Bug is productivity...
Productivity and not wages is the biggest constraint in
developing the plantation industry, a manager said.
Govindasamy, Managing Director Watawala Plantations PLC,
speaking at a seminar in Colombo on Wednesday said that
while the Indian tea plucker on average plucks 30-35
kilos of green leaf daily, his counterpart in Sri Lanka
was plucking half of that, some 13-14 kg. of leaf daily.
was despite an incentive scheme in operation, of an
additional payment of Rs. 10 a kg. on offer, for every
kg. plucked, after the benchmark of 16 kg. had been met.
India the benchmark is much higher at some 25 kg.," said
Govindasamy. And the incentive payment is much lower, at
some Indian Rs. 1.25 for every additional kg. plucked
after meeting that milestone, he said.
Govindasamy blamed this state of affairs to the
politicization of the industry.
can one expect when a Cabinet Minister is also the
leader of a trade union?" he asked at this seminar
organised by the MBA Alumni of Colombo University.
"Workers are guaranteed 300 days wages even if they
don't work eight hours daily, and collective agreements
are not linked to productivity," said Govindasamy.
also warned that with oil revenues falling, the
country's major tea exports markets, namely the CIS
states and the Middle East stand the risk of being
affected. Govindasamy however said that their Zesta
brand was the market leader in the island with a 33%
stake, though the same did not hold true as regards to
their global operations. Sri Lankans consume 20 million
kg. of tea annually, he said.
next venture will be selling Watawala kiri to the local
market. "We have a total of 100 animals, including milch
cows for this purpose," said Govindasamy.
imposed on repo sales
CB's new ruse to ease pressure on rates to fail
Central Bank (CB) on Friday imposed limits on the excess
cash that commercial banks and primary dealers can park
with the same on an overnight (O/N) basis in a bid to
boost liquidity in the market and therewith ease
pressure on rates, a scheme which market sources however
said is deemed to fail because of the excessive
liquidity shortfall that the market is facing these days
due to heavy government borrowings.
imposed a Rs. 100 million limit on the excess cash that
each commercial bank or primary dealer can park with the
same on an O/N basis in the event the Bank is compelled
to lend to the market, i.e. by opening its reverse repo
window to meet any liquidity shortfall.
move follows CB earlier flushing the market with an
additional liquidity injection of Rs. nine billion on a
daily basis since February 27, by reducing commercial
banks' statutory reserve requirement by 75 basis points
(bps) to 7% effective from that date.
banks, due to limits imposed by their head-office with
regard to lending to other banks, park their O/N excess
liquidity with the CB (rather than lend to the market)
through the repo window.
however limits are imposed on that facility, then the
alternative is to subscribe to Treasury (T) Bills with
their excess cash, with possible CB expectations that
the demand thus generated would ease pressure on rates
and therewith would bring down government's borrowing
However, despite these measures, the market, on a net
basis was short by Rs.8.9 billion on Friday, with O/N
repo sales at Rs. 280 million and reverse repo purchases
at Rs. 9,188 million.
these new limits were imposed, O/N repurchase or repo
sales on Thursday were Rs. 2,275 million, while that
offered at the weekly T Bill auction is generally more
than thrice that figure, a sum of Rs. 7,000 million.
any case demand for T Bills is excess of supply in the
weekly auction, but that does mean that T Bill rates
come down," the sources said.
instance last week's T Bill primary auction attracted
bids to the value of Rs. 12,082 million for a parcel of
Rs. 7,000 million worth of T Bills that were up for
re-issue. But only the T Bill rate for the 91 day
maturity, vis-…-vis the weighted average yield (WAY)
fetched at the previous week came down, and that too by
a mere three bps to 15.73%, they said.
for the other two maturities, namely that of 182 and 364
day T Bills remained unchanged at 16.93 and 17.73%, they
said. In the event T. Bill rates do come down there will
be only one beneficiary, namely the government, they
said. This is because the market on an O/N basis has
been short virtually daily, they said.
Pointing out the mismatch between the O/N repo and
reverse repo "markets" that still exists despite new
measures to infuse fresh liquidity to the market by the
CB, they said that the O/N reverse repo market is bigger
by a large margin over that of the O/N repo market, and
hence these measures to bring down rates were doomed to
instance on Thursday the value of O/N reverse repo
purchases was Rs. 21,573 million and that of repo sales
only a10th of that at Rs. 2,275 million; causing a net
market shortfall of Rs. 19,298 million, the sources
said. It was also so on Wednesday, where repo sales were
at Rs. 1,577 million and reverse repo purchases at Rs.
19,910 million, thereby causing a net shortfall of Rs.
18,333 million (and hence pressure on rates); Tuesday:-
Repo sales: Rs. 2,701 million and reverse repo
purchases: Rs. 17,887 million; net shortfall: Rs. 15,186
million and on Monday:- Repo sales: Rs. 2,456 million
and reverse repo purchases: Rs. 15,221 million; net
shortfall: Rs. 12,765 million.
proves that even if repo sales are totally stopped from
the market there still would be an excessive market
shortfall of around Rs. nine billion (as witnessed on
Friday) on a daily basis mainly due to heavy government
borrowings, primarily to meet its war expenditure needs;
to buy foreign exchange and also to meet its rupee
expenditure needs, thereby still causing a liquidity
crisis in the market," the sources said. Meanwhile, O/N
inter-bank borrowing rates last week remained unchanged
at the 13«-14«% levels, similar to that which existed in
the previous week, they said Facilities known as the
O/N repo sales and reverse repo purchases are, in the
case of the former, the interest paid by the CB to the
market for such borrowings (10.25%) in the event there
is an excess, and in the case of the latter, when the
market borrows from the CB, the interest charged is
11.75%, when there is a liquidity shortfall in the
market. Market players, namely commercial banks and
primary dealers, if they exceed the three chances
permissible on a monthly basis to go to the CB's O/N
reverse repo window and borrow from it at the
concessionary interest rate of 11.75%, they will then
have to pay the penal rate of 16.50% on an O/N basis, on
additional borrowings made during that month.
Protectionism way forward
biscuit manufacturer advocated protectionism after
getting his fingers burnt when venturing out into India.
P. Wickramasingha, Chairman Ceylon Biscuits Ltd. (CBL)
recalling his experience in the Indian market at a
seminar in Colombo on Wednesday said that recently the
Indian government did away with excise levies in
relation to locally manufactured biscuits being retailed
at Indian Rs. 100 or less, thereby effectively making
exports from companies such as theirs' which are subject
to all levies, being made uncompetitive.
"earlier" Indian fiasco was the purchase of a biscuit
company in India deemed illegal by the Indian Supreme
Court (ISC), because the liquidator involved in this
case was a provincial liquidator and not an official
blunders, Munchee suffers," said Wickramasingha.
Recalling the incident, he said that CBL bought this
company on a court auction. It outbidded Brittania, ITC
and a Saudi company in this tender. Munchees then ran
this company for four years.
However, the former owner appealed to the ISC and won
this case on the aforesaid technicality, Wickramasingha
said. "We were forcefully evicted from India," he said.
had happened to a Singaporean or European company their
chambers would have had taken up the issue and would
have had given adverse publicity to foreign direct
investment," Wickramasingha alleged.
had called for fresh tenders, with the local Central
Bank saying that they cannot allow for the release of
foreign exchange for the new tender.
also alleged that all countries, including the U.S.A.
practise protectionism. This seminar was organised by
the MBA Alumni of Colombo University.
IMF aid soothes rates
Central Bank's (CB's) announcement that they are seeking
a US$ 1.9 billion IMF bail out package had a salutary
effect on Treasury (T) Bond rates in the secondary
market, with yields on Bonds maturing on 2010 slipping
by 45 basis points (bps) to 17.85% due to demand build
up at Friday's trading compared to the yields fetched
1«-2 weeks ago, those of 2012 maturities down 25 bps to
18% and those of 2013 maturities by 30 bp to 18.10%.
Meanwhile, the US Dollar at spot trading was going at Rs.
114/20/40 in two way quotes, with State owned Bank of
Ceylon (BoC) offering the same to the market at Rs.
114/25; while it, together with the other State owned
commercial bank-People's Bank, buying the same at Rs.
114/20 per unit from the market.
will open a new department store in Singapore later this
month, while at the same time conducting negotiations to
have its products up for sale in 60 outlets each,
located in India and the UK respectively.
will also open a franchise outlet in Maldives.
principal shareholder Ms. Otara Gunewardene told a
seminar in Colombo on Wednesday that despite the
recession, she has been able to clinch those global
however said that the Singapore venture had been a long
term plan, dating back to a year ago, with two floors in
a building having being booked in this regard.
despite the recession people are still shopping, and
Odel's advantage is that it offers quality clothing at a
cheaper price," said Gunewardene. She however said that
her target market is the upper and upper middle classes.
Gunewardene admitted that sales in the local market were
affected due to inflation. "We are looking to
restructure our pricing in the local market," she said.
"But it's because we are stable in the local market that
we are venturing overseas," said Gunewardene.
seminar was organised by the MBA Alumni of Colombo
IRD moves out
Divisions of the Inland Revenue Department (IRD)
operating from its headquarters building in Colombo are
has been found unfit for use after the LTTE crashed one
of its planes into the building recently that's why we
are moving out," IRD sources told The Sunday Leader.
But as yet, we have not come across any files that have
been destroyed or misplaced as a result of this attack,
building itself is not in any imminent danger of
collapse, the sources said.
Already some of its sections have moved into a private
building at Union Place, Colombo; while two other
buildings located at Darley Road and Park Street,
Colombo have been earmarked to accommodate the rest of
plans to finish this relocation by the month end.
Repairs to the head-office cannot be effected while the
staff is there, they said. Discussions with the CECB and
the State Engineering Corporation are on in this regard,
the sources said.
New era of development
Lanka is at the cross roads of a new era of development,
said Sri Lanka Institute of Architects President
speaking at SLIA'27th annual sessions which was started
with the inauguration of Architect 2009 Trade Exhibition
at the BMICH on Wednesday (March 4).
aim is for the industry and the architectural fraternity
to be ready to use this opportunity to 'Do More with
Less' in terms of using resources to ensure
environmentally friendly design concepts and sustainable
development," he said.
Architect Ole B Larsen was presented with a special
award at this event. Larsen who owns one of the leading
practices in Oman was honoured for his recognition of
the Sri Lankan architects at his practice where the
majority of architects are Sri Lankan architects and
members of the SLIA.
who were presented with special awards at this event
were Vidyajyothi Architect Ashley De Vos and Architect
Prof. Lal Balasuriya. De Vos was recognized for his
lifetime contribution to architecture as well as
eco-friendly design and Balasuriya (SLIA Past President)
was presented with the Honorary Fellowship of the SLIA.
ceremony began with a procession comprising council
presidents and guests making their way to the hall for
the main ceremony.
of Honour for this event were Urban Development Minister
Dinesh Gunawardena, Construction Minister Dr. Rajitha
Senaratne, Housing and Common Amenities Minister Ms.
Ferial Ashraff and a host of guests
the Architecture fraternity also attended.
Keynote speaker was Prof. Mohan Munasinghe, UN
Inter-governmental Panel on Climate Change Vice Chairman
who won the 2007 Nobel Peace Prize. This was followed by
the Annual Awards ceremony where the newly elected SLIA
members were presented with their scrolls.
were given to young architects in recognition of their
talents as well as design Awards under the categories of
Excellence Awards, Merit Awards, Colour Awards and for
Research and Publication of SLIA members.
Stallholders at Architect 2009 Trade and Exhibition fair
were also recognized under the product Awards segment,
which aim is to evaluate and encourage local products.
ceremony concluded with the launch of a book, Creating
Simplicity by senior Architect Anura Ratnavibhushana.
is one of the founding members of the Commonwealth
Associations of Architects (CAA), Architects Regional
Council of Asia (ARCASIA) and South Asian Association
for Regional Cooperation of Architects (SAARCH). The
institute was incorporated under an Act of Parliament in
1976. It was re-strengthened by a further amendment in
1996. With regards to Architectural education, SLIA is
the sole body in Sri Lanka that has the "power to
control" the standards of architectural education and
the practice of Architecture.
Vocational Technology University
By Vidya Jyothi Emeritus Professor Dayantha Wijeyesekera
felt need in Sri Lanka on the Development of Vocational
Training and Technical Education has been fulfilled by
the enactment of the Parliamentary Act No 31 of 2008 on
the Vocational Technology University by Vocational and
Technical Training Minister Piyasena Gamage,
Technical Education has been in existence for over a
century with the establishment of the first Technical
College at Maradana in 1895 and Vocational Training has
been in existence from the time of our forefathers,
thousands of years ago, during periods of ancient
civilization, career development opportunities up to
degree level has not been available in a manner or
possible in many overseas countries, for those with
aptitude, skills and competencies.
progressive career development path would be quite
different from the conventional system of university
education where centralized admissions are done through
the Universities Grants Commission (UGC). Furthermore,
the type of University Teachers at such a vocational and
Technological University would have to be quite
different with the special practical and vocational
Students who would be admitted to this university would
be those who have undergone theoretical and practical
education and training at the nine Technology Colleges
(one in each province), those who have pursued National
Vocational Qualifications and also to those who have
acquired mid- level Technological qualifications.
Recognition of Prior Learning (RPL) is a special feature
together with bridging programmes for those who require
theoretical and/or practical competency based training (CBT).
for Technology,the degree would be awarded as the
Bachelor of Technology (B.Tech,), another special
feature of this University would be the production of
the much needed technology teachers for the technical
education institutes including the Technology stream in
the secondary school education. Such graduates would be
awarded the B.Ed (Tech).
Technology graduates from this University and
Engineering graduates from the engineering faculties of
conventional universities would complement one another
in industry similar to Nursing and Medical Graduates in
the Health sector, it is expected that there would be a
large saving in foreign exchange by reducing the number
of mid level qualified technical personnel seeking this
further education overseas, when such work oriented,
quality University degree level Tertiary Education
opportunities are available locally.
HNB's tax component: Rs. 1.8 bn.
taxation regime imposed especially on the financial
services sector, remains non-conducive to growth in the
industry, a banker said.
National Bank Managing Director Rajendra Theagarajah, in
his review of the company's perfomance in 2008 said:
"This year too we observed a sizeable slice being taken
off our profits by the increase in Financial Services
Value Added Taxation to Rs 1.77 bn. compared to last
year's Rs 1.24 bn., which the Bank can ill afford
especially in times where the economy has shown signs of
volatility and capital in short supply. Reduction of
margins, increasing operating costs and high taxation
will impose a challenge for the sector to maintain
required capital requirements and will limit credit
growth of the banking sector."
Despite these vicissitudes, HNB continued its impressive
performance recording post tax profit of Rs 3.22 bn. a
year on year (YoY) increase of 6.5%.
added: "We are delighted to be able to deliver such
results especially against the backdrop of significant
fluctuations in key macro economic variables such as
interest rates, inflation and exchange rates which
adversely affected the growth and profitability of the
financial Industry and a global financial crisis since
the great depression, which caused some of the world's
biggest financial institutions to either file for
liquidation or to be bailed out on being on the verge of
income grew 23.9% YoY to reach Rs 37.17 bn. in 2008
despite economic challenges. Interest income was the
predominant contributor towards the Bank's topline,
growing by 23.5% YoY to Rs 32.43 bn. in 2008. Growth in
interest income was mainly driven by the increase in
yields as a result of the upward movement in domestic
interest rates, whilst growth in interest earning assets
during 2008 stood at 12.2%.
Interest expense too witnessed a significant growth
during 2008 as liabilities were re priced at higher
rates and the deposit mix tilting toward high cost
funds. The resultant Net Interest Income (NII) grew by
14.6% to Rs.12.68 bn. in 2008.
interest income grew this year (2008) by 26.4% to Rs
4.73 bn., resulting in non interest income to net
interest income ratio improving to 27% in 2008. Both
commission income and exchange income witnessed healthy
growths of 13.6% and 4.7% respectively.
Dividend Income witnessed a significant growth of 330%
to Rs. 538 mn. Main contributors being HNB Securities
Ltd. and HNB Stock Brokers (Pvt) Ltd. which made an
exceptional dividend payment as a result of the
restructuring that took place with the formation of the
joint venture Acuity Partners (Pvt) Ltd. with DFCC Bank.
inflationary trends continued to be an obstacle for the
Bank during the year. "Having already infused some cost
management best practices into our working operations,
the Bank was able to stem some of the negativities that
abounded on the operational side with a growth of only
17.3% (increase in operating expenses excluding
provisions and financial VAT is 13.6%)."
"Operating expenses this year recorded at Rs 12.27 bn.
reflects well for our performance in comparison to
general industry trends. Staff cost increased by a mere
11% during 2008 as a result of continuous improvements
made in operational productivity. We managed to keep the
headcount almost flat in 2008 despite expanding the
customer centre network."
Provision made for the staff retirement fund increased
by 74% in 2008 to stand at Rs. 787 mn. Increase in
provision for staff retirement was due to an additional
provision of Rs. 290 mn. made for the purpose of
charging of 1/5th of the transitional liability created
due to the introduction of Sri Lanka Accounting Standard
16 (revised 2006)-Employee Benefits.
deficit in the pension fund as at December 31, 2007 had
to be charged to operating expenses over five years as a
result of the provisions of the revised standard.
Premises equipment and establishment expenses too grew
by 14% to Rs. 2.42 bn.
Despite high inflationary pressure, as a result of the
prudent cost management initiatives of the Bank cost to
income ratio (excluding financial VAT) improved this
year to 54% compared to 56% in 2007, said
Theagarajah.Loan loss provision increased this year by
27.6% to stand at Rs 1.16 bn., maintaining a provision
cover (specific provisions to non performing loans (NPLs))
of 66%. Due to prudent provisioning policy, the Bank
has already achieved the 1% general provisioning
requirement mandated by Central Bank (CB) ahead of the
March 31, 2009 deadline. This reflects HNB's constant
emphasis on a quality credit portfolio which has now
become the primary reason for the Bank's consistent and
sustainable performance. HNB's gross Non Performing Loan
(NPL) ratio increased this year to 6.72% compared to
5.7% in 2007 due to high interest rates and inflation
exerting pressure on the repayment capacity of
Further, as per the Banking Act Direction No.9 of 2008
issued by CB, the criteria used for classifying loans as
non performing was relaxed, however the Bank continues
to adopt the more stringent method which has resulted in
the Bank's NPL ratio being 48 basis points higher. If
the Bank adopted the relaxed criteria, gross NPL ratio
as at December 31, 2008 is 6.24%. The Bank has kept
the NPL ratio at a manageable level due to prudent risk
management strategies, committed recovery team and
excellent monitoring and control systems implemented.
Bank's total asset value depicted an increase of 9.6%,
reaching Rs 255.3 bn., retaining one of the highest
bases among private sector commercial banks in the
country. Total loan portfolio increased from Rs 160.58
bn. to Rs 174.98 bn., with pawning and short term loans
being the largest contributors, recording growths of 26%
and 47% respectively.
Although deposit mobilization was a significant
challenge this year, deposit portfolio displayed a
growth of 7.7%. Impact of the global economic downturn
was felt on foreign currency deposits. Investors were
seen converting foreign currency deposits to rupee
deposits as the interest rate differential widened
between local and foreign currency deposits and the
rupee continued to be stable during most part of the
liabilities at end of the year are displayed at Rs
234.69 bn. compared to last year's Rs 214.49 bn., a
reasonable9.25% growth considering the macro economic
Shareholders' funds grew from Rs 18.4 bn. to Rs 20.02 bn.
as the Bank retained part of the profits generated
during 2008 to support future business growth. The Bank
paid an interim dividend of Rs. 1 per share in December
2008 and has proposed a final dividend of Rs. 3 per
share to be paid in April 2009.
the change over to Basel II in 2008, Bank's total
Capital Adequacy stood stable at 11.3% after
incorporating operational risks in particular which was
not risk weighted in Basel I. During the year the Bank's
core capital & total capital improved by 5% & 11% to
Rs16.2 bn, & Rs19.9 bn. respectively.
on Average Assets this year stood at 1.32%, showing a
marginal decline from 2007. Return on Average Equity (ROAE)
saw a slight dip this year from last year's standing of
19.27% to 16.5% this year.
income too increased by 20.73% to Rs. 38.73 bn. However
due to the setting off of the dividend paid to the bank
by subsidiaries, on consolidation group after tax profit
recorded a9.8% decline over 2007 to end up at Rs. 2.89
it has been a challenging year, we have always said that
the real test is not to win when things are positive,
but rather to win in an environment that constantly
poses trials and challenges. This is where the strong
will prove its mettle and be separated from the weak,"
NPAs up by 1.02 percentage points
Nations Trust Bank PLC's (NTB's) Non-Performing Assets
ratio was affected by the deteriorating risk environment
and resulted in an increase in provisioning for bad and
doubtful debts for the financial year ended December 31,
Director/CEO Zulfiqar Zavahir in his review of the
company's performance said, "The Banking industry was
not immune to the effects of the market turmoil and
economic slow down experienced during the year. Credit
quality continued to suffer, resulting in increased
credit losses and higher non-performing assets (NPA)
ratios across the banking industry. Gross NPA ratio of
the Bank deteriorated to 5.98% as at December 31, 2008
from 4.96% a year before but compares well against an
industry average of 6.2%. Provisions for credit losses
too increased by 117% to Rs. 470.9 mn., contributed to
by the repayment difficulties faced by some segments of
our consumer assets portfolio of Credit Cards and Loans
and to prudential provisions made on account of several
corporate customer exposures over and above the
provisioning policy of the Bank, which is more stringent
than Central Bank guidelines." Despite these
vicissitudes, performance as given in the audited
Financial Statements contained in the annual report is a
reflection of the continued strong performance during
what was a challenging year for the Bank in its
relatively short but eventful decade long history, said
Achieving a milestone, NTB Group reported a Profit
Before Tax of Rs. 1,028.507 mn. for the year against Rs.
847.394 mn. reported for 2007, reflecting a 21% growth.
Profit After Tax grew by 17% to Rs. 593.119 mn. for the
year compared to Rs. 504.818 mn. reported for the
Gross income grew by 49%, with Net Interest Income
growing by 38% and Non Funds Based Income in the form of
Fees, Commissions and Foreign Exchange Income growing by
Deposits grew by 19% to Rs. 34.146 bn., while Advances
grew by 16% to Rs. 39.94 bn. Deposits and Advances
growth for the industry were 7.4% and 6% respectively.
Total Assets grew by 22%. to Rs. 67.732 bn.
the first year of operations under the new Strategic
Plan 2008-2012, 2008 was an eventful year for the Bank.
Chairman Ajit Gunewardene in his message in the Annual
Report said: "The new Strategic Plan envisaged a number
of initiatives relating to brand building, delivery
channels, products and processes. It also identified the
resource requirements of the Bank over the 5-year period
in terms of capital, space and human resources. In this
regard I'm happy to mention that a majority of the
initiatives were implemented and resources were secured
during the year as planned."
Commenting on the performance, he said, "Even in the
backdrop of a slowing down of the Sri Lankan banking
industry, your Bank managed to grow its business volumes
at above the industry growth rates, thus signifying an
increase in market share."
Further, while talking about the possible challenges in
2009 and beyond Gunewardene said, "We also foresee
significant opportunities to expand and capture
profitable market share in this environment. We believe
that we are well poised to grab these opportunities."
Subject to approval of the shareholders at the Annual
General Meeting to be held on March 30, 2009 at the
Institute of Chartered Accountants of Sri Lanka
Auditorium, directors have recommended the payment of a
first and final dividend of Rs. 1.50 per share for the
year in comparison to the Rs. 1 paid for 2007.
During the period, Fitch Ratings Lanka Ltd. reaffirmed
the A(lka) rating of the Bank which denotes a strong
credit risk relative to other issuers or issues in the
country. During the year the Bank raised Rs. 1.048 bn.
by way of a rights issue and Rs. one bn. through the
issue by way of a private placement of unsecured,
subordinated, redeemable debentures, strengthening the
Group's total capital adequacy ratio to 15.70%.
MBSL skills to bailout troubled F&G
skills infusion and not a merger or liquidity infusion
to bail out the troubled Finance and Guarantee (F&G)
Group which has Rs. 13 billion in liabilities that
Merchant Bank of Sri Lanka (MBSL) is looking at, its
Chairman Janaka Ratnayake told The Sunday Leader in a
By Raisa Wickrematunge
Question (Q): How do you think the current situation
with F&G, a Ceylinco Consolidated Company came about?
Answer (A): I feel there should be shared
responsibility between all parties concerned. Depositors
go to finance companies like F&G and deposit their life
savings even though they allegedly know this move may be
subject to failure. They are risking their capital in
order to get a higher return. Companies too should be
careful in taking such deposits-and invest wisely. Long
term investments are risky because you don't get cash
immediately. Central Bank (CB) too as a regulator should
have noticed the activities of the F&G Group of
companies, i.e. F&G, F&G Real Estate Co. Ltd and F&G
Property Developers (Pvt) Ltd. They have been operating
for 15 years.
Q: Is this move with F&G a merger?
It's not a merger. If you look at the crisis F&G is
facing today, it's not a new situation. It started with
the Sakvithi scam, and then with Golden Key. These
people (F&G) have got into trouble because they are part
of Ceylinco Consolidated. If you were to look back,
there were many companies like Sakvithi. For example
there was Pramuka Bank, you can name a dozen companies
like this. When they got into trouble, nobody came to
rescue them, and in the end depositors had to suffer,
since they never got paid. If this situation continues,
depositors of these companies will also not receive the
payment they are entitled to. So we thought of helping
F&G in a professional capacity and constructing a
restructuring plan. Our mission is to analyse the assets
and liabilities of these companies for two weeks,
according to their balance sheet is not in too bad a
state. We want to come out with a restructuring plan to
try to rescue these companies. When we were invited by
F&G group to do this plan, we got the consent of CB as
well since they are the regulators.
Q: What are you offering as a guarantee to F&G
Liabilities of the organization are around Rs. 12 or 13
billion and according to the books they have the same
value of assets as well. I don't think that any third
party could offer security to depositors and investors.
What we do is analyse the situation over there and come
out with a rescue plan. It is not be a bail- out
package. We are trying to ensure that depositors are not
left in a situation where they don't have anyone to turn
to, to get their money back.
Q: How do you plan to address the lack of investor
confidence now evident in relation to any Ceylinco Group
subsidiary in the backdrop of the Golden Key collapse?
No bank in the world can have more than a 20% run on
their deposits. It can be a world renowned bank or a
local bank in a remote area, but if depositors take more
than 20% of their money back, that particular
institution will collapse. The reason is that we take
deposits on a short term basis, for example from one
month to a year or maybe up to five years, and we invest
in long term projects. But if investors were to come and
ask for their money tomorrow, nobody would have cash to
give them. It is for this reason that the institution
will collapse when there is a run on their deposits.
Q: In terms of numbers what kind of an investment has
been made by MBSL in the company?
We are merely offering our services to come up with a
restructuring plan. Looking at their liabilities of Rs.
13 billion, if you make an investment of even a few Rs.
100 million won't help. So there won't be any financial
help in this package. We are using our expertise and
skills. MBSL has over 27 years experience in providing
restructuring plans to private and government sector
organizations. We are using our knowledge to analyse
their net worth, try to find a way for the public to get
their money back.
Q: MBSL has spoken of plans to scale down operations of
the other two companies connected to F&G.?
What happened is the other two companies (F&G Real
Estate Co. Ltd and F&G Property Developers (Pvt) Ltd.)
were not regulated. They are allegedly illegal
companies in the sense they aren't supposed to operate
and the legality of the companies and their deposits are
questionable. It's almost like the past situation with
Golden Key. Our plan is to work with the CB to scale
down these two companies, pay off certain depositors and
bring the balance under F&G which is a regulated
Q: Is this measure part of a rescue package for finance
companies like F&G which were close to bankruptcy?
You cannot say F&G is close to bankruptcy. Unlike Golden
Key and Sakvithi they have enough of an asset base. If
you look at the regulated company F&G, they are
virtually in good shape. So they have reasonable income
for their portfolio and they have assets to fill the
gap, but the problem lies with the other two companies
which are not regulated. They have come to this position
because of deposit withdrawals. Had investors continued
with their deposit renewals they wouldn't have this
problem. About 10 years ago there was a bank called
Mitsubishi Bank, which was one of the best banks.
Unfortunately there was a run on deposits and within a
week, despite being a leading bank, it collapsed. So it
can happen anywhere.
Q: How are you planning on building up investor
confidence in the company?
We started this process almost a week ago, and we can
already see a positive response. People are willing to
renew their deposits, that's a good sign. We informed
the public of the situation through the press. For the
past 2-3 months, the company and depositors have been
acting without any direction. Now they know something
positive is happening, they're willing to hold on.
Q: How far are you in this scheme?
We have a team of 5- 6 people working round the clock to
get the information first and analyse it. We think the
companies seem to be in a comfortable position, except
one company, i.e. the real estate co. With CB
permission, we have said that these companies shouldn't
engage in any transactions. They are not supposed to
make any payments, nor can they transfer their assets.
The reason for this measure is, certain influential
depositors have tried to grab valuable properties to
compensate for the value of their deposits, and some
have even tried to get a higher value. We have stopped
that, because if it is not stopped all good properties
will be grabbed by influential investors and common
depositors won't have anything. In fact, so far for the
last three days we have seen a huge improvement.
Motors (UK) Ltd. has been named Car Maker of the Year by
leading motor trade magazine AM in its 2009 Awards.
Praising the company for its "increasingly strong"
relationship with its dealers and for its "clear
strategy" the award was presented by BBC News anchor Huw
Edwards to Kia UK Managing Director Paul Philpott.
Awards held in Birmingham, are judged by a panel of
industry experts and analysts headed by editor Stephen
Briers and reflect excellence in the UK motor trade with
a particular reflection of views from the trade itself.
Kia beat off competition from Audi, BMW, Jaguar, Mini
and Suzuki to win the title.
Edwards said, "With sales growing last year despite
market decline, with a clear strategy, increasingly
strong relationships with their dealers, and launching a
number of great new products-Kia is fast becoming a
mainstream brand with great potential. Congratulations
to Philpott and his management team for achieving such
major advances. This award is well deserved."
Philpott said, "Over the last two years the Kia UK team
has been focused on delivering strong and sustainable
growth for our dealers and our business.
deliberately decided to re-direct our efforts to build
the strength of our retail offering and withdraw from
the excessive levels of daily rental and short-term
business which paid off last year-despite a challenging
end to the year. That focus is continuing-as is our
determination to develop strong partnerships with our
dealers to deliver organic and profitable growth in the
launch our exciting new Soul B-segment car we expect the
retail appeal of our brand to continue to grow and so
our continued withdrawal from high-cost fleet business
will continue. The continuing difficulties in the market
are a concern for everyone, but Kia is determined not to
be deflected from its path-even if that throws up a few
monthly anomalies-because the route to a strong and
secure future for us and our network lies in retail
Six months free instalments
Associated Motorways PLC (AMW) introduced a
revolutionary concept in leasing with its package 'Buy a
Suzuki M800 today and pay nothing for six months.'
offer is valid upto March 31, 2009.
General Manager Virann de Zoysa said: 'There are over
25,000 Maruti Suzukis' on Sri Lanka's roads and in
celebration of this achievement we have come forward
with this new concept. One could make a reasonable
initial payment and drive away with a brand new Maruti
and start paying the instalments after six months."
facility to buy a brand new M800 from any of our
showrooms in Sri Lanka, not only enables to pay the
lease instalments after six months, but also to be a
recipient of other unbelievable benefits. The increasing
demand for the Suzuki Maruti, acclaimed as the market
leader for the last five years is an indicator of the
popularity of the vehicle and the long term value of
investment. Present Suzuki Maruti owners are aware for
the demand for their used vehicles.
the Suzuki M800 occupies a "special" place in the Suzuki
Maruti range manufactured under Japanese technology, a
recent introduction to its range has been the Suzuki
M800 Ultimate with its modern new look. Nations Trust
Bank PLC with AMW Leasing Ltd. makes preparations for
this project to 'enhance the benefits to the public.'"
Bank PLC which underwent a difficult period last year is
in the process of being re-engineered.
the steps taken by the new management are: "Installation
of a good risk management system for which we just
conducted a workshop with an overseas professional;"
re-engineering the Bank's processes/operations in strict
adherence to regulatory compliance and any other
statutory provisions including Sri Lanka Accounting
strengthen credit appraisal, monitoring and recovery
process in the bank- with the appointment of Board
Credit Sub Committees and reviewing of Delegated
Authority Limits; Curtail expenditure that has no
bearing on profitability; Eliminate all loss making
ventures/lines of business; formulate and implement a
strategic plan for the bank, which process has started
with the involvement of experts in the field; To create
awareness of ownership, responsibilities and
understanding of the bank's position and the bank's
expectations among all staff members to achieve greater
above matters require careful implementation and take
time for their impact and benefits to percolate down.
"We are confident that the Bank has professional,
willing and dedicated operational staff to successfully
implement programmes to restore the Bank to an enviable
position and take it to the pinnacle of local banking.
Consequent to recent adverse market perception since
December 2008, the Bank under its new directorate has
decided to clean up and strengthen its Balance Sheet
position by constantly evaluating its total investment
portfolio including loans and advances and other
investments giving weightage to its realisability,
market risk, interest rate risk and any other associated
on the exercise carried out so far, bank has made
provisions for falling value in marketable investments
and its loan portfolio to fall in line with
International Accounting Standards even exceeding
Central Bank (CB) stipulated guidelines.
Meanwhile Seylan Bank has just published its draft
accounts for the year 2008 which had seen unfavourable
market and economic conditions and high interest rates
scenario with unpredictable variability making its
has however recorded a higher net interest income of
7.215 bn. compared to that in the previous year of
6.784 bn., while the bank has achieved a growth on gross
non interest income comprising Foreign Exchange Income
and other income of 28.5%. The bank made LKR 3.056 bn.
under this category of income compared to previous
year's LKR 2.473 bn.
Bank made an after tax profit of LKR 37.9 mn. for the
year ended 2008 as reflected in the bank's unaudited
Eastman Narangoda, Seylan Bank's newly appointed
chairman confirmed that the Bank under the direction and
guidance of the current 'Professional Board' of
Directors is undergoing a radical transformation.
the support, surveillance and constant monitoring of CB
and the involvement of the management of Bank of Ceylon,
the largest commercial bank in Sri Lanka, Narangoda
expressed his confidence of a better tomorrow.
2009,' an indigenous healthcare exhibition and symposium
will be held at the BMICH from May 23-25.
Exhibitors from SAARC region countries and from other
parts of Asia are expected at this event.
year too as in previous years, large visitor
participation from exhibiting countries and from the EU
is expected. (Sri Lanka Tourism)
Pharmaceuticals & IT
Harcourts Pvt. Ltd., one of the biggest pharmaceutical
importers and retailers in Sri Lanka announced its entry
into the IT industry recently.
signed an MOU for a joint venture with AFI Technologies
Pvt. Ltd. India, one of the leading solution providers
in the Healthcare industry.
has ERP solutions for the healthcare industry. It is
also having specialized products for hospital
management, inventory management, asset management,
financial accounting, pharmacy management, hyper market
management, retail chain management, personnel and
payroll management. The most advanced Electronic Medical
Record (EMR) system which is unique and highly user
friendly will help the hospital and practicing doctors
to maintain patient records in electronic format. AFI is
having specialized EMRs for more than 18 different
medical specialties and Ayurveda.
added a range of world class user friendly products to
its array in order to retain its market leadership.
Global operations are supported by the state-of-the-art
development centre at Info Park Cochin with a team of
engineers in different domains. This enables AFI to
undertake projects and customizations of any dimensions.
the market leader in Oman (where it was founded) and
operates from four different nations vis a vis Oman,
Bahrain, India & Saudi Arabia. AFI is also certified by
Microsoft as their Gold Certified Partner. They also
partner global giants like Motorola and Zebra
Technologies which ensures multi faceted advantages for
their clients across the globe.
Harcourts Chairman Ahmed Rheyas said, "Our plan to enter
into the IT industry as part of diversification was
scheduled for 2008. But we could make it only in 1Q 2009
as we were searching for the best and reliable partner.
We focus on quality IT products and 24 hr. customer
service and AFI is the only company which can ensure
such support as they are following the same system
across the globe. It gives us pleasure to have a JV
with AFI at this juncture."
Technologies Managing Director Alwin George said, "The
advantage is not only of having electronic medical
records and a paperless office, but doctors can use the
data and the reports generated for their various future
added, "One of our major concerns was also to provide
excellent software solutions at the most affordable
rates. There also we realized that AFI is the best. The
software solutions we do provide will be at the best
rates with a year free support service."
According to the World Health Organization, pneumococcal
disease causes up to one million deaths in children each
year and is the leading vaccine-preventable cause of
death in children younger than five years of age
Meanwhile, Wyeth and Edna Pharmaceuticals, the Sri
Lankan distributor for Wyeth, recently announced that
Prevenar (Pneumococcal saccharide conjugated vaccine,
Adsorbed) is now available in Sri Lanka.
Prevenar (also referred to as PCV7), the global standard
in pneumococcal disease prevention in infants and young
children, helps protect against the seven pneumococcal
serotypes contained in the vaccine which cause the
majority of pneumococcal disease worldwide.
Colombo University Medical Faculty Emeritus Paediatrics
Professor Sanath P. Lamabadusuriya said, "Respiratory
tract disease is a leading cause for hospitalization of
children in Sri Lanka and Pneumococcal Infections is a
cause of concern. We are proud about our achievements;
through the expanded programme of Immunization many
diseases such as Poliomyelitis, Neonatal Tetanus,
Diphtheria and Measles have virtually been eliminated
and prevention of Pneumococcal disease through
vaccination will definitely be of benefit for our
Lanka College of Paediatricians President Dr. H. T.
Wicramasinghe said, "Pneumococcal disease is a leading
cause of illness and death among children around the
world. The introduction of Prevenar today is an
important development for the children in our country."
Managing Director Ranga Iyer said, "This milestone is an
important expression of Wyeth's long-term commitment to
developing vaccines such as Prevenar that help make an
important difference in the lives of people worldwide."
Group Chairman Lal Edirisinghe also spoke at this event.
biggest "supermarket," Keells Super Fountain Cafe at
Union Place, Colombo had their "grand" opening recently.
spacious supermarket with the "widest" range of food
products is situated at a prime location with more than
100 parking slots, is an ideal place to shop for busy
executives, housewives and families.
Super Fountain Cafe at Union Place has the "widest"
range of fresh vegetables and fruits, Keells meats,
dairy products, groceries and other food products and
household items for sale. The additional product range
includes a new range of jams and sauces, bakery items,
cold meats, Indian sweets, toys, books, range of gift
items and Claire Wilson ceramic ware to name a few
is also a "show" kitchen where a wide range of savouries,
breads and cakes arc baked daily. Breakfast packs,
"healthy" snacks for lunch or tea time can bought from
the bakery at very reasonable prices. The all time
favourite-Elephant House hotdogs are also sold at Keells
Super Fountain Cafe.
Super Fountain Cafe at Union Place was the 41st
supermarket to be opened in the Keells Supermarket
chain. Keells Super is "above" the rest in quality,
value and satisfaction and has supermarkets at the
following locations: Liberty Plaza, Crescat,
Athurugiriya, Attidiya, Borella, Capital Mall, Gampaha,
Hendala, Ja-ela, Kandy, Kotahena, Kadawatha,
Kalapaluwawa, Kalutara, Kurunegala, Kiribathgoda,
Kohuwala, "Kuuawa," Kotte, Kandana, Mahabage, Malabe,
Marine Drive, Moratuwa, Mt.L,avinia, 'l'emplar Road
Mt.Lavinia, Narahenpita, Nawala, Negombo, Nugegoda,
Panadura, Pelawatta, Peliyagoda, Pepiliyana, Stanly
Tillakaratne Mw Nugegoda,Wattala, Wijerama and Super K
outlets at Piliyandala, Negombo and Kaduwala. The
supermarket chain which is rapidly expanding their
network offers the best in quality of products and
provides a service beyond customer expectations.
NDB's deposit base up 25%
Group reported a profit after tax (PAT) of Rs 1.7 bn,
for the financial year ended December 31, 2008, a 4%
year on year (YoY) increase, whilst NDB Bank's (NDB's)
PAT was Rs 1.2 bn. an 8% YoY increase.
Bank maintains a steady return on equity of 12.44%, one
of the lowest Cost Income Ratios at 47% and the lowest
Non Performing Loans (NPLs) ratio of 2.3% in an industry
which averages an NPL ratio near 7%.
the year under review NDB also strengthened its
liquidity position helped by customer deposits
increasing by 25% over 2007 and by obtaining additional
credit lines from multilateral agencies. The Bank
remains the most well capitalized bank among local banks
with a Tier 1 Capital Adequacy Ratio of 14.42% and a
Tier 1 & 2 ratio of 17.29%.
Products and services offered to customers of the NDB
Group include Insurance from Eagle Insurance Co PLC
(Eagle), Stock Brokering from NDB Stockbrokers (Pvt) Ltd
and Investment Banking from NDB Investment Bank Ltd,
also owns 99.6% of Capital Development & Investment
Company PLC (CDIC) which is an effective vehicle for
NDB's plans for local and regional growth. NDB obtained
the necessary approvals from regulatory authorities in
Sri Lanka and Bangladesh to make an investment in
Capital Market Services Ltd. Bangladesh. Accordingly NDB
invested in Capital Market Services and acquired a
controlling interest in the investee company in January
Fitch Credit rating of AA (lka), amongst the best in the
industry, reflects NDB's strong financial profile in
terms of its capital base, profitability and asset
quality. NDB Group continues to focus on its business
strategy, which is to grow in Commercial Banking
(Corporate and Retail Banking), Emerging Corporates (SME),
Project Finance, Specialized Commercial Markets,
Investment Banking, Stock Brokering and Insurance areas.
core banking revenue (net interest income, forex and
commissions) grew 12% YoY. Bank's Profit Before Tax and
PAT excluding exceptional equity capital gains earned by
the Bank during 2007 increased by 13% and 32%
loans and advances grew by 9%, while the deposit
portfolio grew by 25% YoY. Growth in NDB's lending and
deposit portfolios is commendable despite the prevailing
global and local economic environment in which the Bank
Bank has adopted stringent policies to maintain the
quality of the loan book throughout the year and as a
result the NPL ratio to the gross lending portfolio
remained at 2.3% both at the beginning and at the end of
the year. This compares favourably with the ratio in the
local banking industry. NPLs as at December 31, 2008
amounted to Rs 1,275 mn. as compared with Rs 1,183 mn.
as at December 31, 2007. As per the recent Banking Act
Direction No.9 of 2008 issued by the Central Bank of Sri
Lanka (CBSL), the criteria relating to the requirement
to classify loans as NPLs were relaxed. However the Bank
opted to follow the more stringent earlier basis. Had
NDB followed the new basis, NPLs would have had declined
by Rs 193 mn. to Rs 1,082 mn. as at December 31 2008.
Accordingly the NPL ratio would have had been 1.95%.
Bank also reached CBSL's mandated general provision
requirement on performing loans and advances, by
September 30, 2007 and has been complying with this
requirement since then. Accordingly the general
provision as at December 31, 2008 was Rs 476 mn.
third quarter NDB Bank also launched the NDB Bank Badu
Malla campaign with the aim of encouraging savings among
its customers. This entitles a lucky customer selected
through a grand draw to a NDB Badu Malla worth Rs 5,000
for six months, which adds up to Rs. 30,000. Along with
this the bank also initiated the Dorin-Dorata programme,
a large-scale activation to promote Badu Malla, at
Bank also re-launched its debit card with a new design
and additional benefits with the aim of providing its
customers a high-quality service. With NDB Bank's
ATM/Debit card its customers can access their money
through over 1,000 visa enabled ATM's islandwide and
through over a million globally. Meanwhile operating
expenses excluding provisioning increased by 18% YoY.
The increased expenditure was mainly due to the effect
of the total cost of branches that were opened during
2007 last quarter being reflected in 2008 expenditure
and inflationary pressure. Bank's staff strength
increased from 858 as at December 31, 2007 to 948 as at
December 31, 2008 due to the expansion of the retail
distribution network. Despite increased expenditure, the
Bank's cost income ratio of 47% for the year under
review still compares favourably with the ratio of other
effective overall tax rate inclusive of Financial
Services VAT was 49% for the current year compared with
53% the previous year. Tax on banking operations (i.e.
excluding equity income) was 57% as compared with 61%
the previous year.
Tier 1 and 2 Capital Adequacy ratio was 17.29% as
compared with 19.46% for the previous year. The ratio
for the NDB Group was 23.63% as compared with 26.15% for
the previous year. The reduction in capital adequacy
ratios was due to the increase in the shareholding in
CDIC. NDB's Tier 1 and Tier 2 capital is in excess of
the 10% regulatory minimum. The global financial
meltdown and the economic recession are impacting the
Sri Lankan economy and the banking industry. In this
environment, NDB has focused on consolidating and
maintaining high quality assets. The bank has focused on
stability and a strong balance sheet. The NDB Group
remains one of the best-capitalized financial groups
poised for future expansion in an improved economic
Micro Finance, the new business
Micro Finance Industry is now a whole new emerging
opportunity or business running in to billions by
creating conditions to transform the people at the
bottom of the pyramid out of poverty by empowering them
to create opportunities in the corporate world, said
Banking With The Poor (BWTP) Network Chairman and Hatton
National Bank Deputy General Manager (Personal Banking &
Network Management) Chandula Abeywickrema.
made this observation at the Harvard Business School for
the Harvard Business Asia conference that was held
recently at the School in Boston.
year's conference covered a wide spectrum of key
business initiatives under the theme "Asia in a whole
new world," but this was the first time a session on
Micro Finance was included for the Harvard Asia
inspired the audience which included students from the
Harvard Business School, Harvard Law School & Kennedy
School of Government at Harvard University.
Micro Finance is gaining global recognition as a key
initiative to alleviate poverty, Abeywickrema in his
presentation enlightened the audience of the global
business opportunities in Micro Finance. He also
emphasised the four decades of hard work done by many
stakeholders of the industry who have brought the
industry to maturity.
presentation covered significant partnerships that can
be evolved between banks, micro finance Institutions and
technology providers to deliver Micro Finance services
at a lesser cost to more people in more places.
BWTP Chairman he was passionate on presenting many
thoughts and ideas which were an inspiration to the
students, academic staff and delegates who attended the
Conference. He also enlightened the audience the role
commercial banks could play in the future in
downscaling-in partnerships with technology providers
such as mobile phone operators to bring banking services
to the people at the bottom of the pyramid, thereby not
only alleviating poverty but bringing economic
independence and enrichment to the marginalised people
in developing nations.
said micro finance institutions need people with
passion, commitment and patience to derive the best
through these initiatives as a long term investment. He
assured the audience that many initiatives by various
investor stakeholders will bring life, light and liberty
to the people at the bottom of the pyramid in developing
Asian countries and many other emerging markets now look
at Micro Finance, not only as a medium of elevation of
poverty, but also as a creator of economic independence
and revival of people in developing nations.
presentation, he covered the new global initiatives,
particularly in the area of technology, which create
easy access to financial services to many people in more
places. He showcased some of the good examples in some
of the Asian countries as well as Sri Lanka, as
to how financial services can be taken from the "bottom
of the pyramid, profitability and use of the newest
technology delivery mechanisms now available."
his presentation, he covered the three important aspects
that is required to be a successful Micro
Financier-Passion, Patience & Commitment. He also
encouraged commercial banks with a conviction to move in
to Micro Finance.
decades of tireless work done by socially conscious
organisations, institutions and also micro finance
institutions, has brought the Micro Finance Industry
into a level of maturity. Boss Banking, Mobile Banking
and Agent Banking models are now available for banks to
successfully downscale with less transaction costs and
more profitability. He concluded by saying that many
institutions in different levels who are now in place in
the Micro Finance Industry bring life, light and liberty
to the poor.
Campus in Nugegoda
Campus, the leader in private sector education in Sri
Lanka opened its sixth and Modern branch Campus in
CEO/Executive Director Mohan Pathirana in his welcome
speech mentioned that Nugegoda is considered to be one
of the leading education hub cities in Sri Lanka with
over 30,000 students attending classes on weekends.
Establishment of ICBT Campus in Nugegoda will be a
unique opportunity for students to study for
internationally recognized programmes.
Campus Chairman. Jagath Alwis in his speech highlighted
that ICBT Campus Nugegoda will be offering a range of
Diploma to Degree level programmes in IT, Business
management, Construction, Quantity Surveying,
Engineering and English Language programmes in
association with some leading universities and education
service providers in UK and India.
also said that ICBT will be offering modern facilities
at the Nugegoda branch which will include modern class
room with A/C, labs with latest computers, audio visual
equipment and library facilities.
Students who enrol for programmes offered at ICBT Campus
Nugegoda on or before March 15 will receive free P4
computers, pen-drives, T- shirts, caps and other gifts.
HR & Finance
(The Chartered Institute of Management Accountants), Sri
Lanka Division in collaboration with the Institute of
Personnel Management Sri Lanka has organised a
Mastercourse "Finance for HR Professionals" on March 11,
today's dynamic business environment organizations need
an edge over their competitors in order to succeed. An
effective Human Resources department is an indispensable
part of the success of any business, said a statement.
senior executives admit that today HR plays a more
effective and strategic role in their organizations and
believe that the application of financial analysis to HR
functions can be crucial to that effort. The question is
how many HR employees possess the requisite skills.
Managers need to take decisions; these decisions cannot
be taken without understanding and being aware of the
financial implications of such decisions. An
understanding of the finance function and its impact on
the bottom line of organisations will give you that
'edge' and enable you to perform better. "Finance for HR
Professionals" is a course "tailor" made to cater to the
needs of senior and middle HR managers which will
"sharpen" their financial skills in catering to the
demands of the market in an ever changing environment.
Presently there allegedly isn't a simillar progrmme in
Sri Lanka catering specificaly to the HR professional
and those in business are recommend to pick on this
opportunity . The programme will be conducted by an
"exceptional" speaker who has experience in training
non-financial specialists. Finance for HR professionals
will give participants the boost they need to deal with
Richard Pieris & Co PLC Group Finance Manager Mallik De
Silva who has conducted financial awareness workshops
for non finance managers in Sri Lanka and overseas will
lead the programme that will be conducted at the CIMA
for this programme is limited. Registrations are now
being accepted for the Mastercourse. Further details and
registration forms can be obtained by contacting CIMA
part of a major initiative to develop and strengthen the
accountancy education in the regions, the Institute of
Chartered Accountants of Sri Lanka (ICASL) began its
fifth Information Centre in Ratnapura-at Sabaragamuwa
Provincial Chamber of Commerce & Industry, Main Street,
President Nishan Fernando said, "We are keen to provide
education facilities for Chartered Accountancy to the
students from the regions and by now we are in four
other locations; Kandy, Anuradhapura, Kurunegala and
Matara. These information centres are already being
patronized and used by a large number of students. The
response so far has been positive."
main objective of the expansion program is to introduce
the 'premier' Accountancy qualifications throughout the
country," he added.
decided to expand its services to the Sabaragamuwa
Province as it is a fast developing region in Sri Lanka
with a vast potential for promoting Accountancy
education and developing new businesses with a lot of
this effort, ICASL works in unison with the Sabaragamuwa
Provincial Chamber of Commerce and Industry. "Through
this combined synergy we expect to deliver our best
services to the youth in the province and support their
education plans so that they can be the future leaders
who could develop the region's economy."
Chief Executive Officer Aruna Alwis said, "The two
institutions are planning to contribute their best to
improve the quality of education in the province and
also to encourage many students to enter the higher
education path through this partnership. We want to
provide the latest opportunities to the students in the
area; they lacked such opportunities earlier."
Information Centres are designed to provide
"comprehensive" details about Accountancy education
including training and employment opportunities and how
to plan a career in the Accountancy field. They can also
get information about ICASL, its current and future
is the Premier National Accounting body in the country
and is also the only statutory authority for Accounting
and Auditing Standards in the island.
Foreign T Bond holdings down 22%
Foreign holdings in Treasury Bonds in the week ended
Wednesday declined by 21.9% week on week to Rs. 9,180
T Bill holdings down 1%
Central Bank's Treasury Bill Holdings in the week ended
Thursday contracted by 1% week on week to Rs. 180,700
million (Source: Central Bank)
Milk consumption falls 20%
in volume terms fell by 20% year on year last year, an
industry source said.
attributed this to high milk prices that prevailed
globally coupled with high inflation which caused a dent
in consumer spending power.
Milk powder levy up Rs. 20
Government has upped the special commodity levy on
imported milk powder by Rs. 20 to Rs. 55 a kilo
effective from a fortnight ago, making milk powder
manufacturers to think of seeking a price increase from
the regulator, the Consumer Affairs Authority (CAA).
are contemplating of such an action," Fonterra sources
told The Sunday Leader. Fonterra is the manufacturer of
the Anchor brand of milk powder which has the largest
market share in the country.
Currently a 400 gram milk powder packet of all brands is
retailed at the controlled price of Rs. 260.
will make a loss if this increased levy is not passed on
to the consumer," the sources said.
said that Fonterra, for the first time since 2004 made a
loss in their operations last year because the CAA did
not allow them to increase prices commensurate with
rising global milk powder prices.
However, since then, prices have been on the descent,
coinciding with the crash in commodity prices that took
place from September 2008 and onwards.
result, the price of a 400 gram pack of milk powder was
slashed from Rs. 275 to Rs. 260 recently.
Government's campaign to promote liquid milk (as opposed
to powdered milk) will not work because the necessary
infrastructure is not in place, industry sources told
The Sunday Leader
"Promotion of liquid milk will not achieve the desired
result as the necessary cold room chain including
fridges to store fresh milk is not in place in several
houses because those are too expensive investments,"
Sources said that currently 80% of the milk consumed in
Sri Lanka is available in the form of powdered milk and
only the balance 20% is available in liquid form.
another stumbling block in the promotion of liquid milk
is that milkmen, the "door to door" milk delivery men
who were popular prior to the liberalization of the
economy in 1977 are no longer there, the sources said.
They may have had found other avenues of employment.
Humility key to success
Humility has been a key virtue for the success of an
advertising agency, an official said.
Varuni Amunugama Fernando, joint managing director Triad
speaking to the recently passed out Civil Engineering
graduates of Moratuwa University on Tuesday said that
that was the advice she received from her father, Deputy
Finance Minister Dr. Sarath Amunugama.
come from a privileged family, therefore remember to be
humble," her father had told her, she said to the
Unrest at Kelaniya
Continuous unrest at
has compelled a blue-chip company to re-locate its
career guidance seminar to Moratuwa University.
Keells Holdings plc's CSR arm John Keells Social
Responsibility Foundation (JKSRF) had had these career
guidance seminars previously at Kelaniya University, in
2006 and also in January 2008.
frequent unrest at that university compelled JKSRF to
shift this programme to Moratuwa University this year.
This week long seminar concluded on Friday.
international school has started sending their A' Level
students for placements in industry during holidays, so
that they would learn what the industry wants from them.
Harsha Alles, a director at Gateway International
speaking to the recently passed out graduates of
Moratuwa University's Civil Engineering Department on
Tuesday said that work experience was important.
Graduate Institute of Management Director Dr. Uditha
Liyanage also speaking at this career guidance seminar
said that the academia, more often than not thinks that
what the employer seeks from a prospective employee is
knowledge, skills and behaviour, in that order.
reality what the employer wants is behaviour, skills and
knowledge, in that order, he said.
13,000 AAT "graduates"
were more than 13,000 Association of Accounting
Technicians (AAT) certified students acting as middle
level support staff to accountants as at end of last
institute at present has 38,000 students islandwide. Two
of its main subjects are IT and Taxation.-AAT President
Henanayake Bandara in his address at the AAT
certification ceremony (where 300 students received
their certificates) which was held at the BMICH on
Reserves down 43%
official reserves at US$ 1,753.4 million as at end
December 2008 was sufficient to finance 1.5 months of
imports. This amount also translates to a year on year
decline of 42.7%.
Remittances: US$ 2.6 bn.
Private remittances inflows on a gross basis increased
by 16.7% year on year (YoY) to US$ 2,918.1 million last
year. On a net basis this increase was 15.9% YoY to US$
2,565.2 billion. (Source: Central Bank)
"Shop N Win"
Commercial Bank of Ceylon presented prizes worth Rs. 1.6
million to winners of its 'Shop N Win' promotion carried
out in December 2008 for the Bank's debit and credit
winners at the grand draw won return air tickets to
Singapore while 155 others received Rs. 10,000 each
during the 31 day promotion.
prize winners were chosen from those who spent a minimum
of Rs. 5,000 per day on their debit or credit cards. The
Bank presented Rs.50,000 to five winners each day,
during the promotion period. All participants were
automatically entered into the grand draw at which two
air tickets were on offer.
Commercial Bank already has more than 1.6 million debit
and credit cards in circulation. Commercial Bank's Card
Centre Chief Manager Lakshman Perera aired his views in
General Manager (Operations) Sanath Bandaranayake handed
over a gift to one of the winners, M Sivakumarasarma in
the presence of a representative of the Provincial
100 bn. in damages
Chevron Lubricants Lanka PLC is to launch a road safety
campaign targeting motorists in association with the
campaign was conceptualized by Caltex following the
recently submitted interim report of the Parliamentary
Committee on the increase in road accidents that found
that road accidents in the last decade caused damage of
over Rs. 100 billion, ith more than a million vehicles
damaged. One hundred and fifty accidents take place
daily with 5-6 fatalities.
campaign will start in Colombo and in a span of 10 weeks
cover Galle, Matara, Kalutara, Kandy, Avisawella,
Ratnapura, Kurunegala, Anuradhapura & Gampaha as well.
Chevron Managing Director Kishu Gomes also aired his
views on the project.
Ranpath Paper Pvt Ltd. unveiled its copy/printbureau in
"Metropolitan is happy to partner with Ranpath, " said
Metropolitan Office Ltd. CEO Ivor Maharoof.
Lanka United Kingdom Society (SLUKS) recently celebrated
the sixty-first year of independence for Sri Lanka at a
Colombo hotel. The event was sponsored by Standard
Chartered Bank. Among those present at this occasion
were SLUKS President Dr Lalith Perera, Ms. Gill Westaway
(Vice Patron), Deputy British High Commissioner Mark
Gooding and children representing the different ethnic
groups in Sri Lanka.
SCB OPBT up 13%
Standard Chartered PLC in the financial year ended 2008
saw income rising 26% to US$13.97 billion and operating
profit before tax (OPBT) by 13% to $4.57 billion.
PAT up 13%
Singapore listed Asia Pacific Breweries Ltd (APB) which
holds a 60% interest in Sri Lankan-based Asia Pacific
Brewery (Lanka) Ltd in the first quarter ended December
31, 2008 saw attributable net profit (after exceptional
items) rise 13.4% to S$48.3 million.
Chevron Lubricants Lanka PLC (CLLP) has extended its
agreement for 3rd Party Logistics (3PL) optimisation
services with Logiwiz Ltd. a subsidiary of the Hayleys
group of companies, to continue providing warehousing
and distribution solutions for the organization for
their sales operations covering the local retail market
as well as export markets, namely Maldives & Bangladesh.
signing of the agreement took place at the Hayley
Advantis premises recently between Managing Director/CEO
CLLP Kishu Gomes and Hayleys PLC Deputy Chairman Mohan
Chevron's other local partners include Phoenix
Industries, Polypak, Nisol, Star Pack, Uni Dil
Packaging, Indo East Engineering & Construction Lanka
and Sedawatte Drums Ltd. which are involved in the
supply of packaging material for the range of lubricants
marketed under the Caltex brand.
Virtusa Corporation (NASDAQ: VRTU), a global information
technology (IT) services company that provides IT
consulting, technology implementation and application
outsourcing services announced it plans to partners
Microsoft to provide consultation to Microsoft Office
SharePoint Server 2007 (MOSS) services in Sri Lanka.
can transform business functions that formerly required
many man hours in custom development.
Virtusa Sales and Client Services for the Middle East
and Asia Pacific region Associate Director Druvi
Jayamanne said, "Virtusa looks forward to serving Sri
Lankan enterprises the same way it has served leading
organizations in the USA and Europe for close to 12
years, having worked with Fortune 500 companies spanning
Banking, Financial Services, Telecommunication,
Manufacturing, Retail and Technology sectors."
British High Commissioner Dr. Peter Hayes recently
visited the Hill Country.
briefed on the political environment in the Central
Hills and the problems faced by the estate communities.
with Ceylon Worker Congress Vice President Mrs. Anushia
Sivarajah and Upcountry Peoples Front leader Minister
also met with the newly appointed Chief Minister Sarath
Ekanayake and S.B Dissanayake.
visited Trinity College, John Knox International School,
the Mentally Handicapped Children and Families Education
project and the Hidramani Factory. He also visited the
Victoria reservoir, which was built using British
Technology and opened by former British Premier Margaret
Tratcher in 1985. During his visit, he inaugurated the
British Council's Education Exhibition in Kandy.
16% growth in transshipment volumes
Colombo Port, last year, witnessed a throughput of
5,413,889 twenty foot equivalent units of containers (TEUs)
a 9.9% year on year (YoY) increase.
volumes comprised both domestic and transshipment TEUs.
privately run terminal SAGT in the Colombo Port in this
connection witnessed a 12% YoY growth to 1,726,424 TEUs.
That comprised a 16% growth in transshipment voumes and
a -3% growth in domestic volumes.
State run JCT Terminal in this connection witnessed a 9%
YoY growth in volumes to 3,687,465 TEUs. However the
growth breakdown of domestic and transshipment TEUs of
JCT in the period under review was not immediately
during this period handled 1,273 vessels; a 5.4% YoY
growth. (SAGT News)
Confifi Group has appointed Ms. Anushka Lovell as its
Group General Manager-Sales & Marketing.
previously held senior managerial positions with the
Galle Face Hotel Group, Marriot International, Hyatt
Hotels and Resorts in the Middle East. Prior to these,
she was with Oberoi Hotels for eight years.
have been servicing Garment & Textile Factories,
Automobile Workshops, Machine shops, Footwear
Manufacturers, Transport Fleet Operations, Hotels,
Vehicle Valet & Service Stations, Confectionary
Manufacturers, Cable & Steel Manufactures, Ready Mix
Concrete Plants, Janitorial Companies, Security Service
Companies, Plastic Ware Manufactures, Air-conditioning
Maintenance, Agro Product Manufactures, Metal Packaging
Producers, Fertilizer Manufactures, Marine Maintenance,
Container Depots, Motor Vehicle Dealers and several
others including government establishments over the
Services has provided their product range to several
local and foreign based institutions over the years who
are engaged in a variety of engineering and other
could even offer your specific products from our range
on 'import & supply"' basis should you so desire. "
Services has the complete, comprehensive and innovative
products available to various categories of
Ceylinco Shriram Securities Ltd, (CSSL) a Primary Dealer
appointed by the Central Bank of Sri Lanka (CBSL) to
deal in Government Securities is geared to provide
higher level of service standards, which is supported by
professionalism and business ethics to ensure client
as an intermediary between CBSL and the public use state
of the art tools in its operations. The company's
activities are monitored by CBSL through on site
examinations as well as daily, weekly and monthly
we need is two weeks to execute the recovery plan, "
Merchant Bank of Sri Lanka (MBSL) Chairman Janaka
Ratnayake told reporters recently at the signing of a
Memorandum of Understanding with Finance & Guarantee
(F&G) Group with the consent of Cental Bank of Sri Lanka
(CBSL) to set up a Management Council to conduct
business operations of F&G Group to assure the security
of deposits and investments of its clients.
have stopped refunds and withdrawals that take place in
these companies," he said. Ratnayake said that no bank
in the world could refund its depositors if there is a
20% run on its deposits unless the Government or a
regulatory body stepped into rescue it.
Company's investments in real estate and property
development have been virtually stagnant due to the
downturn in the property market in recent times. It
therefore approached MBSL to support it to overcome the
Management Council formed in this regard would encompass
three companies of the F&G Group, namely The Finance &
Guarantee Co. Ltd., a CBSL licensed finance company, F&G
Property Developers (Pvt) Ltd. and F&G Real Estate Co.
International Finance Corporation exercised their put
option in respect of their 7.5% share of South Asia
Gateway Terminals Ltd (SAGT). John Keells Holdings PLC (JKH)
acquired its pro rata entitlement of 4.22% of the share
capital of SAGT for a consideration of US$ 19.34
million, the balance was acquired by APM Terminals BV, a
now SAGT's largest shareholder with a 42.22% stake in
the company, followed by Maersk (32%). Its other
shareholders are the government owned Sri Lanka Ports
Authority (15%) and Evergreen Taiwan (10%).