BUSINESS

TQB suspends quotas of over 80 firms

The Textile Quota Board (TQB) has suspended the services and main quota utilisation of over 80 garment companies. It is alleged that these companies, mostly small factories, had not engaged in any import/export activities last year. They are also believed to have transferred their quotas for payment and engaged in subcontracting work for larger firms or buying offices since they were not in a position to attract buyers.

The move by the TQB followed a disclosure by a Customs representative on the board who stated that a considerable number of factories had not been involved in any imports/exports during 2002. Thereafter, the board had decided to withhold allocation of main quotas to such companies.

The utilisation of main quotas had been suspended since January 21, said TQB Director General Chandralal Attanapola.

However, 40 of the affected companies had appealed against the TQB decision. Their appeals were evaluated and it was recommended that quotas be restored to 25 of the companies. The Quota Board had asked them to submit evidence to prove that their factories were operational. Such evidence included EPF/ETF payments for employees, utility bills, confirmation of having undertaken sub-contracting for other parties and proof of payment received for such subcontracting.

As for the other 15 companies which had appealed against the TQB decision, officers attached to the Textile Division of the Ministry of Enterprise Development will inspect their factories before it is decided to restore quotas.

Attanapola said they would temporarily remove the suspension of services and offer quotas sufficient for the particular shipment if an affected party approaches them stating they urgently have to meet export orders.

It was in November last year that the TQB issued preliminary quotas (upto 70% of the main quota entitlement) for 2003. These were suspended for over 80 companies on January 21.

Meanwhile, one small garment company (which has been exporting to the world market since 1983) strongly criticised the TQB for suspending their quotas. The company claimed they undertook an export order in December 2002. They also said they have received an export order under the 'hot' quota category 347 (pants and shorts to the U.S.) and they have to deliver by end May.

Its managing director alleged that the TQB is composed of representatives of large garment firms which are trying to edge out the smaller players and grab all the quotas for themselves. He pointed out that the U.S. and other countries offer quotas to developing countries for fair distribution among legitimate factories.

He also alleged that some large exporters had attempted to influence the authorities to place the 'hot' quotas in the pool so that they could obtain these for free.

According to him, there is a strong demand for pants and shorts for the coming summer season, and the big players are attempting to obtain as many category 347 quotas as possible.

He also said the TQB does not have the authority to suspend quotas. However, TQB sources confirmed that they have such powers under the TQB Act.

Small garment firms stated that certain factors resulted in them being unable to export in 2002. These included the attack on the Katunayake airport, a surcharge on imports/exports placed by the shipping community, the terrorist attacks in the USA, the unstable local political environment and shipping lines avoiding Colombo port.

One company said that they kept their factory open although many large companies halted operations in 2001 and 2002. They claimed that they will be compelled to terminate the services of their employees as they cannot bear an "undue quota suspension."

TQB Director General Chandralal Attanapola refuted the charges levelled against the board . He said the board decides what categories and quantities of quotas should be released to the pool, but allocation of such quotas is done in a transparent manner. "Even small companies have received pool quotas in the past," he added.

He also said category 347 had not been placed in the pool since 2001, and they will not put it in the pool this year.

Banking sector performs well 

The strong profit growth which the banking sector witnessed in 2002 is unlikely to continue at the same level in the near future. However, the banking stocks will continue to build on this base and achieve record profits in FY 2003, which will allow them to outperform the market in the medium term. This was stated in the Banking Sector Research Report by HNB Stockbrokers released last Wednesday.

"We feel that fundamentals such as cost ratios, efficiency levels, leverage, the quality of the loan portfolio and scale issues will be critical success factors of banking performance in the long run, and Sri Lankan banks are well positioned to benefit from these," the report stated.

After a dismal year in 2001 all banks performed exceptionally during the Year 2002. Largely driven by the economic recovery, the banking sector was further boosted by revisions to the tax legislation introduced in the Budget 2002. The abolishing of the Goods and Services Tax , National Security Levy  and Turnover Tax enabled banks to achieve higher interest margins, and is evidenced in their interest income numbers. Overall, the banking sector reported strong results during the first nine months of the fiscal year to 30th September 2002, with profits growing by an aggregate of over 50% YoY. For the full year, HNB Stockbrokers expect the aggregate to actually increase to 62%.

One of the key reasons for the banks' earnings out performance in 2002 is the widening of interest spreads. By the end of 2002, there was a sharp decline in interest rates, with the 12-month treasury bill rate declining by 476 basis points since the beginning of 2002. A year ago the 12-month treasury bill rates were as high as 13.7% but had dropped to 8.9% as at 16th January 2003.

The Central Bank has continued on this rate reduction policy, and recently cut key short-term rates, in an effort to further strengthen the recovering domestic economy.

Despite the government's intention to reduce the lending rates, the banks have continuously enjoyed better spreads, with lending rates continuing to be sticky downwards. Most banks have maintained or marginally reduced the lending rates but have been cutting the deposit rates by a higher proportion. This is reflected in the varying levels of changes in the Average Weighted Fixed Deposit Rate (AWFDR), Average Weighted Deposit Rate (AWDR) and the Commercial Bank Prime Lending Rate (PLR). It is believed that the interest rate spread will at least be maintained if not increased, as we are likely to see further reductions in the deposit rate and a lower than corresponding reduction in lending rates. "Meanwhile, loan to deposit ratios (LDRs) on average have been declining slightly over the last few years, and we have assumed this ratio to remain static in our forward forecasts. However, we may see LDRs improving on increased lending to the North East," the report stated.

For lending, Sri Lankan banks have focused on the trading sector, where 40% of their loan books are placed. It is felt that this trend would continue in the future but is is believed that this could change with North East development.

The banking sector would have a major role to play in the North East development, as the World Bank has already advanced funds for the purpose. It is believed that development banks would be at a better position to take advantage of the long term project lending but the commercial banks will have a part to play. The construction industry, which represents 10% of the advances currently, is likely to be a larger representation in a peace scenario. It is believed that the overall loan portfolio of the banking sector would grow by at least 25%-30%, with the construction industry representing 18%-20%. Furthermore, growth in financing towards the tourism sector can be expected.

The most recent budget proposal of the UNF government has introduced an additional Value Added Tax (VAT) surcharge on the banking sector. The 10% VAT surcharge will lead to a reduction in profitability of the banking sector but it is believed that this is a replacement for the Turnover Tax and National Security Levy which were in place until Budget 2002. VAT will be calculated as, 10% x (profit before tax + personnel cost). The Bankers Association is currently negotiating with the Finance Ministry to include the VAT as a tax-deductible expense (as the TT and NSL used to be) and if they succeed the effective rate would be reduced to approximately 7% from 10%.

State-of-the-art data loss prevention and data care software now in SL 

NetSolv Private Limited, which operates from World Trade Centre, has introduced state-of-the-art data loss prevention and data care software to the Sri Lankan market.

This array of software has been developed by Unistal Systems Private Limited, India, after much research and development in the field of data care. NetSolv (Private) Limited has been appointed Unistal's exclusive premier channel partner in Sri Lanka.

"With ever expanding computerisation, computer dependency and an accelerated hike in data volumes, the need for data loss prevention and recovery solutions are an absolute necessity to data owners," said CEO, NetSolv, Brian Walter.

He added that data loss is the most dreaded term any computer user has ever experienced. Hours and hours of hard work, months and months or years and years of developments may get lost within seconds due to virus attacks, corruption of partition or boot, hard disk failure, faulty software functions, folder damage, voltage glitches, or even due to accidental formatting or file deletion. The user realises this only when the disastrous message is displayed.

However, recovering all data in the same form is nearly impossible. Companies have gone out of business, projects got delayed, and organisations has lost their credibility, which results in financial burden, time loss, resource wastage and frustration.

Solutions for these situations are:

Crash Proof - A data loss prevention utility, once installed is designed to revive the data back. Its new heuristic technology saves the critical images of the hard disk while installing and updating them at regular intervals. This unique software prevents data losses even from future viruses or other means.

Quick Recovery - Automated data recovery software, which diagnoses a crashed disk and simulates the files/folders.

Unistal Anti Virus- A complete anti-virus solution that is designed to prevent and remove/cure all types of viruses in a single scan. Updates are continuously available through its live update feature. The unique POP3 layered firewall eliminates e-mail viruses even before they enter the mailbox.

Data Protect - Confidential and sensitive files are exposed to the risk of hacking. It could even be a situation where your PC, or laptop is shared by others or could get lost/stolen. This software protects files by encrypting using Unistal's unique encrypting algorithm, hence preventing unauthorised access to your secret data.

Data Wipe - Sensitive and confidential files are present on the computer, even if they are deleted from the recycle bin or the disk is formatted. The deleted files can be retrieved using software, thus  resulting in information leakage. Data Wipe doesn't just delete but wipe unwanted files, hence assuring permanent wipe, which is unrecoverable.

Disk Repair - A useful utility to remove logical bad sectors and to repair 'track 0 bad' hard and floppy disks.

Unistal Systems (Pvt) Ltd, a niche player in the field of data care since 1994, has joined hands with NetSolv (Pvt) Ltd to extend its marketing arm to Sri Lankan data owners/computer users in order to give a chance to experience the taste of their cohesive, cutting edge solutions.

This assurance enables Sri Lankans to march forward in their ventures with confidence, without such fears of data loss nightmares.

The sale of more than 200,000 copies during the last three years in India, ever since the launch of their ace product Crash Proof (and more than 8500 data recoveries successfully completed) testifies the superiority and dependability of these data care solutions.

Currently Unistal products are marketed in Europe, Middle East, China and Australia. These solutions come with reasonable and introductory price tags, which give every computer user in Sri Lanka the chance to experience the software solutions offered.

'SelectBanking' from Standard Chartered

Standard Chartered Bank launched 'SelectBanking' formally at a function at Jaic Hilton on February 13.

Standard Chartered offers 'Business Class' for the working executive and 'Priority Banking' as an internationally branded wealth management product, for the exclusive high net worth segment.

'SelectBanking' was designed to meet the needs of the intermediate  segment and take relationship banking and personalised service to new levels.

"Customers need convenient options and a personal interface with the bank. 'SelectBanking' is the customised solution to achieve this objective by providing the right balance between personal interface and technology driven features," said Head, Consumer Banking, Standard Chartered, Vivek Chand.

'SelectBanking' makes banking simpler and more convenient by providing dedicated relationship managers and special counters to fast track and prioritise 'SelectBanking' of customers.

Specially branded cheque books and ATM cards ensure recognition of customers throughout the branch network and financial flexibility is provided via international credit cards and loans at preferential pricing.

There are a host of other benefits but the key element is personalised service for this important segment of customers..

Mundo Gas to start filling within the next two weeks

Managing Director, Mundo Gas, Ariyaseela Wickremanayake said that within the next two weeks they should be able to start filling gas.

"The barge is presently here and once the terminal is completed the company hopes to start filling gas cylinders," he said.

Wickremanayake speaking to The Sunday Leader said that the price of a cylinder has not been decided yet, adding however, that the price difference will be at least Rs. 100.

The company hopes to put out 100,000 gas cylinders around the island.

Wickremanayake added that they are equipped to fill as many gas cylinders as needed.

The gas terminal is situated in Galle.

Earlier this week at a press conference at the Consumer and Commerce Ministry, Minister Ravi Karunanayake said that it was his job to bring in competition in order to bring down prices. This is what he has done and he is also in contact with Caltex and Petronas of Malaysia to bring in more competition for the price of gas to come down, he said.

The minister said that these companies will not be able to increase their LPG prices like Shell and Laugfs and the government will not come into any agreement with gas suppliers in the future so this will stop arbitrary price hikes.

The minister also said that in April an awareness programme will be carried out to educate the public on their rights, so they would be able to take action against any violation of the act.

This act will also help do away with monopolies in the market and increase the supply of quality products and services, he said.

Richard Pieris buys prime real estate

Richard Pieris - the blue chip conglomerate - recently entered into an agreement with the Bank of Ceylon to acquire 229 perches of prime land at Union Place for Rs. 176 million. This block of land, adjacent to the existing Arpico Supercentre at Hyde Park Corner, once amalgamated, will give main road access from Union place and is the critical size for an attractive real estate development opportunity. A company spokesmen said, "This acquisition will greatly enhance the value of our existing property and the retailing centre and will also ideally position us for the development of our real estate sector in the foreseeable future."

"We would now own four and a half acres of valuable land in the heart of the commercial centre earmarked by the Urban Development Authority for development."

Richard Pieris opened its third Arpico Supercentre at Hyde Park Corner in November last year, which includes Sri Lanka's largest supermarket and furniture store with parking for nearly 150 vehicles. "This supercentre, which has an unmatched range of supermarket goods and household merchandise, has all the conveniences and the highest standards of quality expected by discerning consumers of today," the company spokesman added.

• Continuation of the interview with Mahendra Amarasuriya on the remarkable success of Commercial Bank

People are the most important resource

By Dinesh Weerakkody 

Q: Now, what role did the bank management actually play in the amazing turnaround?

A: Managing Director Amith Gooneratne and his management team played a vital role in the amazing turnaround. Though I mentioned earlier that Morrison who at the helm during the transition period did initiate the change in management culture he was MD only for one year.

It was Gooneratne who gave the required leadership to develop the new corporate culture and make rapid progress towards achieving the bank's latest vision, 'To be the Financial Power House in Sri Lanka.' This  new vision was also formulated by the management team under his leadership. He has succeeded in motivating and driving the bank towards achieving this vision.

Q: How strong are your human resources management practices?

A: With all humility I can confidently state, the best in Sri Lanka, as endorsed by the IPM Sri Lanka  Institute and the bank judged the overall winner of the coveted 'National HRM Award 2002,' at the first ever National Human Resources Management Awards Convention held recently. The final selection was made from among 50 blue chips and multinationals who  entered the final round. We have always believed that our people are the most important resource available and done everything possible in managing them and looking after their development. Regular meetings are held with all unions  to  maintain a continuous dialogue with our people.

A well planned training program formulated annually after a needs analysis is published and made available to the staff at all levels including both local and overseas training. Our well equipped training center offers a range of programs to our staff and outside participants. In 2002, the bank entered into a collaborative MoU  with the Asian Institute of Management, Bangkok, and conducted a special program on 'Strategic Management in Turbulent Times' attended by our staff and outside participants.

Q: As the chairman, how involved are you in the commercial operations?

A: I am not directly involved in the day-to-day operational activities. The managing director and his senior management team manage all operational activities. All branches are connected to the head office by a very effective computer network. As a result of which information is available on an 'On Line Real Time' basis, enabling close control of all activities by the MD and senior management in Colombo. Five regional managers also overlook the 109 branches situated all over the island. With regular visits to branches, review meetings and close monitoring, the MD has successfully developed target-oriented technology driven culture. My involvement is at the policy making and strategic decision making board level but I endeavour to be in close touch with important operational activities through the Managing Director.

Q: What role does the Managing Director and his team play  when it comes to policy formulation?

A: Being an important member of the board as the chief executive officer, the MD plays a very important role. All policies formulated by the board always give special consideration to the invaluable contribution made by the MD. He also plays a leadership role in the annual corporate planning process through which the overall targets and profitability projections are formulated for approval by the board. More importantly we coordinate all activities connected with the implementation of the annual business plan and the long term corporate plan.

24 hour mobile computer repair centre introduced by CCPL 

For the first time in Sri Lanka, Computer Care Pvt. Ltd. (CCPL) introduces yet another innovative value added service to the IT industry: a 24-hour mobile computer repair center geared to help you maximise productivity in a hassle free environment.

With a state-of-the-art fully equipped repair centre, ample stocks of parts and backed by highly qualified engineers and technicians, Computer Care fills a void in the IT industry.

The services available at Computer Care are on-call repairs, disaster recovery management, resource management, comprehensive maintenance, back-up services, routine services, preventive maintenance, corrective maintenance, user training and a help desk.

With free estimates and gap analysis, Computer Care services are available for any branded and assembled products irrespective of the supplier and condition of the equipment.

Computer Care is a subsidiary of Computer Island - the manufacturer of CIL and IBM business service partner in Sri Lanka with ISO 9002 international quality standards certification.

"In Sri Lanka people have been supplying products to the market but haven't concentrated on repairs and maintenance. Having realised there is a demand for this service, we decided to start Computer Care for repairs and maintenance," said President, Computer Island, Janaka Ratnayake.

"We have a modern fully equipped lab and around 30 trained technicians at Computer Care. There was a company that started carrying out maintenance and repair work before, but they could not continue probably because they did not have the expertise," he says, adding "the response generated by Computer Care has been very good."

There was a vacuum in the industry so the response from the public and the corporate sector has been very good.

"Services are not carried out only on our products. That is CIL and IBM. We are the service partners to IBM and are authorised to service and maintain IBM computers. We have extended our services to include  all other branded and unbranded computers and the know-how acquired from servicing and maintaining IBM computer systems helps to support these operations."

Maintenance is carried out according to ISO standards, said Ratnayake.

With the tenth anniversary of Computer Island coming up in May this year, he is mainly concentrating on acquiring the new ISO standards for his company. "Computer Island obtained ISO 9002 about three years back. We are on the verge of changing into new standards. We adhere to ISO standards when providing service."

The CIL mission is to 'be an active player in the global village through superior products, services and people to deliver value to consumers and understand consumers better than competitors. Through development of employees they will strive towards constant improvement, thereby achieving both the short and long term company objectives whilst satisfying all customers.

Started in 1993, CIL is today estimated to be worth over Rs. 100 million and is expected to be the first IT company to be certified for ISO 9001-2000 standard and ISO 14000 in Sri Lanka. As a socially responsible corporate citizen, CIL plays its part by being a benefactor of numerous socially beneficial projects, especially targeting the younger generation. CIL also regularly donates IT equipment to needy people.