The Sunday Leader Online

The bomb explosion which ripped through the Colpetty police station on Wednesday (7), killing five and injuring eleven others has sent shock waves throughout the business community who claim that such a trend should be stopped immediately for the sake of development and investment in the country.

The blast which took place in the heart of Colpetty and within close proximity of star class hotels, embassies and Temple Trees sent shockwaves throughout the country within minutes due to which the Colombo stock market panicked and lost almost Rs. 5 billion in value in the last hour of its trading on Wednesday.

The market was on a steady rise in the early hours of Wednesday with the ASPI up over seven points and the MPI higher by 20 points. However, by the final hour of trading on Wednesday ASPI was at 1339.49, down 21 points and MPI at 2039 points, down by 26 points. Prior to the blast, trading was at Rs. 180 million after which it ended at Rs. 397 million and market capitalisation was down by Rs. 4.7 billion to Rs. 327.8 billion.

President, Federation of Chambers of Commerce and Industries in Sri Lanka (FCCISL), Nihal Abeysekara told The Sunday Leader that Wednesday's explosion has indeed affected the country's economy seriously and the government and the LTTE should go ahead with the peace discussions without any further delay.

"Already the foreign media has flashed this incident quite seriously and now foreign investors will think twice before investing in the country due to the fear of the war starting once again. It is extremely necessary for the country to go ahead with its trading without any hindrance and now the entire economy depends on the stability of the peace process. The government and the LTTE have to go ahead with the peace process soon in order to have a stable economy," Abeysekara said.

Research Manager, HNB Stock Brokers, Hasitha Premaratne told The Sunday Leader that this bomb blast seemed to be more of an isolated attack. In order for foreign investors to continue investing in the country, Premaratne said that the government and the LTTE would now have to give assurance and make a strong statement to the public on whether the peace process would continue. Premaratne said that just because there was an explosion in the heart of Colombo did not mean that it was an indication that the war was about to begin once again and that this entire issue of the ethnic conflict would have to be taken up without any further delay with different forums such as the Norwegian peace envoy. "If this issue is discussed with different forums such as the Norwegians and Indians, then investors will continue looking at the country with a positive attitude. If the government promises the stability of the peace process then this would not affect the economy severely," Premaratne said.

According to Chairman, Ceylon National Chamber of Industries, Ranjit Hettiarachchi, this explosion was another signal that leaders would have to act fast in order to continue the stalled peace process.

Hettiarachchi said that today in every society, peace was the most important essence and such types of 'breakdowns' could not be tolerated any longer.

"We have suffered a lot for the past 20 years and it is time that a permanent solution was found to this ethnic conflict. It is time that we started working hard in order to develop this country. We cannot have intervals such as this and since Sri Lanka is a small country, when an explosion occurs, the image that is developed in a foreign investor's mind, is extremely bad. Currently we need foreign investors investing in our country and the way the foreign media flashes these types of incidents, it ruins the country's image," Hettiarachchi said.

Meanwhile, in a statement released by the Tourism Ministry following the explosion, tourist operations have not been affected and continue to function as before.

Ministry officials said that there were no risks to tourists holidaying in Colombo and to those planning trips from Colombo to any travel destinations in other parts of the country.

Meanwhile, commenting on Wednesday's explosion, UNF MP and former Finance Minister , K. N. Choksy said that this bomb blast would have a definite adverse effect on the economy in several directions.

"Firstly, the tourist inflow will be affected because unfortunately the blast occurred in close vicinity to the locations of two important diplomatic missions and also several tourist hotels situated in Colombo, namely the Colombo Plaza, Galle Face Hotel, Holiday Inn and the Renuka City hotel," Choksy said.

He said that Colombo being the principal entry and exit points of tourists is also another consideration.

"Secondly foreign direct investments and foreign investment in the share market are likely to be reduced. Foreign direct investment is mainly in the business and industrial sector. Capital increases in these areas result in increased production of goods, the export market, reduces inflation and enhances employment opportunities. Affectation of these areas necessarily results in contraction of the economy," Choksy said.

He added that the buoyancy of a country's currency is important to maintain capital growth and increase foreign reserves.

"The Sri Lankan rupee has appreciated against the US dollar and stood at approximately Rs. 94 at the end of last year. The reduction in capital inflow will have the affect of further depreciating the slide in the value of the rupee which has taken place since the last general elections and further depreciate the rupee which stands at higher a figure at Rs. 103 to the dollar," Choksy said.

He added that the government's targeted figures of budget deficit and economic growth are bound to be thrown out of gear.

GoldQuest- All out to clear its name

GoldQuest has denied reports from both media and regulatory officials categorising its operations in Sri Lanka as a pyramid scheme.

"These attacks have unfortunately prompted the mislabeling of our legitimate network marketing programme," a statement issued by GoldQuest said. It further states that lawyers of GoldQuest have taken this issue to the Central Bank (CB) and hoped to clear all doubts with CB. According to this statement, the participants that have violated exchange control regulations by using their credit cards should personally deal with the banks involved by receiving advise from these banks as to how to deal with the authorities.

This happened in the wake of recent warnings by the CB to participants that have used their credit cards to make payments to third parties, which the bank categorises as a violation of the exchange regulations. While credit cards of such persons would be terminated, they would also be liable to pay three times the value of the offence.

GoldQuest has also denied media reports of its involvement in the recent attempt to murder Customs Officer Athula Lankadeva who is presently carrying out investigations of the GoldQuest case. Earlier this month, Customs detained a shipment of gold coins on the basis of the value of these coins and their eligibility towards importing these products.

GoldQuest has already urged police to carry out investigations in to this alleged attack with a view of identifying the culprits. GoldQuest has also requested the police to investigate the beginnings of the campaign to tarnish its name as it believes that there may be a link between persons who may have initiated this campaign and those involved in the alleged incident.

According to GoldQuest, they have provided opportunities for the unemployed and underemployed population as well as others who wished to exercise their personal selling skills through its operations in Sri Lanka. The statement further states that GoldQuest sought to clarify their stand on these issues and would continue to make representations and take all necessary actions to clear their name and provide the correct picture to the authorities and customers while taking legal action where necessary.

- Shehan Moses

Outsourcing cheaper

By Mandana Ismail Abeywickrema

Although the government spends millions of rupees when outsourcing health services, it is yet expected to be cheaper than actually maintaining staff in the government hospitals to provide supplementary services.

Supplementary services are outsourced during a strike and are directed at private hospitals and laboratories.

Speaking to The Sunday Leader, Deputy Director, Colombo National Hospital, Dr. Rani Fernando said that the government spends less when outsourcing supplementary services. However, the amount spent on the facilities run up to millions depending on the number of days the strike lasts.

She went on to say that although the government hospitals cannot outsource facilities provided by the doctors, others - minor staff and supplementary staff, which includes lab technologists, radiologists, pharmacists, etc. - could be outsourced. According to Dr. Fernando, during health sector strikes, private hospitals offer packages on lab facilities.

However, Dr. Fernando pointed out that strikes by the government hospitals' supplementary staff have now reduced with the realisation that the government would spend far less when outsourcing these facilities rather than maintaining a staff for the purpose.

When asked how much the government would spend on supplementary services when outsourced, Dr. Fernando said that it would be difficult to give an exact amount as they vary according to the nature and number of tests done in private institutions. She went on to explain that the price of each test varies, adding that one CT scan could cost up to Rs. 9,000.

A strike in the government health sector results in a sharp increase in patient traffic in private hospitals.

Managing Director, Durdans Hospital, Sathis Tudawe said that the number of patients treated by the hospital sees a sharp increase when paramedics are on strike. He went on to say it is the hospital's OPD section that is congested as the hospital's admissions are not affected by the strike. However, lab facilities too see an increase during the period, he said.

When asked whether this in turn reflects in the hospital's turnover he said that it is not so as the OPD and channeling money does not result in a sharp increase in revenue. Another leading private hospital also agreed by saying that although the number of OPD patients see an increase, it does not in turn affect the hospital's revenue.

Automobile market hit by weak rupee

By Shehan Moses

Depreciation of the rupee against currencies, which includes the US dollar and the Japanese yen, has hit the automobile market in Sri Lanka. The selling rate of the yen on July 7 had increased to 0.95.

Managing Director, United Motors, Anil Wijesinghe told The Sunday Leader that the effect would be immediate and has already affected the market in Sri Lanka.

"The yen has appreciated nearly 15% over the year which is not favorable to the industry," he said.

According to Wijesinghe the market for brand new cars has been more affected as against the reconditioned car market.

"Several years back the brand new car market against the reconditioned car market was 20:80, however today the market has fallen to 10:90," he revealed.

Wijesinghe attributes this situation to the poor economic condition witnessed during the past resulting in the weakening of the rupee against hard currencies and the duties levied against car importers.

"Today only a few can afford a brand new vehicle in comparison to several years ago, therefore they go for much cheaper reconditioned vehicles," he stressed.

"Several years ago 1,200 units of double cabs were imported. However, today barely 400 cabs are imported to Sri Lanka since many cannot afford such vehicles," emphasised Wijesinghe.

A senior official of Stafford Motors told The Sunday Leader that there has been a steep decline in the car market in Sri Lanka over the last few months due to the weakening rupee and the increase of Cost Insurance Freight (CIF) and other duties related to the automobile trade.

According to this official, the motorbike market is more affected than the car market. He states that it is the middle and lower middle class consumers that purchase motorbikes and when there is a marginal increase of the price, they would be affected due to their poor purchasing power.

"The growth of the motorbike market is affected not merely by the price hike of motorbikes. When the economy is not performing well people cannot afford such products," stressed this official. Wijesinghe urged the government to take immediate measures to safeguard the automobile market in Sri Lanka by reducing import duties.

Citigroup's Corporate Banking Platform ranked No. 1

Citigroup's CitiDirect Online Banking took first place in an independent study by Greenwich Associates to evaluate the internet-based cash management applications of 10 leading banks in the U.S. for the second year in a row. The respected institutional research firm chose CitiDirect as "best in class" among cash management websites for U.S. corporations and financial institutions, giving it an overall score of 94 out of 100.

CitiDirect ranked first or tied for first in 20 of the 32 categories compared to competitive offerings, based on 31 evaluation criteria in the areas of usability and features; site management and integration; and online products and services. CitiDirect, available in 21 languages and providing information and transaction services to clients in over 90 countries, received perfect scores across the board.

"We have involved clients in the development of our internet-based banking offerings to ensure that our products truly meet their needs - and set the standard for the industry," said Global Head, Cash Management, Citigroup Global Transaction Services, Paul Galant. "Our focus from the beginning has been to provide corporate and institutional clients with a single point of access for online cash management and trade transactions and reports, no matter where they do business around the world - and to back up these offerings with expert advice and around the clock client support. This study tells us that our strategy and its execution have been both, sound and successful. However, that does not mean that we can take our success for granted," he added. "We must - and will - continue to enhance the CitiDirect application so that it remains best of breed and meets the expectations of the corporate treasurers and cash managers who rely on it to run their operations."

"CitiDirect Online Banking stands out in a highly competitive peer group, driven by strong product functionality, focus on client workflow, and many unique value added features. Online cash management functionality in the market overall continues to evolve at a rapid pace, and Citibank's ability to stay ahead of the pack is impressive," said Principal and Director, Business Development, Greenwich Associates, Steven Busby.

Citibank N.A. commenced its operations in Sri Lanka in December 1979 as a full service branch of Citibank N.A., New York. Since its inception, it has been a leading provider of cash management and trade services to financial institutions and corporate clients, providing timely, accurate information and dynamic, web-based tools to effectively manage financial positions, working capital and supply chains around the world.

Stocks - Long term buys recommended

The FY2004 results of Distilleries recorded a Net Turnover growth of 73% to Rs.10.74 billion compared to Rs.6.20 billion during last year. Our forecast for the full year 2004 was Rs. 6.09 billion excluding SLI. The other main deviation in the revenue forecast came from the Food and Beverages (F&B) segment, which grew, by approx. 21% during the Q4 of FY2004.

The major part of the full year turnover growth in DIST (other than the insurance segment) was accounted for by the Food and Beverages segment. The F&B segment grew by 19% to Rs. 4.3 billion from Rs. 3.6 billion recorded in FY2003. Approximately 70% of this growth was generated through the increased prices while the balance was from growth in volumes. Increase in volumes in this saturated market could only come through capturing the market share away from illicit manufacturers. However, the high excise duty structure that drives the legal manufacturers' prices up remains a main barrier in this regard, since the illicit products are sold at significantly low prices.

We project this segment to grow by 24% over FY2005 to Rs. 5.31 billion. Our FY2005 gross turnover growth projection for this segment is at 26%, nevertheless with the possibility of the govt. running on an enhanced fiscal deficit, we anticipate a possible duty hike and thus the net revenue growth is projected only to be 24%.

The insurance segment represented by SLI contributed Rs. 3.6 billion to the top line. We see this growing by another 15% in FY2005 to Rs. 4.14 billion. We do not anticipate an exponential growth in the top-lines of SLI in the immediate future since the initiatives taken at present (particularly in the fields of IT and human resources) may take at least till the medium term to yield justifying returns.

The plantation sector represented by Balangoda and Madulsima plantations recorded a turnover of Rs. 2.49 billion, up by 7%, compared to the previous financial year. Growth in volumes was the main cause for such increase in revenue in the plantation sector. Our turnover growth forecast for this segment in FY2005 is at 7% to Rs. 2.67 billion.

The textile sector, represented by Timpex showed a growth of 28% to Rs. 350 million. Here too increased volumes mainly drove the growth. We see another 20% growth in this category coming in FY2005 to Rs. 420 million.

Sale of shares boost earnings

The other operating income amounting to Rs. 598 million is mainly the gains from the sale of shares of JKH, Sampath Bank and more recently Aitken Spence. This pushed the operating profits up to Rs. 2.14 billion, which was 150% higher than the Rs. 854 million recorded during last year. Furthermore, there were no significant increases in the operating expenses though we did anticipate a high operating cost with the SLI consolidation.

The goodwill amortisation of Rs. 233.7 million includes the SLI component of Rs. 213 million and the same charge would be appearing over the next four years as well.

The operating profits of Rs. 2.137 million had the main F&B sector bringing in a significant Rs. 2.12 billion (including capital gains). The insurance segment contributing with Rs. 80 million, textile giving in Rs. 4 million and the plantation sector in the negative region of Rs. 61 million. The plantation sector was affected by the higher operating costs and the overall decline in the industry during the early part of FY2004 with unfavorable weather making things worse. Nevertheless, with better tea prices and increased demand during the Q1 of 2004, we believe that the Balangoda and Madulsima plantations would recover from a bad patch to post a modest profit during FY2004 (Balangoda has already posted profits for year ended De. 2003).

Our operating profit forecast for FY2005 is at Rs.1.72 billion. Though all segments are expected to record a growth in operating profit, we project a 20% decline in the consolidated operating profits to Rs. 1.72 billion, as we do not envisage DIST recording the same level of capital gains experienced in FY2004. The capital gains during the year amounted to Rs. 598 million. Out of the FY2005 operating profit forecast of Rs. 1.72 billion the F&B segment is expected to contributed Rs. 1.38 billion, the capital gains are estimated at approx. Rs. 107 million, Insurance sector is expected to bring in Rs. 207 million (after goodwill write off of Rs. 213 million), plantations are to contribute with Rs. 13 million and textiles would chipping in with Rs. 8 million.

Net earnings up by 152%

The net finance income has increased from Rs. 129 million in FY2003 to Rs. 138 million this year. Though at Q3 (without SLI consolidation) it was a net finance cost of Rs. 208 million mainly on account of the additional borrowings for the acquisition of SLI, the interest income of SLI (approx. Rs. 248 million) has reversed it to a net finance income at the full year consolidation. We see this improving to a net finance income of Rs. 211 million in FY2005.

The share of profits from the associate company (Aitken Spence) saw an increase of 115% to Rs. 408 million from Rs. 190 million last year. This was mainly driven by the tourism and power sector earnings, as reported in our full year earnings review of Aitken Spence on June 25. With the sale of shares of SPEN to SLI the direct holding of SPEN by DIST is 17%. We are nevertheless treating it still as an associate and consolidating the earnings for a 17.26% holding. Thus the share of earnings from associates is at Rs. 327 million for FY2005. Furthermore during FY2006 where SPEN is expected to get the contribution from their new 100MW plant, the contribution from associates would jump up by 76% to Rs. 574 million.

The net earnings to shareholders for FY2004 stood at Rs. 2.218 billion, up 152% from last year's Rs. 880 million. This outperformed our expectations with the increased earnings from the F&B segment, and the income from associates (SPEN) both of which exceeded our projections. Furthermore, the gain from the sale of Aitken Spence shares contributed significantly towards the bottom line. Meanwhile the interest income of SLI wiped out the interest cost on borrowings of DIST, thus further improving the bottom lines beyond our expectations.

At a share price of Rs.25.25 and an EPS of Rs. 7.39 the PER stood at 3.42x. The NAPS was at Rs. 20.28 giving a PBV of 1.24x.

Forward outlook

Our forward earnings forecast for DIST for the FY2005 stands at Rs. 1.826 billion. Despite the decline in the earnings, this results in an EPS of Rs. 6.09 yielding a PER of 4.1x at a market price of Rs. 25.25. Though this is an increase from the current PER level of 3.4x, we still see the counter very attractive at 4.1x compared to the market. Furthermore DIST diversifying in to insurance justifies it being ranked higher than the historical PER range of 1.9x - 4.2x that it has traded over the last five years.

Additionally the forward PBV of 1.0x remains attractive compared to DIST being ranked higher than the normal PBV range of 0.4x-1.1x that it has traded during the last five years.

Thus we maintain our recommendation, a long term buy.

- HNB Stock Brokers

Pvt. sector needs more access
to govt.'s infrastructure facilities

Speaking of the rationale that business is a part of society and the stability of society is essential for business and vice versa and that the private sector has a role to play in social development outside their enterprises, just as much as governments have a role to ensure a climate that is conducive to business, Director General, Employers' Federation of Ceylon (EFC), G. K. B. Dassanayake in an interview with Dinesh Weerakkody says that the private sector has the clout and capacity to influence decision making in government. "I believe that our private sector has the capacity to influence decision making in government and we see a growing trend for private sector involvement in the decision making process. To strengthen its lobbying capacity and clout it is important however, for the private sector to speak in one voice. Any government would then take more serious note of the views of the private sector having regard to it being the principal partner in economic development.."

Following are excerpts:

Q: The EFC is organising a high profile seminar on Corporate Social Responsibility (CSR). What do you hope to achieve and promote?

A: The objectives of this symposium are twofold. Firstly, to recognise the importance of the subject for which purpose we have focused on a study and review of the subject globally and in Sri Lanka, and to formulate practical steps to enhance commitment to CSR, in the context of its importance in today's business environment. Secondly, to discuss the possible role of the EFC in the area of CSR in relation to our members and the business community as a whole. In the case of the former objective we consider it very important to not only identify relevant issues, but see a need to develop a balanced approach to CSR, which avoids unfair expectations from enterprises.

Q: The concept of social responsibility has been around for a while. Why is it that the EFC took so long to showcase CSR in the private sector?

A: I do not think it is correct to say that EFC has been slow to react to the need for CSR. I would refer you to the publication which marked our 50th year, which was 25 years ago, and the comments made by the well known Indian industrialist Naval Tata, who complemented the EFC for its leadership in social responsibility issues.

The drive for a more committed programme on CSR has been of recent origin, especially in our country. In countries such as ours, the significant role now played by the corporate sector in national development is relatively new and this places more of a responsibility on the part of the corporate sector to respond to social needs. In fact, it is only now that many international organisations such as the International Standards Organisation, the International Organisation of Employers (IOE) of which the EFC is a member, are addressing this subject in a systematic manner. We have given leadership to promoting the ILO Declaration of Fundamental Principles and Rights at Work, of 1988. The aim of this declaration is to reconcile the desire to ensure that social progress goes hand in hand with economic progress.

We have also given leadership in promoting the Global Compact of the Secretary General of the United Nations. The Global Compact as you know is a call to the world business community to voluntarily subscribe to a set of standards in the areas of labour, the environment and human rights. A number of EFC member companies have subscribed to the Global Compact. More recently the EFC has worked on the setting up of an Employer Network on Disability. This network facilitates employment related training and job placement for the disabled. I will not go on to list what we have done but merely say that all in all, from our very inception in 1929 the EFC has been conscious of the importance of social stability and progress while focusing on economic growth. This has also been the credo of the ILO, of which the EFC has been the Sri Lankan employer constituent.

Q: Does our private sector have the clout and capacity to influence decision making in government?

A: I believe that our private sector has the capacity to influence decision making in government and we see a growing trend for private sector involvement in the decision making process. To strengthen its lobbying capacity and clout it is important however, for the private sector to speak in one voice. Any government would then take more serious note of the views of the private sector having regard to it being the principal partner in economic development.

Q: Private sector firms have only been solely responsible to their providers of capital. What is the rationale for management to look beyond the bottom line?

A: The rationale is that business is a part of society and the stability of society is essential for business and vice versa. For this the private sector has a role to play in social development outside their enterprises, just as much as governments have a role to ensure a climate that is conducive to business. The bottom line would be impacted if there is social instability. In other words, it is an issue of sustainability for all and the theme of our symposium is "CSR for sustainable development."

Q: The private sector more than ever needs to demonstrate a social conscience with the greatest possible vigour in order to prevent antagonism being built up against the private sector by the public. What role can the EFC play to develop this social conscience?

A: I agree that it is important for the private sector to demonstrate a social conscience. That is one important aspect that we are trying to promote through this symposium. It is unfortunate however, that the perceptions entertained in many quarters in relation to the private sector do not necessarily reflect the correct position. If you take private sector establishments, many have been involved in numerous activities which demonstrate a high degree of social responsibility. Most of them however have been ad hoc approaches and have not received the publicity they deserve. The book that is to be published for our symposium will discuss some of the initiatives taken by the private sector. Perhaps what enterprises should be doing is to move to a more policy based approach, which shows a long term commitment to social change. Hopefully, the EFC can assist enterprises in this regard and also develop itself as a link between the private sector and society as we have hitherto done with our member companies, their employees and trade unions.

Q: What has been the EFC's contribution to develop and nurture the underprivileged people in our society?

A: I have in my answer to your earlier question referred to the EFC's contribution in different forms. Of course it needs to be understood that our role is limited in the context of our objectives and our rules. But we take pride that over the last 75 years we have been a partner with our member enterprises, the state and trade unions in improving terms and conditions of employment, and in developing an equitable approach to the solution of labour related problems. We have in the past attempted to focus on the need for a proper employment policy which takes account of the need for investment to create much needed jobs. The EFC has also made a significant contribution in relation to the training of youth and our officers have served on many boards involved in vocational training. We invested our own money in the Skills Development Fund (SDF) along with the government, but the SDF unfortunately has not made as important a contribution as envisaged, due to several constraints for which we are not to blame.

Q: Finally, what role do you wish the government to play in bringing about private-public partnership to uplift the living standards of the poor?

A: The government possesses infrastructural facilities and substantial resources to which the private sector should have more access. In the areas of education, vocational training, and other fields the government should encourage private sector participation and use the technical resources available there. It is important that these resources are utilised to create more employability skills as well as encouraging the less fortunate to engage in worthwhile small scale business activities. Special attention must be paid to those in the informal economy to give them support so that they could be suppliers to the formal private sector. The support could come in many forms including the setting up of co-operatives and other organisations which could link up with bodies such as ours which have the ability to tap into technical assistance from agencies such as the ILO. What is important is for parties to take each other into their confidence and work together within a defined framework for the ultimate good of the majority of the people.

JKH electronic dividend payments via Deutsche Bank

John Keells Holdings Limited (JKH), announced that it will be processing dividend payments electronically via Deutsche Bank's electronic banking system, db-direct internet.

This will replace the traditional practice of issuing dividends using corporate cheques that require manual signatures. Deutsche Bank is the first bank to introduce electronic processing of dividend payments in the country.

"With this new process using db-direct internet, the company can approve bulk payment of dividends in one single batch instead of the tedious task of approving each dividend payment individually.

Hence, the electronic-based method of payment ensures a more secure process that requires no manual intervention and is also one that is less labour-intensive," explained Group Treasurer, John Keells Holdings Limited in Sri Lanka, Rohan Perera. "Automation also means that we will be able to better manage the information flow and enjoy the benefits of new cost-efficiencies arising from more accurate data and reduced processing times."

"Our winning this mandate represents the confidence the Sri Lankan market has in Deutsche Bank's comprehensive range of cash management products, which is complemented by our partner bank network. We provide our customers with workable solutions that they can use to better address their daily needs," added Asia Pacific Head, Deutsche Bank's Global Cash Management for Corporates, Jimmy Yap.

Education hit by increasing Pound

By Shehan Moses

Sharp Depreciation of the rupee against the Sterling Pound during the past few weeks has caused a severe impact on the British based education qualifications in Sri Lanka. The Pound was sold at Rs.186.49 on June 30, whereas on July 7 it was sold at Rs.190.13.

Among the qualifications available, the most popular are the management accounting based Charted Institute of Management Accountants (CIMA) and marketing based Charted Institute of Marketing (CIM). The examination fees for these qualification range from Pounds 40-60 per subject while registration fees would be around Pounds 100.

CIMA President, Claude Perera told The Sunday Leader that this unfavorable situation has caused an adverse impact on CIMA students islandwide.

"The students will find it difficult to cope when the Pound value increases since they will have to pay more rupees for their exam and registration fees," said Perera.

According to Perera, there is a threat of the student population declining due to the high cost involved in this qualification due to the adverse exchange rate situation.

"As a precaution we are presently discussing this issue with CIMA-UK to provide a concessionary rate on tuition fees in terms of Pounds to our students," remarked Perera. However, Perera sees this unfavorable situation as a short-term problem which he believes could be overcome on the longer term. "When CIMA qualified students enter the job market in Sri Lanka or overseas they earn a significant income within a short span of time that would compensate the massive amount they spent when studying for the qualification," emphasised Perera.

Chairman, CIM, Lasantha Wickramasuriya shared a similar view to Perera. According to Wickramasuriya marketing students would face difficulties when it comes to paying for their examination fees due to the high cost of the Pound.

"Since many of our students are employed and they have to pay the fees by themselves it would create a sever burden to them."

Wickramasuriya stressed that since many companies do not sponsor students for their exams and their monthly salaries would not be sufficient to pay their examination fee, there would be a threat of student membership declining.

He emphasised that there was no significant growth of CIM membership this year when compared with the previous years and he attributes this situation to the rising effect of the Sterling Pound.

Wickramasuriya stressed that though CIM UK would offer a concessionary rate for local members it would not have a significant impact on the exam fees payable.

"Even if they provide a concessionary rate it would be just a marginal discount which would not be sufficient," he said.

Enforcement authorities boost government revenue

The government recorded a Rs. 1,250 million (9.8%) increase in government excise revenue for the first six months ended June 30, 2004, mainly attributed to the declining volumes of illegal and counterfeit tobacco products in the local market.

In a press release, Ceylon Tobacco Company stated that government revenue has grown from Rs 12.7 billion during the six months ended June 30, 2003 to Rs. 13.9 billion during the same period of 2004. The growth of 9.8 % in government revenue comes in the wake of massive raids and detections carried out by Customs officials and police to minimise the availability of counterfeit and illegal cigarettes. The estimated volumes of these illegal products mainly "Gold Seal" have seen a decline during the period under review.

Customs officials detected the largest consignment ever of Gold Seal cigarettes during the month of May, with the number of detected cigarettes being over 14 million sticks.

During the first half of 2004, Customs, Police and the Excise Department have conducted 193 raids and confiscated cigarettes amounting to over 20 million sticks.

House of design that's going places

By Ranee Mohamed

When I met Principal, Academy of Design and Director, Interior Design Programme, Annette Wendling-Willeke, four years ago, she made an impression that lived on.

With her colourful personality and professional success, she convinced me that there is more to life than being a lawyer, doctor or an engineer. She opened the doors of the school and showed me a whole new arena - of colour, of glamour and of talent - all there for the taking.

But time is an enemy they say and I expected time to change things at the Academy of Design - and it had, but this time for the better.

It may be because they always get their students to get a 'feel' of things that one is able to easily get a 'feel' of things at the Academy of Design. And here the feelings again were of talent, longings and dedicated, budding professionalism.

It was originally called the New York School of Visual Art, but today it goes beyond New York - it goes all over the world. For that is what their subject matter is all about. It is about designing for life - be it fashion or interior. Be it to adorn a personality or to settle over one's surroundings, this academy has it all within its sombre walls. It is like a caterpillar that puts forth the butterflies - the hard training and the colourful success thereafter.

The Academy of Design is cut out to groom any student with an undergraduate education which will be accepted anywhere in the world.

And today several years later, Managing Director, Linda Speldewinde is shocking me with her success story as she is with her delicate blend of both glamour and knowledge of the subject.

"We have given Sri Lankan students a pathway into a different undergraduate education," points out Speldewinde, whose brainchild, the Academy of Design has made a remarkable contribution to Sri Lanka's garment industry alone. On pursuance of the courses of study at this school, students become "very" employable.

Speldewinde said that there are two streams in the school - fashion designing and interior designing. "Interior designing is misconceived in Sri Lanka and people mistake it for interior decorating," pointed out Speldewinde. Among the qualified staff are Tizian Picogna, the head of the fashion design faculty and Director, Fashion Programme, Jacky Vogt.

This school of thought is different in that it offers any student an alternative profession - not the traditional - as law, engineering, medicine, dentistry, etc. This is of fashion designing and interior designing. Among the areas of study are life drawing a composition of various media. Communication ideas through visual language, legislation, social and professional responsibilities, major historical art and design movements, ethics, time management, portfolio presentation, fashion marketing, basic sewing, embroidery, trend forecast, collection portfolio, blocks, dark and seam manipulation, scale pattern, pattern construction, grading, fashion business and merchandising.

In 18 months students are able to obtain a qualification that is accepted internationally and is the equivalent of any international qualification in design at a locally accepted cost. There are no air fares and no expensive university fees. While many foreign universities may charge up to Rs. 450,000 a term for such a course of study, the cost at the Academy of Design seems negligible.

"Designing is about the psyche. It is about the individual," points out a section of the students who have gone deeper into fashion designing. These young men and women are full time students of the Academy of Design. Young Yasisurie said that she is learning something different. "I did not want to study business and marketing etc. I wanted to do something different, something art-related because my interest since I was a child was in fashion. This was the perfect opportunity for me because an overseas education on the same lines would have cost so much more."

"This is quite controversial though. It is not pattern making or dressmaking... It gives you the exposure, the capacity you have to grow," she said.

Kaushi joining in said that she did not know which way to go after her advanced level. "I wanted to do computer management and heard about accountancy. I wanted to do something different and I wanted to go overseas, but the costs were prohibitive. When I came here to 'look around' I knew that this was it - that this was my everything and I have no regrets."

"I knew that I was no lawyer, doctor or banker since I was 13 years old and when I finished my advanced level I dropped in here on my way for classes and out of the three places I have visited, it was the Academy of Design that caught my eye," said Shehana another enthusiastic student at the school. "I truly liked the place and luckily my parents backed me up in my chosen profession," she said.

"I am very passionate about what I do and I am inspired by the school. Of course there was much controversy at home because they attributed all this to a 'woman's field.' Today, this school has made me what I am," said Michael, a student serious about his work here at the Academy.

"People feel that this is kindergarten stuff. But this is much more. We have endured many sleepless nights. It is a whole process, step by step..." they explained.

And it is to go up step by step in this highly sophisticated lifestyle of fashion and glamour that the team at the Academy of Design have given a hand to. And hats off to all of them, especially to Linda Speldewinde for making it all possible for conceiving an idea that will be in fashion through time.

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