Call rates up 400-500 bp in
Govt.'s increased expenditure
causes pressure on rates
Increased government recurrent expenditure
on defence and salaries caused overnight
call money market rates to shoot-up by
400-500 basis points (bps) and hit 18% on
Friday over Thursday's close, market sources
This is terrible, this was a phenomenon that
was not there in the previous UNF regime
where they consciously curtailed government
spending to make borrowings cheaper for the
investor, they said. (100 bp=1%)
Overnight call money market rates are the
rates at which commercial banks borrow from
each other for a day.
The Central Bank (CB) said that the weighted
average rate of overnight call money market
rates on Friday was 16.43%, 303 bp more than
Thursday's figure of 13.40%. The maximum
rate overnight call rates fetched on Friday
was 19.75%, 562.5 bp points more than
Thursday's rate of 14.125%.
In a bid to lessen pressure on rates, the CB
opened its overnight reverse repurchase
window to banks on Friday and lent to the
industry Rs. 1,487 million at the
concessionary interest rate of 12%.
Government borrowings from the market on
Friday were through the state controlled
Bank of Ceylon (BoC), they said. BoC would
have had borrowed around Rs. 3-4 billion
from the market on Friday alone, they said.
At the same time, BoC may have had sold
around $ 20-30 million to the market on
Friday to get rupees on behalf of the
government in turn, the sources said. The
deficit would have had been bridged by them
borrowing from the market.
By this action, the US dollar remained
steady at the Rs. 107.60-107.80 levels in
spot trading due to the influx of dollars to
the market, they said.
But what this has caused is that exporters
are being hit, they are not getting enough
rupees for their dollars, the sources said.
Government policy to tackle inflation
appears to be to keep borrowing rates high,
while at the same time having a strong rupee
to make imports cheaper, they said.
Inflation, as measured by the point to point
change in the Colombo Consumers' Price Index
(CCPI) hit 28.1% last month, up 4.1% over
February's figure of 24%.
But the mismatch here is that there is an
increase in wasteful government expenditure
which was not there in the previous UNF
regime. The government should stay away from
the market to stabilize the economy, they
Borrowing to buy bullets does not make the
country richer, the sources said. What is
needed is investment in infrastructure
development like roads which however is not
forthcoming, they said.
Government is distorting the market by
increasing their recurrent expenditure
spends by coming to the market to meet their
borrowing needs, the sources said.
War hits cement industry
A slowdown in government infrastructure
development works has put the brakes on the
growth of the local cement industry, a
cement manufacturer representative told The
Ratnayake, Brand Manager for Holcim Lanka
said that as a result, the industry which
grew by 6.8% year on year (YoY) in 2006
slowed to 6.5% last year.
attributed the slowdown in infrastructure
development works in the country to the
government channelling more resources to the
He said that the industry was missing out on
development works in the North and East
because of the conflict.
further said that though the East is
"liberated," Holcim was yet to witness the
benefits of "peace" from that province in
the form of increased sales.
He expected the benefits of "peace" from
that area to be derived only next year.
"The East is still in a state of flux," said
Ratnayake. He said that the country consumed
about four million metric tons (mts) of
cement in 2007.
According to latest Central Bank (CB)
reports, cement supply in the country in the
first 11 months of last year grew by 10.7%
YoY to 3.4 million mts. This comprised a
6.2% growth in local supply to 1.5 million
mts and a 14.5% growth in imported cement to
1.9 million mts.
that the Gampaha and Colombo districts
contribute more than 40% of sales.
He said that this status quo would remain
unchanged this year as well. According to
the CB, half of the country's GDP is
contributed by the Western Province.
The Swiss based Holcim Group which bought
Ambuja Cement from Birla Group, India, last
year, is the market leader in the local
cement industry with a 38% share, claimed
Ratnayake. They were followed by Tokyo
Cement with a 30% share.
Recently, the Birla Group submitted an
unsolicited proposal to the construction
ministry to exploit the government's
unutilized cement plants in Kankasanthurai
at an investment cost of Rs. 300 million.
Jaffna is rich in limestone, a key raw
material needed for the manufacture of
clinker, which in turn is a composition
needed to manufacture cement.
He said that 85% of Holcim's income is
derived from household buildings and the
balance 15% from government infrastructure
"Of that 85%, 15% comes from cement
consumption in condominium development
works," he said.
Contrary to reports, Ratnayake said that he
has not seen a slowdown in the country's
condominium industry. Holcim markets a 50
kilo bag of cement at Rs. 730.
The Sunday Leader was not able to
immediately get comments from other industry
sources such as the CEO of the Chamber of
Construction Industry Dhakshitha
Thalgodapitiya and the General Manager of
Tokyo Cement Christopher Fernando.
PMB headhunting for CEO
People's Merchant Bank PLC(PMB), a public
quoted company has been functioning without
a CEO since the resignation of Guy de Silva
from this post nearly a year ago. People's
Bank is the single largest shareholder of
PMB with a 39% stake in the company.
Reliable sources who did not want to be
named said that though they had advertised
for this post twice, they did not get any
"We need a person who is versed in
commercial activities such as leasing and
hire purchase to take over as the company
CEO, but we are yet to find such a person,"
the sources said.
The CEO functions of the Bank is now carried
out by Thimira Rajapakse, a businessman, who
is also a director of People's Bank.
Other major shareholders of the company are
LOLC (20%), Lionhart Investments-an overseas
investment fund (10%) and South Bridge
Investments Hong Kong (7.5%). The rest of
the company shares is held by the public.
Lionhart made their strategic acquisitions
in PMB late last year with the exit of David
Pieris Motor Company from PMB.
The company in the third quarter (3Q) ended
December 31, 2007 saw income grow by 30%
year on year (YoY) to Rs. 100.3 million.
However, profit for the period declined by
45% to Rs. 5.4 million.
In the nine months ended December 31, 2007
company income grew by 103% YoY to Rs. 267.9
million, but net profit after tax in the
period under review dipped by 75% to Rs. 7.2
directors are: Asoka de Silva and Kapila
Ariyaratne (People's Bank nominees), Mahinda
Hardasa (South Bridge nominee) and Kapila
Jayawardena (LOLC nominee)
The company is due to hold its AGM next
month and it's expected that this meeting
would result in further board changes in PMB.
GTH makes mandatory offer
Global Telecommunications Holdings NV
Netherlands (GTH) that bought NTT Japan's
35.19% stake in SLT for Rs. 32.07 billion on
Tuesday, made a mandatory offer to buy the
shares held by its other stakeholders at Rs.
50.50 a share, the highest price that GTH
paid to obtain NTT's stake in the company.
GTH is a
subsidiary of Usahas Tegas, Malaysia, a
company controlled by multi-billionaire T.
Ananda Krishnan who runs Maxis, a telecoms
operation in Malaysia, which has recently
biggest shareholder is the Treasury which
has a 49.5% stake in the company.
The bourse, in the absence of institutional
activity returned a low Rs. 232 million
turnover at Friday's trading.
Market sources attributed this depressed
activity due to the forthcoming avurudhu
holiday season. They said that despite a
high interest rate regime prevailing in the
country, there were investors who were still
prepared to place their money in the market.
The sources expected this sluggishness to
continue throughout the month before taking
off next month.
The main contributors to Friday's turnover
were SLT (Rs. 44 million), Commercial Bank
Non Voting (Rs. 25 million), Browns (Rs. 24
million), JKH (Rs. 17 million) and DFCC Bank
(Rs. 13 million).
Meanwhile, the benchmark ASPI and the more
sensitive MPI fell by 4.53 and 10.2 points
respectively on Friday over Thursday's
closing figures to finish the week at
2,624.97 points and 3,300.67 points
"Pass through" effect reaps dividends
Merchant Bank of Sri Lanka PLC (MBSL) in the
fourth quarter (4Q) ended December 31, 2007
saw income grow by 24.1% year on year (YoY)
to Rs. 445.3 million, while profit after tax
(PAT) in the period under review grew by
18.3% to Rs. 134 million. The Group in the
financial year ended December 31, 2007 saw
total income increase by 24.1% YoY to Rs.
1.4 billion, while profit increased by 18.3%
to Rs. 244.6 million.
Group Chief Executive officer Gamini
Karunathilake told reporters on Wednesday
that growth was due to cost rationalization
and the "pass through" effects of the
country's high interest regime to the
MBSL is a Bank
of Ceylon subsidiary.
The Group was able to reduce their non
performing loan portfolio from 14% to 10% in
the period under review.
The company which is also involved in
capital market activities, is working on
three initial public offerings valued at Rs.
1.5 billion this year, its Deputy Director
A.M.A. Cader said.
German beauties here
Miss Germany 2008, 18-year-old Kim-Valerie
Voigt is currently touring Sri Lanka along
with two other celebrity beauties: Claudia
Hein, Reigning 'Beauty of the World' and
Carina-Alexandra Nix, Third Runner Up in the
'Miss Germany 2008' pageant.
They are here on an initiative of Sri Lanka
Tourism and Sri Lanka Tourism's Office in
Voigt was a special invitee to the Sri Lanka
stall at the ITB Fair in Berlin last month
(March) where she assisted in presenting Sri
Lanka Tourism Travel Awards to German Tour
Operators who promoted destination Sri
The invitation to visit Sri Lanka was
extended to the German beauty queens by Sri
Lanka Tourism Germany during the final event
of 'Miss Germany 2008' contest which took
place in Freiberg, Germany in February 2008
where Sri Lanka was a sponsor.
This visit of the German beauty queens, will
future support the marketing campaigns
promoting Sri Lanka as an exotic
destination, renowned for warm hospitality.
Their first taste of Sri Lanka was an
Ayurvedhic treatment at Ayurvedhic Pavillion
in Negombo. The other hotels they stayed in
were The Beach Negombo and Club Hotel
A fashion show organised by world acclaimed
designer Dinesh Chandrasena is also a part
of the itinerary where the beauties made a
The team will visit Sri Lanka's cultural and
natural sites of Sigirya, Minneriya National
Park, Pinnawela Elephant Orphanage,
Peradeniya Botanical Gardens and Nuwara
Eliya along with a visit to Galle.
Sri Lanka Tourism will ensure that the
beauties and their team will take back
wonderful memories of the destination.
Seylan-Sathosa joint promo
together with Seylan Bank Debit Cards have
introduced an offer that will help ease the
financial burden of shoppers this season.
With the country gearing up for
celebrations, and everyone from villages to
the cities preparing for the season, one's
less worry will be how they're going to
afford to celebrate this season.
A 5% discount will be offered on all
purchases made at any one of the 65 Sathosa
outlets to the ever increasing Seylan Bank
debit card holder base in the island. They
can now take advantage of this offer upto
April 30, according to Seylan Credit Cards
Marketing Manager Jayantha Gunasekera.
Speaking to The Sunday Leader, Gunasekera
said that Seylan credit cards is proud to
have been chosen by Sathosa for this special
Avurudu promotion and that this was the
first time Sathosa has hosted such a
He said, "If there's one worry on everyone's
mind this Avurudu season, it's how to manage
expenses while celebrating. Sathosa is
looking out for their customers in doing a
promotion of this nature. This discount will
help them a great deal."
He added that people who don't possess
Seylan Bank debit cards need not be left out
as they can open a savings account with
Seylan Bank before April 30 to make the best
of this offer.
added that the promotion will be on at all
Sathosa outlets in the country and that the
bank's wide branch network will be helpful
to reach out to the rural sector.
He said that this is the first of more such
promotions to come where customers can take
advantage of discounts.
Larders will be full in village areas now,
not just because the harvests have been
collected, but because two giant companies
have got together to make it possible for
tradition and customs associated with
Avurudu could still be practiced.
With just about every other store and
service trying to make a quick buck during
this season, Sathosa and Seylan Bank are
doing just the opposite by giving.
said, "It's great what they're doing and
this is the first time that we have tied up
in such a partnership. It's too soon to say
how the response has been, we expect a high
turnover in the next few days leading up to
Greenland going green
ACCA Sri Lanka
Chapter President Dilshan Rodrigo speaking
at the recently concluded ACCA
Sustainability awards ceremony said that he
saw a BCC documentary about Greenland going
" Whilst Greenland's inhabitants are
thrilled by the prospect of being able to
grow trees, flowers, vegetables, and other
produce after generations of snow covered
lands, for the world this signals two
horrifying prospects: On the one hand the
melted ice which washes in to the sea would
result in sea levels rising, causing
increased flooding, hurricanes and
On the other hand, the ice caps in the North
Pole are one of the principal mechanisms by
which Earth cools itself. Their gradual
erosion would lead to forest fires and
droughts that will serve to destroy farm
crops and produce.
This phenomenon is being caused by the
immense volumes of Carbon emissions that we
release daily to the atmosphere.
Today there is greater recognition than ever
before of climate change because we all are
experiencing it. Former US Presidential
candidate, now an environmental advocate-Al
Gore stresses that concerted action from all
interested parties-private sector,
government and community is required to
address this issue. We all need to think of
the environment as our life support
system-supporting our business, lifestyle,
children and grandchildren. We need the
environment more than the environment needs
us. Today, environmental issues have taken
over Corporate Social Responsibility and
Ethical Reporting, the key issues of the
past, as the number one priority in
Sustainability Reporting, Rodrigo said.
" We had a 50% increase in companies
competing this year over last year. It was
gratifying to see representations from the
public and SME sectors this year. Whilst all
this is encouraging, I believe for a market
place with over 100 listed companies and at
least 5 major unlisted companies not to
mention SMEs, we have only scratched the
surface, for me it only underscores the
potential for more companies to join the
bandwagon of sustainability reporting," he
HSBC pioneers mobile info
market leader in credit cards has introduced
an innovative service for the very first
time in Sri Lanka to serve their customers
even better, with greater convenience. The
mobile information service is an informative
concept enabling HSBC credit card customers
who possess a Dialog or Mobitel connection
to gain quick access to information on all
HSBC credit cards offers via their mobile
By using this number, information on HSBC
credit card offers and other HSBC services
could be accessible from anywhere-locally or
overseas at anytime at no extra cost. As a
result, customers will not have to wait
until they are informed of what they stand
to benefit by using their HSBC credit card
to enjoy life.
The service will allow credit card customers
to access information on HSBC credit card
benefits and offers, 0% merchant outlets,
rewards partner outlets, bill payment
options and inquiries and important
telephone numbers (toll free for customers
with roaming facilities and international
HSBC Sri Lanka and Maldives Chief Executive
Officer David J. H. Griffiths said,
"Partnering with two of Sri Lanka's fastest
growing telecoms providers has given HSBC a
competitive edge in reaching a wide segment
of credit card customers and supplying them
with information at their finger tips."
The service is the newest technological
innovation introduced by a bank to the
commercial market in the recent years. This
will help to reduce the use of paper based
communication material such as brochures,
pamphlets and leaflets, creating a greener
environment that is in line with the bank's
global business strategies to preserve the
environment that we live in.
Head Rienzie Martinesz said, "Our customers
before making plans to go shopping or go out
for a meal, get pampered at a spa or plan a
holiday, will now have the facility to check
the HSBC credit card special offers by
simply dialling their Dialog or Mobitel
mobile phone for instructions."
HSBC plans to
tie up with other mobile service providers
in the country to expand the reach and make
information accessible to customers using
CPSICL launches credit cards
Sharing Investment Corporation Ltd (CPSICL)-
one of Sri Lanka's leading Islamic financial
institutions - will be launching the
Region's first ever stand-alone, Islamic
Credit Card - the Ceylinco Profit Sharing
Visa Credit Card soon by joining hands with
Seylan Bank PLC.
the banking industry in launching services
that are unique to the industry and it will
serve as the service provider to CPSICL.
"Islamic Banking is the fastest growing
segment of the world's banking industry and
Ceylinco Profit Sharing recognizes the
desire of a growing number of its customers
to conduct their banking and financial
transaction in accordance with Islamic
Sharia. The Ceylinco Profit Sharing Visa
card is in the final stages of development,
and will also shortly be followed by a
number of Sharia compliant products and
services," said CPSICL CEO Dr. Z M Rafeek.
Under the 'Ceylinco Profit Sharing Credit
Card Programme,' a Classic, Gold and a
Platinum card will be launched, extending
this facility to CPSICL customers.
NDB donation to CNH
NDB Bank (NDB)
recently donated a television set, a pocket
sized tape recorder and six rotating chairs
to the Information Centre of the Colombo
National Hospital's (CNH's)-Accident ward
and Orthopaedic Service.
Head Vice President Kumar Weerasinghe handed
over the items to CNH's Deputy Director
Accident Service (AS) Dr. Anil Jasinghe.
CNH AS Training Coordinator Ms Pushpa
Ramyani Zoysa also participated.
"Call & Go" to "Call & Replace"
Union Assurance PLC was the first insurance
company in Sri Lanka to introduce the "Call
& Go" motor insurance policy which allows
customers involved in an accident to log an
entry with the call centre and drive off
without waiting at the scene of the accident
for an assessor to inspect the damage.
The company has once again taken customer
convenience to the next level by introducing
"Call & Replace."
Under this new scheme, Union "Call & Go"
customers could have minor repairs such as
damages to windscreens, side mirrors or
lamps attended to at a time and place
convenient to them.
"From customers' perspective one of the
vital issues today is the lack of time to
get minor repairs sorted out. There are many
occasions that only your windscreen, lamps
or side mirrors are damaged. We have focused
directly on these key needs through "Call &
Replace," said Senior Marketing Manager
Union Assurance has tied up with a number of
leading suppliers who will visit customers
and attend to the repairs as per their
convenience. All expenses related to
accidental repairs will be borne by Union
Assurance. "Union Assurance has always made
simple propositions to its customers, which
have turned out to be convenience factors.
Through "Call & Replace," the company has
successfully leveraged the resources
available in the country and provided
customers a unique and efficient method to
get their accident related repairs done,"
Finance companies directed to reduce deposit
The Monetary Board of the Central Bank of
Sri Lanka (Monetary Board) has issued a new
direction titled 'The Finance Companies
(Interest) Direction No. 1 of 2008' to
registered finance companies, lowering the
maximum interest rate that can be paid on
term deposits by 0.5 and 1% based on the
term to maturity of term deposits, and by 1%
in respect of savings deposits.
This new direction will come into force
As per the new direction, the maximum annual
rate of interest which may be paid by a
finance company on a time deposit which
carries a maturity period of 12 months or
less, shall not exceed the weighted average
yield applicable to 364-day treasury bills
issued during the immediately preceding
quarter plus 2.5%. For deposits which carry
a maturity period of more than 12 months,
the interest rate may not be more than 5%
over the weighted average yield applicable
to 364-day Treasury bills issued during the
immediately preceding quarter. The previous
limits were 3 and 6 % respectively, above
the relevant Treasury Bill yields.
The interest rate that can be paid on
savings deposits has also been changed. The
maximum annual rate of interest on any
savings deposit should not exceed the
weighted average yield applicable to 91-day
Treasury bills issued during the immediately
preceding quarter, less 1%.
Prior to the new direction, the maximum
rate was the weighted average yield
applicable to 91-day Treasury bills issued
during the immediately preceding quarter.
All registered finance companies are
required to comply with the direction. The
relevant weighted average yields applicable
to Treasury bills are sent to all registered
finance companies by the Department of
Supervision of Non-Bank Financial
Institutions of the Central Bank of Sri
Lanka at the end of each quarter to enable
finance companies to adjust interest rates
as required by the direction.
Central Bank expects that these revisions
of deposit interest rate ceilings would in
turn lead to the reduction of the lending
rates of finance companies.
e-delivery to reduce corruption
Commissioner General of Inland Revenue (CGIR)
S. Angammana suggested edelivery to minimize
Speaking at a taxation seminar in Colombo
recently, he said that India has suggested
some measures to ensure integrity
One is transparency in tax administration.
They have specially mentioned restriction of
discretionary process. One way to achieve
this is to interpret each and every grey
area in statute by a ruling committee so
that there would be some standardization and
clarity in law.
Other measures are to reduce interface with
revenue officers by way of edelivery of
taxpayer services, simplification of tax
laws, right to information and regular
Integrity is expected not only from the
revenue officer but also from the
professional adviser, he said.
Angammana also said that to manage
integrity each country has its own set of
rules which are codified and made known to
"In Sri Lanka, we have Establishment Code
and financial regulations which control the
responsibilities of public sector employees
and how they conduct transactions in
relation to the state. "
Further, Institutions have their own ethics
of conducts. IRD also introduced its Code of
Ethics and Conduct in 2005. Then there is a
document called Taxpayers Charter introduced
in 2005 which gives the rights and
obligations of tax payers.
While having only codes on booklets will not
serve the purpose intended, employees should
be educated and monitored. Effective
organization structure should be there to
monitor. If there is a breach, there should
be a mechanism to look into that, he said.
Imports increase 49%
Exports increased by 15.4 % year-on-year (YoY)
in January 2008 along with a 41% growth in
Tea exports, which were adversely affected
by reduced production owing to labour unrest
in January 2007 made a significant 38%
contribution to the growth in total exports
in January 2008 as a result of both the
volume of export and the export price of tea
increasing further, on a YoY basis. Tea
fetched a monthly average export price of $
3.83 a kilogram in January 2008; the highest
recorded at that time.
The export price of rubber also increased
further in January 2008 resulting in a
monthly average price of $ 2.70 a kilo.
The growth in the volume of rubber exports
in January 2008 could be partly attributed
to this increase in the export price of
rubber. Industrial exports accounted for
about 28 % of the growth in total exports in
January 2008, with exports of garments and
textiles expanding further by around 4%.
Amongst other key categories of industrial
exports, rubber products and diamonds and
jewellery recorded significant growth, but
exports of machinery and equipment and food,
beverages and tobacco contracted. Total
exports in January 2008 amounted to $ 565
million compared to $ 489.5 million in
Expenditure on imports increased by 49.2% in
January 2008. While the rise in petroleum
prices as reflected in the monthly average
import price of petroleum which rose to $
92.7 a barrel in January 2008; the highest
recorded up to then, impacted on import
expenditure, the increase in expenditure on
imports is partly a reflection of the fact
that there were no imports of crude oil in
January 2007. Non-oil imports increased at
a relatively lower rate of 19.1% in January
With respect to consumer goods imports
which grew by 38% YoY in January 2008, price
increases were recorded in relation to
several key categories of food items such as
rice and wheat. A further significant
increase in the volume of imports was
recorded in respect of rice, YoY.
Sponsors for the upcoming 41st International
Advertising Association (IAA) World Congress
which is being held in the USA for the first
time in over 20 years (from April 6-9)
are:-Platinum level: CNN International,
Dentsu, Dubai Media City, The Economist,
EURO RSCG Worldwide, JCDecaux and Microsoft.
Silver level: Adweek Media, Eurosport and
Global Advertising Strategies Bronze level:
Hakuhodo, National Geographic and StarHit
(Russia). Founder level: Telefonica.
700 delegates from over 50 countries are
expected at the Congress
Ceylinco pays 72% more than promised
As a result of Ceylinco Life's attractive
bonuses, it has been able to deliver more
than it has promised to policyholders,
director Mrs Amali Seneviratne said.
"For example, a policy maturing after 15
years in 2007 with a guaranteed sum assured
at maturity of Rs. 100,000 under an
endowment assurance, would be paid a
maturity value of Rs. 171,500 reflecting a
71.5% growth over the promised value," she
Meanwhile, Sri Lanka's life insurance leader
will distribute Rs.19 million in 'Avurudu
Cash Bonuses' to policyholders, continuing
an auspicious tradition it introduced to the
industry in 2004.
This will bring the total value of Ceylinco
Life's Avurudu cash bonuses over the last
five years to more than Rs. 100 million. The
bonuses which come in the form of
immediately encashable cheques will be
home-delivered for the fifth year running by
Ceylinco Life personnel on and between April
4-7, rewarding some policyholders by as much
as Rs 125,000.
These bonuses are offered in addition to the
annual bonuses paid by Ceylinco Life to
active policyholders and form part of the
company's 'Life Rewards' portfolio of
"With this year's payment of cash bonuses,
Ceylinco Life has given 61,750 policyholders
an additional reason to celebrate,"
"The trust they have placed in us and their
loyalty have earned them these rewards."
cash bonuses are structured to ensure that
the bonus rates increase with loyalty, so
that the longer the policy stays active, the
higher the bonus received.
The Special Cash Bonus will be equal to Rs.
25 per Rs.1,000 sum assured for those who
complete 10 years and Rs. 50 per Rs. 1,000
sum assured for those who complete 15 years.
Accordingly, a participating policy with a
sum assured of Rs.1 million will be entitled
to a cash bonus of Rs 25,000 on completion
of 10 years and Rs. 50,000 on completion of
Sri Lanka's largest and most successful life
insurer, Ceylinco Life is the local
insurance sector benchmark for innovation,
product development, customer service and
The company's islandwide branch network
represents the widest presence in the local
insurance industry. The company has won
international and local awards for good
corporate citizenship and brand image
building. Ceylinco Life ended 2007 with a
premium income of Rs 6.8 billion, an
increase of more than Rs 1.1 billion over
the previous year.
The company's Life Fund exceeded Rs 16.8
billion as at December 31, 2007.
Golden Key signs up SLT
Sri Lanka Telecom (SLT) signed an agreement
with Golden Key Eye & ENT Hospital,
Rajagiriya, providing them with voice
This communication solution comprises a
state of the art PABX infrastructure,
dedicated high capacity digital connectivity
for voice communication and inter-branch
communication system for the Golden Key
Consolidated Golden Key Group Deputy
Chairman/CEO Kavan Perera said, "Ceylinco
Group has had a long standing relationship
with SLT and
with this agreement, it is one further step
in the right direction in consolidating the
relationship. They have a good, flexible
network and the package that we have been
offered by them is attractive."
Golden Key Eye & ENT Hospital Executive
Director Nishantha Danthanayarana said, "SLT
is the premier telecoms service provider. We
want to associate with the best, in whatever
we do; because we want to be the best in our
field-Eye and ENT care. Hence we are proud
to be a part of this initiative.
SLT has the
capability to serve the future demands of
any corporate in Sri Lanka, with the company
already laying down giant infrastructure for
international and domestic connectivity.
This can serve any customer's communication
needs, especially in terms of Internet
Protocol (IP) services. Also SLT internet
Data Centre (iDC) plays an important role
through the provision of data hosting
services to SLT corporate customers with the
highest international security standards for
customer's valuable business critical data.
SLT CEO Shoji
Takahashi said, "I'm appreciative of the
management of Golden Key Eye & ENT Hospital
Ltd., for choosing the solution provided by
us. We aim to provide them with a customized
solution based on their requirement as well
as cost effective real time communications.
Also we believe in the future we can further
smoothen Golden Key Eye & ENT Hospital's
activities through broadband services using
our world class technologies."
SLT has the
largest international bandwidth for
broadband services and is the only telecoms
company in Sri Lanka that operates an
aggregate bandwidth of over 2.5 Gbps on its
international internet backbone. The
backbone consists of multiple optical fibre
under sea connections and a satellite link
that together operates in a complete
Data Centre (iDC) provides data hosting
services to SLT corporate customers with the
highest international security standards.
The company has already rolled out its
national optical fibre network and
established the required infrastructure for
seamless international and domestic
Electricity bills by
Ceylon Electricity Board (CEB) recently
partnered Nations Trust Bank whereby all
electricity bill payments may be made via
the American Express (AmEX) Credit Card.
This is the first time CEB has permitted
the usage of a credit card to facilitate
utility bill payments, and AmEx has the
privilege of being the only credit card that
is accepted by the CEB.
Bill payments are now accepted at the CEB
Head Office at Sir Chittampalam A. Gardiner
Mw, Colombo and will be available islandwide
card members also have the flexibility of
adding their CEB monthly bill payments to
the Automatic Bill Settlement facility which
will be available shortly.
4 corporates top sustainability reporting
Four companies made headlines in winning the
prestigious ACCA Sri Lanka Sustainability
Reporting Awards 2007 at a ceremony presided
by Export Development Minister Professor G.L.
Peiris recently. Holcim Lanka won in the
large scale category while Union Assurance
emerged the winner in the medium scale
category. Two commendation awards were
presented to Ceylon Tobacco Company for its
continuous and consistent focus on
sustainability, and Sampath Bank for
innovative projects clearly integrating
The panel of judges comprising Consultant
Franklyn G Amarasinghe, CEO Fitch Ratings
Lanka Chanaka Wickramasuriya and Financial
Market Specialist IFC-SEDF Sri Lanka
Maldives World Bank Group Deva de Silva
judged the contenders on established
reporting criteria implemented by ACCA UK
and based on defined GRI (Global Reporting
Holcim Lanka's Annual Review and
Sustainability Report detailed a
comprehensive description of the
organisation's commitment to sustainable
development, its impacts and activities
including GRI guidelines, and posted key
performance indicators accompanied by
measured results and external benchmarks,
stakeholder requirements and integration of
these into business plans and described the
governance structure for sustainability with
definitions of roles and responsibilities.
The medium scale category winner Union
Assurance was one of the few reports to have
external assurance, while also providing a
checklist for compliance with GRI guidelines
and emphasised on how customer requirements
are integrated into product design.
which won a commendation for innovative
projects integrating sustainability
principles, described structures for
evaluating environmental and social impacts
of financed projects and explained
initiatives taken to integrate
sustainability concepts into internal
processes and community projects.Another
report that had external verification for
process and implementation and posted KPIs
which were aligned to GRI guidelines-CTC,
won a commendation for continuous and
consistent focus on sustainability, and also
described the social reporting deliverables
Page writes history
(Ceylon) Ltd., Chief Executive Officer
Ranjith Page was honoured with the 'Business
Leader of the Year' (Large Scale
Organisation) Gold Award at the CIMA
Janashakthi Pinnacle awards held at the
Cinnamon Grand on Wednesday . Page will
receive a scholarship to the Annual
Programme on "The Job of the Chief
Executive" at the Singapore Institute of
The CIMA Janashakthi Pinacle Awards
celebrate business excellence, leadership,
management and team work at the highest
standards. They also reward excellence in
professionalism among the cream of Sri
Lanka's business community.
Nobel Prize Co-Winner Prof. Mohan Munasinghe
was the Chief Guest. He was joined by a host
of distinguished invitees from the
financial, accounting and corporate world.
Janashakthi Insurance Company Ltd, Chairman
W.T. Ellawala was Guest of Honour.
partnered CIMA with this awards scheme since
its inception and has sponsored it for the
fifth consecutive year.
Lanka Transformers Group of Companies Chief
Financial Officer Ravindra Pitigalage
triumphed as the CFO of the Year (Large
The Gold Award for the Young CIMA Star of
the Year was awarded to Textprint Lanka (Pvt)
Ltd. General Manager Asanka Wimalaratne.
Hemas Manufacturing (Pvt) Ltd Management
Accountant Dayan Gunasekera took home the
Silver Award in this category while Sampath
Bank Ltd Asset and Liability Management
Officer Himashi De Silva won the Bronze
Award in this category. Three Merit Awards
went to Kasuni Silva, Fadhil Jiffrey, and
The CIMA Business Manager of the Year Gold
Award went to HNB Securities Ltd. CEO G.
Ramanan. The winners of The Young CIMA Star,
Business Manager of the Year and Chief
Financial Officer of the Year will receive a
scholarship to a two-week executive
programme at the Indian Institute of
The Gold Award for the Management Team of
the Year was awarded to Lanka Bell (Pvt)
Ltd., while the Merit Award went to Amba
Research Lanka (Pvt).
Prof. Mohan Munasinghe said, "The high
calibre of award winners shows that there is
no dearth of talent in Sri Lanka which
should be a cause for both pride and
optimism as we face the challenges of the
21st century. In particular, addressing
issues like sustainable development, poverty
alleviation and climate change will require
us to focus on not only the economic, but
also the social and environmental
dimensions. The business sector has a
critical and constructive role to play, in
collaboration with government and civil
"The CIMA Janashakthi Pinnacle Awards were
created five years ago to recognise and
facilitate the accomplishment of business
leadership and financial professionalism; to
recognise talent, skills; to focus on
ambition and the determination to achieve.
Our continuing association with the Pinnacle
Awards demonstrate our commitment to
encourage these attributes in local
The judges panel comprised Trevine
Fernandopulle, Ravi Peiris, Richard Jurienz,
Rohini Nanayakkara and Dr.Uditha Liyange.
Top MBAs at ACHE
Start off your Academic Career with one of
the World's Best MBA programmes-at ACHE. The
American College of Higher Education (ACHE),
established in 1995 has grown to be one of
the finest and most sought after educational
institutes in Sri Lanka.
ACHE is strategically located in Dehiwala,
just outside Colombo city limits, ensuring
accessibility and an environment conducive
ACHE has five other branch campuses-located
in Kandy, Galle, Negombo, Matara and
Kurunegala which specialize in providing an
American style education.
ACHE is committed towards providing students
with excellent academic as well as personal
ACHE is offering students the privilege of
starting one of the world's best MBA
programmes offered from the North Dakota
State University, USA (NDSU) which was
ranked 4th among the US public colleges and
universities by Consumer Digest magazine USA
in June 2004. NDSU is also accredited by
the North Central Association of Colleges
and Schools and has an enrolment of more
than 12,500 students.
From the time it was established, ACHE has
been involved in many university transfer
programmes where students are provided the
opportunity to study for the first two years
in Sri Lanka and later transfer to the USA
to complete their majors. By following
Associate Degree programmes, students can
study for the first two years in Sri Lanka
before transferring to the USA.
"We have also started our Bachelors Degree
programmes after which we felt the need to
offer our students a real American
accredited MBA programme. The MBA programme
the university currently conducts with NDSU
offers students the ability to study for the
first year of their course work and
specialization part in Sri Lanka and in the
second year they can transfer to the NDSU in
order to study for the practical component
of the programme.
The Master of Business Administration
programme at NDSU is a non-thesis,
professional programme structured to serve
qualified students with undergraduate
degrees in a variety of fields.
The programme is designed to provide
students with an effective set of analytical
skills, a broad view of the way in which
organizations work and an understanding of
the functional areas of business.
The NDSU programme takes a generalist
approach to graduate business education
while providing a variety of electives to
give the student the opportunity to pursue a
particular area of interest in business or
related disciplines. NDSU business faculty
uses a variety of teaching methods such as
case studies, group and individual projects,
field research, computer applications, class
discussions and lecture, through which the
student is able to acquire and improve
problem-solving and communication skills
which can be effectively applied to real
life business situations.
There are many special features of this MBA
programme which includes the American
exposure and know-how students will receive.
In addition to this the NDSU MBA programme
is accredited by the AACSB, which has
currently accredited as few as 15% of the
best business schools in the world. This is
also the first time in Sri Lanka that
students are offered the opportunity to
study for an American accredited MBA at an
affordable price in which they only have to
spend a nominal charge to complete this
degree programme. Students who transfer to
NDSU will also be offered within 4,000 to
6,500 scholarships depending on their GPA
and GMAT scores. Therefore if students work
hard enough 69% of their scholarships will
be guaranteed. Students who complete their
MBA will also have the opportunity to work
for an additional year depending on the
arrangements they have made in Sri Lanka.
Students who are unable to leave the country
have the ability to follow the fast track
programme offered at ACHE, which allows 9
months in Sri Lanka and 9 months study in
the USA in order to complete their MBA
Students of NDSU are provided with
internships and practical training in USA
prior to conferring of their MBA degree.
Over 150 blue-chip companies visit the NDSU
website for various recruitments, therefore
students who have performed well have the
opportunity to receive their job placements
from the university itself.
ACHE is an academic school and encourages
its students to reach their fullest
potential, whilst training them to compete
with students from the USA.
"Most of our students have been eligible for
various scholarships due to their
exceptional performance levels. ACHE
students are offered the best of facilities
which include a library, virtual library,
computer labs, Chemistry, Physics and
Biology labs, classrooms and other
recreational facilities such as a cafeteria,
student lounge with pool table and
In addition to this we also offer students
All this and more are offered to students in
a multinational and multicultural study
environment where quality education is
ACHE's motto." The MBA programme will start
on May 7, 2008.
To varsity with O/Ls
Sri Lanka (MCSL) has been operating in Sri
Lanka for just over a year now. Their first
graduating students have already left for
2nd year university studies in Monash in
Australia and Malaysia. MCSL is a valuable
division of Monash University, one of
Australia's highly ranked universities.
Director-Enrolment Management Annette
Delaney said, "We provide undergraduate
diploma and university foundation year
programmes at MCSL. The MCSL options bridge
the gap between the local students' current
qualification and the academic qualification
required by Monash University Melbourne."
The Monash University Foundation Year (MUFY)
offered in Sri Lanka is recognised by
Australian universities and provides an
academic bridge into any degree. Students
can start the MUFY programme with O/L
results, they don't have to wait for A/L
results and they don't need to feel
discouraged by disappointing A levels
results, they still have options to get into
the Australian university of choice.
Students can join Monash programmes
throughout the year in Sri Lanka and could
start as soon as late as this month (April).
She also said: "The MUFY programme is a full
time accredited programme that meets the
entry requirement at any university in
Australia, especially top ranking
universities. Students can choose their
career path in Business, Engineering,
Information Technology, Law, Medicine and
Health Science. The undergraduate Diploma
programmes are also popular and provide
entry to at least 50 degrees in Business,
Engineering, Information technology, Arts
and Health Science.
undergraduate diploma programmes lead to
direct entry to 2nd year of Melbourne
University, Malaysia or South Africa on
successful completion. Students are equipped
with the skills and knowledge to be
competitive in the University. In fact our
research shows that students entering
university after starting at Monash College
generally obtain better results. Monash
University is ranked in the top 5 in
Australia and top 40 in the world and our
foundation programmes are the guaranteed
qualification necessary for entry into
We work with schools and education experts
by providing seminars, career guidance and
information programmes to inform the local
community about opportunities available in
Sri Lanka. Career path decisions of the
students in Sri Lanka are often influenced
by parents and other family members. In
Australian schools a lot of the guidance is
provided from within the career guidance
unit of secondary schools.
Students and parents start making decisions
about their career and tertiary education
options during their Ordinary Level year.
Parents and students in Sri Lanka are eager
for information about their career choice.
There are often limited careers teachers in
schools locally to direct questions to and
who have enough information regarding
specific universities for the students.
MUFY in Sri
Lanka Programme Director Alan Robertson said
that the global trend by universities is to
design and deliver quality university
foundation programmes to meet the transition
difficulties often faced by international
students and to prepare them for greater
success at the best universities around the
To be globally competitive young people
require more than a paper qualification.
They need to also possess employability
skills and students are trained to work in
teams, to work independently, to solve
problems, to think creatively and
innovatively and also to use their
initiative. Employers are looking for
candidates to recruit to ensure they are
globally competitive. Monash graduates
obtain some of the best jobs in the world
with highly paid entry level salaries and
find they can work anywhere in the world
"I'm Monash College Sri Lanka's Business
Head. My students are developing a range of
skills including independence as learners,
self-motivation and problem solving skills
by studying in an academically challenging
environment. Students in my classes are
challenged to participate and develop a
range of skills while beginning their Monash
educational journey, while still living with
their families here."
Dean Dr. Upali Mampitiya said the curriculum
is provided by the Melbourne Australia
Faculty, exams are sent to us by the faculty
and results are moderated by the same
faculty in Melbourne. The outcomes for
success are exactly the same as that of
students studying in Melbourne. In fact, if
a student was in week 5 here in Sri Lanka
and flew over to Melbourne for week 6, there
would be no gaps as we have a clear
curriculum to deliver. You could say it's
the real thing no matter where it is
delivered. To support the curriculum our
students have direct access to Monash's
online libraries and this provides them with
thousands of resources, all of this while
sitting at a desk in Sri Lanka.
Prospective students and parents can obtain
further information by contacting one of the
enrolment managers at Monash College Sri
Lanka or by visiting at R. A. De Mel Mawatha,
Inflation, rupee dip hit Singer
A determination to believe in the Sri Lankan
dream despite present market conditions saw
Singer (Sri Lanka) invest for the future,
according to the review of its financial
results for 2007.
The Company Gross Profit of Rs 4,887 million
for 2007 registered a 13% increase over the
previous year and Company Revenue grew by
12%. However macro-economic factors depleted
Net Profit of Rs 310.6 million which was
27.4% lower than the previous year.
Business growth saw investment in human
resource (an increase of nearly 10%) and
infrastructure improvement by way of
renovation and expansion of the sales
distribution network. Macro-economic
factors which hindered growth included
double digit inflation and a continuingly
depreciating rupee, increase in fuel costs
and import tariffs, high interest rates and
the unstable security situation (which in
particular meant that many of the markets in
the North and East could not perform to full
Despite a lower net profit than the previous
year, the Company made several strategic
gains. The masterstroke was the clinching of
the coveted national distributorship for
Samsung, the leading global electronics
brand. Another enviable gain was the
'acquisition' of Hayleys' consumer products
channel which underpinned progression
towards a comprehensive expansion of the
Company's retail presence throughout the
island. Similarly the introduction of the
Nokia sales agency added to brand stature.
Says Singer (Sri Lanka) Chairman Hemaka
Amarasuriya: 'Our aim in the last financial
year was to retain the Company's position as
a national retailing icon with
consumer-centricity as our focal point.'
Indeed with a multi-brand strategy
encompassing global names such as Samsung
Whirlpool, Philips, Hitachi, Moulinex,
Rowenta, Panasonic, Nokia, Toshiba and more,
Singer serves a customer base of over four
Focus also shifted in the year under review
from brand and category management to
channel management. The company built on the
strengths of its retail channels-Singer
Plus, Singer Mega, Sisil World and Modern
Homes along with trade and institutional
In 2007, for the first time Singer Mega
achieved sales of over Rs one billion, a 32%
increase over the previous year. Five of the
nine Singer Mega stores achieved sales of
over Rs 100 million. Singer Mega is a unique
Singer retail channel by way of department
stores offering the Company's products as
well as products and services of other
leading brands inviting the customer to an
exceptional shopping experience of comfort
and convenience. Modern Homes, the
specialized furniture retail arm of Singer
offering both local and imported goods
showed a 23% increase in sales during the
year under review. Singer Finance registered
a Rs. 19 million net profit despite increase
in tax rate from 15% to 35%. Singer Finance
is a Central Bank registered finance company
which offers hire purchase facilities to
employees of selected companies to enable
them to buy consumer durables, hire purchase
and lease finance for the purchase of
private and commercial vehicles and also
Together with the Company's multi-brand
strategy, Singer Mega, Modern Homes and
Singer Finance have changed the face of
Singer for millions of households in Sri
Lanka, where once the Company represented
the sewing machine, it is now the retailer
who cares enough to offer an extensive range
of durable goods at affordable prices and so
offer the Sri Lankan citizen a more
Sanasa enjoys 50% advances growth
Development Bank Ltd (SDBL) performed well
in 2007, recording a pre-tax profit of
Rs.161 million compared to Rs.155 million
last year. Post-tax profit was Rs. 94.9
million as against Rs.75.6 million in 2006.
Provision of VAT on financial services for
2007 was Rs.35.3 million as against
Rs.30.5million in 2006 and the income tax
provision for 2007 was Rs.31.1 million
against Rs.49 million in 2006, said SDBL
General Manger/CEO, Nimal J. B. Mamaduwa.
Speaking to the The Sunday Leader, Mamaduwa
said that the 2007 performance has been
impressive with net interest income
continuing to be the key contributor towards
the bottom line accounting for 43% of total
income. 50% growth in advances and
efficient management of funding costs
enabled SDBL to maintain a healthy spread
despite the rising trend in interest rates.
Deposits grew by 36%, notwithstanding the
adverse impact of the security and economic
situation, market conditions and high
interest regime. Encouragingly, the Bank
was able to attain this growth mainly due to
increased customer confidence and the
"attractiveness of our products" to all
customer segments. "Competition and high
interest rates compelled us to offer higher
rates to important customers. Increased
presence due to opening of new branches also
supported the deposit drive.
Advances grew by an impressive 50% despite
prevailing constraints and uncertainties.
A strategic shift towards micro-finance,
small projects and group lending to Sanasa
Societies helped us reap the desired
results. Lending to a carefully selected
segment in the corporate sector also
contributed to sustainable growth in
profitability and volume."
The Bank continued to maintain a healthy
portfolio in 2007. " Our NPA rate was 3.9%
(as against 4.3% in 2006), well below
industry standard. This was due to our
having maintained a high standard of
evaluation and diligent, ongoing risk
management, along with effective post-credit
management and follow - up, Mamaduwa said.
During 2007, the bank opened 11 new customer
centres (6 branches and 5 extension centres).
Three existing extension offices were
upgraded to full-fledged branches. Total
number of customer service centres stood at
36 on December 31, 2007. This expansion is
reflected in the increase in expenditure
recorded in the year's results. However,
the long - term benefit to the bank will
exceed these initial costs.
A unique feature of the year was the opening
of three branches in the Eastern Province-
at Trincomalee, Batticaloa and Kalmunai.
Another milestone for the bank in 2007 was
that SDBL was chosen amongst 641
microfinance providers by Forbes magazine
and it was ranked within the top 50
microfinance Institutions (The only MFI
provider in Sri Lanka ranked within the
first 50 is SDBL).
Bank will obtain regulatory approval to open
14 new branches in 2008 with a presence in
more rural locations being the focus of
branch activity in 2008.SDBL's core capital
(Tier I) increased steadily during the year
due to retained profits and an equity
infusion by Orient Global, Singapore, which
contributed up to Rs. 71 million (plus
assurances of a further invest of up to 15%
of issued capital, or Rs. 225 million).
Tier I & Tier II capital shows an improved
position registering 13.40% and 13.48%
respectively as against 11.9% and 11.4% in
Tier I and Tier II as at December 31, 2006.
Shareholders' fund has shown a steady growth
of 29% whilst the balance sheet has
registered a healthy 44.5% growth. "Several
international co-operative organizations
that rallied round us after the tsunami
disaster continued to provide us with
valuable support in 2007. Among these were
the Canadian Co-operative Association,
Canadian International Development Agency,
Development International Desjardins and the
World Council of Credit Unions.
"Supporting the community continues to be
our key CSR objective. SDBL with its strong
links to the co-operative movement has
identified the development of this concept
as a priority. In 2007, a programme for
assisting 6,000 youth under a national
programme was conducted by the Bank at the
Sugathadasa stadium under the leadership of
Sanasa Movement Leader Dr. P. A.
"Our strategies for the future will be
derived, as always, from our vision, mission
and values. SDBL will continue to be a
leader and active partner in the development
of the nation and its rural economy. Our
strengths as a Group will provide support
and encouragement for everyone engaged in
these activities. Our broader network will
extend financial services to a bankable
community not served by other banks,"
Allianz enters Life business
Allianz SE Munich, for Asia; the Middle
East, and North Africa Division Executive
Vice President Heinz Dollberg was in Colombo
last week to present his Company's
application to Insurance Regulator IBSL
(Insurance Board of Sri Lanka) for its local
subsidiary Allianz Insurance Lanka to start
Life insurance business in Sri Lanka.
Approval of the application enables the
setting up of a separate operational entity
to manage Life business in Sri Lanka which
conforms with proposed IBSL regulations that
support the setting up of separate corporate
entities to manage Life and Non Life
Business. At present, "all" insurance
companies in Sri Lanka are composite,
handling both Life and General business.
Explaining the Munich-based Insurance
conglomerate's decision to venture into the
Life arena in Sri Lanka Dollberg said, "Our
young Sri Lankan subsidiary is developing
wel, and we are satisfied with its progress,
premium-wise as well as the bottom line.
It is not always the case that a barely
three year old company can develop this
fast. This confirms that we have got the
Allianz Insurance Lanka, the fully owned
subsidiary of Allianz SE, recently recorded
a 258% increase in profitability, posting a
Profit Before Tax of Rs 53.2 million for
"The prevailing non tariff market in Sri
Lanka is an interesting one for Allianz. It
is not overcrowded. Also, Sri Lanka has a
favourable environment for foreign
investment because foreigners are allowed
100% ownership of businesses unlike in
several other countries in the region. We
intend developing the market. We will
observe the rules of the market and want to
be treated like other local market insurers.
We will be growing the business in Sri
Lanka, and will be building a direct sales
force, since one can't rely only on brokers
to sell Life business, so this will mean
more people and more branches soon, and we
will be going into other areas of Sri Lanka
to grow the business."
Speaking on Allianz SE's business strategy,
Dollberg said, "When we enter a new market,
our usual strategy has been to start up with
General business, as it is much easier to
learn the conditions in the market. It is
usually not a question of whether a market
is big or small, but whether it is
profitable. We not only want to sell the
right products, but also look at the
profitability of the Company, and take
particular care to ensure that the interests
of our shareholders are met. We are
concentrating here on corporate business. We
go after other companies that insure with
Allianz around the world. These are not only
German, but are US, UK, European and Asian
businesses as well. Most of the large
corporates worldwide, insure with Allianz."
According to him the importance of insurance
cannot be overemphasised. "People are
usually of the opinion that insurance
benefits only the insurer, but this is not
so. Currently Life insurance has a bigger
potential because it has a direct impact on
Life insurance is also important for the
security of a government and for the
economic health of the country. Money
invested in insurance is usually reinvested
in Government bonds and similar instruments
in the development of the economy. All
insurance is important. Take for instance,
the person who is building a house and needs
a loan. Insurance covers him if a disaster
strikes. The disaster of the tsunami could
have been mitigated if more people had taken
insurance, and more policies sold. This
means closer involvement in the community.
If one carried out one's business right, it
is usually a win win situation for both the
insurer as well as for the insured."
Dollberg has decades of experience in
diverse areas of Life and Non Life business,
having served within the Allianz group
throughout his career. He is experienced in
setting up Allianz operational entities in
countries around the world, especially in
the Asia Pacific, with responsibility for
mergers & acquisitions. Earlier, as Regional
Director, he was responsible for the
operations of Allianz entities in Hong
Kong, Thailand, Korea, Taiwan, Mainland
China and Australia.
At present, Allianz commands about 2% of the
General insurance business in Sri Lanka, but
intends to expand market share to 10% in the
next 10 years. "Allianz is known in Germany
by 99.9% of the people. We are confident
that we will achieve the same recognition in
Sri Lanka as well," said Dollberg.
AAI, value driven insurer
Asian Alliance Insurance (AAI) Deputy
Chairman Paul Ratnayeke applauded the
Company for marking yet another
exceptionally successful year at the
company's AGM after its 2007 results were
AAI recorded a profit before tax of Rs. 114
mn. a 63% year on year (YoY) growth.
Ratnayeke assured shareholders that the
Company will do its utmost to provide
shareholder value as discussed at the
previous year's AGM.
For the future of the Company, Chief
Executive Officer Ramal G. Jasinghe
enlightened shareholders that expectations
are promising, supported by prudent
management of the Company's core operations.
The Company grew its investments by
exploiting the prevailing investment rate
environment, with the yield increasing to an
average of 14.5% with an increase to Rs. 1.5
bn. The Company met the required Solvency
Margin of Non Life with a Solvency Ratio of
4.10 and of Life with a Solvency Ratio of
3.15 based on Solvency rules applicable.
The conservative management approach adopted
over the last three years succeeded in
erasing accumulated losses and increasing
shareholder equity to Rs. 268 mn. It was
further expressed that the Company
endeavours to be the most value driven
insurance company and a force to be reckoned
within the insurance industry in the near
Sinhaputhra raises Rs. 167 mn.
Sinhaputhra Finance Ltd AGM Finance &
Planning Ms. Chithrani Abeyratne disclosed
that the recent preference share issue
fetched a sum of Rs. 167 million, boosting
the companys's Tier 1 Capital.
This infusion she explained further
strengthened the capital adequacy of
Sinhaputhra which is one of the companies
that has already surpassed the Rs. 200
million minimum core capital requirement for
registered finance companies (RFCs). She
said Sinhaputhra is now showing 25% in
excess of the requirement.
Capital adequacy is used as a key ratio to
limit exposures of financial institution
thus reducing the risks to investors.
Conversely, a stronger capital base also
allows for greater volumes of investment in
interest earning assets such as leases and
loans as well as leverage to invest in fixed
A ratio of 1 to 10 of Capital to Risk Assets
she explained is used by the Central Bank to
reduce an RFC's exposure to build up risk
assets. She said that Fixed Assets, Leases
& Loans and such portfolios register a 100%
risk whilst deposits with commercial banks
cause a 20% risk and Treasury bill
Investment & Cash in Hand have a 0% risk.
Sinhaputhra manages its assets and growth
with these ratios in mind. A perfect blend
of these assets ensures and sets course for
a planned growth.
The recent Non Redeemable, Non Cumulative
Preference Share Issue was a positive impact
and supported the impact of a Rs. 150
million investment on the company's new
headquarters at Hill Street, Kandy.
The company's Director Board are: Ravana
Wijeyeratne (Chairman/Managing Director),
Mrs. Chintha Balalle, Parakrama Keppetipola,
K.H.K. Wijayadasa, Mohan Weerakoon, Dr. Cuda
Wijeyeratne and Sarath Imbuldeniya.
Promoting boat industry
The Boat Building Technology Institute in
association with the EDB proposes to
organize the first ever Boat Show in Sri
Lanka at the Sirimavo Bandaranaike
Convention Centre from June 8 -10, 2008.
The Exhibition will consist of 150 trade
stalls. EDB has invited buyers delegation
from Maldives, India, Bangladesh, Norway,
Germany, France, Italy and countries in the
Middle East to visit "Boat Show."
The primary aim of the boat show is to
introduce this trade to the local market and
create a much more sophisticated target
audience and to create awareness among
foreign importers of the capabilities of the
Sri Lankan boat building industry to attract
Stock market announcements
Vallibel Power Erathna Ltd., has declared a
tax free interim dividend of 30 cents a
share. Excluding dividend (XD) date is April
22 and payment date May 5.
Asiri Hospitals Ltd., has declared an
interim dividend of 75 cents per share for
the financial year 2007/08. XD date is April
23, 2008 and payment date May 6.
UA relocates Negombo Branch
Union Assurance, one of the biggest players
in the insurance field relocated its Negombo
branch to St. Joseph Street recently.
The new branch which is in the sprawling
business hub of Negombo, caters to both Life
& General insurance needs for existing and
potential customers of Union Assurance (UA)
as well as providing easy access to a host
of services offered by UA to Negombo
UA Senior Manager Marketing Dharshana
Amarasinghe said: "UA relocated to a new
strategic location and is in a more
conducive environment to serve customers
better and efficiently."
The relocated Branch is conveniently
situated with ample parking and convenience
to its customers. UA is proud to have been
helping to meet the financial needs of our
island for more than 21 years and is
committed to keep on continuously improving
our service and facilities."
"The layout of the new branch is designed to
help facilitate service needs and
transactions for our customers," said
Amarasinghe. "UA sales and marketing culture
strive to increase efficiency and ensure
customers are able to easily take care of
their insurance needs, both in Life and
General."UA is powered by the corporate
might of John Keells Holdings PLC and
Com Bank, 10th time top bank
For a record 10th year running, Commercial
Bank of Ceylon PLC has been adjudged Sri
Lanka's 'Best Bank' by one of the world's
most respected financial publications,
Global Finance USA.
Commercial Bank has now won this award 10
out of the 15 times that Global Finance has
published the results of its annual survey
of Best Emerging Market Banks.
The report covers best banks in Asia, the
Middle East, Africa, Latin America and
Central and Eastern Europe. Global Finance's
evaluation showed that the Commercial Bank
continued to retain its position of the
largest private sector bank in terms of
assets and profits in 2007,
had the highest market capitalization and
best track record of dividends in the
Banking and Financial Sector.
The Bank's market capitalization as at
December 2007 was Rs 34.2 billion, about 4%
of the total market capitalization of the
Commercial Bank Managing Director Amitha
Gooneratne said: "We are pleased at being
ranked Sri Lanka's Best Bank for the tenth
consecutive year. With this, Commercial Bank
has established a level of consistency of
performance that is unique in the region."
Global Finance's evaluation of the Bank's
performance over the past year included
asset growth, profitability, strategic
relationships, customer service, competitive
pricing and innovative products, led its
input from industry analysts, corporate
executives and banking consultants to select
Commercial Bank as the best among Sri Lankan
banks in 2007.
Among the other indicators looked at were
market share, return on equity and earnings,
key capabilities and services offered,
geographical range, recent or planned
significant developments such as new
launches, customer service endorsements and
deployment of leading-edge technology.
The Bank's key capabilities and services in
the period reviewed included the expansion
of the e-Exchange franchise, Model Branch
concept and the launch of PAYMASTER-Total
Its significant recent developments included
re-affirmation of its credit rating of
AA+(lka), strengthening of its Risk
Management Unit and Anti Money Laundering
Unit and the issue of instant debit cards to
Other banks from the region to receive the
Global Finance Best Bank award included HSBC,
HDFC Bank-India, Maybank - Malaysia, Habib
Bank- Pakistan, Shinhan Bank-South Korea,
Chinatrust Commercial Bank-Taiwan and Janata
The best banks in 20 countries in Asia were
identified during the survey.
Commercial Bank Group saw group pre-tax
profits soar 33.8% to Rs 6.791 billion in
the year ended 2007. Post-tax profits rose
to Rs. 4.152 billion, while total deposits
of the group rose to Rs 183 billion, a 16.3%