Highlights of NLB’s heritage

In the 53-year journey, the National Lotteries Board marks a remarkable year in 2016 and is progressing with a vision to be a model business organisation in the Government sector.

Established in 1963 by the Finance Act No 11 of 1963, NLB, as it’s popularly known now, was enjoying a monopoly on lottery sales in Sri Lanka until a competitor was introduced to the market. Both being state agencies enjoying similar perks and privileges, NLB for the first time faced competition in the field of lotteries but managed to keep its position as the market leader. Today NLB holds 57% of the lottery market.

Over the years NLB has seen a growth in business. Having commenced business with marketing a single lottery ticket, today, it has nine passive and two instant lotteries within its portfolio. However, the year 2014 though it showed a growth in the business failed to make a profit mainly due to over expenditure.

The year 2015 started with a significant change in the country’s political fabric and the challenge for the new administration was to make every effort to arrest the declining profit. An aggressive marketing campaign was introduced with the aim of achieving targets.

Recent innovations and developments 

In order to bring in fresh ideas and innovative thinking, advertising division was re-named as marketing division, engaging new creative agencies for advertising products, introducing market research, training employees, new product mix, bringing competition among the district dealers by introducing the Mahathma Award for the ‘Best Dealer of the Year’ were some of the major decisions taken. These innovations were coupled with some technological modification as well.

Performance of the Board

NLB, functions under the preview of the Ministry of Finance and the Minister of Finance being the first professional accountant to be a Cabinet Minister and he drives the philosophy of ‘value creation’ at the heart of managing an enterprise. He has given a very strict mandate to the Board to ensure the Board fully supports the development initiatives of the country and avoid all wasteful expenditure.

Top management/directorate of NLB was appointed from February 2015. The board functions under the leadership of a full time, professional chairperson leading form the front. The other board members include a chairman of a highly recognised, large business conglomerate, a senior chartered accountant with decades of experience and a highly qualified treasury representative and a full time, hands on working director.

The top management team was strengthened to include an additional General Manager to strengthen the sales department and to drive implementation and a Chief Marketing Officer position was created to bring about much needed ‘market and customer orientation’ and to craft and implement competitive strategies.

Management philosophy

Governing and leading the organisation as a profitable organisation that places socially responsible profitability, making optimum use of the resources available and an equitable stakeholder satisfaction.

Eradication of waste and corruption, good governance, efficient management of resources and participatory decision making are the main elements of management philosophy.

Groups of stakeholders and satisfaction 

Government of Sri Lanka as the sole owners of NLB

•     Increase in tax revenue
•     During the two years of existence of the new Board, that is during 2015 and 2016, NLB has contributed per year an additional sum of Rs. 600 million on average, as additional VAT, NBT and Income Tax
•     While increase in contributions to the consolidation fund in 2015 to 303 million, the income in 2016 expanded to Rs. 920 million. 
•     To the distribution chain consisting of district dealers, agents and sellers
•     The increase in sales for the first two years compared to the previous year is over 15% per annum, that results in additional income to all members in our supply chain that exceed 15,000 in number
•     Additionally NLB introduced an insurance cover for medical and accidents for the sellers who are at the lowest level in the supply channel that mostly constitute very deserving segments of our society.
•     Additionally for the first time, we also recognised excellence of employees and the supply chain by way of the ‘Mahathma Award’
•     ‘Diriya Vanitha Saviya’ project was introduced this year to uplift the livelihood of 1,000 women. 
• Valued employees
•     Enjoy one of the best remuneration packages in the public sector that also include incentive payments that again results in additional and growing income.
•     Employees work round the clock by having lotteries on all seven days of the week that include multiple draws on several days thereby creating an example of a hard working public sector organisation.

Valued customers 

The most important segment that includes all citizens from all over in our island nation; they have the opportunity to win substantial prizes that will make a real difference in their lives. In 2016 over 39 super prize winners with prize monies exceeding Rs. 1 billion; a very noble satisfaction that whenever, you buy NLB you will be indirectly contributing to some of our country’s most important national projects including that of our health sector, agriculture sector, sports sector, labour sector, Samurdhi, Ranaviri Seva Authority, airport and aviation and housing sector.

Recent performance highlights 

•     Achieved 20 billion revenue in 2016
•     An additional Rs. 600 million on average, as additional VAT , NBT and Income Tax
•     An additional Rs. 920 million rupees contributed for the Consolidation Fund in 2016
•     The increase in sales over 16% per annum

Drivers behind the growth

The master action plan rallied around the ‘strategic intent’ given by the Minister at one of the meetings we had at the Ministry to achieve a target of Rs. 20 billion. Thereafter a few strategic changes were made to boost the sales. Increasing the number of draws was among them. 

The Board was initially handicapped with an IT – ERP solution that was very purely evaluated and implemented. The Chairperson spearheaded an initiative to resurrect this solution through specialised advice through the Moratuwa University – IT expertise. NLB has recently launched sales through SMS attract new customer segment.

Some highlights to show the NLB’s financial success

•     Increase in sales during the last two years is in excess of 16 % per year and NLB reached 20 b sales during the year 2016 
•     Increase in VAT and NBT during the last two years on average per year figure compared with 2014 is approx Rs. 150 m
•     Increase in Income tax during the last two years on average per year figure compared with 2014 is approx Rs. 450 m
•     Increase towards consolidated fund during the last two years on average per year figure compared with 2014 is 303 million rupees and 1,226 million rupees respectively.
•     Increase in profit after tax during the last two years on average per year figure compared with 2014 is approx Rs. 300 m. (It is relevant to note that the Net Loss of NLB in 2014 is a sum of Rs. 9 m)

Accordingly the annual value creation of NLB under the new administration towards the Government of Sri Lanka during the last two years on average is over a billion rupees per year.

The Board continues to contribute to socio/cultural and religious events such as Kandy Perahara and therefore our valued customers are given the opportunity to indirectly contribute towards all projects such of national importance through increase in tax revenue and increases in contributions towards consolidated fund.

Introduction of Neeroga

The Finance Minister made a special request to the NLB Top Management how we can assist in the President’s noble objective to fight the menacing kidney disease. The NLB Board was able to launch in June 2015 special lottery titled ‘Neeroga’ within a record mark time period from conceptualisation to market, dedicated to our President’s kidney disease alleviation endeavours. This lottery is gaining popularity and momentum by the day. Funds generated through Neeroga lottery will directly go to the National Kidney Fund. So far NLB has contributed Rs. 173 million for the National Kidney Fund during the period of 18 months.