thesis.

Ongoing, on

request

Employees Employees are a very strong link to

provide accurate information to the

customers and many of other

stakeholders

Training, Performance

Evaluation, voluntary

circles

Ongoing

Customers To ensure green consumerism and to

develop a sustainable consumer base

for future business

Directories, Notices,

Informed at check-ins,

communicate through tour

operators/ Travel Agents,

Tent Cards, leaflets

Ongoing and

Some are

updated

annually

Local

Government

Authorities

To assist in developing policies where

long term sustainability is handled and

gain national policy makers attention

toward sustainable tourism.

Assist in developing

management systems,

productivity techniques

Ongoing,

Project Base

Local

Community

To blend the business with the

community and gain more positive

attraction of the stakeholder

Meet community leaders,

invite community leaders

for internal activities

Ongoing


33

6 MANAGEMENT APPROACH

Sustainability is fully integrated into the business concept of Heritance Kandalama

and in fact the hotel pioneered in bringing the sustainability in to the business

activities in Sri Lanka in the year 1994. Heritance Kandalama, then it was called

Kandalama Hotel is one of the very first organization in Sri Lanka to conduct

Environment Impact Assessment (EIA) and has evolved with 3R principle to 7R

principle, a way of life in contributing to the triple bottom line, 5S to Green

Productivity. The environmentally friendliness, social sensitivity, economic viability

is an inherent achievement of the resort from its inception which now have become a

buzz word in the business scenario. In long term, the Resort views its sustainability

focus to be a key not only to the financial and commercial interest of the hotel but

also to Sri Lanka as a destination. With a growing number of travellers looking

towards green destinations in an effort to minimize their own carbon footprints, the

resort will be a forerunner in assisting Sri Lanka to achieving a green destination

status. Furthermore, by protecting the environment and the culture within which it

operates the resort identifies its capacity to differentiate the product offer and retain

a truly Sri Lankan identity. Sri Lanka is not a nation geared for mass tourism. Its

tourism infrastructure capacities coupled with the nature of the product, allows the

nation to specialize and cater to niche segments of high-end travellers. Thus, the

destination should be pursuing a strategy of sustainable tourism whereby tourism is

utilized as a tool to preserve the nation’s culture, heritage and environment and not

over-exploit them through continuously increasing visitations. By integrating CSR

into core business processes and stakeholder management, the Resort recognizes its

ability to achieve the ultimate goal of creating both social value and corporate value.

However, the adaptation of CSR and sustainability goes beyond face value, the Resort

views sustainability as a strategic avenue for growth in the long-term. As opposed to

ad-hoc philanthropy, strategic sustainability streams are embedded into the overall

business approach and filters to the fundamental business practice. This, the Resort

perceives sustainability beyond the scope of stepped-up environmental performance,

but as a comprehensive way of doing business; one that delivers tremendous

economic value and opens up a vast array of new opportunities.


34

The company’s unwavering commitment to sustainability is evident in the inclusive

role that sustainability plays in its daily operations. In much the same manner,

engagement and involvement with the community within which the Resort operates

is fundamental to values and ethics. The Resort recognizes that the integration of

sustainability practices require relentless determination and tenacity, but also

accepts that by doing so it is able to generate substantial business value whilst

enhancing the quality of life of the communities, customers, suppliers and employees

that are part and parcel of its inter-linked business environment. Similarly, its

impact on the immediate natural environment and wider global environment is far

reaching.


35

7 PERFORMANCE INDICATORS

7.1 ECONOMIC PERFORMANCE INDICATORS Direct economic Value Two years at a glance

The net sales and revenue has demonstrated a significant growth during the

period under review. The change is 12.4% and 12.5% respectively

All types of cost have increased when compared to year 2017. The Operating Cost,

Employee wages, Employee Benefits, Payments to providers of Capital and

Community Investments have increased 9.5%, 26.8%, 27.5%, 421.5%, 147%

respectively and decreased Payments to Government in 15% . The cost of operation

has been increased by 34% mainly due to the energy and raw material price increase

and the continuous inflation in the economy.

Direct economic Value Graph 08


36

The cost of staff has been increased due to new recruitments based on the business

improvements and the salary increments according to the government regulations .

January – December

2017

January – December

2018

Direct economic value generated

Net sales 1,371,121,171.49 1,541,075,556.56

Revenue 1,402,074,517.49 1,578,091,672.49

Economic value distributed

Operating costs 262,752,820.63 287,725,234.59

Employee wages 130,586,638.96 165,612,208.12

Employee benefits 74,028,794.56 94,443,973.08

Community investments 493,052.00 1,218,607.50

Employee cost

Cost towards wages salaries 130,586,638.96 287,725,234.59

Other benefit costs 74,028,794.56 94,443,973.08

Total personnel costs 204,615,433.52 382,169,207.67

Payments to providers of funds

Interest payments made to providers of loans 0 0

Staff Cost - Graph 10


37

Coverage of the Organization’s Defined Benefit Plan Obligations

All employees of the company are members of the Employees’ Provident Fund and

Employees’ Trust Fund, to which their employers contribute 12% - 15% and 3%

respectively such employees’ basic or consolidated wage or salary, cost of living and

all other allowances. Contributions to defined benefit plans, EPF & ETF, are

recognized as an employee benefit expense in profit and loss in the periods during

which services are rendered by employees. The defined benefit plans are done

according to the gratuity Act. No.12 of 1983. All employees are allocated the required

amount based on their salary and a provision is kept in the operational budget on

annual basis although the payment of the gratuity takes place after completion of 5

years of uninterrupted service of an employee at the Resort.

The defined benefit plan for both years has been the gratuity payment for all

employees who completed continuous five years of service. The liabilities for stock

holders have grown slightly and have amounted to 25% compared to the same period

last year.

Significant financial assistance received from the government

There is no significant financial assistance received during the period under review.

However, the Resort has gradually decreased its financial expenses based on the

below graph.


38

Policy practices and Portion of Spending on Locally –Based Suppliers at

Significant

Heritance Kandalama

Purchasing Policy

We at Heritance Kandalama Hotel are committed to protect and conserve our present and future

environment.

As we are an environmentally sensitive organization, all our purchasing will be done in the most

environmentally friendly manner. Bulk purchasing will be preferred over supplies in small

containers. Priority will be given to supplies in returnable containers. Packaging out of

biodegradable materials will be encouraged.

Suppliers should be able to deliver with the least handling and transport. Goods with eco-labels

and recycle labels will be preferred over all others. Biodegradable soap and detergents and items

with the least amount of chemicals such as phosphates, sulphates, nitrates and boron salts will be

purchased.

Local materials and fair trade products including elements of local art and cultural heritage will

be given priority in purchasing.

When selecting suppliers, their environmental commitment and policies will always be

considered.

General Manager

The local suppliers are given priority in purchasing all types of raw, semi-finished

and other materials. The Resort has a defined 20km radius boundary in prioritizing

purchasing decisions .

Local Purchases

Development and Impact of Infrastructure Investment and Services

provided Primarily for Public Benefit through Commercial, In-kind or

Pro-bono Engagement.

LKR. 610,220.00 has been invested on developing infrastructure which is 75%

increase compared to the similar period previous year. Other than the said, the

Resort plays a coordination role in carrying out infrastructure development

programmes which has amounted to LKR. 112,121,941.86 during the period under

review. Physical and intellectual capital of the Resort is shared with its stakeholders

to promote sustainable development where 1.75 million of global citizens gained


39

access to the Resort’s knowledge pool. The “Gasifier” was introduced to contribute to

the triple bottom line approach of the organization in the year 2009. It consumes

2100 Kgs of fuel wood {(Gliricidia) the plant was used as fences of the farming lands

in the local community and the leaves were used as animal food previously} for a day

replacing 800 Lts of diesel which reduce carbon emission, cost of operation by 68%

and provide the opportunity to the community to supply the wood which is freely

available and grow in abandoned lands and gain LKR 40,000.00 daily. Further it has

generated 8 more employment opportunities to the community.

Understanding and Describing Significant Indirect Economic Impacts

Including the Extent of Impacts

Percentile value of the cadre employed from the 35km radius was 54.9% and all of

them are bread winners to the household which in turn contribute in eradication of

poverty. The Self Development Centre, the resorts state of the art training and

development facility provide an array of training and development programmes to

meet the hotel’s demand and to provide opportunities in the tourism field. Within

the history of resort’s existence, it has developed more than 3085 employees to the

industry and 64 are now holding senior management position in the global tourism

industry out of whom 9, joined as trainees are still onboard.

Villagers preparing fuel wood (Gliricidia)

for Renewable energy plant at Heritance

Kandalama

Provided School bags 210 nos for vicinity

schools in kandalama


40

7.2 ENVIRONMENTAL PERFORAMCE INDICATORS

Materials used by weight or volume

The above is the consumption of raw material, semi-finish goods, packaging material

etc for the period under review with the comparison to the similar period of 2017.

The graph illustrates on consumption per room with a comparison to the similar

period of 2017.

Material 2017 2018

Vegetable 133657.12 132548.55

Fruits 171,369.69 177,960.60

Other Food Items (Kg) 665,669.80 664,645.91

Beverage (Lt) 643082.3 693375

Fuel – Diesel (Lt) 407102.49 187228

Fuel – Wood (Kg) 415339.5 445162

Other Maintenance Related Items (Units) 222209 211205

Stationary (Units) 193250 169099

LP Gas (Kg) 29,062.50 30,712.50


41

Percentage of Materials used that are Recycled Materials

Since the majority of the stationary are based on recycled materials, the amount

shown is the recycled stationary against total stationary purchased during the period

under review and for further understanding it has been compared with the previous

year

Direct energy Consumption by Primary Energy Source

Direct Energy Consumption 2017/2018 January - February

Graph 5

Stationary Consumption Graph 1

Stationary Consumption


42

Indirect Energy Consumption by Primary Energy Source

Total Indirect energy consumed 2017/2018 Graph 6

Energy saved due to Conservation and Efficiency Improvements

Total energy saved due to various initiatives had amounted 6,331,311.86MJ,

5,920,680.08MJ in the years 2017 and 2018 respectively. The above graph shows as

to what kind of initiatives have made by the Resort during the period under review.

Initiatives to provide Energy-Efficient or Renewable Energy based

Products and Services and reductions in Energy Requirements as a

result of these Initiatives

Please see the above paragraph and the line chart for ENVT 6


43

Initiatives to reduce indirect Energy Consumption and Reductions

achieved

January - December 2018

Energy Saving Methods & Saved Values - Heritance Kandalama

Item Description

Per

Month

Qty

QTY for

Year of Jan

'18 to Dec

'18)

in Ltrs

QTY forYear of

Jan '18 to Dec

'18)

in MJ

Remarks

1 Fuel saving by

1.1 *By limiting usage of hotel vehicle

1.1.1 Goods transferring to Staff Village by

tractor

*Early - 2 times per Day

*Present - 1 times per Day

*Reduction - 7.5km per Day

7.5km per

day

(1.07 ltrs

per day)

32.14

ltrs per

Month

385.71 14,502.70 Assuming : Tractor

diesel usage is 7km

per 1ltr

1.1.2 Purchasing by using hotel van.

*Early - 2 times per month

*Present - 1 times per month

*Reduction - 340km per month

340km per

month

(37.77ltrs

per Month)

37.77ltr

s per

Month

453.33 17,045.21 Assuming : Van

diesel usage is 9km

per 1ltr

1.1.3 Cable modification in generator .When

CEB done long term power cut, Operate

Single generator for the both wings

*Early - for the both generator used 180

ltr diesel per hour

*Present - When there is power cut

,Single generator can powered both

wings with 100 ltr diesel

Average

800 lts per

day

8000

ltrs per

10 Days

8,000 300,800.00 Assuming:

* 10 days have full

CEB power cut day

time (8 hrs) per

Year.It depend on

the wether

condition of the

country

TOTAL SAVING PER MONTH, FROM ABOVE COST SAVING

METHODS / (MJ) 31,547.90

Item Description

Per

Month

Qty

QTY for Year (Jan

'18 to Dec '18)

in Ltrs

Remarks

2 Water reduction by

2.1 *By implementing new machines

2.1.1 TertiaryTreated water supply for

Staff village urinals

*Saving of tube well water -

average 12m3 per day

average 12m3

per day

360,000 ltrs

per Month

16,639,200.00


44

2.1.2 Put 1.5ltrs water bag in to

cisterns of guest rooms & Public

Area

1645 ltrs

saving per day

49,360 ltrs

per Month

2,281,419.20 Assuming:

* 5 times usage of one commode in

guest room per day &

* Average occupancy for last Year is

83% &

* 50 times usage of public area

commodes per day

2.2 *By changing the process or method

2.2.1 Water saving from laundry

washing machines (this is done

only for three machine up to

now. There are 2 m/cs more)

*Early - when the CEB power cut

all water will drain & need to fill

again.

*Present - when the CEB power

cut water will not drain

*water saving - 2850ltres per day

2850 ltres per

day

85,500 ltrs

per Month

3,951,810.00 Assuming : CEB power will be cut 3

times per day during luandry

operating time period

TOTAL SAVING PER MONTH, FROM ABOVE COST SAVING

METHODS / (Ltrs) 22,872,429.20

Total Water withdrawal by Source

Different type of sources 2017 2018

Surface water 0.00 0.00

Ground water 90,518.00 103,524.90

Rainwater collected and stored 0.00 0.00

Wastewater from other

organization

0.00 0.00

Municipal water supplies 0.00 0.00

Total water Withdrawal 90,518.00 103,524.90

Water source significantly affected by Water usage

Source Size of source(m3) 2017 (m3) 2018 (m3)

03 nos. of tube wells -

Water below the rock bed

Approx. 100ft, 250ft,

160ft in depth 90,518.00 103,524.90


45

Percentage of total Water usage that is Reused or Recycled

Source

Quantity of water (m3)

during

January to December

Quantity of water (m3) during

January to December

Percentage of

water

recycled/

reused Water

withdrawal

Recycled

or reused

Water

withdrawal Recycled or reused

Surface water 0.00 0.00 0.00 0.00 -

Ground water 90,518.00 85,992.10 103,524.90 98,348.66 95% from total

water usage

Rainwater

collected and

stored

0.00 0.00 0.00 0.00 -

Waste water 0.00 0.00 0.00 0.00 -

Municipal water

supplies 0.00 0.00 0.00 0.00 -

Total 90,518.00 85,992.10 103,524.90 98,348.66

Location and size of Land owned, Leased or Managed in or next to

protected areas or areas of high Biodiversity value outside protected area

Heritance Kandalama situated alongside the Kandalama Tank, a manmade rain fed

reservoir of 8sq Km built by King Vasaba in the 17th century. The area is rich in

biodiversity and house a spectrum of wildlife, including the Asian Elephant, 09

endemic birds, 172 other birds including migrants, three types of monkeys. A canopy

of tropical dry mixed evergreen hardwood trees that take an average of 40-50 years

to mature distinguishes the area. The Resort has a natural preservation of 193 acres

of conservation forest that ensures the bio-diversity is protected. The preservation

also protects the origins of 11 natural streams that provide irrigation water to 34 dry

zone reservoirs. The preservation also acts as preventive mechanism against

deforestation and the construction of unauthorized artificial structures.

Bio Diversity Indicators

Type Number of

Species

Type Number of

Species

Native Flora 120 Reptiles and Amphibians 19

Birds 183 Mammals 17

Trees 120 Butterflies 73


46

The Eco Park is one of the unique attractions of Heritance Kandalama, located just

ten minutes walk from the resort. It includes a wildlife orphanage and rehabilitation

centre for injured animals, a state-of-the-art waste water recycling plant, compost

fertilizer pits, wet and solid waste recycling centres, elephant dung paper making

facility, a herbal garden and an eco library.

The Eco Park performs a valuable role in community education. More than 1.75

million visitors have passed through the Eco Park and have been exposed to the

Heritance Kandalama’s Green Philosophy.

Description of significant impacts of Activities, Products and Services on

Biodiversity in protected areas or areas of high Biodiversity value

outside protected areas.

The organization is taking utmost care in its operation not to disturb the natural

habitats and biodiversity of the adjacent land and the land it sits on since the nature

has been the cutting edge advantage from its inception. More than disturbing and

negatively impacting the nature, the resort has contributed in developing and

assisting to improve the variety of species in ways of replanting native trees,

controlling wildlife hunters.

Total direct and indirect GHG emissions by weight

The GHG footprint figures are aimed at identifying, analyzing and quantifying

sources of GHG emissions for Heritance Kandalama. The Engineering department at

Heritance Kandalama oversees carbon management and inventorization along with

support from Stores, Travel desk, Eco-park, Accounts, Kitchen and Human

Resources department.

The following approach has been used to determine Heritance Kandalama’s GHG

footprint as described in this report:

Methodology of Estimating GHG Footprint

Each division / function of the hotel was consulted for determining the GHG

footprint. Subsequently, data was collected through data collection formats which are


47

consistent with international guidelines on GHG foot printing. GHG data collection

protocols were developed to assist hotel in consistently reporting its annual carbon

footprint on an ongoing basis.

For each division/function, GHG emissions were identified, categorized and

calculated, as per standardized calculation approaches for the year 2018. There are

two basic approaches for estimating direct (Scope 1) CO2 emissions from stationary

combustion:

1) Direct measurement of the mass of CO2 in the exhaust gas and

2) The calculation of CO2 emissions based on proxy (i.e., activity) data.

Both approaches are acceptable ways to estimate CO2 emissions from stationary

combustion. Direct measurement, although more accurate, is an expensive and

unfeasible option. Thus, in the absence of direct measurement of the mass of CO2 in

the exhaust gas, it is acceptable to base the calculation of CO2 emissions on proxy

(i.e., activity) data involving the monitoring of fuel types and consumption rates.

Assumptions

The carbon footprint of Heritance Kandalama was primarily calculated based on

standard emission factors, and involved monitoring of fuel use patterns. Since

physical determination/direct monitoring of GHG emissions was not possible, or

practically infeasible due to the expensive nature of instrument or testing procedure,

globally accepted standards and emission factors have been adhered to for

determination of GHG footprint.

GHG Footprint - Overall Hotel Operations

The Total GHG footprint of Hotel Heritance Kandalama for 2018 is 3025.201 tCO2e.

The chart below explains the breakup of total carbon emissions from the hotel. As

illustrated, Scope 2 forms the highest proportion of overall GHG emissions with a

contribution of about 77%. Scope 1 emissions are the second largest contributor to

overall GHG emissions with a contribution of about 22%.


48

Scope 1 emissions

The activities contributing to scope 1 emissions have been clubbed under the

following heads:

Utility

Housekeeping

Kitchen

Waste Management

Transportation

The total scope 1 emissions for Hotel Heritance Kandalama stand at 674.55 tons of

CO2e. A deeper look into the breakup of scope 1 emissions reveals that utility

operations contribute to significant proportion of the overall scope 1 emission (79%).

Utility related activities primarily include diesel consumption in the boiler and diesel

generator. 15% of the scope 1 emissions are contributed through kitchen operations.

This is through the use of LPG in guest kitchen, staff canteen and use of food heating

gel in restaurants. The contribution from waste management (incineration,

composting, waste transportation) and transportation using company owned vehicles

is relatively lower contributors to scope 1 emission

Scope 2 emissions

Scope 2 emissions which are the single largest contributor to Hotel Heritance

Kandalama’s carbon footprint stood at 2315.007 tons of CO2e. In order to clearly

understand the contributors towards scope 2 emissions, data from energy


49

sub-meters were obtained. GHG emissions related to electricity consumption from

chiller plant (DW and SW) were found to be contributing the maximum. The GHG

emissions from chiller plant alone account for 52% of the overall scope 2 emissions.

The miscellaneous category accounted for 3rd largest emission source and includes

electricity consumption at STP, guest rooms, main restaurant, boiler, gassifier and

SW swimming pool.

Scope 3 emissions

Total scope 3 emissions stood at 35.64tons of CO2e, the smallest amongst scope 1,

scope2 and scope3 emissions. The activities considered for calculating the scope 3

emissions include the following:

Outsourced transportation for employees and guests

Guest activities like safaris and balloon rides

Paper manufacturing in the hotel facility

GHG emissions due to outsourced logistics related to waste management and Freight

diesel consumption for sourcing of raw materials were not considered for calculating

scope 3 emissions due to unavailability of relevant data.

Vehicle diesel/ petrol consumption in Transportation 92% of the overall scope 3 emissions.

Transportation of guests and employees included only such activities that are not under

direct control of the hotel i.e.: fuel allowances provided to employees, public transportation

and office bus used by employees, contracted vehicles for guests and employees and guest

safaris


50

Initiatives to reduce Greenhouse Gas emissions and Reductions achieved

Source of Emission Description

Gross Profit of the Gasifire (only considering

Energy Costs) AND CO2 Saving from the

Gasifire

Considerations : Unit cost of Fuel Wood = Rs. 12.5 Unit cost of Diesel = Rs. 107 01ltr of Diesel = 4.1 * 01kg of Fuel Wood Please Note That : have not considered the O&M payment & Panalty charges for the calculation

Description Amount

Actual Expenses for Boiler Running

Total Fuel Wood Consumption Average per month / (kg)

52,716

Cost for above Fuel Wood / (Rs.) 658,950.00

Total Amount of Diesel for Boiler Running during a average per month / (ltrs)

4,800

Cost for above Diesel / (Rs.) 513,600.00

Actual Boiler Running Expenses for the month / (Rs.)

1,172,550.00

If Boiler Run With Only Diesel

Total Equivalent Diesel Amoumt / (ltrs) 17,657.56

Cost for above Equivalent Diesel Amoumt / (Rs.)

1,889,359.02

Average Gross Profit from the Gasifire / (Rs.) 716,809.02

CO2 SAVING

Total CO2 Saving for a average month / (kg) 32,143.90

Total CO2 Saving for a average month / (T) 32.143

NO x SO x and other significant air emissions by type and weight

Not measured so far


51

The hotel uses the aerobic extended aeration method in treating its effluent at three

plants comes from the hotel rooms, staff rooms, kitchens and laundry and all other

small operations. An average of 300 M3 of waste water (Per Day) is discharged after

treating to the above mentioned standard. The water discharged is not sent to a

water body or any other environmentally sensitive area but 100% is reused whilst

4% of the water is recycled and sent to the toilet cisterns in the staff area. The sludge

is converted to compost to be used in the organic vegetable farm belongs to the

resort.

Total waste Water discharge by quality of Effluent and Volume

PLANT 01 -

Dambulla Wing

Water quality parameters Limits Before

treatment After treatment

Ph 6.0-8.5 Not measured 7

TSS / (mg per ltr) <50 Not measured 15

TDS (ppm) Not measured Not measured Not measured

BOD / (mg per ltr) <30 Not measured Less than 20

COD / (mg per ltr) <250 Not measured 60

Oil and Grease / (mg per ltr) <10 Not measured Less than 01

PLANT 02 -

Sigiriya Wing

Water quality parameters Limits Before treatment After treatment







PLANT 03 - New

Sigiriya Wing

Water quality parameteres Limits Before treatment After treatment








52

Total weight of waste by type and disposal method

Type of waste Disposal method Quantity (tons)

2017 2018 2017 2018

Non - hazardous

Wet Waste

Purchased by a

piggery owner as food

for pigs

238.58 247.83

Dry Waste Sold for

recycling/Reuse 26.84 24.88

Coconut shells Coverts to carbon by

the purchaser 3.44 2.57

Total quantity of non - hazardous waste 268.86 251.28

Hazardous Dry Waste

Transported across

the boundary and

land fill by the

buyer

0.91 0.88

Total quantity of hazardous waste 0.91 0.88

Total number and Volume of Significant Spills

No significant spills have been reported in the period under review.

Weight of transported, exported or treated waste deemed hazardous under the terms of the basel convention annex i,ii,iii and viii and percentage of transported waste ship internationally

Since the Resort does not generate significant amount of hazardous waste it is

transported across the boundary and land filled by the purchaser.

The sludge is converted to

compost


53

Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation

Material use

The hotel practices the 7R principle (Reject, Reduce, Reuse, Repair, Reclaim, Replace and Recycle) which is unique for the hotel and that reduces many of the adverse impacts to the society, environment and economy.

Water use

The hotel uses the ground water to minimize the adverse impacts to the biodiversity and as a social obligation. 95% of the water used are recycled or reused in ways of irrigation and sending back to the toilet cisterns.

Emissions

Hotel has already estimated the carbon footprint and a gasifier has been introduced to reduce the GHG and operational cost.

Effluents

All effluents are treated and used as compost.

Noise

Main noise creator is the DG set and the DG room has been installed with noise reducer and it meets the level accepted by ISO 14001 standard.

Solid Waste

All types of waste are applied with 7R principle and sorted out at the source itself. Segregated waste is sold to an outside recycler.

Application of 7R principle at Heritance Kandalama

Percentage of products sold and their packaging materials that are reclaimed by category

In the nature of the hotel operations, there are fewer amounts of products sold with a

packaging. However, although it has not measured, the Resort uses reclaimed

packaging materials in its operations


54

Monetary value of significant fines and total number of non-monetary sanctions for

non-compliance with environmental laws and regulations

No fines or non monitory sanctions have been reported in the period under review.

Total environmental protection expenditures and investments by type

Promotion of best practices for Sustainability Production and Consumption along the supply chain

Raw material suppliers have been given with standard specifications to use in

sourcing, transporting, storing products such as;

• Method of transport

• The volume to be transported at a time to reduce no of trips

• Numbers to be included in a Kilogram – Eg. 6 tomatoes per KG

• Purchase of bulks amounts for higher price to reduce multiple transportation

– Eg. LKR 5.00 extra per Kilo is paid for the suppliers who supply more than

20,000.00 Kgs at once.

Investment & Expenditure for Environment

Protection

2017

January-

December

2018

January-

December

Total Water Treatment cost 1,881,700 1,672,949

Total Pollution Prevention cost 858,846 1,051,734

Environment Protection license fee 8,415 10,965

Voluntary EMS/FSMS Audit & Certification fees 336,642 163,203

Total Amount 3,085,603 2,898,851

Educating suppliers on

sustainable transport and quality

Engage with Fuel Wood Suppliers


55

7.3 SOCIAL PERFORMANCE INDICATORS

Total workforce by employment type, employment contract and region

As a policy, Resort does not recruit/hire employees on part nor on seasonal basis.

The employees hire to the organization are based on full time basis. However, to

maintain the sustainability, hotel freezes recruitments/hires during the off peak

times of the business.

Following is the break down and analysis with a comparison to similar period of 2017

and 2018.

Graph 7 Graph 8

Item 2017 January-December 2018 January-December

No of full time employees 383 364

No of part time employees 0 0

No of supervised workers 383 364

No of non supervised

workers

0 0

Employees based on employment contract

Permanent 188 193

Contractual 161 142

Trainee 34 29


56

Graph 9

Total number and rate of employee turnover by age group, gender and region

Rate of Employee Turnover Graph 10

Turnover based on Age Group Graph 22

Turnover based on Gender Graph 23 Turnover based on Distance

Graph 24


57

Benefits provided to full-time employees that are not provided to temporary or part-time employees by major operations

The hotel recruits all the employees on full time basis although the seasonal

employment regulation is applicable to the tourism industry. However, the

permanent employees are given more benefits than the other workers regardless of

the category.

Common benefits provided to all employees

✓ Bonus/Exgratia, Service Charge

✓ Insurance cover for injuries/fatalities/disabilities/Hospitalization/invalidities

and deceases

✓ Benefits at the death of an employee, immediate family members

✓ Annual gift vouchers to purchase books for children

✓ Contribution for ETF/EPF, Loan on no interest

✓ Gifts at the marriage, Gift for first and second baby, Gift when starting the

education of children

✓ Gift when children of employees get though the grade five examinations

✓ Annual day outing with immediate family members

✓ Staff day once a year, Annual staff’ trip, Annual executives’ trip, Annual

supervisors’ trip

✓ Uniforms including shoes and PPEs for required operations,Three

Meals,Accommodation,Facilities for recreational activities for 100% of the staff

Special Benefits for permanent employees that are not provided for

other employees

✓ Reimbursement of tuition/exam/course fees on successful completion

✓ Maternity Leave, Annual Leave, Casual Leave

✓ Gratuity for employees who have completed full five years of service


58

Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advance on occupational health and safety programs

100% of the workforce is involved in some kind of joint management committee and

get involved in contributing for decision making etc.

Health, Safety and other committees Percentage of total

workforce represented Level where committee operates

2017 2018 2017/2018

First aid 18.28% 18% Middle Management ,Supervisors and

Operational level below

Trainers 13.05% 12.91% Middle Management ,Supervisors and


Management of Solid Waste (7R) and storage of

environmentally harmful substances 25% 25%

Management , Supervisors and


Social and cultural development 25% 25% Management , Supervisors and


Management of energy efficiency, green house gas

emissions, fresh water and waste water 25% 25%

Management , Supervisors and


Transport, air Quality protection and noise control 25% 25% Management , Supervisors and


Quality 2.30% 2% Middle Management ,Supervisors

Rates of Injury, Occupational Diseases, Lost Days and Absenteeism, and total Number of Work related Fatalities

Available Man Days based on Category

Graph 25


59

The total no of man days available is calculated based on the no of actual working

days for a month (22) which has amounted to 96,096 for the period under review

(22*12*383) & (22*12*364). No occupational diseases, fatalities, have been reported

in the period. The first aid level injuries are excluded in the report whilst the

unauthorized leave have been reported as lost days regardless for what reason the

leave has been utilized by the employees.

Education, Training, Counseling, Prevention and Risk-Control Programs in place to assist Workforce Members, Their Families or Community Members regarding Serious Diseases

The resort carries out training and awareness programmes to the community and

employees on prevention of Aids and improvement of environment/productivity

Average Hours of Training per Year per Employee by Employee Category

The training and development programmes are conducted base on the annual

training needs analysis which the results are derived from personal interest of all

employees, observations, suggestions from the management heads, performance

appraisals, other gaps created due to technology improvements, introduction of new

products, services, processes, systems. The below table illustrates on no of

programmes conducted during the reporting period and no of hours per employee on

category of employees against total no of employees were employed during the

reporting period.

No. of lost days based on category Graph 26


60

Employee category No of Training Hours

No of Training Hours

Per Employee

2017 2018 2017 2018

Executive 315:30:00 996:40:00 10:31:00 30:12:07

Supervisor/Clerical 1009:15:00 4395:30:00 14:01:03 63:42:10

Other 3767:15:00 11038:15:00 13:24:24 42:07:51

Total 5092:00:00 16430:25:00 13:17:42 45:08:19

Programs for Skills Management and Lifelong Learning that Support the continued Employability of Employees and assist them in Managing Career Endings

The private sector retirement age, based on National regulations has been set for 55

years, the Resort offers the extension for all employees passing the age of 55 to

continue the employability. On the other hand the employees are offered

employment opportunities in the overseas operations within the group of Aitken

Spence Hotel Holdings PLC as a cross exposure and to gain more knowledge of

No. of Training Hours Graph 27


61

diversified tourism environment to protect the continuity of the employment with no

interruptions to the career.

Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership and other indicators of diversity

Ratio of male to female of the total cadre is very low as 12:1 (336:28)due to many

geographical, educational, cultural reasons in the area that the Hotel is being

operated. However, the hotel takes maximum effort in maintaining equity in

diversified areas like region, gender, ethnic group etc. Because of that reason new

ladies accomodation also establish to continue the equity of both parties. Almost all

the employees are a member of Resort’s welfare society. Other than the chair person

who is the General Manager of the Organization, all officials are from a cross section

of the organization and it is a policy to have ladies in the committee whilst all

employees of the organization are given the membership of the society in order to

raise their opinion on the welfare activities, employee benefits etc. The Resort’s

welfare society meets on quarterly basis and AGM every year to select the team of

officials and committee members from various departments.

Public Policy Positions and participation in Public Policy Development and Lobbying

The management team which consists of an average of 33 are members of the Ceylon

Hotel School Graduate Association and the Vice President of Aitken Spence Hotel

Holdings PLC who is a previous General Managers was appointed as the President of

Ceylon Hotel School Graduate Association during the period under review.

Total value of Financial and in-kind contributions to Political Parties, Politicians, and related Institutions by Country. Nil

Monetary Value of Significant Fines and Total Number of Non-Monetary Sanctions for Non-Compliance with Laws and Regulations

No significant or minor fines have been posed against the organization during the period with regard to violation of social conditions.


62

Total Number of Incidents of Non-Compliance with Regulations and Voluntary Codes Concerning Health and Safety Impacts of Products and Service During Their Life Cycle, by Type of Outcomes. The critical areas of food and beverage items which are very sensitive to consumers

have been identified to conform to the voluntary international standard ISO 22000

while the boilers, steam generators, gas receivers, steam receivers are measured and

tested to comply with the national standard since the vulnerability remains high in

the areas. Hence, no non compliance, monitory or non monitory fines have been

imposed to the organization during the period according to the reviews .

Type of Products and Services Information Required by Procedures and Percentage of Significant Products and Services Subject to Such Information Requirements.

The jam produced in the small jam factory are distributed to the hotels belongs to

Aitken Spence Hotel Holdings PLC. The labeling is done to meet the requirement of

the food act of Sri Lanka and the production meets the HACCP/ISO 22000 standard.

Total Number of Incidents of Non-Compliance with Regulations and

Voluntary Codes Concerning Product and Service Information and

Labeling, by Type of Outcomes

Other than the minor NCRs for environment management system and food safety

management system, no fines or warning given by the voluntary codes verifying

organizations and regulatory bodies during the period under review

Practices Related to Customer Satisfaction, Including Results of Surveys

Measuring Customer Satisfaction

As any of the organizations in the world, Heritance Kandalama believes in customer

preference is a key to the success of any kind of Hotels or Tourism operation. Hence,

the Resort applies few methods to get the feedback of the customers and consumers

to plan and organize future developments and devise changes for prevailing products

and services.

The questionnaire provided in each room brings many valuable outputs whilst

guests’ comments books give another choice for guests to throw their ideas,

complaints and suggestions. Below graph depicts the representation of the analyzed

complaints (Only complaints) from all the comment sheets provided in the rooms

during the period under review .

Programs for Adherence to Laws, Standards, and Voluntary Codes

Related to Marketing Communications, Including Advertising,

Promotion and Sponsorship

Marketing of alcohol and tobacco products in Sri Lanka should align the national

laws and the Resort is meeting those standards and has never disqualified by

regulations or voluntary codes.


63

Total Number of Incidents of Non-Compliance with Regulations and

Voluntary Codes Concerning Marketing Communications, Including

Advertising, Promotion and Sponsorship by Type of Outcomes

The marketing campaigns of the resort are done in Sri Lankan and overseas. The

resort takes utmost care in marketing the property to potential customers mainly

through electronic media. The increasing price strategy and value added products

and services have mainly brought the business to the peak. In marketing, the hotel

has been always meeting the best standard which has grown beyond national law.

The resort has not been punished/taken any negative actions in the period of review

nor through the history of its existence since the customer base has been developed

through word of mouth than any other.

Monetary Value of Significant Fines for Noncompliance with Laws and

Regulations Concerning the Provision and Use of Products and Services

No fines reported during the period under review therefore no cost has been incurred

by the resort during the period.

Life Cycle Stages in which Health and Safety impacts of Products and

Services are assessed for improvement and Percentage of Significant

Products and Service Categories subject to such Procedures

No products and services are researched, developed, transported, stored or sold by

the organization which has significant negative impacts towards society and

environment.


64

8 Bibliography

www.sltda.gov.lk/statistics

www.wttc.org

Monthly Financial Information – Heritance Kandalama

Monthly Energy/Water/Effluent Analysis Records

Monthly HR Indicator Reports

Monthly EMR Data Records

Monthly Oracle Finance Report

Monthly Opera PMS Reports

http://www.sltda.gov.lk/statistics

http://www.wttc.org/

The Inh - Aitken Spence · 2019-02-22 · Heritance Kandalama Being the strongest pioneer for the Eco-friendly resort, its quality and success are rewarded and recognized many times

Documents