Business

Bug is productivity...

Productivity and not wages is the biggest constraint in developing the plantation industry, a manager said.

Vish 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.

This 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.

"In 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.

"What 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.

He 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.

 Watawala's 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.

Limits 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.

CB 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.

This 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.

Some 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.

If 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 costs.

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.

Before 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.

"In 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.

For 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.

WAYs 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 fail.

For 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.

"This 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

A biscuit manufacturer advocated protectionism after getting his fingers burnt when venturing out into India.

Mineka 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.

The "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 liquidator.

"Court 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.

"If it 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.

ISC 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.

He 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.

Going global

Odel 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.

It will also open a franchise outlet in Maldives.

Its principal shareholder Ms. Otara Gunewardene told a seminar in Colombo on Wednesday  that despite the recession, she has been able to clinch those global openings.

She 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.

"But 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.

This seminar was organised by the MBA Alumni of Colombo University.

IRD moves out

Divisions of the Inland Revenue Department (IRD) operating from its headquarters building in Colombo are moving out.

"It 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, they said.

The 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 the staff.

IRD 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

Sri Lanka is at the cross roads of a new era of development, said Sri Lanka Institute of Architects President Jayantha Perera.

He was speaking at SLIA'27th annual sessions which was started with the inauguration of Architect 2009 Trade Exhibition at the BMICH on Wednesday (March 4).

"Our 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.

Others 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.

The ceremony began with a procession comprising council members, past

presidents and guests making their way to the hall for the main ceremony.

Guests 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

from 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.

Awards 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.

The ceremony concluded with the launch of a book, Creating Simplicity by senior Architect Anura Ratnavibhushana.

SLIA 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

A long 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,

Though 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.

This 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 emphasis.

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).

While 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).

While 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. 

The taxation regime imposed especially on the financial services sector, remains non-conducive to growth in the industry, a banker said.

Hatton 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%.

 Theagarajah 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 collapse.

Total 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.

Non 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.

High 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.

 The 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 borrowers.

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. 

The 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 year.

Total 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 conditions.

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.

With 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.

Return 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.

Group 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 bn.

"While 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," said Theagarajah.

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, 2008.

NTB 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 a statement.

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 previous year.

 Group 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 34%.

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.

Being the first year of operations under the new Strategic Plan 2008-2012, 2008 was an eventful year for the Bank.

 NTB 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

It's a 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 recent interview.

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?

A: 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 depositors ?

A: 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?

A: 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?

A:  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.?

A: 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 company.

Q: Is this measure part of a rescue package for finance companies like F&G which were close to bankruptcy?

A: 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?

A:  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?

A: 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.

"Car Maker"

Kia 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.

The AM 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.

"We 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 future.

As we 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 business."

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.'

This offer is valid upto March 31, 2009.

Asst. 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."

"This 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.

Whilst 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.'"

Re-engineering Seylan 

Seylan Bank PLC which underwent a difficult period last year is in the process of being re-engineered.

Among 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 Standards.

To 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 participation.

The 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 risks.

Based 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 impact. 

Bank has however recorded a higher net interest income of 7.215 bn. compared to that in the previous year of

LKR 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.

The Bank made an after tax profit of LKR 37.9 mn. for the year ended 2008 as reflected in the bank's unaudited accounts.

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.

 With 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.

'Ayurveda 2009'

'Ayurveda 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.

This 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.

 Harcourts signed an MOU for a joint venture with AFI Technologies Pvt. Ltd. India, one of the leading solution providers in the Healthcare industry.

AFI 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.

AFI 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.

AFI is 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."

AFI 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 research."

Rheyas 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."

Preventable deaths 

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 worldwide.

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 children."

Sri 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." 

Wyeth 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."

Edna Group Chairman Lal Edirisinghe also spoke at this event.

"Biggest supermarket

The biggest "supermarket," Keells Super Fountain Cafe at Union Place, Colombo had their "grand" opening recently.

This 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.

Keens 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 categories.

There 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.

Keens 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%

NDB 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.

 The 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%.

 In 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, among others.

 NDB 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 2009.

NDB's 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.

NDB's 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% respectively YoY.

Bank's 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 operates.

The 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%.

The 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.

In the 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 branch level.

NDB 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 local Banks.

NDB's 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.

NDB's 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 environment.

Micro Finance, the new business

The 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.

 He made this observation at the Harvard Business School for the Harvard Business Asia conference that was held recently at the School in Boston.

 This 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 Conference.

 Abeywickrema inspired the audience which included students from the Harvard Business School, Harvard Law School & Kennedy School of Government at Harvard University.

 Since 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.

 His 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.

As 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.

He 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 nations.

Many 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.

In his 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."

During 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. 

Four 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 

ICBT Campus, the leader in private sector education in Sri Lanka opened its sixth and Modern branch Campus in Nugegoda recently.

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.

ICBT 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.

He 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

CIMA (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, 2009.

In 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.

 Many 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.

HR 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 numbers confidently.

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 Auditorium.

Intake for this programme is limited. Registrations are now being accepted for the Mastercourse. Further details and registration forms can be obtained by contacting CIMA Sri Lanka.

Covering Sabaragamuwa

As 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, recently.

ICASL 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."

"The main objective of the expansion program is to introduce the 'premier' Accountancy qualifications throughout the country," he added.  

ICASL 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 employment opportunities. 

In 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."

ICASL 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."

ICASL 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 programmes.

ICASL is the Premier National Accounting body in the country and is also the only statutory authority for Accounting and Auditing Standards in the island. 

In Brief

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 million.

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%

Milk consumption in Sri Lanka in volume terms fell by 20% year on year last year, an industry source said.

He 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).

"We 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.

"We will make a loss if this increased levy is not passed on to the consumer," the sources said.

They 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.

As result, the price of a 400 gram pack of milk powder was slashed from Rs. 275 to Rs. 260 recently.

Signifies nothing

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," they said.

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.

And 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.

Ms. 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.

"You come from a privileged family, therefore remember to be humble," her father had told her, she said to the graduates.

Unrest at Kelaniya

Continuous unrest at Kelaniya University has compelled a blue-chip company to re-locate its career guidance seminar to Moratuwa University.

John 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.

But frequent unrest at that university compelled JKSRF to shift this programme to Moratuwa University this year. This week long seminar concluded on Friday.

Placements

An 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.

Dr. 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.

Post 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.

But in reality what the employer wants is behaviour, skills and knowledge, in that order, he said.

13,000 AAT "graduates"

There 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 year.

The 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 Tuesday.

Reserves down 43%

Gross 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 card holders.

Two winners at the grand draw won return air tickets to Singapore while 155 others received Rs. 10,000 each during the 31 day promotion.

Cash 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 this regard.

Deputy 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 Revenue Department.

Rs. 100 bn. in damages

Chevron Lubricants Lanka PLC is to launch a road safety campaign targeting motorists in association with the Traffic Police.

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.

This 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.

Partner

Ranpath Paper Pvt Ltd. unveiled its copy/printbureau in Kohuwela recently.

"Metropolitan is happy to partner with Ranpath, " said Metropolitan Office Ltd. CEO Ivor Maharoof.

Celebrations

Sri 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.

Logistics

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.

The 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 Pandithage.

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.

Partnership

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.

MOSS 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."

Visit

British High Commissioner Dr. Peter Hayes recently visited the Hill Country.

He was briefed on the political environment in the Central Hills and the problems faced by the estate communities. 

He met with Ceylon Worker Congress Vice President Mrs. Anushia Sivarajah and Upcountry Peoples Front leader Minister Chandrasekeran.

He also met with the newly appointed Chief Minister Sarath Ekanayake and S.B Dissanayake.

Hayes 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

The 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.

Those volumes comprised both domestic and transshipment TEUs.

The 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.

The 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 available.

SAGT during this period handled 1,273 vessels; a 5.4% YoY growth. (SAGT News)

Appoinment

Confifi Group has appointed Ms. Anushka Lovell as its Group General Manager-Sales & Marketing.

She 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.

Service

Aries 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 years. 

 Aries 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 trades.

" We could even offer your specific products from our range on 'import & supply"' basis should you so desire. "

Aries Services has the complete, comprehensive and innovative products available to various categories of trade/business.   

Monitored

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 satisfaction.

CSSL 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 reporting procedures.

No withdrawals

"All 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.

"We 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.

The 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 crisis. 

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. Ltd.

Acquisition

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 Maersk subsidiary.

JKH is 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%).