Dhaham Constructions Company PLC

Analysis of Financial and non-financial information

Director’s Report
Introduction
This report aim to give a brief understanding about company financial situation. How
management and collective decisions make impact on the shareholders interest. What are the
future advantages or dis advantages arisen from those decisions and activities. Then what are the
suggestions to take in the future for the company successful operations. Discuss the ideas of what
are the necessary steps to take to overcome the covid19 pandemic situation impacted to the
company.

Dhaham Constructions Company PLC., is a hypothetical company in Sri Lanka. The

company main subject is undertaking construction on behalf of government and private
sector since year 2001.

Followings are Dhaham Company financial reports. Here are the results the statements showing
us. We will discuss this statements to understand the decisions made by us is clearly
implemented. The decisions of marketing, human resource, employee training, information
technology enhancing policy, construction strategy and financial strategy etc.

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 Content

 Analyzing financial information of Dhaham Construction Company PLC

incorporating nonfinancial data (qualitative information) also a comparison
between financial analyses of Company with previous year financial data.

 With the results of financial and non-financial analysis, discuss about

- Changes in business environment - Financial Strategy
- Marketing strategy - Production strategy
- IT Strategy – Human Resource strategy

 Conclusion & Recommendations for Dhaham company growth and to cope up with
uncertainties in business environment including Covid 19 pandemic.

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STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 2019

2019 2018

3
STATEMENT OF FINANCIAL POSITION 2019

2019 2018

4
STATEMENT OF CASH FLOWS 2019

2019 2018

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Analyzing company financial information
Above given statements of Dhaham Construction Company revels important information .we can
categorize as fallows.

Sales
We have good sales figure in 2019 it is Rs.20,448,189,559 it is Rs.2,823,584,799 increase from
last year figure Rs. 17,624,604,760. That was 16.02% increase. If we take 2018 as a base year
2019 figure is 116 in according to the 2018. Good sales technics, customer service and excel
marketing activities are main pillars of this success. Last year sales was 56.41% with comparison
to the cost of sales. This year it was little increase by 0.15% figure is 56.56%.

Cost of sales
In 2018 cost of sales was Rs.13.647,549,913 but in the year 2019 it was Rs.15,716,388,314 and
the increase was Rs.2,068,838,401 that is 15.15 % increase with comparison to the base year of
2018. The company has manage to increase sales percentage from 0.87% than cost of sales.

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# above illustration shows Dhaham Company horizontal analysis of the profit and loss account of
2019 with comparing 2018 financial year data.
Revenue and gross profit increased by 16.02% and 18.97% respectively. Meanwhile cost of sales
has increased 15.15% according to the 2018 financial data. Revenue increased is higher than the
cost increased by 0.87%.

Human Resource Development

In 2019 other income dropped by 8.34% than 2018. Administrative cost increased because they
have stared recruiting new employees because expansion of operations. They give trainings to
new employee to fit the state of the art construction site. All the employees insured with
comprehensive cover of health at the site. And it is more important to have safety precautions of
the operating environment. Last year no mortality and no sever accidents because employee good
education and trainings. Trainings more valuable to improve savings and efficiency.

Financial Policy
Strategically they achieved savings by lowering other expenses by almost 17%. Because of that
operation profit gone up by 16.05%. Interest payments is burden to company where cannot
predict the rates because of instability of the economy. They have planned to right off bank
permanent over drafts in 2019 because of that the net financial cost increased by 256.86%.
Further they have satisfy equity accounted investees by giving away 154.89% higher profit for
them when comparing to the year 2018. And total net profit of the year has been grown up by
7.65%.

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Dhaham Company’s Financial position Statement
Vertical Analysis of Assets 2019 with 2018

Dhaham Company’s Financial position Statement

Vertical Analysis of Equity and Liabilities 2019 with 2018

8
Horizontal Analysis of Dhaham Company Financial Position
Statement 2019

We have passed a good year of 2019. Because with our raised marketing activities we got more
contracts here you can see the investment Properties Wok in Progress have increased 177.8%.
This make future potential of more profits. This figure shows customers trust on us.
All investments with reputed clients have legal contracts .because of that there is less risk of
credit and amount due.

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Fallowing is the Dhaham Company Cash flows Statement
2019 in Vertical Analysis

Fallowing is the Dhaham Company Cash flows Statement

2019 in Horizontal Analysis

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By considering above two analysis we can take a look about how cash handle in Dhaham
Company. Profit before tax we take as basement to illustrate the situation. According to the
report the profit before tax is increased by 7.9% than 2018. But total cash flows generated from
operating activities has goes down by 37.0% by comparison to year 2018. But net cash flows
from investing activities shows positive number considering to the past year. After all net cash
and cash equivalents increased 137.4% than last year is positive last year it was negative number.
In 2019 the number is Rs.580, 001,126.00.
Financial policy illustrations
According to the financial policy this year we have paid interest that increased 588.7% compare
to the 2018 and it is 20.6% from the profit before tax.
Human resource development
Because of marketing department get more constructions we have demand for high skill
knowledge. We came to the contract with the existing employee who planned to resign in 2019
and stop the leaving because of that we increase the efficiency because they have good
knowledge and then reduce the gratuity payments.

#. Now we look at the financial ratios that is more important

to get management decisions.
Ratios
1. Current Ratio
This ratio shows the relationship between current assets and current liabilities. The ideal
recommendation is keep two assets to each one liability.

Current Ratio= Current assets/Current Liabilities

Dhaham Company Current Ratio is 2.26 in 2019 and 2.66 was 2018. In year 2019 the ratio
decrease but it is good because excessive investment in working capital that may not producing
profits.
2. Quick Test Ratio
This is important to a company because this shows in emergency can the entity meet the
obligations immediately.
Quick Ratio= Quick Assets/ Current liabilities
Quick assets means current assets minus inventory and prepayments because this ratio aim is
give a measure of liquidity.
Dhaham Company Quick Ratio is 1.66 in 2019 and 2.31 was 2018. In year 2019 the ratio
decrease but it is good because excessive investment in working Capital that may not producing

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profits. Dhaham Company come to the fine turning adjustments of their working capital ratios. It
is good sign of alertness of the financial situation.
3. Receivable (Debtors) Turnover ratio.
This measures the average receivable balance is converted into cash during the year. It is
also considered a measure of the efficiency of credit granting and collection policies that have
establish by Dhaham Construction Company.
Net credit sales= All constructions we are carrying out with contract. That means only 20% cash
at stat and others will received as we completing the construction. Government constructions will
carries out also in contract basis. To pass the full amount we have to finish the job first. Because
of that 80% of our sales are credit sales.
Average Debtors= (2019 debtors+2018 debtors)/2
Receivable turnover= Net credit Sales/average Debtors
= Rs.16358551647/ Rs.7698495119
= 2.124

Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many
times a business can turn its accounts receivable into cash during a period. In other words, the
accounts receivable turnover ratio measures how many times a business can collect its average
accounts receivable during the year.
Dhaham Construction Company collects its average credits 2.124 times a year. That means the
company would have turned its accounts receivable almost twice because it collected twice the
amount of average receivables.
In another words we can see the ratio with the view of days
Average collection period =365/2.124
The Dhaham Company collect accounts receivables in every 172 days.

4. Inventory Turnover Ratio

The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is
managed by comparing cost of goods sold with average inventory for a period.
Inventory Turnover ratio=cost of goods sold/average inventory
=4.08

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In other words the inventory make four times contribution to the sales. Within the year average
inventory rotate and became sales in for times. The inventory turnover ratio is an efficiency ratio
that shows how effectively inventory is managed by comparing cost of goods sold with average
inventory for a period. This measures how many times average inventory is “turned” or sold
during a period. In other words, it measures how many times a company sold its total average
inventory rupees amount during the year.
Inventory Turnover days=365/inventory Turnover ratio
= 89.02
The above figure shows in every 90 days average inventory rupee amount being sold as sale.in
this kind of a business it is fair to have 90 days because high inflation rates and foreign exchange
fluctuations will make extra cost we can reduce that by holding inventories for three months
and we do not have cost to hold inventories. Because we hold most of the inventories in work-in-
progress construction sites.
5. Creditors Turnover Ratio
In Dhaham Company all Purchases are Credit Purchases. We use total purchases to calculate
Creditors turnover ratio.
Total purchases = cost of goods sold + last Inventory-beginning inventory
= Rs.18, 653,419,011
Average Creditors= (Beginning creditors + last Creditors)/2
= Rs.6, 609,893,998
Creditors Turnover Ratio= Total Purchases/Average Creditors
=2.82
This ratio helps creditors analyze the liquidity of a company by gauging how easily a company
can pay off its current suppliers and vendors. Within the year Creditors payments received 2.82
times. If another word in every 130 days they get paid for their Credit accounts.
6. Debit to Equity Ratio
The ratio is used to evaluate a company's financial leverage. The D/E ratio is an important metric
used in corporate finance. It is a measure of the degree to which a company is financing its
operations through debt versus wholly-owned funds. More specifically, it reflects the ability of
shareholder equity to cover all outstanding debts in the event of a business downturn.

Debt to Equity Ratio= Total Liabilities/Total share Holders Equity

= 0.67

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Lower than one ratio result shows Dhaham Company can cover total Liabilities. Therefore the
less risk to be assumed by creditors.
7. Debt Ratio
Debt Ratio=Total Liabilities/ Total Assets
= 0.402
This lower figure says in the event of liquidation of the firm; there are greater assets protection to
the creditors
8. Equity Ratio
This ratio is referred as the relationship of the assets and proprietorship. The equity ratio
highlights two important financial concepts of a solvent and sustainable business. The first
component shows how much of the total company assets are owned outright by the investors. In
other words, after all of the liabilities are paid off, the investors will end up with the remaining
assets.

Equity Ratio= Total Share Holders Equity/Total assets

= 0.59
In Dhaham Company the other parties hold 41% of company assets.
9. Interest Coverage Ratio
The interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a
company can pay interest on its outstanding debt. The interest coverage ratio may be calculated
by dividing a company's earnings before interest and taxes (EBIT) during a given period by the
company's interest payments due within the same period.
Interest Coverage Ratio= Earnings before interest and tax/ Interest Expenses
= 22.32
Overall, the interest coverage ratio is a very good assessment of a company’s short-term
financial health. Dhaham Company can cover up more than 22 times its interest expenditure by
EBIT.

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10. Profit Margin Analysis

10.1 Gross Profit Margin= Gross Profit/Net sales Revenue

= 0.231
Each sales the Company made they get gross profit of 23%.
10.2 Net Profit Margin = Net Profit After tax/Net Sales Revenue
= 0.142
Each sales the Company made they get net profit of 14%.

11. Assets Turnover Ratio

In this ratio we measure how efficiently assets are used to generate sales revenue.
Assets Turnover Ratio= Net sales Revenue/Average Total Assets
= 20,448,189,559 / 33,194,560,528
= 0.61

The asset turnover ratio measures the value of a company's sales or revenues relative to the value
of its assets. The asset turnover ratio can be used as an indicator of the efficiency with which a
company is using its assets to generate revenue.
Total assets used 61% to make sales in Dhaham Constructions PLC. More than 50% is
acceptable in this kind of huge industry.
12. Rate of return on total Assets Ratio
This is an attempt to Measure the rate of return earned by management through activities
and is determined by dividing the sum of operating profit before tax plus interest expense by
average total assets for the year.
Return on Assets = EBIT/Average Total Assets.
= 3,352,208,040/33,194,560,528
= 0.100
= 10%
Dhaham Construction Company have ROA 10% this is good. Good management practice need
to achieve this level .this indicate suitable utilization of assets.

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Return on assets gives an indication of the capital intensity of the company, which will depend
on the industry; companies that require large initial investments will generally have lower return
on assets. ROAs over 5% are generally considered good.
13. Return on Ordinary Shareholders Equity
This measures of how well the firm’s resources are being used to generate profits for the
ordinary shareholder. The ratio will show how much the company earned for each rupee invested
on ordinary shareholders funds.
During the year Dhaham Company has not issued ordinary shares and no dilution of earning per
share.
There have been no other transactions involving ordinary shares or potential ordinary shares
between the Reporting Date and the date of authorization of these Financial Statements.
Return on Ordinary Shareholders
Equity = Net profit-Preference Dividend
Average ordinary Shareholders Equity
= 2,746,183,683/19,772,955,174
=0.1388
14. Earnings per Share
EPS is one of most used ratio to decide whether to buy Dhaham Construction Company
Shares or not in these years company performing well even in Sri Lanka Economy goes down
turn. Let calculate the amount.

Earnings per Share= Net profit-Preference Dividend

Weighted Average Number of Ordinary Share outstanding
= 2,746,183,683/ 1,000,000,000
= 2.74
Basic earnings per share amounts are calculated by dividing the net profit attributable to equity
holders of the Dhaham Construction PLC by the weighted average number of ordinary shares in
issue during the year.
This means if you have invested with Dhaham Construction PLC your return is 270%

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15. Price Earnings Ratio
This ratio indicate how much an investor would have to pay in the market place each
rupee of earnings. Since Dhaham Construction PLC is in growing stage of Sri Lanka
infrastructures and constructions business this ratio is favorable to investors.

Price Earnings Ratio = Market Price per Ordinary share/ Earnings per Share
= Rs.9/2.74
= 3.33
16. Earnings Yield
Earnings yield indicates the average rate of return available to a prospective investor if an
investment is made in the Dhaham Construction PLC’s Shares at the Market Price.

Earnings Yield Ratio = Earnings per Share /Market Price per Ordinary share
= 2.70/Rs.9
= 0.3
They receive 30% more yield from the Company.
17. Dividend Yield
This ratio is normally calculated by an investor who is acquiring ordinary shares
primarily for dividends rather than for appreciation in the market price of the shares.
Dividend Yield= Dividend per Ordinary share/ market price per share
= 1.50/ 9
= 0.166
This is percentage wise is more meaningful because they got 16.66% yield for investing in
ordinary shares.

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# Analyzing Ratios with Past year Performance
 This kind of appraisal is need to understand past performance main points.
 This will help to further improvements of sections of the organization
 It will guide the management to understand the failures
 This will help to evaluate past year decisions
 This will shape the further performance of the Company.

This is the Horizontal Analysis of Liquidity Ratios

We have analysis Current ratio ideal stage is more than 2.25 we try to keep that because no need
to money to stagnate. With using strategical financial management we fund the money to
ongoing constructions to while stabilizing the current ratio and quick ratio.

Horizontal Analysis of Efficiency Ratios

Trade receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. Other financial nature receivables are recognized as other
receivables. If collection is expected in one year or less (or in the normal operating cycle of the
business if longer), they are classified as current assets. If not, they are presented as non-current
assets. Because we are doing projects some projects last for more than year. Therefore the

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receivable ratio and inventory ratio and creditors’ ratio and days are extended for comparing with
the other industry.
In 2019 Dhaham Construction Company PLC got favorable number in receivables ratio and two
days add to the receivable turnover days. Because our sales increase and average debtors
increase.

Creditors turnover ratio we can see there is not a significant change because we run our
businesses smoothly with the quality guide lines fixed to this kind of an industry. We have good
ration ship with suppliers we have foreign and local suppliers .we came with them an agreement
for suppling and payments settlements.

Horizontal Analysis of Long Term Solvency Ratios

Interest rate risk in respect of surplus cash is managed by making deposits with suitable financial
institutions.
In 2019 company less the risk of debt to Equity ratio by 1.47%. Also got strategically reduce the
debt Ratio by 0.99%. Because of the trust of the company and received more constructions our
equity basin has expanded with more retained earnings and make more investments as Non-
controlling Interest because of that in 2019 equity ratio increased.
In Interest coverage Ratio it is good at 3 to 4 times cover up considering to the Earnings before
tax and interest. This scenario still Dhaham Company shows good indicator can trust for long
term to facilitation from any financial product to offer. This is because they have good profit.

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Horizontal Analysis of Profitability Ratios

Road and Highway construction — significant revenue growth was mainly fueled by the Stage 2
of the Central Expressway which was in full swing during the year with a major portion of work
being completed. We completed around 65% of our scope of work during the year and the
project is due to be completed and handed over by 2020. Because of that our Gross Profit Margin
has increased.
Positive impact of significant boost in the revenue towards the gross profit has been offset by the
increased cost of sales at the same pace. Despite the growth in the operational activities with
higher revenue reported, at the Company level, administration and other expenses as a
percentage of revenue remained at increase. This emphasized the Management effort on reducing
the Company’s overall overhead costs by improving the efficiency and productivity of operations
via efficiently managing the micro factors of the Company with special focus on improving
efficiency of “procurement activities” for better working capital management. For above reasons
our net profit margin goes down by 1.39%.
ROE is the final barometer of financial performance and the financial position. Amidst
continuity of the macro challenges similar to the previous reporting period, as a forerunner in the
use of value engineered construction technologies and innovations with more focus towards
improving the efficiency and productivity, Company has reported a positive increase of the
overall ROE.
With the strategies implemented to ensure proper asset utilization via procurement strategies and
with the expected increase of dividend income from subsidiary companies, ROE is expected to
trend upwards in the future.
We will continue to provide the highest return on investment to our shareholders as a reward for
their trust and loyalty they have placed on Dhaham Constructions. We plan to achieve a higher
profit after tax to invest in tax-free ventures with a view to declare tax free dividends. Our
dividend policy of declaring 40% to 50% out of Company profits will remain unchanged. With a

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view to better manage the working capital, we will strengthen the treasury management system
in the Company. Further, we will strengthen internal control procedures and closely monitor the
performance of our subsidiaries and our investments.

Horizontal Analysis of Market Based Ratios

At the Company level, improving the efficiency and productivity of operations remained a key
priority during the year and further savings in cost and time can be achieved through this.
Another key focus area was improving efficiency of “procurement activities” for better working
capital management. We continue to explore more areas of improving procurement.
These strategies helped the Management to keep reasonable profit margin and despite the
continuity of industry challenges from the previous year to the current year too.
Earnings Yield is shows good increment and people can invest with confident. During the year
the Company has not issued ordinary shares and no dilution of earnings per share.

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#. Last year Business environmental changers
Tax support from Sri Lankan Government
The concessionary tax rate of 12% on construction income was removed with effect from 1 April
2018.The income tax concession given for the manufacturing of construction-related material
ended on 31 March 2018.
Construction activities are now taxed at 28% as opposed to the concessionary tax rate of 12%
prior to 2018 Removal of NBT from construction activities as suggested by the 2019 budget will
have a positive impact on projects
Seasonal and other weather issues
Extreme weather conditions affecting the progress of construction-related activities

Economy and political Environmental Changers in Global

Global growth has moderated in 2018 and grew at an estimated 3.6% according to World
Economic Outlook 2019 and is projected to decline to 3.3% in 2019. Global economic activity
was impacted by trade tensions between China and the US, Brexit and its implications on
Europe, and a strong US Dollar leading to a tightening of financial policy in the emerging
markets. Global economic activity within the year was supported by advanced economies such as
the US, UK, and Japan. The global economy was characterized by a softening of industrial
production and slowing down of trade. Further, global energy prices declined by 17%.
Sri Lankan Economy
Sri Lanka underwent a challenging year with GDP growth reaching 3.2% for the year. The
growth momentum in the first two quarters slowed down in the last two due to political
instability. However, recovery in the agriculture and services sector and advances in the export
and tourism sectors will drive growth in 2019. This growth was largely supported by services
activities that expanded by 4.7% and the recovery in agriculture activities, which recorded a
growth of 4.8%. Industry activities slowed down significantly to 0.9% during the year, mainly as
a result of the contraction in construction. The per capita GDP was recorded at USD 4,102 in
2018, which was marginally lower than in the previous year. Devaluation of the Rupee impacting
margins.
Construction industry experienced only a marginal 1.3% growth in 2018 and if this slow growth
momentum continues local companies too could be affected funding constrains due to Treasury
not having sufficient funds can also influence the progress of infrastructure development
activities
Interest rate specifies the borrowing capacity and influences the investment process especially if
the projects are debt financed Depreciation of the Sri Lankan Rupee has led to foreign exchange
losses and high cost of imports for raw materials such as cement and steel.

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Competition
Competition from foreign construction firms. For Sri Lanka infrastructure developments foreign
banks helped because of that our government should allow to enter that foreign country
construction Company to bid in Sri Lanka development process because of that the competition
is higher.

Ecological
issues Concerns on preventing environmental pollution (Air, water, and land pollution)
Continuation and renewal of operating licenses based on the stated rules and regulations of
Central Environmental Authority (CEA) and Local Authorities Current legislations Laws stated
by the Labour Authority relating to working hours, minimum wage rates, Employee Provident
Fund, Employee Trust Fund, and health and safety of employees Laws and regulations relating to
obtaining construction licenses, approval of plans etc.

International legislations (Global influence)

The open economy policy adapted by Sri Lanka and the encouragement to improve Foreign
Direct Investments has attracted the participation of international firms, especially in the
construction sector Local Companies including construction companies are bound by the
International Treaties that Sri Lanka has pledged to uphold Regulatory bodies and processes All
industry participants should confirm to the specifications stated by the Construction Industry
Development Authority (CIDA) The CIDA has specified grading for construction companies and
the renewal of grading will occur by observing compliance with the established rules and
regulations
Government policies, terms, and changes Infrastructure development is heavily dependent on the
policy directions set out by the GoSL Funding, grants, and initiatives The tendency to
increasingly engage in multilateral and bilateral funded projects will improve the flow of foreign
funds and grants to the country Payment terms negotiated by the GoSL including the grace
period, interest rate, etc. will have a direct impact on construction contracts Market lobbying
groups The influence of market lobbying groups in determining: The sustainable utilisation of
natural resources Protection of human rights Prevention of environmental damages through air,
water, or land pollution .

Sociological Environmental Factors

The emergence of the construction boom and high degree of attention towards condominium
developments in the country will favour the building construction sector. Increase in urbanisation

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has created opportunities for construction companies specially for construction of condominium
apartments. Ageing population creating limitations for the potential workforce especially
engaging in construction-related works. Influence of the public media by bringing to limelight
pressing issues of the general public like housing, water, electricity, etc. is creating more
opportunities for construction activities and companies.

Technological Environmental Factors

In last year Development of modern techniques that: Reduce the use of natural resources and raw
materials Reduce pollution Reduces cost and speeds up construction. Development of
sophisticated software. Especially for the purposes of designing which in turn result in accuracy
and speed. The construction industry is moving from being a strictly labor incentive one to a
more knowledge incentive one Emerging technological advances used throughout the world to
foster efficient construction are now introduced and used in Sri Lanka. Heavy emphasis on
research and development to further initiate technological advancements and construction
materials. Construction related products and services don’t face the problem of having a shorter
life cycle. Most of the products are perceived as long-term investments. However there is
technological obsolescence of machinery and methods used in the construction processes.

Financial Strategy
Because of our financial strategy we paid our shot term loans and significantly cut down the
Bank overdraft in 2018 the bank overdraft was 412,594,547.00 and fill the 14% portion from
liabilities. But in 2019 it was reduced to 8% and figure was 278,198,636.00.
Because of that we can improve the profit by reducing finance cost.
Improving efficiency and productivity rationalized the procurement function including those of
Project Management Divisions to achieve cost and quantity savings. All known provisions have
been accounted for in preparing the Financial Statements. The expense relating to provision is
presented in Income Statement net of any reimbursement.
Close Family Members are Key Management Personnel related parties to the entity. There were
no transactions with CFM during the year.
Loans and borrowings are initially recognized at fair value net of directly attributable transaction
costs. Subsequently they are measured at amortized cost.

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Marketing strategy
Because of our marketing strategy the revenue increased by 16% percent and figure was
20,448,189,559.00
To get more Projects we have to have good reputation in the industry we market our key
personnel and building Key Management Team as a Dhaham Company Brands.
And we engage in a fair competition. We think industry as a whole and our performance will
make belief in customers mind and industry get more opportunities. Then we can have benefits
from that because we are key player of this industry.
For us to be a leader in knowledge-based value engineering, we need to liaise with companies
specializing in particular areas enabling a valuable knowledge transfer process. They also
collectively expect us to safeguard their interests honoring their obligation on time while
building progressive sustainable relationships.
A clear strategic direction is essential to the long-term sustainability of our Company. Thus, our
medium-term strategy focuses on improving our core business lines. However, in the long term,
we recognize that diversification and synergy between different business lines will be key to take
the next step in our corporate journey.
One of our principal strengths is our vertical integration of construction arm of the Group which
has led to increasing market share, self-reliance, and strengthening our leadership position in the
industry.
By publishing all our events and timely updating the news we are going to gather more stock
purchases at Colombo Stock Exchange.

Production strategy
We have 18 production plants in island. LKR 705 Mn. Investment in property, plant, and
equipment. LKR 286 Mn. Invested in heavy machinery and equipment fleet.
We are a forerunner in the application of innovative technology in the field and in the
introduction of new and unconventional construction methods to the Sri Lankan industry. These
value engineering solutions have resulted in time and cost saving. For example, the alternative
beam casting method adopted for the Central Expressway Project has enabled us to remain ahead
of schedule along with a reduction in construction cost. We also continued to use technologies
such as HDD, Diaphragm walls, Micro trenching, Post tensioning, and others in our projects.
Our systems and internal controls are compliant with international best practices and we leverage
the latest technology in the construction field.
Completed projects with least number of defects Speedy delivery of projects at a lesser cost
solutions that are less costly and speedy such as the diaphragm wall, prefabricated bridges, post-
tensioning, HDD, micro trenching, etc.

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Information Technology Strategy
Virtual realization on projects before implementation. Make computer added designs before
starting that make us to lower the wastage.
LKR 20.5 Mn. invested to upgrade integrated information and planning systems that was
included in machinery and equipment.
We are currently in the process of developing a new Human Resource Management system that
will provide integrated HR information. This system will improve the efficiency of the HR
department, enhance employee experience, and increase accuracy while making data collection
and data analysis easier.
The implementation of “SAP Fiori”, which provides a set of applications on compatible hand-
held devices enabling to perform certain business functions, was also completed during the year.
“SAP Fiori” is user friendly, more secured, and more efficient compared to the existing system.
It facilitates a faster approval process and hence decision-making.
The implementation of the Document Management System was completed during the year. This
system is used to track, manage, store documents and to reduce the usage of paper.

Human Resource Strategy

186 internal and external training programs conducted .because of that our administrative cost
increase by 21% but we consider it as an investment. Total staff and laborers 2,458.
We maintain high standards of ethics and integrity being an example to the whole community.
We have a zero tolerance policy for corruption and unethical behavior. Our policy in this regard
is clearly laid down in the Dhaham Constructions Company PLC code of ethics. All new
employees are given an orientation programme where they are introduced to the Company
culture and our values, systems, and processes. Further, our policy on disciplinary management
and annual core team meeting headed by the MD reinforces the addressing of ethical issues,
disciplinary issues, and conflicts of interest.
Our employees function as ambassadors of Access Engineering and we are blessed with a team
of motivated, committed, and well-rounded professionals who are at the heart of all our
operations. We in turn give the utmost priority to our employees by investing in them and
empowering them to grow and excel in a rapidly changing business environment.
There is a healthy engagement between our team and the Management where our employees are
aligned with our corporate values to fulfil our strategic objectives. We empower our employees
by fostering learning and development within the workplace to spur collaboration that cuts
across traditional boundaries.

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All our employees are offered equal opportunities based on their skills. As an equal opportunity
employer, we do not discriminate based on gender, race, religion, or ethnicity. Further, we
maintain an equal ratio of basic salary remuneration between men and women. Dhaham
Company employees are not covered under the collective bargaining agreement and there are no
trade unions operating within Dhaham Company. We take into account the views of our
employees when implementing significant operational changes and have in place a minimum
notice period which is specifically mentioned in the employee handbook.

#. Conclusion & Recommendations for Dhaham company

growth and to cope up with uncertainties in business
environment including Covid 19 pandemic.

The economy of any country runs on two major arms, the Manufacturing Industry and the
Service Industry. With a ‘complete lockdown’ in the country due to coronavirus, 90% of the
Manufacturing Industry has shut down and the supply chain severely affected. This means one
arm of the country’s economy is disabled. This would ultimately transform in to huge losses
once the lockdown is removed. Construction is part of this process and somewhere along the
chain we as construction industry stakeholders will also be facing the brunt of it.
The spread of the virus and getting it under control is only part of the issue: the aftermath of the
epidemic is highly unpredictable and the current forecast of a world-wide recession will certainly
impact on the construction industry adversely, especially in Sri Lanka, where the industry has not
recovered from the Easter Sunday tragedy of 2019. When other sectors such as foreign
employment, apparel industry and tourism will take precedence, construction contractors and
consultants will be adversely affected.
The contribution by the Construction industry to the GDP and Employment generation is about
8%. Gross Domestic Capital Formation contribution is about 42%.
The construction industry employs over 1 million people of which a majority are laborers and
semi-skilled workers. Mostly, they belong to the lower echelon in society and are the sole wage
earners of the family.
Above information shows how vital is the industry to Sri Lanka. We are key player of Sri Lanka.
But we face major draw-backs with Covid-19 Situation.
Using regular meetings is very essential to continue the work process therefore using technology
and keeping the distance we need plan meetings.
New business taking is less possible in this situation where we have to use minimum work force
to complete on-going projects

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Our machines can be damage if we have stop working for long time and we should do at least
minimum operations using the machines and equipment.
I suggest to do carry out comprehensive research studies on the construction industry to take
rational decisions based on accurate information.
Less credit in doing business than last year. Need to reduce workforce.
As production output is expected to decrease by 20-40%, investment in public infrastructure is
likely to fall off the table. Such development has the potential to hit hard on contractors
specialized in non-viable public infrastructure. Because of that near future we need to diversify
our business to allowing small constructions projects to acceptable by our Company.
Develop relationship than before with employees, suppliers and clients.
We can’t have two people working closely together unless they have an increased level of
Personal Protection Equipment. So that’s all going to affect the crews and their ability to work at
a normal pace. Because of that supply virus protection equipment to workers.
Reduce hostel facilities at construction sites and encourage people to come to work from home.
And recruit workers from nearby.

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