Business

Budget has increased bank tax rates by 20-25%

Nihal s. Welikala

By Sunalie Ratnayake

The total tax charge on banks has come close to 60% on banking income as a result of the recent budgetary tax increases, NDB Bank (NDB) CEO Nihal S. Welikala told The Sunday Leader in a recent interview.

He was responding to a question when asked in the backdrop of budget 2007, what impact increased taxes would have on the profitability of the bank. Welikala said that tax rates have effectively gone up by another 20-25%. "that certainly would impact on NDB's bottomline," he said.

 "When you look at the need to accumulate capital to comply with present banking requirements, 60% is quite high," said Welikala. So there is a contradiction between the high tax rates and the need to accumulate capital. "We are certainly concerned in relation with the tax situation," he said.

When asked whether the Bank would pass on these taxes to the customer, Welikala said: "I believe that there is a highly competitive banking industry and there is a limit to what you can pass on to the consumer. So, each bank will have its very own different strategies on how to make the bottomline work for their shareholders. That will be a balance between the consumer and the shareholder. We will try to walk appropriately and in a fair balance," he said.

Welikala however said that there has been a very strong growth in terms of  NDB's interest line as well as the commissions line in 2006 in comparison with 2005. "The reason is because we got our commercial banking license very recently and then a big expansion happened, both in terms of customer acquisition as well as, in terms of distribution, the number of branches that the customers could reach," he said.

When asked what he thought of the banking business in this present situation, "where there is a threat of a war breaking out?" Welikala said: "I think there is a lot of resilience in the economy and even in during the worst of times, Sri Lanka has managed to recover. Incidents of violence unfortunately do occur in Sri Lanka and many other countries, but as long as the economy is growing at the pace it is, there will be more banking opportunities," he said.

To a question as to how the bank felt in operating "in this high inflationary scenario and in what way does the bank hope to give the customers a better rate?" he said: "The benchmark interest rates will determine for the banking industry what is the best that the banks could offer their customers. We will be quite aggressive in terms of offering, both rewards to the customer and different kinds of products that they can benefit from over a long-term period. One does not look at a particular quarter and say that inflation is very high. We tend to look at a much longer-term period."

Prima accused of selling contaminated flour

Prima Ceylon Ltd., which enjoys a monopoly status in milling and selling wheat flour to the local market has been accused of supplying worm infested flour by confectioners.

" Ceylon Biscuits Ltd's (CBL's) success in exports is due to quality and price. When quality and consistency are affected, it will not take long to lose our export market, which we have gradually built up in time," CBL Chairman Mineka (Micky) P. Wickramasingha told The Sunday Leader.

The quality problems observed in Prima flour deliveries to CBL, a leading confectioner gave rise from December 2005 to November 2006 and allegedly includes the detection of flying insects and the flour being infested with weevils and maggots (both live and dead).

 On March 29, it was detected that the "bag outer" and  "vehicle interior" was allegedly infested with weevils. This consignment was rejected by CBL. On April 3 the same problem had allegedly once again taken place. This allegedly continued until May 6 and on August 29, there were allegedly specification variations and poor quality flour was allegedly supplied to CBL by Prima. On September 1 the delivery vehicle base was damaged. Wood splinters were allegedly attached to flour sacks during unloading.

 On September 20, a product mix up allegedly took place. A container supposed to be carrying an Aeroplane brand of flour was delivered to CBL allegedly mixed with Mill AB brand as well. Then again on September 21, live weevils were allegedly detected in the flour. On October 10, the bag outer was allegedly heavily infested with live weevils. On October 15, quality problems were observed in the poor quality flour allegedly supplied by Prima. Similar situations allegedly arose until November 21 and on the same day CBL was reluctantly compelled to use Mill AB for their products as Prima could not alleghedly supply the approved Aero brand.

Wickramasingha said that Prima has been supplying poor quality flour, while giving 24-hour notice in regard to price hikes. Also, prohibitive duties on flour imports make it uneconomical for CBL to import flour direct.

 Another major problem is that Prima does not adhere to delivery dates.

Too big to handle

The Trade and Tariff Cluster (TTC) is studying a request made by the confectionery industry to reduce the duty on imported wheat flour, TTC co-chairman and Trade Ministry Secretary Dr R.M.K. Ratnayake told The Sunday Leader.

The current duty on imported wheat flour is Rs 10 a kilo and on wheat grain, Rs 4 a kg. He said that these duties have been imposed to encourage rice consumption. If duties on wheat grain imports, as advocated by the industry, is increased, and not duties on milled wheat flour imports, that would have cascading effects on prices and would be beneficial to Prima, said Ratnayake.

He was however unable to say by when they hope to resolve this issue. "Prima is a company that is bigger than I," said Ratnayake. He agreed that confectioners had a valid grievance and admitted that among the problems faced by the industry due to the monopolistic nature of wheat flour operations in Sri Lanka are the availability of poor quality flour and  the required flour not being delivered on time. The TTC functions under the Finance Ministry's National Council for Economic Development.

Gold Quest ups JKH stake to 6%

Gold Quest, the controversial Hong Kong based company allegedly involved in the banned pyramid type of business bought 2.3 million shares of the blue-chip John Keells Holdings Ltd (JKH) at the Rs 192-193 price levels per share at Friday's trading, thereby giving a thrust to the bourse, market sources said.

This transaction was worth Rs 440 million and comprised 1.59 million shares being bought at the Rs 192 price levels and a further 700,000 shares at Rs 193 per share. It took place closer towards closing, the sources said. The seller is believed to have had been Sri Lanka born, but US based high networth individual Raj Rajaratnam.

Total foreign purchases for the day were Rs 442 million and foreign sales, Rs 455.4 million. The day's total turnover was Rs 661.8 million and the number of JKH shares traded, 2.36 million. JKH closed at Rs 193, Rs 1 less than its previous closing price.

Prior to Friday's trade, Gold Quest was believed to have had been having around 5.5% of JKH's equity. JKH has around 459 million issued shares. Friday's transaction was equivalent to around 0.5% of JKH's equity. Market speculation is that Gold Quest wants to up their stake in JKH to 10% or beyond.

The single biggest shareholder of JKH is Sohli Captain and related parties with around 22-25% stake, followed by Rajaratnam with between 10-12% and then Gold Quest with 6%.

TU action spreads

The go slow action started by tea pluckers demanding a Rs 300 daily wage hike has since generated into a complete work stoppage from the last week-end, Asia Siyaka Commodities Vice President Anil Cooke told The Sunday Leader.  Asia Siyaka is a leading tea broking firm.

The trade union (TU) action which began in the middle of last month in the upcountry estates is now spreading to the low country areas, said Cooke. There is a danger that future tea auctions may be disrupted, he said. Weekly around 51/2-6 million kgs of teas are sold at the Colombo auctions.

 If buyers leave the auction searching to buy teas from elsewhere it would be difficult to get them back, said Cooke. Prices of high grown teas shot-up by Rs 10 a kilo at last week's auction due to this TU action.  The government needs to intervene to resolve this crisis, he said. Plantation Industries Minister Milroy Fernando was not immediately available for comment. However, the Minister last week had had discussions with the management companies over this issue, a ministry spokesperson who did not want to be named said.

With the workers expected to be paid their last month's salary on December 8, chances of them returning to work in the near future are bleak, said Cooke. He further said that the workers are not allowing teas to be taken-out from the estates. He also harboured fears that with money in their hand on account of salaries received, this would lead to the workers getting inebriated and hence the possibility of turning violent this week-end.

The management is prepared to pay the workers Rs 250, up from the nearly Rs 200 daily wage that they are currently being paid. However, the workers are sticking to their demand for a Rs 300 wage, said Cooke.

CF opens ATMs

Central Finance Co Ltd., (CFCL) the predominant player in the financial sector successfully ventured into the savings programme "CF Savings" in early January 2006, said a statement. These accounts attracted many customers because of the unique features and benefits offered to suit individual needs.

From the inception, the fundamental principle of CF Savings was to " Understand your customer and give them what they want." The implementation of the flexcube unibanking system is one such programme to provide customers to perform their transaction from any CF branch with ease. A boost to this venture is the latest addition - Central Finance own Automated Teller Machines (CF-ATM) network which began operations on Tuesday.

December 5, the date "CF Cash" ATM network launch coincides with the historic date of  establishing CFCL in Kandy on December 5, 1957. CF - ATM Initially complements their successful savings schemes at their Head Office at Raja Vidiya, Kandy and in their City office located at Vauxhall Street, Colombo; Kurunegala - Mihindu Mawatha, Kurunegala; Negombo -Main Street, Negombo and Nugegoda - High Level Road, Nugegoda.

 CF-ATMs are linked to on-line to access any time, 365 days. Since the beginning of the year CFCL is breaking ground into new areas of operation to provide more and a better service to their loyal customers such as money transfers through Western Union.

The unique features of the CF ATM are: Fast Cash - allows the cardholder to withdraw from primary savings accounts; balance inquiries, statement inquiries, PIN change and language change and fund transfers.

Negotiations are underway by Central Finance with a leading commercial bank to link their islandwide savings operation with a network in furthering the facilities. This will enable customers to access their savings accounts from anywhere in the country.

The language change allows the cardholder to select the language he prefers and the entire CF Cash ATM network is secured  with a strict security system. The CF Cash ATM is equipped with the most innovative and latest technology, and intends to introduce many more features and benefits in the near future.

As the progress of  financial activities  of Central Finance is high and solid, it became the only finance company in Sri Lanka to be rated a A+(lka) by Fitch Ratings. The last CF financial year was an eventful one with its deposit base exceeding Rs 10.4 billion. The gross deposit mobilization amounted to Rs 13.1 billion out of which new deposits and current capitalization was Rs 2.6 billion.

CFCL is proud to take this initiative to walk the extra mile to provide the convenience that all their customers seek in financial transactions. As a special launch programme to access "CF Cash" in a hurry, keeping in mind this festive season.

"CF Savings" intends to issue free of  charge ATM cards to any CF Savings, CF Super Savings, and CF Senior Citizens Account holders until end 2006. CFCL's board comprises C Wijenaike (President), S V Wanigasekera (Chairman), E H Wijenaike (Managing Director), G S N Peiris, Mrs. C. Kiriella, M. S. Wijenaike, U. L. Kadurugamuwa, G. C. B. Wijeyesinghe, R. E. Rambukwelle and A. K. Gunaratne.

New Browns Centre

Brown and Company Ltd., recently opened its new Browns Centre in Colombo which has a range of products that include renowned brands such as Sharp -TV/ microwave ovens/ refrigerators/hi-fi systems/air-conditioners/washing machines/photocopier/faxes, Parker-pens, Timex-watches, Cornell/Rico-grinders, toasters, irons, Olympus-cameras, Eukanuba-pet food  and Exide batteries.

A statement said that the Centre is equipped with modern amenities and houses renowned brands under one roof. It has ample parking and the best deals where customers will experience shopping like no other in town, as Browns is true to their word in providing "Commitment to Excellence."

Browns has a heritage in Sri Lanka having established themselves in 1875. The company subsequently was listed in the Colombo Stock Exchange as a public quoted company. Browns achieved Group status in 1974 and has since diversified its activities.

The company is a conglomerate with fully owned subsidiaries and associates involved in manufacturing and distribution of batteries, radiators and paints. The company also represents itself in the banking, airline and trading sectors and trades a range of products in consumer electronics, hardware, agricultural products, generators, automotive batteries, veterinary pharmaceuticals and office automation.

The Browns group is led by a dynamic management who are ever alert to business opportunities and avenues of advancement through joint ventures with overseas partner companies engaged in the distribution of renowned brands.

 Consequent to ownership change, the new board has put in place a strategy to ensure that the Browns team is equipped to take a leading part and be in the forefront of Sri Lanka's new growth and development.

The board comprises Mrs. R.L.Nanayakkara, N.M.Prakash, I.C.Nanayakkara, A.L.Devasurendra, S.V.Somasunderam, M.T.L.Fernando, V.Malalasekara and J.M.G.Candappa.

Reggies on Dec. 13

The 'Reggies' this year promises to be an event to remember with a record number of participants, even more entries, a gala event and an eminently qualified and infinitely experienced panel of judges, said a statement.

 The 'Reggies' conducted by The Reggie Candappa Foundation For The Arts hopes to carry on the late Deshabandu Reggie Candappa's legacy as a man of the craft, blessed with multitudinous talents and a perfectionist of the highest order.

It is a small way of paying tribute to a man of art, an incredibly talented photographer, an incredible illustrator and typographer as well as a great writer whose influence on the advertising landscape of Sri Lanka has been, to put it mildly, legendary.

First and foremost the Reggie Candappa Awards (RCA) seek to reward those who seek perfection in their craft, understanding true inspiration and the efforts expended towards achieving perfection. The trust placed in 'The Reggies' by the individuals involved in the industry is well reflected in the mammoth number of entries and the numerous organisations and individuals taking part in the competition this year.

Thirty five advertising agencies, production houses and individuals are involved in the RCA this year with over 500 entries submitted. The judging panel for the print category for the 'Reggies' this year is chaired by Ms Nicola Bolling, Creative Director Leo Burnett Solutions and comprises Ms Chandini Rajaratnam,  Vice President and Executive Creative Director JWT;  Upali Herath,  Executive Creative Director of BBDO Swara, Mike Masilamani,  Managing Director Masters DDB; Rajiv Wirasinha, Director Heensare and Russell Miranda,  Executive Creative Director of Grant McCann-Erickson.

The judging of the television category is headed by Mrs Lilamani Dias-Benson, Co-Chairperson LOWE LDB and comprises Dileepa Abeysekera, Managing Director Heensare; Steve de la Zilva, Managing Director Wrap Factory; Suren de Silva, Managing Director Video Image and Vinodh Anand, Commercial Director Vision Works.

A tough competition is virtually guaranteed with the high standard of excellence expected by the judges, enabling only those who really deserve it to ultimately win.

 The grandeur of the 'Reggies' will culminate in a gala event at King's Court, Trans Asia Hotel on December 13. The main sponsor of The Reggie Candappa Awards 2006 is the ABC Radio Network, with co-sponsors being Derana TV and Battery energy drinks.

New faces at Lowe

New faces mingle with the old, adding fire to the top team at Lowe LDB, said a statement.

Michael Holsinger recently joined the Agency as its Chief Operating Officer. Also Rimzan Farook (Media Director) and Renuka Jeya Raj (PR Director).

With them are stalwarts of the Agency, Nathasoruban Sivapatham and Udaya Tennekoon Joint ECDs, Vasantha Wettewe Media Operations Director and Pahan Rodrigo, Client Operations Director.  Mrs. Lilamani Dias Benson  is the founder CEO of the Agency.

Lowe LDB is well known as the Advertising Agency that consistently builds brands. That makes intoxicating advertising that people fall in love with and inspires loyalty beyond reason.

Their clients know how much they respect engaging penetrating ideas.   How much score they place on mining for market insights and on developing differentiators that are the key to winning market share for their clients. 

Lowe is passionate about adding value in changing times, explained Benson, who is also Co-Chairman of the Lowe Group.  Which is why, she says they believe in constantly replenishing the talent pool. Benson said that the Agency is already working with several clients on interesting new ventures which will enable these clients to connect with their consumers in ways they had not been able to do before.

She also explained that their sister companies Lowe India, Imag Lintas and Interactions, India were also providing exposure and specialised training which is invaluable. "Its not only whether you know your consumer," she said, "it's also how well your consumer gets to know you and engages with your brand intimately," Benson said.

SCB's unique "forward" scheme

Standard Chartered Bank (SCB) recently structured and completed Sri Lanka's first "Rupee option," said a statement.  The Bank was also instrumental in introducing this product to the local market having worked closely with the Central Bank of Sri Lanka to obtain regulatory approval - which is now available for all banks.

SCB has completed two historic transactions the very first USD/LKR call option and the USD/LKR Put option in the Sri Lanka market, with Prima Ceylon Ltd and Brandix Lanka Ltd respectively.

The unique feature of a Rupee option is that it gives importers and exporters greater freedom when hedging/ covering their rupee/ USD exposures. Previously when booking forward, customers were compelled to deliver on a contract, whether or not the market rate was favourable. A Rupee option gives the buyer the right, but not the obligation to either buy or sell the currency at an agreed price, on an agreed date for an agreed amount, for a payment of an upfront premium. This would mean that, on the maturity date, if the market rate is in the client's favour, then the client will exercise his right to buy or sell at market levels. If the market rate is against the client, he will exercise his right to buy or sell at the contracted price.

SCB Sri Lanka Global Markets Head Rukshan Dias explained: "An exporter, who would seek an appreciation of the USD, would look to buy an option, where he earns the right to sell USD against LKR. This is known as a USD put - LKR Call transaction. On the other hand, an importer, who would look for the USD to depreciate, would want to buy the right to buy USD against LKR. This is known as a USD Call - LKR put transaction. After the payment of a premium, an exporter buys the right but not the obligation to sell USD against LKR at say Rs 103 for delivery on a specified date. At the expiry date of the transaction, if the market rate is over 103, the exporter will sell their USD at the market rate. If the rate is below 103, the exporter will exercise his right to sell USD at 103 to SCB."

SCB Sri Lanka CEO Clive Haswell said: "We are delighted to introduce yet another global product to Sri Lanka. SCB is known in Sri Lanka for innovation and the introduction of new products in every segment it works which then quickly become industry norms. As a leading international bank which has been in Sri Lanka for over 100 years - this is we believe part of our obligation to not just to our customers but to the local industry. We have the know-how expertise within our bank and our relationship with both our customers and regulators - make us ideally suited to be the market innovator and move the industry to the next level."

Regional Global Markets Head Sundeep Bhandari said: "This product is an important step in developing the local forex market and and it is always a privilege to lead the way. In India when this product was introduced in 2004, 70% of foreign exchange transactions were related to forward contracts, but today over 70% have moved to the options market. Given the value addition this product brings to customers in providing stability in uncertain market conditions, while still allowing the customer to benefit from market change,  we are confident that the Sri Lankan market will follow suit."

"Benefit from Life"

"Union Life, 'Benefit from Life,'" campaign highlights the need for financial plans and security at any stage oflife, including Union Life plans such as retirement income, investments, child education and protection, said a statement.

"This campaign is a celebration of life," said Union Assurance Ltd (UAL) AGM Marketing  Wiranjan Peiris. It reminds viewers and readers that people are living longer, healthier lives in retirement and what better way than getting rewarded when they are a live.

Planning for the future means building and securing wealth. "At UAL, we want to see families obtain security without compromising their financial resources and assets. Union Life can help you build a flexible portfolio of securities and insurance investmentsthat balance both risk and return at a level of risk you are comfortable with. After all, your future depends on it."

Sound financial investment strategies can contribute to the best of times while preparing you for the worst of times. UAL understands that, for some, traditional retirement and savings plans may not be enough for a secure retirement. "As we age, our financial needs and situations can change at a moment's notice. That's why it's important to access UAL's network of over 1,400 advisers. They can help you to plan for your future requirements such as retirement, child education and investments.

Our competitive life insurance policies are tailor-made to fit your family's lifestyle and needs. Our Life insurance products and medical assurance provides benefits for a specific period of time and typically offers the greatest amount of coverage at the lowest cost, ideal for young families who need to ensure college expenses for their kids."

Life insurance can provide long term death benefit protection, including an income for a surviving spouse. "Life insurance policies enable you to accumulate cash value which you may access to fund unanticipated financial needs.

Planning for retirement is one of the biggest challenges facing all of us today. That's why it's important to consider on long-term financial contracts issued by insurance companies that are designed to provide a series of payments to a named individual in exchange for a premium or a series of premiums. To learn more about how Union Life can help you plan for retirement, contact your UAL financial adviser."

NL opens third counter at Kandy

Nations Leasing (NL) recently opened the third of its specialized leasing counters at Nations Trust Bank's (NTB's) Kandy branch, said a statement.

This will enable both existing as well as prospective customers in the area to avail themselves of leasing products and services that are offered by NL.

They include the obtaining of lease and hire purchase facilities and making rental payments with "convenience and ease."

According to Deputy General Manager- Leasing Keshini Jayawardena, the differentiation NL brings to the industry which is now recognized as one of the fastest growing within the financial services sector is that NL believes in long standing values and life-long relationships.

Jayawardena affirmed that this would entail a business proposition that includes fast approvals, competitive interest rates and a superlative service "all of which together with the entire range of banking products and services will be available under one roof."

In the course of 2007, NL will further its presence in strategic locations.

In addition, customers may access NL services through all NL Branches as well as the 30 NTB branches or by contacting NL hotlines. The Kandy branch is located at Colombo Street, Kandy.

HSBC promotion

The 'Badu Mallai, Panseeyai' promotion for HSBC credit cardholders at all Cargills Food City, Cargills BigCity, Sentra Supermarket and Park n' Shop outlets has proven to be popular with HSBC cardholders, said a statement.

 Launched in September 2006, this promotion gives any HSBC credit cardholder who makes purchases for Rs. 2,000 and above on the credit card at any of the above outlets the chance to win a gift voucher to the of value of Rs 500 from Cargills.

The winners are picked daily through a system programmed to select customers on a random basis. There is no draw involved. The winner may use the voucher against the same bill or save it for another day. This promotion continues until December 15.

Wins car in Janashakthi promo

E. A. Silva of Nittambuwa is the latest winner of the brand new car offered bi-annually by Janashakthi Full Option (JFO) as part of its ongoing consumer promotion for JFO policyholders, said a statement.

Janashakthi Insurance Company Ltd Managing Director Prakash Schaffter handed over the keys of the vehicle to the winner at a ceremony recently.

Apart from the brand new car on offer every six months, JFO, the revolutionary trend setter in the Sri Lankan motor insurance industry, also offers airline tickets to Bangkok and ten gift vouchers every month, thus enabling its policyholders more chances of winning prizes.

"Janashakthi considers every customer as a key stakeholder in the Company's path to success. Hence our continuous recognition of the trust and confidence they have placed in the Company. JFO is the only insurer that gives its policyholders the opportunity to win while  enjoying secure protection. With JFO you are always a winner", Schaffter said.

"Janashakthi Insurance has one of the largest branch distribution networks counting more than 100 branches. Our branch distribution revenue has grown by over 30%," he added. Crowned the 'Most Innovative Service Brand of the Year' at the recent SLIM Brand Excellence Awards, JFO's success is attributed to constant deliberations on consumer insights, a highly professional management team and above all, the passion for achievement and the courage  to challenge leading brands.

JFO is the leading innovator and "most comprehensive" motor insurance solution provider in the Sri Lankan motor insurance industry providing the best value to Sri Lankan motorists with a vast array of unique benefits.

Among its many groundbreaking new dimensions in the industry are Zero Interest Monthly Instalment Plan, highest ever No Claim Bonus of 75%, 15 days grace period after policy expiry, highest discount on multiple vehicles and income support for buses and three-wheelers.

All these are in addition to an islandwide onsite damage inspection (with no police reports required) and a claim settlement process. This claim process is supported by a 24-hour and 365 day operational Full  Option Call Centre which assists motor policyholders by arranging for  immediate inspection of vehicle damage and authorising repairs.

The company also operates a state-of-the-art technologically advanced vehicle collision repair centre which carries out repairs to its motor policyholders' vehicles. JFO was also the first to offer personal accident protection and hospitalisation benefits to the vehicle's occupants. Other benefits include free 'natural perils' protection with flood cover and the Janashakthi Pedestrian No Fault Scheme which compensates the next of kin in the event of a fatal pedestrian accident.

SLT connects LEARN

Sri Lanka Telecom (SLT), the nation's premier telecoms provider will power the latest upgrade of the LEARN (Lanka Education And Research Network) network, said a statement.

LEARN is the national research and education network (NREN) of Sri Lanka that interconnects academic and research institutions in the country. Under the new project, SLT will provide connectivity to the University Grants Commission (UGC) and 13 universities islandwide with 10 Mbps IP-VPN links.

The Education Ministry's IRQUE (Improving Relevance and Quality of Undergraduate Education)project will provide funds for upgrading 10 links, while the upgrade of the remaining four links will be funded by LEARN itself.

The upgraded network infrastructure will facilitate various e-learning activities, enhanced video conferencing, video streaming, routing of inter-university voice and broadband internet access for academics and students in the respective universities to liaise and improve their educational skills and requirements.

The network upgrade wlll also support the operation of forthcoming HEMIS (Higher Education Management Information System)which require high bandwidth for speedy flow of management data among universities.

"The enhanced LEARN network represents a breakthrough in using educational content to refine personalized student instruction," said Education Ministry Secretary Ariyaratne Hewage. "At both the user level and the university level, this network will respond to the growing need for faster Internet access to assist in navigating educational content."

 The IRQUE Project is set up by the Ministry and funded by the World Bank. Under the IRQUE project, all universities will be encouraged to ensure quality and relevance of all their undergraduate courses.

The upgraded LEARN network is based on MPLS IP-VPN technology and each university is connected to SLT's MPLS backbone through optical fibre.   Core servers of the new LEARN network are co-located in SLT Internet Data Center (iDC).  SLT's commitment to the improvement of education in the country is further strengthened with this advanced infrastructure.

SLT CEO Shuhei Anan said, "Our partnership with IRQUE demonstrates SLT's commitment to collaboration and excellence in education. 'Together with the Ministry we want to create a stronger resource for students and their universities across the country and we believe that SLT's technology in new LEARN can only enhance these educational applications."

SLT is one of the country's most valuable blue chip companies with an annual turnover in excess of US$ 300 million. NTT Communications Corporation of Japan owns a 35.2% stake in SLT while 49.2% is owned by the Government of Sri Lanka and 15.3% is listed on the Colombo Stock Exchange.

The Company has a customer base of over 1.5 million including multinational corporations, large and small corporate, retail and domestic customers.   Today, with NTT Japan as a strategic partner, SLT provides domestic and international voice, advance data transmission services which include internet services on leased lines, broadband (on ADSL) and dial up, data circuits, frame relay solutions to IP based services such as IP-VPN, total corporate solutions, satellite uplink  services and mobile telephony through the fully owned subsidiary Mobitel.

 With a view to making Sri Lanka a broadband island, SLT is in the process of introducing the necessary infrastructure in the form of NGN networks using fibre backbone and broadband services such as IMS and IPTV. SLT also provides high speed global connectivity to countries in the South Asian Region through its investments in international submarine cables such as SMW3, SMW4 and the India/Sri Lanka Bharat Lanka cable.   The proposed submarine link between SLT and Dhirragu will also extend cable connectivity to the Maldives.

 The company was awarded an AAA (sri) rating by Fitch Ratings Lanka followed by a BB- international rating by Fitch International and Standard & Poor's.

LB latches onto PB network

Lanka Bell (LB) and People's Bank (PB) recently entered into an agreement whereby all LB bills can be paid at any of PB's 650 branches (including service centres) islandwide. Both account holders as well as non-account holders can now make use of this bill payment facility.

LB customers who pay their bills at these branches will get their accounts updated immediately, while payments made at branches not currently online will be credited to LB accounts on the next working day.

LB Managing Director Suren Goonewardene said, "As the only fully Sri Lankan owned company in the telecoms industry, we are happy to team up with PB to extend this bill payment facility for the convenience of our rapidly expanding customer base across the country."

This tie-up with PB, the 'largest' commercial bank in the country is a win-win situation for both parties. Its 650+ branches spread across the island have direct access to an ever increasing customer base representing a large cross section of social levels.

We're thus happy to merge our individual strengths for the ultimate benefit of our customers," Goonewardene added.LB pioneered the launch of cutting edge CDMA technology to Sri Lanka in May 2005 and changed the country's telecoms landscape by connecting the remotest of villages in record time. This forms part of its long-term commitment to extend its fixed wireless telecoms network and share the benefits of modern telephony with the rural masses.

The Company has since then revolutionised the telecoms landscape of the country and enjoys growing market penetration both at urban and rural level.

BBDO ties-up with Swara

A landmark event took place in the advertising industry of Sri Lanka recently, when BBDO Worldwide network aligned with local agency Swara, said a statement.

BBDO is the world's fourth largest advertising agency and is regarded as the most creative network in the world. BBDO recently came top in the worldwide creative rankings - The Gunn Report - and is the only network to have won this accolade four times.

Swara (Pvt) Ltd - previously a sister concern of Thompson Associates (Pvt) Ltd (TAL) - is a relatively new entity in the industry with plans to bring on board the very best of talent in Sri Lanka.

The BBDO-Swara partnership is the culmination of a 10 year relationship where the agency has cooperated on accounts such as ICI and Visa. The agency's first priority is to build a dedicated team focused on the recently won Fonterra account. Fonterra owns a number of key brands including Anlene, Anmum and Anchor.

 BBDO Asia Pacific Chairman Chris Thomas says: "Across Asia we have built a lot of momentum in 2006. We are delighted to be strengthening our partnership in Sri Lanka with the launch of BBDO Swara. BBDO has always sought to attract and retain the very best creative and strategic talent in every market that we have entered. That is precisely what we are doing in Sri Lanka."

The operation will be headed by former TAL Jt. Managing Director Keith Wijesuriya as BBDO Swara CEO, while the other key roles are filled by Upali Herath as Executive Creative Director and Kunal Roy as Strategic Planning and Creative Director.

Wijesuriya said: "This is a defining moment in the development of our business. We will have a commitment to the quality of our creative ideas across all communication channels. Our aim is to create work that is rich in local insight, strategically strong and contemporary. Our creative benchmark will be the international scene, be it AdFest, Clio or even Cannes, with our very own "Chillies" being a hot testing ground. Our philosophy is the same as it is in BBDO anywhere in the world - a relentless focus on - the work, the work, the work."

Wijesuriya has spent 20 years at TAL. In 2004 he, along with his partner Renuka Marshal, took over the reins of TAL and has nearly doubled the size of the agency in two years. While heading the media team he paved the way for many innovations like the first commercial as an interval during news, the first Sinhala jingle on English radio and the first 'no interruption' tele-drama.

His FMCG experience includes - from Unilever's Signal Toothpaste and Sunlight Washing Soap to Munchee Biscuits, from Keells Processed Meats to Farley's Rusk, from Haliborange to Rich Life Milk and from Captain Canned Fish to Cheers Fruit Drinks to Prima bread and noodles.

Wijesuriya has been on the faculty of CAM as lecturer on Direct Marketing and Sales Promotion and has been on the 4As Board for the last four years, currently as Vice President.

Herath has "won and judged" almost every award the country has to offer. In his career spanning more than 25 years, he has worked on the biggest brands at some of the bigger agencies - JWT, Grant McCann, Leo Burnett, Bates and Phoenix Ogilvy.

Wijesuriya adds, "In Herath we have someone who understands and has studied the local idiom, someone who can inspire great work and get down doing it himself and someone who can build a world class creative resource".

Head of Planning, Kunal Roy has been working with Wijesuriya at TAL and has to some good extent helped in its resurgence. "Roy is an unusual talent. Apart from being strategic, he also brings creativity. His passion for advertising is compelling and he produces work that is consistently both creative and effective," says Wijesuriya.

Before Sri Lanka, Roy has worked with MAA Bozell and Grey Worldwide in Bangalore, India among other agencies and has also had a short stint in Brand Consultancy. He has worked on category leading brands across industries: Hero Honda, Tata Motors, Apollo Clinic, Britannia, AMD Athlon, Dell, ING Vysya Bank, Aviva Eagle Insurance, Standard Chartered Bank and Prima.

The new agency, in addition to local training has plans to develop talent through BBDOs regionally and globally organized workshops and conferences. The members of the agency will not only get to work on big, international brands, but will also be exposed to the bank of BBDO's knowledge, expertise and resources. 

Initially, BBDO Swara will handle all brands of Fonterra. In addition, the agency will continue to handle the Visa International brand, building on a successful three year relationship. A great foundation to build from.

Kahanda joins DCSL board

Kolitha Jagath Kahanda (47) was appointed a director to the blue chip Distilleries Company of Sri Lanka Ltd (DCSL) recently, said a statement.

 DCSL is the fifth largest market capitalized company in the Colombo Stock Exchange. Headed by its Chairman, business magnate Harry Jayewardene, DCSL is also one of the largest conglomerates in Sri Lanka with commercial interest spanning beverages, insurance  and financial services, telecommunications, tea and rubber plantations, power  and energy, shipping, logistics, healthcare, hotels and hotels management.

 Kahanda has been with the DCSL top management team since 1993. His previous employer was the Colombo Hilton. A product of St. Thomas' College, Matale and a well known hockey player in the late 1970s, Kahanda was a member of the National Hockey team.

He also captained the National youth hockey team and also the Defense services Under-23 team. He is the son of the late A. Kahanda and Mrs. Ruby Kahanda of West Covina, California, USA. Kahanda is married to Mrs. Suwadana Dambulugala and has one daughter Nithya. He is  the son-in-law of the then famous cinema and TV personality Late Joe Dambulugala  and Mrs. Dambulugala.

For 1st time mngrs.

Unleash Talent Inc. (UTI), and Future Waves (Pvt.) Ltd. (FWPL), will conduct a workshop for first time managers at Trans Asia Hotel on December 13, said a statement.

FWPL is recognized for organizing programmes for human resource development and training. The company has organized a number of internal and external training programmes in the past, with both locally and internationally renowned resource persons.

UTI CEO Rukmal de Silva said: "When corporate executives are appointed to their first management positions, they often think that they have made it and that all their hard work as an individual contributor has been finally rewarded. They generally believe that they are more than ready to take on the management role.

Nonetheless, most of them struggle and don't live up to their full potential and expectations posed by the new role. This symptom is called management underperformance and it's not uncommon in the Sri Lankan business environment either. It's due to a lack of understanding what it takes to become a manager."

UTI junior consultant Tomi Astikainen said: "We have run this programme a few times now and every time those little lightbulbs on top of participants' heads are lit, the trick is that people already know what they should be doing; they just need someone to shake them up for them to change their behaviour at work.

That's our role in the process. We inspire people and organizations to unleash their own and others' potential. You should participate in the programme to understand what potential actually is."

34% increase in Sampath's profits

Sampath Bank achieved a pre-tax profit of Rs. 1,265.9 million in the nine months ended September 30, 2006, which is a 43.3 % increase when compared to pre-tax profit of Rs. 883.6 mn. in the nine months ended September 2005.

Despite the higher rates of effective financial VAT and corporate income tax, net profit after tax increased by 33.9 % from Rs. 565.9 mn. to Rs. 757.9 mn. Return on assets before tax was 1.83 in September 2006 compared to 1.70 in December 2005.

Net interest income rose to Rs. 2905.3 mn. and was 23.1 % higher than in 2005 despite higher rates that prevailed on customer deposits.  Resultant Interest expense increased by 49% as against only 37 % increase in interest income.

Non-interest income increased by 53.8% from Rs. 969 mn. upto end September 2005 to Rs. 1,490. mn. by end September 2006. A 36% increase was recorded in commission and fee based income as the transaction volume grew whilst the volatility of foreign currencies paved way for opportunities in foreign exchange income to rise by 282.4%.

Careful cost management against a background of branch expansion contributed to a 3% reduction in 'cost to income' ratio. Operating expenses increased by 18.2 % to fall in line with the previous year's increase.

The charge for bad debts of Rs. 613.4 mn. comprises specific provisions of Rs.797.5 mn., recoveries of Rs. 211.1 mn., written off loans of Rs 118.8 mn. and a Rs 145.8 mn. increase in the general provision. As at September 30, 2006, net non performing loans totalled Rs 4,968.9 mn., representing 5.2% of the total advances portfolio.

Total assets increased by 18.2 % in 2006 principally as a result of strong lending activities. Net Loans and Advances increased by 20.4% from Rs. 56 billion. to Rs. 67.4 bn., whereas total deposits increased by 15.6%, from Rs. 65.9 bn. to Rs. 76.2 bn.

The Bank capital ratio as at September 30, 2006 was 10.3 % and the Tier 1 ratio was 8.1 %, both above the agreed minimum of 10% and 5% respectively. The Bank surpassed the asset base of Rs. 100 billion at the end of the quarter and Branch network stood at 90 branches as at September 30, 2006.

The exchange rate fluctuations and recent Central Bank of Sri Lanka directives on risk weightage  allocation on advances and general provision may have an impact on fourth quarter results.

HNB voted bank of year

Hatton National Bank Ltd (HNB), Sri Lanka's premier private commercial bank must have surely savoured the momentous occasion when it was awarded the Bank of the Year 2006 by the prestigious publication, 'The Banker.'

A statement said that at a ceremony held at Dorchester Hotel, London  recently, HNB MD Rajendra Theagarajah received the prestigious "Bracken" award naming HNB as the  Bank of the year 2006 for Sri Lanka.

Soon after receiving the award, Theagarajah said that this award is firstly a tribute to their efforts in the past, its endeavours at present and the visionary planning done for the future.

Expanding on this, he added that back in 2004, a shortfall in the capital adequacy ratio left HNB with a tough choice:  Curtail growth, shed assets or infuse fresh capital. The Bank chose the last alternative. Rs. 1.1 billion was raised through a rights issue.

A further Rs. 970 million was poised to be inculcated through a Global Depositary Receipt (GDR) when fate played its hand just two days before closure of the offer - the devastating tsunami hit and almost vetoed all the Bank's plans.

But a 118 year old tradition of resilience and the team spirit does not go under at the first obstacle. In the short time-span of four months new investors were found and the GDR successfully closed in June 2005.

This capital input was a major catalyst in business being conducted with renewed vigour, optimism and purpose. A major ongoing restructuring programme focuses on cost control, divesting of non-strategic investments, improving collection ratios, managing margins realized from advances and relationships, improve portfolio quality and the strengthening of the risk management process.

The Bank's new vision and mission statement reflects the changing direction which centres on five key issues to translate vision into action in the medium term.

Firstly, there will be a renewed focus on the small and medium enterprise segment for which HNB, with its islandwide network is well positioned to play a vital role.

HNB has one of the largest asset bases among private sector banks in Sri Lanka from which a relentless drive for improved asset quality, investment and the creation of a healthy risk management philosophy with optimum risk/return trade-offs will accelerate. This will be supported by a renewed drive for productivity and economies of scale through centralized procurement, shared services and business process re-engineering initiatives, behind which will always be a passionate, empowered team of associates committed to reviewing the Bank's structure in the light of world-class best practices.

 Lastly, but by no means least, there will be continued investment in leading-edge technology to deliver faster response times through an integrated linkage to all delivery channels.

 Today, with one of the largest asset  bases among private sector banks in Sri Lanka with  an indomitable spirit that regards changes as challenging opportunities, a prudent, yet dynamic management team and a committed staff, HNB is steadily pushing the frontiers of achievement in the banking industry back, even as new horizons beckon. 

In the CEO's words, "much has been achieved, but we are only at the beginning of an exciting journey ahead."

The Banker has been a trusted source of global financial intelligence since 1926. The criteria for assessment of The Bank of the Year awards are to identify one single bank in each country for the best overall performance in the previous period incorporating both performance criteria, qualitative achievements and strategic initiatives.

 The Bracken award was named after Brandon Bracken the founding editor of The Banker in 1926 and the chairman of Financial Times from 1943-1958. Winning the Bracken award is a fitting accolade for the performances of the world's top financial institutions.