http://www.sundaytimes.lk Official website of the Sunday Times Newspaper in Sri Lanka Sat, 19 May 2018 18:55:34 +0000 en hourly 1 http://wordpress.org/?v=3.3.2http://www.sundaytimes.lk/180520/business-times/foreign-workers-294472.html19 May 2018 @ 6:11 pm A Chinese worker peels a banana while travelling to work with other colleagues to a Colombo construction site. Sri Lankan professionals are vociferously protesting over trade agreements which are likely to permit foreign workers without proper protocols in place. Pic by Indika Handuwalahttp://www.sundaytimes.lk/180520/business-times/president-orders-removal-of-crippling-gem-levies-294470.html19 May 2018 @ 6:09 pmPresident Maithripala Sirisena recently ordered the removal of crippling levies on the gem and jewellery trade followed concerns raised by the Sri Lanka Gem and Jewellery Association (SLGJA). Association officials said a decision about 2-3 months ago by the National Gem and Jewellery Authority (NGJA) to impose a levy of Rs. 25,000 per 100 carat on gem export sales or contracts and increasing the licence fee to half a million rupees from only Rs. 35,000 earlier brought the trade to crisis-point proportions. After a delegation from the association briefed the President on the ad-hoc levies, the head of state had instructed the NGJA to remove these levies and the license fee. Accordingly the NGJA board decided to remove these levies and the decision was conveyed to the SLGJA, officials said thanking the President profusely for reversing a decision that would impact heavily on the trade. The recently-fixed rates had resulted in a slide in gem exports. The industry has been enjoying income tax exemption for the last 40 years since 1979, but the new Inland Revenue policy has removed this exemption, despite elaborate representations made to the government to reinstate this relief, they said. The SLGJA pointed out earlier that due to the new tax policy, supplies from Africa which now comprise up to 70 per cent that are imported and re-exported from Sri Lanka, was affected. These rough gem stones from Africa to Sri Lanka have in fact started to go to competitor countries like Thailand and Hong Kong, the SLGJA lamented. Officials point out that in order to facilitate good gem stone supplies and re-export quality products, good gem stones should be supplied to the gem cutting sector. While the recent budget approved the removal of the NTB on gem stone exports, the authorities are yet to implement this proposal. While the online gem stone and jewellery sales market is becoming very large and a multi-billion dollar market in the world, current export procedures and changes pursued by the authorities render it infeasible to carry out an on-line business. The recent 15 per cent tax on gold imports has also badly affected jewellery manufacturers, retailers and exporters in the country. “There should be an immediate solution to facilitate gold bullion at competitive rates to the legitimate jewellery manufacturers, exporters and retailers,” one official explained. The gem export process should be liberalized on par with such countries like Thailand and Hong Kong where companies in those countries are able to efficiently and competitively cater to the demands of the international market, the SLGJA points out.http://www.sundaytimes.lk/180520/business-times/cnn-blitz-gets-conditional-approval-294467.html19 May 2018 @ 6:07 pmThe Government this week approved the CNN blitz set to promote the destination but subject to certain observations by the Finance Ministry. Tourism Ministry officials told the Business Times that the CNN campaign was approved at this week’s cabinet meeting but that the amount allocated US$650,000 was an issue as a result the ministry has been asked to follow the procurement guidelines in entering into an agreement on such a campaign. The Finance Ministry has asked the Tourism Ministry to follow government procurement guidelines as it had not agreed with the amount that had been entered into by the ministry and CNN. Tourism Development Minister John Amaratunga told the Business Times on Friday that the cabinet had approved the CNN campaign and that they would start airing the adverts and programmes in about two weeks. He also said that the digital campaign was taking time due to the procedures involved in the bureaucratic system. Meanwhile there have been further delays in the selection of the agencies that submitted bids for the conduct of the campaigns in five selected markets - the UK, Germany, France, India and China - for the digital marketing campaign scheduled to kick off in June. It is learnt that a recently retired advertising guru, appointed earlier this month as a consultant, has been involved in the selection of the agencies from these markets. This has resulted in further delays for a campaign prompting industry representations on the Sri Lanka Tourism Promotion Board to request an urgent board meeting to discuss about this issue.http://www.sundaytimes.lk/180520/business-times/cb-watches-over-rupee-trends-294465.html19 May 2018 @ 6:05 pmThe Central Bank (CB), in a bid to curb volatility in the US dollar, has begun monitoring all bills and trades to ascertain the reason for a depreciating Sri Lanka rupee. While the CB has assured of sufficient foreign reserves in an effort to stabilise the market, money market dealers say the fluctuations are essentially due to a supply and demand scenario. On Friday, the dollar was pegged at Rs. 157.90-Rs. 158 after hitting a high of Rs. 159 in the past 10 days. On Wednesday, the CB said in a ‘reassuring’ media release that gross external reserves are expected to hit a record $11 billion by mid-June. On the same day, it withdrew intervening in the market. However , it is learnt that the International Monetary Fund has urged Sri Lanka to refrain from using foreign reserves to defend the rupee. Since early May, the CB has been pumping dollars in to the market to curb volatility which hasn’t had much of an impact though. Dealers said larger quantities need to be used to contain the depreciating rupee otherwise the dollar rebounds. Demand for dollars is largely due to exits from debt and equity by foreigners while exporters, expecting the dollar to further progress, are keeping their proceeds abroad for the maximum prescribed 120 days.http://www.sundaytimes.lk/180520/business-times/better-results-from-listed-firms-in-q1-294463.html19 May 2018 @ 6:04 pmColombo’s publicly listed companies are showing improved results in the latest end March 2018 quarter against the 2017 quarter as these firms weren't affected by floods. Last year's consumption spending slowed owing to the floods and as a result the bottomlines were hit badly, analysts said quoting results that have come in. This year fortune has smiled on the listed companies and they're posting much better results, they noted. Earnings for the consumer goods companies should come in better this quarter, supported by low inflation that prevailed in 1Q, a stock market analyst said. Overall, the banks and financial services reported solid numbers, with private banks reporting profits up approximately 20 per cent year-on-year. This was driven largely by loan growth, with Net Interest Margins staying relatively stable. Increased retail prices by Ceylon Petroleum Corp last week will impact bottomlines of firms in Q2, analysts noted. LIOC also followed suit. Consumer goods companies will largely have a short-term impact from rising prices of milk powder, gas and fuel, which will feed into higher cost of living, they added. “However, with a recovery in the agricultural sector (employing nearly 25 per cent of the labour force) we believe the impact on buying power will not take a major hit. Therefore, we are cautiously optimistic on the sector, but will continue to watch how the underlying consumer spending patterns evolve over the year which is a key driver of profitability for the consumer goods companies,” one analyst said.http://www.sundaytimes.lk/180520/business-times/fuel-taxes-at-around-40-in-2000-to-201718-294461.html19 May 2018 @ 6:03 pmContrary to claims and counter-claims by all sides of Sri Lanka’s political spectrum, an analysis by the Business Times shows that during the 17-year (2000-2017) period, tax on petrol and diesel has averaged 40 per cent of the retail price of both fuels. Fuel prices, year-on-year, have increased except for three instances: It was reduced by up to 4 per cent in 2009, by 6 per cent in December 2014 and, a month later (January 2015) by 22 per cent. Even during the international oil price hike period of 2010 to 2014, where the barrel of oil shot up to a level of US$79.52 and $109.84, Sri Lanka’s taxes on petrol remained at a level between Rs. 24 and Rs.45. The price of petrol varied from Rs. 115 to Rs. 162 and the average tax on fuel during the period was around 40 per cent. Taxes on diesel varied from Rs. 12 to Rs.33, also reflecting around 40 per cent of the retail price. In 2004 and 2005 fuel prices were not allowed to increase in spite of significant increases in international fuel prices. This was similar to the earlier policy of providing government subsidies to recover operational losses of the CPC, one Treasury official disclosed. Successive governments have followed a fuel pricing policy based on revenue generation without considering fluctuations in international oil prices and depreciation of the rupee. Several indirect tax payments such as import duty, excise duty, stamp duty, value added tax, turnover tax and security levy on petrol and diesel have contributed immensely to the government revenue. It also includes direct taxes such as income tax, dividends and other levies imposed on Ceylon Petroleum Corporation (CPC). Inefficiency costs and overheads of the CPC during previous regimes have also compelled the governments to increase taxes on fuel as well as various other direct and indirect taxes, analysts said. The price of fuel also depends on terminal costs at the Colombo port, CPC debt recovery charges, CPC wholesale costs and retail/distribution costs, they pointed out.http://www.sundaytimes.lk/180520/business-times/achcharu-sri-lankas-political-pickle-294458.html19 May 2018 @ 6:00 pmWhile Kussi Amma Sera and Serapina have dominated these columns with their juicy gossip and ‘handy’ column ideas, this time it was the turn of another equally, belligerent woman to steal the show. Thursday was a rainy morning and a no-show by Serapina for her usual garden “tete-a-tete” with Kussi Amma Sera. The rain was pouring cats-and-dogs and looking at the gloomy skies I realized that rain would be a spoiler in trying to gather a column idea. Then, in comes Kussi Amma Sera with the morning tea, in a high-pitched voice saying, “Budu Ammo, Mahattaya. Hari wedak wuna.” (My god Mahattaya. A fine thing happened.) Pausing in thought, I asked: “Aei?” “Apey Mabel Akka, honda kathawak quewa eeye (Mabel Akka, told us a good yarn yesterday),” she said, placing the tea cup on the office table and adjusting her “redda” for better leverage. I braced for a long harangue. For the record, Mabel ‘Rasthiyadu’ is the duo’s bosom pal and well-known, down-the-lane gossip. While KAS and Serapina might be gossip legends in their own domain (as domestic aides and in their village) they are no match for Mabel. Relating the conversation on Wednesday between the three, KAS described Mabel’s angry outburst: “Welanda polata giyoth … achcharu.” (If we go to market….a pickle.) “Kade giyoth … achcharu.” (If we go to the boutique…..a pickle.) “Ispirithale giyoth … achcharu.” (If we go to hospital…..a pickle.) “Aanduwe kanthoruwakata giyoth …. Achcharu.” (If we go to a government office……a pickle.) “Hema-thenama (everywhere)… achcharu.” It was unclear, I was in a pickle (nope, achcharu) and since I had a puzzled look, KAS went on: “Mahattaya, Mabel Akka-ge achcharu adahas, apey ratey tattvaya gena. Api katha-kere ihala yana mila ganan gena.” (Mabel’s ‘pickle ideas’ are about the situation in the country. We were talking about the rising prices.) Apparently the trio had been in a heated conversation on rising prices based on the latest hike in fuel prices. Not an unusual conversation anyway as this is the latest talk-of-the-town and ideal fodder for news-hungry journalists and columnists. It’s not rising oil prices, hesitantly passed to consumers which appear to be the problem. Listen to this conversation at a bank where I had gone to check my finances: “Appoi Sir, don’t wear that shirt,” said the friendly bank-teller. “Why,” I asked, again puzzled, in today’s parlance “like a tube-light”. Then it dawned on me, my green shirt (colour of the UNP). For balance, I showed her my lunch “pettiya” wrapped in a blue bag. “Not that too, Sir,” she replied with a smile. More focused on her work and good-natured banter with customers, she didn’t realise that she was also wearing a green saree! Her grouse and a common curse today is that while people are not opposed to the changes in fuel prices (and willing to make sacrifices) to reflect global oil prices which are around US$78 per barrel and likely to hit $100, they are angry about the extravagant spending by government politicians, parliamentarians and on costly ‘development’ projects. Similar complaints come from industry and commerce. “Paying taxes is fine and no country can run without taxes. However, while the people make sacrifices, are the politicians making that sacrifice? Look at the cars they import, look at the extravagant spending? Is that where our tax money is going,” said another consumer at a local market, pointing out to the ‘costly toilet’ renovations at the Colombo Mayor’s bungalow and sarcastically saying this would be in line for first prize as the best-maintained government toilet! Oil prices are surging and the authorities have no option other than to resort to a formula that reflects ‘real’ import prices instead of doling out subsidised fuel. Eventually, these losses (from subsidies) have to be forked out by the people in a cheap-now-pay-later scheme. Our fuel prices are like buying petrol or diesel or a luxury item with a credit card. You don’t have immediate cash but resort to credit and end up paying more, later! Politicians on both sides of the fence are at each other’s throats: One side says prices must reflect global oil pricing trends while the counter is that prices should have come down when international prices were low. Both arguments are valid. So is the one that if taxes are reduced (an opposition claim also articulated by a former UNP finance minister), oil prices would be much lower. However, all sides conveniently forget that governments over the years have resorted to high taxes and subsidised fuel to appease the people to win votes. Capacity constraints due to the need for urgent but costly refurbishment of the refinery at Sapugaskanda, Kelaniya of the Ceylon Petroleum Corporation (CPC) result in more refined oil imports which are costlier than raw crude oil. While there are various tools that could be used in assessing future prices and buying options, the CPC burnt its fingers in the infamous oil hedging saga in 2008. The culprits are still at large, while the country coughed out millions of dollars to foreign banks in foreign arbitration cases. Hedging is still an option, if done properly. While the argument is that local prices should reflect overseas trends, governments present and past have not always followed this route. Rising government spending is funded by taxes and some taxes are often a tactic to reduce consumption (cigarettes or alcohol) but it never happens that way. It is the “nice guy” approach: Committed to reducing consumption of a health hazard but on the other hand, handy to collect revenue. In the case of fuel taxes, high prices rarely reduce consumption since people cannot reduce daily travel in inefficient public transport (despite the entry of private buses) or cut cooking gas usage at home. For the sake of clarity (and without comment), we examined the price of petrol and diesel per litre versus oil price per barrel in the period 2000 to 2017 (based on Central Bank data), to get an idea of the relationship between overseas prices and fixing local rates. In 2000, fuel was US$28.78 per barrel with petrol at Rs. 50 per litre and diesel Rs. 24.50 per litre; 2001 - $24.62, petrol unchanged and diesel Rs.26.50; 2002 - $25, Rs. 49 and Rs. 30 respectively; 2003 - $24.41, Rs. 53 and Rs. 32; 2004 - $37.45, Rs. 68 and Rs. 42; 2005 - $52.92, Rs. 80 and Rs. 50; 2006 - $64.28, Rs. 92 and Rs. 60; 2007 - $72.01, Rs. 117 and Rs. 75; 2008 - $97, Rs. 120 and Rs. 70; 2009 - $63.93, Rs. 115 and Rs. 73; 2010 - $79.52, local prices unchanged; 2011 - $108.59, Rs.137 and Rs. 84; 2012 - $114, Rs. 159 and Rs. 115; 2013 - $109.84, Rs. 162 and Rs. 121; 2014 - $104.53, Rs. 150 and Rs.111. Since 2015, when oil was $54.80 (2016 - $46.30 and 2017 - $57.79), local prices have been unchanged. In January 2018, oil was pegged at $72 per barrel while on Wednesday (May 16), it was traded at $78. On May 10, the Government introduced the widely-touted, IMF-based fuel pricing formula, pushing petrol to Rs. 137 and diesel to Rs. 109. An analysis of the taxes imposed on petrol and diesel also provides some interesting reading. Check our analysis on Page 1. Worthy economists like my good friends Sirimal and Wije are likely to tear down these arguments but you cannot beat the down-to-earth, kitchen-style theories of KAS, Serapina and now Mabel Rasthiyadu that make or break Governments! Tired of the fuel debate? Then make a beeline to an interesting discussion on ‘The future of Sri Lanka (innovation-wise)’ organized by the Sunday Times Business Club. Few invitations available. Maybe they have a new remedy for Sri Lanka and a spicier recipe for achcharu!http://www.sundaytimes.lk/180520/business-times/brexit-exit-from-the-eu-to-an-fta-294452.html19 May 2018 @ 5:56 pmBrexit is “Britain’s exit” from the European Union (EU). On June 23, 2016 the majority of British people voted for Brexit. Britain is now packing its suitcase to leave the EU. The departure date is fixed as March 29, 2019. However this departure too is a gradual process allowing for a smooth transition which is due to complete by December 31, 2020. On January 17, the UK Prime Minister Theresa May presented the exit plan. Although everyone calls it “Brexit”, it is actually the UK that is getting ready to exit. Many are using the two terms interchangeably, but Britain comprises England, Wales and Scotland, while the UK includes Northern Ireland as well. This is a source of another dilemma in Brexit. It seems that an exit is more problematic than an entry. Today we try to look at some of the economic issues of integration and disintegration. At the same time, we will also look at the specific issue of Northern Ireland. Exit plan There were two important points in the speech of the UK Prime Minister which I like to pinpoint: The first is that she wanted Britain to be more outward-looking than ever before; this means that Britain is ambitiously looking forward to become “global”, going beyond the borders of Europe. The second is that Britain is looking forward to enter into a Free Trade Agreement (FTA) with EU; this means that Britain does not want to lose the benefits of free trade with EU members even after leaving the EU. The underlying economics of the two points are very clear. Britain is better off being integrated with the rest of the world including EU rather than being in isolation. It is easy to grasp the meaning of the first point. Britain was so far integrated more with EU than with other countries in the world. After leaving the EU, Britain which is already one of the most diverse and multi-cultural countries in Europe is looking forward to integrate with or open to the world rather than to Europe. The second point - going back to the EU with a proposal for FTA, requires little more details to understand the meaning. Levels of integration There are different levels of integration. The FTA is the most basic form of integration under which cross-border trade in goods and services is free from tariffs and other trade barriers. The second level is known as Customs Union under which the member countries should have common trade barriers to non-member countries. The EU established its Customs Union in 1968. The third level of integration is a Common Market or Single Market. This level of integration requires the free movement of goods, services, capital and, people. There are two types of rules and regulations: The first type is cross-border barriers between the member countries which have to be removed. The second type is the inconsistent rules and regulations that are applied internally within member countries, which have to be harmonised. The EU as a Single Market was established in 1992. There are even higher levels of integration such as the one which applies to Euro Zone; it is an Economic and Monetary Union under which member countries require to have harmonised or surrendered macroeconomic policies as well. The Euro was launched as the single currency of the Euro Zone in 1999, while its notes and coins were introduced in 2002. However, the UK did not become a member of the Euro Zone. Out of the 28 member countries of the EU, 19 belong to the Euro Zone. From single market to FTA [caption id="attachment_294455" align="alignright" width="400" caption="(AFP) -Britain's Prime Minister Theresa May speaks during Prime Minister's Questions (PMQs) in the House of Commons in London on May 16,. Britain will produce a dossier spelling out its Brexit strategy in the coming weeks, the government said."][/caption] It is now clear that where Britain comes from and where it wants to go: It was a member of the EU Common Market where goods, services, capital and, people are allowed to move freely across the borders. In fact, the people’s vote for Brexit was more political than economic. Free movement of people had created an influx of immigrants causing Britain to lose its English authenticity. However, it is not a wise thing to lose everything due to Brexit. Therefore, according to Prime Minister Theresa May, Britain will “…pursue a bold and ambitious Free Trade Agreement with the European Union.” This means, even after leaving the EU, Britain is committed not to sabotage its free trade in goods and services with EU. Economics of EU The European Union economy which is home to over 510 million people is as big as the US which has over 320 million people. The EU is a US$16 trillion economy whereas the US is $18 trillion economy. The UK is a strong economy in the EU which accounts for more than 15 per cent of the entire EU economy. What is even more important is that the EU is stronger than the US in terms of export growth and the resulting healthy trade balance lies mainly in its strong economies. As a region, export of goods and services from the EU is about 43 per cent of its GDP. Compared with that, the US has a persistent trade deficit, while its exports account for about 12 per cent of GDP. A striking feature of EU trade is that their trade within the EU is greater than that with the countries outside the EU. About two-thirds of EU exports are traded within the EU itself. Therefore, it is obvious that the UK does not want to fall down from the economic prosperity that it enjoys by being in the EU. That is why at least an FTA with the EU is important for the UK. Brexit dilemma The biggest Brexit problem is not any of the above, but the Ireland border which is also the UK’s physical boundary with the EU. While Ireland (Republic of Ireland) is an independent sovereign state and a member country of not only the EU but also the Euro Zone; everything there however looks more European than English. Northern Ireland which looks more English than European, is part of the UK; therefore, Northern Ireland together with Britain has to break away from the EU. Because both Ireland and the UK were members of the EU, the land border between Ireland and Northern Ireland was irrelevant; there was free movement of goods, services, capital and people. After the breakup of the UK from the EU, this border will have to be controlled with check points. This is a difficult choice since Ireland is the major trading partner of Northern Ireland. Nevertheless, as the UK Prime Minister emphasized, the UK will be pursuing a bold and ambitious FTA with the EU. This means that the border between Ireland and Northern Ireland (or in other words, between the EU and the UK) has to be open for free trade but closed for free movement of people. Prime Minister May emphasized that “…family ties and bonds of affection that unite our two countries (Ireland and the UK) mean that there will always be a special relationship between us.” What she proposed is the maintenance of the Common Travel Area (CTA) between the two countries ensuring their special relationship, while safeguarding the integrity of the UK’s immigration system. This also looks little tricky because opening a CTA with Ireland means that the UK is open for the EU through Ireland. Impact on Sri Lanka While the EU is Sri Lanka’s major export market which accommodates about 30 per cent of total exports, one-third of that is destined to the UK. However since the UK is not planning to reverse its free trade policy, there are no significant direct implications for Sri Lanka’s export trade. If Sri Lanka is going to lose any EU concessions that were applied to the UK as well, there will be a need for re-negotiation. One important indication in the Prime Minister’s Brexit Plan is to enhance the UK’s global economy beyond the EU which would improve its economic ties with other countries. In a transition process of UK as such, the countries that are prepared to hold it will move ahead. (The writer is Economics Professor at the Colombo University and can be reached at sirimal@econ.cmb.ac.lk)http://www.sundaytimes.lk/180520/business-times/dockyard-seals-contract-to-build-two-vessels-for-iraq-294233.html18 May 2018 @ 8:12 pmColombo Dockyard PLC (CD) has secured a contract with Toyota Tsusho Corporation (TTC) of Japan to build two vessels; Pilot Station Vessel and Buoy Tender Vessel, for General Company for the Port of Iraq (GCPI). TTC and GCPI signed the contract on April 27 in Dubai, CD said in a media release. TTC is a trading and investing company which is also a group company of TOYOTA. By recognising the potential of CD, TTC decided to collaborate with the Sri Lankan company for this project to compete and submit bid proposals in response to a tender floated by GCPI in July 2017, it said. “After the selection of the bid proposal submitted by TTC in collaboration with CD, there were contract negotiation meetings in Basrah, Iraq and in Colombo, Sri Lanka. These negotiations and discussions were able to strengthen the relationship between the parties to enter in to a successful contract.” The two vessels are to be delivered in Iraq in April 2020. CD was established in 1974 mainly for shipbuilding and ship repairing activities, and in the span of 44 years has earned a reputation internationally, of being one of the most competitive and dynamic shipbuilding and ship repairing facility in the South Asia region. CD operates in joint collaboration with Onomichi Dockyard Company Limited of Japan which owns a stake of 51 per cent at Colombo Dockyard. CD also has a 35 per cent shareholding from Sri Lankan Government institutions.http://www.sundaytimes.lk/180520/business-times/diversifying-exports-thro-incentives-for-entrepreneurs-294231.html18 May 2018 @ 8:11 pmSri Lanka is to diversify its export products considering the current demand in the export market and develop a mechanism to reach non-traditional destinations, Finance Ministry sources revealed. This initiative launched under the Enterprise Sri Lanka Programme has given priority to encourage the existing exporters and start-ups and strengthen the supply chain of the export products, Finance Minister Mangala Samarweera said at a top level official meeting recently. Sri Lanka's exports were being concentrated on a few products such as tea, gems, fruits and spices, he pointed out emphasising that there is a huge export potential for the organic agro products, spices, handicrafts, biodegradable products, Ayurvedic products, ceramic and porcelain etc. According to the external sector performance report of the Central Bank, in February 2018, earnings on merchandise exports recorded a moderate growth, reflecting the impact of a low base for comparison in February 2017 when earnings contracted. In nominal terms, export earnings in February 2018 amounted to US$916 million. This meant a break in the recent momentum in merchandise exports, which recorded double-digit-growth rates year-on-year basis for seven consecutive months. With the aim of improving this situation, a special loan scheme titled “Jaya Isura” has been introduced to assist exporters; he said adding that they will be given loan facilities through state owned and private banks two times higher than the loan amount of other borrowers. A sum of Rs.400 million will be distributed among exporters of agriculture, fisheries, tourism and IT fields. The aim is to create a large number of new entrepreneurs by providing all necessary facilities for them, Minister Samaraweera said adding that Sri Lanka has been able to achieve one of the best export performances last year and it will record a new high this year. Small enterprises with an annual turnover between Rs. 10 million to Rs. 250 million and with an employment cadre of 5 to 50 engaged in a range of specified activities are eligible for a maximum loan amount of Rs.100 million with the interest subsidy of 50 per cent and a lending rate at 6.75 per cent. Medium entrepreneurs with an annual turnover between Rs. 250 million to Rs. 750 million and with an employment cadre of 51 to 300 who are engaged in the same sectors are eligible to a maximum loan of Rs. 400 million with an interest subsidy of 25 per cent and lending rate at 6.75 per cent. In another loan scheme named “Swashakthi, a credit facility up to a sum of Rs. 200,000 will be extended at a concessionary interest rate of 5.5 per cent through 17 public and private banks while a non-recovery financial grant of Rs.50,000 will also be given along with the loan to meet the preliminary expenses of the business. Meanwhile, a sum of Rs.250,000 will be extended for developing the existing businesses at the same concessional interest rates. These loan sachems will come into effect from next month, he pointed out adding that the banks will be encouraged to move from collateral based lending to cashflow based lending which is more helpful to entrepreneurs.http://www.sundaytimes.lk/180520/business-times/bharti-airtel-rolls-out-first-of-its-kind-carrier-digital-platform-for-wholesale-voice-biz-294229.html18 May 2018 @ 8:10 pmNew Delhi - Bharti Airtel, India’s largest telecommunications service provider, last week announced the launch of a first-of-its-kind carrier digital platform which will enable global carriers to do wholesale voice business with Airtel at the click of a button. The innovative digital platform [www.airtel.in/global-voice] will offer paperless sign-up, quick voice interconnects and real-time traffic analytics for global carriers across the world, the company said in a media release. To offer a unique model to global carriers, the platform will not only allow customers to buy voice termination services from Airtel but also enable them to propose sell rates for their target markets. With on-boarding time reduced to a few hours, the platform also offers LIVE rates for routes across the world enabling faster decision making for traffic exchange. Through real-time usage analytics, users can access various real-time online reports that will track key performance indicators (KPIs) including traffic, traffic rates, payment, etc for destinations of their choice. The voice platform, which has been designed on the basis of extensive customer insights, will empower global carriers with faster decision making, ease of business and enhanced business efficiency through considerable reduction in time required to get started on voice interconnects. Airtel will soon also provision a single window on the digital platform for product discovery, on-boarding, billing, payment, enquiry, and support across multiple B2B products. Airtel is the third largest mobile operator globally serving 390+ million subscribers across 16 countries in Asia and Africa. Airtel has a worldwide network coverage spanning 250,000 route kilometres across 50 countries and 5 continents terminating over 23 billion minutes globally.http://www.sundaytimes.lk/180520/business-times/sri-lanka-grappling-with-economic-nationalism-says-eran-294218.html18 May 2018 @ 8:08 pmSri Lanka is grappling with economic nationalism by imposing tariffs and other restrictions on the movement of labour, goods and capital. The country must open up from this state of ideology, argues State Minister of Finance Eran Wickramaratne. [caption id="attachment_294226" align="alignright" width="400" caption="At a separate event Dr. Rohan Samarajiva - Chairman, ICTA and Ms. Ankhi Das - Public Policy Director - India, South & Central Asia, Facebook entering into a partnership to empower youth and entrepreneurs in Sri Lanka."][/caption] Attending the ‘Boost your Business’ programme organised by Facebook and Information and Communication Technology Agency of Sri Lanka (ICTA) at Hotel Galadari in Colombo on Wednesday, the Minister also said: “It’s a dilemma in the tourism, tea, rubber and coconut industries in Sri Lanka whereas it’s high time the country focuses on exporting technology that is developed in the country. We want to connect Sri Lankan companies to global value chains.” At the forum, State Minister of National Policies and Economic Affairs, Harsha de Silva elaborated on some of the obstacles the Sri Lankan technology sector faces. “Infrastructural delays in providing Internet facility, insufficient human resources, lack of financing and no proper payment platform are some of the obstacles the industry faces,” he pointed out. Constructive engagement of people through social media while creating a digitally empowered society is what the government is looking at through Facebook after the recent incident in Digana, ICTA Chairman Rohan Samarajiva stated. Governments’ concerns should be communicated to the partners through social media platforms, he added. Meanwhile Minister of Telecommunication and Digital Infrastructure, Harin Fernando stated that Facebook has become very smart by helping entrepreneurs boost their businesses via social media. “Marketing is a very big issue within the government. The right reasons for making use of social media have not been focused on yet,” he noted. He also mentioned that people have more negative stories to share on social media than the positive news articles. Facebook Business Development Manager for South Asia, Kushagra Sagar explained how entrepreneurs can boost their businesses through Facebook. He said, “There are 2.2 billion Facebook and 1.5 billion WhatsApp users worldwide. Creating a page for your business, posting and promoting it, doesn’t take much time. What you post and who your audience is, is what matters.” People don’t want to read lengthy posts and content that doesn’t make sense. Strong content articulated in short format attracts people to read. Also based on how responsive a page is, it is likely for businesses to get more reaches and that in turn generates sales and leads. An advertisement must create the curiosity among people to view or play it if it’s a video ad. A brand has to tell a story to the people for them to purchase the product online or by visiting the outlet, noted Mr. Sagar.http://www.sundaytimes.lk/180520/business-times/dcsl-pays-more-dividends-294215.html18 May 2018 @ 8:04 pmThe Distilleries Company of Sri Lanka PLC (DCSL) board of directors has revised the dividend policy of the company to that of paying out a minimum of 70 per cent of the Net Profit After Tax (NPAT) of the company as dividend. "This revision was made due to the fact that non-liquor investments of the group will now take place at the holding company level, and the need of funds of liquor sector related expenditure will be minimal," its Chairman D. H. S. Jayawardena has said in the interim financial statements of the company for the quarter ended 31st March 2018. The NPAT for the last quarter of 2017/2018 was Rs. 1,902 million compared to the Rs. 811.9 million reported in the corresponding quarter in the previous year, showing a year on year increase of 134 per cent. "The increase in profit for the quarter is a reflection of adjustments that have been made in November 2017 to recover all increases in taxes imposed in November 2016. Until then the company has been partially absorbing to somewhat deflect the sharp increase in price that would have otherwise been passed on to the consumer," Mr. Jayawardena has said. The NPAT after tax for the year 2017/18 stood at Rs. 4,484 million compared to Rs. 4,975 million in the previous year. "This decline of 9.9 per cent was as a result of lower profitability during the period March 2017 to November 2017, due to the reasons explained above. Based on the performance in the quarter ended 31st March 2018, I am hopeful that your company will record impressive results in the ensuing financial year," Mr. Jayawardena has said.http://www.sundaytimes.lk/180520/business-times/investment-from-scandinavian-countries-grow-by-54-since-13-294212.html18 May 2018 @ 8:04 pmThe Nordics – Sweden, Denmark, Norway and Finland which have a global reputation for excellent performance in investing that emphasises on Environmental Social and Governance (ESG) standards and Socially Responsible Investing (SRI) and related international rankings - are eyeing Colombo's stocks. Investments from Scandinavian countries have grown by 54 per cent per annum compound annual growth rate (CAGR) since 2013, Colombo Stock Exchange (CSE) data shows. These are funds which believe that deliberately investing in companies with good behaviour or agitating to improve the behaviour of offenders — can deliver results. Scandinavian ESG funds and their business communities and government policies are often held up as an example to other countries. In general, socially responsible investors encourage corporate practices that promote environmental stewardship, consumer protection, human rights, and diversity. Some avoid businesses involved in alcohol, tobacco, fast food, gambling, pornography, weapons, contraception/abortion, fossil fuel production or the military. There is a high degree of homogeneity among the Nordics in terms of all this in cultural as well as institutional investments. In 2018 (January to April), Scandinavian countries have invested Rs. 7.8 billion in the Sri Lankan stock market, which constitutes 22 per cent of the total foreign purchases during the period, the Business Times’ research showed. Amongst them Tundra and Coeli stand prominent. Tundra has US$ 150 million is in its Frontier Sustainability Fund, which has invested $ 20 million (12 per cent) of the fund portfolio in Sri Lanka. Coeli, a Swedish asset manager is now at number 3 in the shareholder list at Nestle’s PLC as at March this year with 308,500 shares (0.57 per cent). Coeli Frontier Markets Fund has 7.5 per cent country allocation to Sri Lanka as at April 2018. Opalesque, a publication which scours professional news services to participants in the alternative investment sector, has said that global service provider Northern Trust’s recent survey of 50 Nordic institutional investors in Stockholm found that 80 per cent among them expect investor allocations to alternative assets to increase within the next five years. Notably, half of these expected a greater focus on ESG factors within the investment process, with 25 per cent of these even saying ESG credentials would make or break deals. Analysts say that foreign investment can be driven by ESG and that specifying the underlying mechanism of foreign investors' stock picking behaviour. They say that ESG compliant firms can attract foreign investment. According to the Global Sustainable Investment Alliance (GSIA), assets valuing over $21.4 trillion have incorporated ESG concerns into their investment selection and management globally, representing 30.2 per cent of the total assets under management. Analysts say that foreign investment can be driven by ESG and that specifies the underlying mechanism of foreign investors' stock picking behaviour. They say that ESG compliant firms can attract foreign investment.http://www.sundaytimes.lk/180520/business-times/tundra-sustainable-frontier-fund-adds-ceylinco-to-portfolio-294209.html18 May 2018 @ 8:02 pmTundra Sustainable Frontier Fund says that it bought shares in Sri Lanka's insurance company Ceylinco valued at around five times of its annual profits making it very cheap in a frontier context. "The company is well placed to continue to grow its bottom line by above 10 per cent per year going forward. Insurance premiums (general and life) as a percentage of GDP in Sri Lanka are approximately 1.5 per cent compared to about 5 per cent for Asia as a whole and 8-9 per cent in developed markets," a Tundra communiqué said. Ceylinco primarily underwrites general and life insurance products. "The company also has several subsidiaries in the education, power – generation and distribution of hydro power to the national grid – and financial sectors. For its CSR, the company runs social impact projects such as providing scholarships to disadvantaged children, blood donation drives and supporting relief measures like it did during the 2017 floods. Founded in 1939, Ceylinco is headquartered in Colombo," the release said. Tundra emphasises on Environmental Social and Governance (ESG) standards and Socially Responsible Investing (SRI). Since autumn 2016 all Tundra's funds are screened for violations of international conventions (guidelines from UN Global Compact, OECD, and ILO) and they focus high on this aspect. Tundra has an in-house ESG research team and external screening consultant. There're two dedicated analysts working exclusively with ESG analysis where they communication with all portfolio companies and we focus on a systematic, scientific and thematic approach. Avanceon Ltd, and IT company from Pakistan, was divested by Tundra during April due to financial considerations.http://www.sundaytimes.lk/180520/business-times/south-asia-investment-conference-2018-in-colombo-294205.html18 May 2018 @ 8:02 pmThe inaugural South Asia Investment Conference (SAIC), jointly organised by Capital Alliance Securities (Pvt) Ltd, AKD Securities - Pakistan and Lanka Bangla Securities - Bangladesh was held on May 7-8 at the Taj Samudra Hotel in Colombo. The two-day event played host to round-the-clock meetings, attracting over 100 participants from eight countries. [caption id="attachment_294207" align="aligncenter" width="400" caption="Seen here a panel discussion in progress at the event."][/caption]http://www.sundaytimes.lk/180520/business-times/three-carson-firms-in-talks-with-sec-on-fate-of-being-listed-294203.html18 May 2018 @ 8:01 pmCarson Cumberbatch PLC firms - Indo-Malay PLC, Good Hope PLC and Selinsing PLC - are gearing to delist from the Colombo Stock Exchange owing to minimum public holding issues, company sources say. As per Rule 7.13.1 (a) of the Listing Rules of the Colombo Stock Exchange, a Listed Entity on the Main Board having a public holding below the specified requirement in terms of the said rules, has to ensure that the public holding of such entity is maintained at a defined public holding percentage of shares in the hands of a minimum number of 500 public shareholders. These three Carson firms don't at present satisfy the requirement relating to minimum public holding. They had made a voluntary offer to all shareholders in 2011 in a bid to acquire the entire minority shareholding as a step towards the consolidation of the oil palm plantation business segment of Carson’s group. The offer documents also mentioned that upon completion of the voluntary offer, the rationale for remaining listed will be evaluated. Since the voluntary offer did not result in the acquisition of the entire minority shareholding, the companies continued to remain listed. "Taking into consideration that a voluntary offer had been made and also considering that there is no requirement for additional capital infusion to the companies and resultantly, there being no plans for issuing of new shares nor a dilution by the majority shareholder, and as previously communicated to shareholders through market disclosures and annual reports, the companies would not be in compliance with the said requirements and we would report on the proposed course of action in consultation with the regulator (the Secrities and Exchange Commission),” Chairman Hari Selvanathan has said in the recent annual reports of all three firms. All three companies sold their Malaysian plantation assets and also distributed the set sale proceeds in the form of a share repurchase and a dividend to the shareholders during the previous financial year with due approvals, he has said. He has said that Indonesian plantations are currently recovering from the impact of low cropping arising from consecutive years of drought weather conditions. The operations of all three firms now consist of the equity investment made in Indonesia (PT Agro Indomas) through Shalimar Developments Sdn. Bhd. (SDSB) and the shares held in Shalimar (Malay) PLC (SMPLC). The Indonesian Investment, PT Agro Indomas is managed through the group's fully owned management arm in Indonesia. PT Agro Indomas consists of 26,981 hectares of plantation with processing facilities of 225 MT/hr within the plantations. Indo Malay PLC recorded a net loss after tax of Rs. 0.42 million for the year as compared to the profit of Rs. 1,932.10 million recorded in the previous financial year, which included the profits of Rs. 1,856.32 million from Malaysian plantation operations and the sale of Malaysian plantation assets. Good Hope recorded a loss after tax of Rs. 4.71 million from operations during the year under review compared to a profit of Rs. 4,128.78 million recorded in the previous financial year. The previous financial year's results included the profits from the plantation operations and the sale of plantation assets. Selinsing PLC recorded a profit after tax of Rs. 6.93 million from operations during the year under review compared to the profit of Rs. 323.49 million recorded in the previous financial year. Here too, the previous financial year's results included the profits from the plantation assets. Accordingly, no dividend has been proposed for the year under review.http://www.sundaytimes.lk/180520/business-times/three-acre-ceylon-grain-income-high-on-good-market-conditions-294201.html18 May 2018 @ 8:00 pmThree Acre Farms PLC group revenue increased during the first quarter ended 31 March 2018 as a result of improved market conditions for Broiler Day Old Chicks (DOCs), although the demand for Layer DOCs had been adversely affected by continued volatility in the table egg market, the company has said. "The group profitability during the period was adversely affected by a drop in Parent Stock DOCs production and export, which was a result of import restriction placed on Grandparent stock DOCs caused by avian flu epidemic in the suppliers' countries. Moreover, the unsold Layer DOCs due to poor demand together with the increase in corporate tax rate had further narrowed the net profit margins," Cheng Chih Kwong, Executive Director and CEO has said in his quarterly review. Group revenue for the first quarter of 2018 was Rs. 657 million compared to Rs. 630.1 million during first quarter of 2017, representing an increase of Rs. 26.9 million or 4 per cent. The company's revenue for the first quarter of 2018 was Rs. 510.4 million compared to Rs. 530.8 million during the same quarter of 2017, representing a decrease of Rs. 20.4 million or 4 per cent. The group reported a total comprehensive income of Rs. 166.3 million for the first quarter of 2018 compared to Rs. 189.2 million during the same quarter of 2017, representing a decrease of Rs. 22.9 million or 12 per cent. The company reported a total comprehensive income of Rs. 130.3 million for the first quarter of 2018 compared to Rs. 164.2 million during the same period of 2017, representing a decrease of Rs. 33.9 million or 21 per cent. Mr. Kong has noted that in Ceylon Grain Elevators PLC in which he's also the chairman, the group during the quarter under review reported a total comprehensive income of Rs. 314.1 million which is an increase of Rs. 65.2 million or 26 per cent, when compared to Rs. 248.9 million reported during the same quarter of year 2017. The company reported a total comprehensive income of Rs. 131.4 million in the first quarter of 2018, an increase of Rs. 88.7 million or 208 per cent when compared to Rs. 42.7 million that was reported in the same quarter of 2017. "The profitability of the group increased during the period under review, mainly due to the improved prices for chicken meat and feed. The decreased cost of production with better feed formulation had further improved the group profitability. The bottom line of the group could have been better if not for increase in corporate tax rate from 12 per cent to 28 per cent". The group's revenue for the first quarter of 2018 was Rs. 3,769.8 million, a decrease of Rs. 63.8 million or 2 per cent when compared to Rs. 3,833.6 million during the same quarter of 2017. The company's revenue for the first quarter of 2018 was Rs. 3,649.4 million a decrease of Rs. 94.1 million or 3 per cent when compared to Rs. 3,743.5 million during the same quarter of 2017. The revenue of the group was impacted by the decrease in Layer Feed sales volume consequent to the lesser number of Layer birds on ground. Lower export revenue from Broiler Parent Stock DOC and the decreased demand for Layer DOCs due to the depressed market for table eggs had further reduced the group revenue.http://www.sundaytimes.lk/180520/business-times/lanka-hospitals-to-start-facility-in-seychelles-294197.html18 May 2018 @ 7:59 pmThe Lanka Hospitals PLC (LHPL) is eyeing setting up a facility in Seychelles and plans to commence work on it this year, top officials say. "This will be a pilot project for Lanka Hospitals and progress will be monitored carefully to refine it further for replication in other locations," LHPL Chairman Dr. Sarath Paranavithana has said in his annual review. An ageing demographic, high incidence of non-communicable diseases, declining fertility rates and increasing levels of awareness of the benefits of good health and wellbeing provide significant opportunities for growth and shaping the role of the hospital, he has said. LHPL has invested Rs. 600 million in upgrading technology and plan to invest a further Rs. 200 million in expansion of facilities in the country in 2018. Lanka Hospitals – in an agreement with the Health Care Agency of Seychelles – is providing specialised services in Cardiology, Neurology, Urology, Oncology, Gynaecology and Obstetrics at Lanka Hospitals. So far the Colombo hospital has treated 178 patients from peripheral hospitals in Seychelles. "We also perceive opportunities to expand our services outside the Western Province as there is a significant disparity in service indicators between the Western Province and others," Dr. Paranavithana has said. The hospital explored opportunities in medical tourism attracting tourists from Maldives, Bangladesh, India, Seychelles, China and the Middle East, in line with the state agenda to promote medical tourism. "Expansion is a priority and we have commenced implementation of the same in 2018. They include investment in a new 12 storeyed building, establishing a minimum of 10 satellite offices around the country and establishing a medical branch in Seychelles. We will continue to optimise utilisation of our current facilities as well to drive revenue growth and expand our service menu. Private Health sector expenditure is expected to maintain an upward trend due to growth in non-communicable diseases and high levels of awareness of the benefits of good health and well-being," Dr. Paranavitane has said. The revenue growth was a mere 8 per cent stymied by the epidemic of dengue which resulted in high levels of occupancy and human resources but lower utilisation of LHPL's diagnostic and treatment infrastructure. "This also impacted margins together with costs associated with JCI re-accreditation and obtaining accreditation from the College of American Pathologists. Despite these challenges, gross profit increased by a modest 2.7 per cent. Administrative expenses and other operating expenses increased by 12 per cent and 13 per cent respectively due to inflation and increased level of administrative activity, reducing operating margins. Consequently, operating profit decreased by 19 per cent to Rs. 729 million, "Dr. Prasad Medawatte, Group CEO has said in his statement. The charge for taxation increased from Rs. 109 million in 2016 to Rs. 341 million due to the change in the rate of tax which increased from 12 per cent to 28 per cent. Accordingly, the charge for the year increased from Rs. 109 million to Rs. 341 million while the impact of the rate increase on deferred tax amounted to Rs. 252 million for the current year. This resulted in a dramatic decline of 40 per cent in profit for the year which amounted to Rs. 581 million for 2017 in comparison to Rs. 972 million for 2016.http://www.sundaytimes.lk/180520/business-times/ncinga-innovations-wins-spot-at-microsoft-tech-centre-singapore-294193.html18 May 2018 @ 7:57 pmnCinga Innovation, a Sri Lankan company focusing on digital transformation of manufacturing companies, has been chosen by Microsoft Corporation to be featured at its newly opened industry zone at the Asia Pacific Technology Centre in Singapore. The Microsoft Technology Centre (MTC) is a facility that assists companies in their digital transformation journey by capitalising on the changing needs of their customers and the new business opportunities of tomorrow. It allows customers and partners to experience, envision, ideate, problem-solve and deliver practical real-world solutions that power their digital transformation across different industry verticals. “We are pleased to be chosen by Microsoft to showcase nCinga Innovation’s advanced digital manufacturing solutions. I feel that MTC it is a perfect platform for nCinga Innovations and we look forward to working closely with MTC towards assisting our clients achieve their digital transformation goals,” Imal Kalutotage, CEO nCinga Innovations was quoted in a company media release on this latest achievement. All Microsoft clients and partners that visit MTC are able to explore the latest innovations in the digital space and obtain industry expert advice for starting or accelerating their digital transformation journey, it said adding that nCinga Innovations is featured under the Internet of Things (IoT) and Artificial Intelligence (AI) segment at MTC Singapore. “As businesses look for better and faster ways to leverage the fourth industrial revolution, modern technology such as cloud computing have a crucial role to play. With our partners, we seek to bring innovative solutions on Azure to transform businesses. Our partnership with the leading ISV, nCinga Innovations stems from this commitment and we believe that the Smart Factory solutions will help make a difference. We look forward to a long association,” Pratima Amonkar – Microsoft APAC Area Head – ISV Partners has said. “nCinga Innovations is a company on a mission of empowering data driven decisions for companies in the manufacturing sector,” Mr. Kalutotage has said. “We aim to build smart factories and manufacturing plants that operate in real time.” The company’s integrated industrial IoT platform collects, processes and analyses data in real-time in the cloud and presents it back to key decision makers with actionable insights. “This is the key information required to succeed in today’s competitive industry environment,” Mr. Kalutotage said noting that nCinga Innovations can do this by employing IoT and AI on the production floor, extracting and digitising data from the manufacturing process that was previously locked away.http://www.sundaytimes.lk/180520/business-times/united-professionals-movement-perturbed-over-fta-with-singapore-294189.html18 May 2018 @ 7:56 pmAlthough the government agreed with the United Professional Movement three years ago to formulate a clear cut policy on bilateral agreements with other countries, the state so far has failed to map out such a policy, said Gamini Nanda Gunawardana, Media Spokesman for the United Professional’s Movement (UPM). The UPM is a collective professional group which expressed dissatisfaction over the recently concluded bi-lateral agreement between Sri Lanka and Singapore at the media briefing held at the Organisation of Professional Association (OPA) in Colombo this week. “We even proposed to the government to present the bi-lateral agreement between Sri Lanka and Singapore before parliament for debate and to be passed with a two thirds majority before it was signed.” However the agreement was signed before a proper assessment was made on its impact on Sri Lanka. He said the agreement had created a precedent and has paved the way for other countries such as India and China to sign such bilateral agreements to the detriment of Sri Lanka. “We have filed a petition in courts regarding the agreement and awaiting a judgment.” Referring to country’s limited water resources, he said if a multinational company was to set up a plant using water resources under a bilateral agreement such a company would be exempted from a tax. However owing to issues raised by the UPM sometime back, the authorities in turn showed its commitment to engage in transparent and ongoing consultations with all stakeholders and decided to establish a joint Working Committee in 2016 with the approval of the Cabinet Sub Committee on Economic Management with Cabinet ministers. Sri Lanka Architecture Institute President D.H. Wijewardene said that they have no qualms whatsoever of investments coming into the country but the real question was whether this would happen in reality, where such investments would come into the country. He said several clauses included in the Bi-lateral agreement between Sri Lanka and Singapore are vague and should be brought before the Parliament for a debate to be passed.http://www.sundaytimes.lk/180520/business-times/lankas-lhi-completes-2nd-coastal-protection-consultancy-in-france-294185.html18 May 2018 @ 7:55 pmSri Lankan engineering consultancy company, Lanka Hydraulic Institute Ltd (LHI) recently completed a coastal rehabilitation project in Bormes les Memosas, Southern France. [caption id="attachment_294187" align="alignright" width="400" caption="Port of Bormes les Memosas, France."][/caption] LHI has been serving international markets for over three decades and its work saw Corinthe Ingenierie, a renowned French engineering consultancy company, commission LHI for the rehabilitation work. This project comes soon after the completion of a fully-fledged commercial fishery harbour in Sidi Ladjel, Algeria. The project is also the second coastal stabilisation work received from France after LHI’s famous beach restoration project in Cannes in 2013, LHI said in a media release. Port of Bormes les Memosas experienced damages to its breakwater from extreme Mediterranean waves, needing a large scale structural revamp. The project team investigated applicability of the latest and most eco-friendly ECOPODE concrete armour units on the breakwater slope under extreme wave conditions via conducting a series of physical model tests at LHI’s hydraulic modeling laboratory. “A larger emphasis was placed over assuring structural and public safety from raging waves of return periods up to 100 years. As stated by Dr. Sanjeewa Wickramaratne, senior engineering manager of LHI, this work is a fine example of Sri Lankan expertise being fruitfully utilized in foreign soils,” the release said. The company maintains a state-of-the-art hydraulics laboratory with capabilities in engineering design, field measurements, physical/ mathematical modeling; and carries out consultancy work for both domestic as well as overseas clients in West Asia, Southeast Asian, East Asian, African and European Regions. During its 34 years long journey, LHI has contributed enormously to the coastal and water sector with more than 400 consultancy projects completed worldwide. A significant feature of LHI is that all projects are handled in-house using Sri Lankan expertise. Key project staff consists of five PhD and five MSc qualified senior engineers having ample international and local experience, backed with a technically proficient supportive staff. LHI undertook 20 major projects last fiscal year including 2D (Flume) physical modeling for coastal protection in Fujairah, UAE, and a coastal engineering study for K. Bolidhuffaru Resort Development Project, Maldives. Top local projects include feasibility study and detailed engineering designs of Myliddy fishery harbour in Jaffna and anchorages at Dehiwala, Balapitiya, Rekawa and Mawella. Helping out Coast Conservation Department, LHI also completed a detailed bathymetric survey and a sand properties study from Mount Lavinia to Galle. In addition, the company offered its numerical modeling expertise for the development of Liquefied Natural Gas (LNG) terminal in Colombo, and a tourism and recreation development project attached to Dedduwa Lake.http://www.sundaytimes.lk/180520/business-times/global-innovation-index-founder-keynote-speaker-at-slasscom-innovation-summit-294183.html18 May 2018 @ 7:54 pmSLASSCOM’s annual Innovation Summit & Awards “Celebrate Ingenuity!” is to be held on June 14 at the Cinnamon Grand, Colombo with Dr. Soumitra Dutta, Founder and Co-editor of the Global Innovation Index (GII) as the keynote speaker. “Innovation has become the buzzword of the decade across the world. Understanding truly what it stands for and putting a metric behind it may seem an arduous task. But, the Global Innovation Index (GII) does just that.It produces a comprehensive broad-based model of measuring innovation that captures its complex nature in both developed and emerging economies. Since its first edition, published in 2007, the GII has gained international recognition, leading to numerous countries incorporating the GII into their innovation agendas and metrics,” SLASSCOM said in a media release. Dr. Dutta is also the former Dean and current Professor of Management at the SC Johnson College of Business, Cornell University. “It is very exciting to be a part of the first ever SLASSCOM Innovation Summit in Sri Lanka. It will bring to light the importance ofleadership in creating vibrant digital innovation ecosystems and what some of the leading economies are doing better than others. Hopefully this will catalyze Sri Lanka’s journey towards innovative greatness,” he was quoted as saying. With the recent unveiling of Sri Lanka’s national branding of the ICT/BPM sector, IOI – Island of Ingenuity, the SLASSCOM Innovation Summit becomes a celebration of ingenuity and innovation. As part of the SLASSCOM Innovation Summit, there will also be an Innovation Awards segment to recognise and celebrate ingenuity. The core judging panel will consist of acclaimed international figures, led by Dr. Dutta. On the awards, SLASSCOM Chairman, Ruwindhu Peiris, said: “We’ve carefully selected categories of awards that truly embodies the spirit of innovation. It will be great to see the applications that come in and to bring to the limelight all the innovation spurring growth in Sri Lanka’s ICT/BPM sector.” Applications are now open for the award categories: Best Product Innovation, Best Start-up Product/Service, Best Client Delivery Innovation, Best Disruptor, Best Innovation in Internal Process, Best Innovation in Business Process Management, and the Best Technology or Framework Innovation.http://www.sundaytimes.lk/180520/business-times/sls-population-under-poverty-level-could-increase-based-on-daily-spend-294180.html18 May 2018 @ 7:53 pmWhile the absolute poverty level in Sri Lanka today is at a low 3.8 per cent of the population with a US$ 1.30 spend per day, if this goes up to $2.5, then a quarter of the country’s population will be considered poor, says Indrajit Coomaraswamy, Governor of the Central Bank of Sri Lanka. Attending the ‘Youth to Nation Foundation’ event organised by the Carson Cumberbatch group at the Lakshman Kadirgamar Institute in Colombo last week, Dr. Coomaraswamy said that entrepreneurship will be critical to transform the livelihoods of the rural population, where many of them are trapped in low productivity and low income levels. “The absolute poverty in Sri Lanka is very low at 3.8 per cent of the population based on $1.30 spending per day. But if we increase the poverty line to $2.50, more than a quarter of the country’s population will be below the poverty level in this country. While we get people out of absolute poverty there is a very large proportion who are living rather an economically insecure life,” he said. He also mentioned that 27 per cent of Sri Lanka’s population is involved in agriculture which contributes only 7 per cent to the GDP which should only involve 15 per cent of the population. Agriculture needs transformation with modern cultivation practices. Low productivity and low income is attained when 35-40 per cent of the produce is lost at the post-harvest level. No proper storage, refrigeration and transport are some of the concerns. Dr. Coomaraswamy reiterated that the future of this country is in the hands of the young generation. “I personally feel that young people in this country seem to have the energy and commitment to move in the right direction. Programmes like ‘Youth to Nation Foundation’ must provide them the support framework to get the foothold and start moving forward.” Access to market is the biggest challenge among rural entrepreneurs, Dr. Coomaraswamy noted. Institutions must help them link to supply chains and open the marketing channels, he added. Netherlands Ambassador to Sri Lanka, Joanne Doornewaard stated that entrepreneurs are the drivers of economic growth and innovation. “When you talk about economic development you have to think about sustainability and include the poor,” she noted.http://www.sundaytimes.lk/180520/business-times/groundbreaking-hsbc-blockchain-transaction-set-to-revolutionise-trade-294176.html18 May 2018 @ 7:52 pmHSBC and ING Bank have successfully executed, what is claimed to be the “first scalable live trade finance transaction using blockchain” for Cargill, an international food and agriculture conglomerate. Last week, a shipment of soybeans was transported from Argentina to Malaysia, via Cargill’s Geneva and Singapore subsidiaries. The deal was financed using a Letter of Credit, which was completed digitally on R3’s scalable Corda blockchain platform, marking a tipping point in the way goods are bought and sold, HSBC said in a media release. The transaction shows that blockchain is a commercially and operationally viable solution for trade digitisation. Up until this point, banks, buyers and suppliers had been experimenting with blockchain, testing proofs of concepts and conducting internal pilots. However, this Letter of Credit transaction was an end-to-end trade between a buyer and a seller and their respective banking partners, completed on a single and shared digital application rather than multiple systems. What’s more, the blockchain platform used is already being supported by 12 banks, who are working with R3 and their partners to continue the development to bring the platform to market more broadly, it said. According to Vivek Ramachandran, Global Head of Innovation and Growth, Commercial Banking at HSBC: “With blockchain, the need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous. What this means for businesses is that trade finance transactions have been made simpler, faster, more transparent and more secure.” This technology is ideally suited for trade because it helps to streamline a previously paper-intensive process which usually takes between 5-10 days to exchange documentations. This exchange was done in 24 hours. “The success of this live transaction builds a firm foundation for the future of trade finance. The improved operational efficiencies, greater security with real-time tracking of goods and documents, and automatic reconciliation of payments will help boost both intra-regional and international trade flows,” said Ajay Sharma, Regional Head of Global Trade and Receivables Finance for Asia-Pacific at HSBC. Ivar Wiersma, Managing Director, Innovation Wholesale Banking, ING, said: “It’s exciting to see this transaction has been completed successfully with clear client benefits in speed and ease in execution. On top of that, it shows the power of collaboration.” The release said Enterprise blockchain records data digitally in much the same way as bookkeepers used to write in old-fashioned legers. However, the information is recorded on a shared ledger, with each party holding a copy of said ledger that updates the appropriate information required by the participant instantaneously. Each party can only see the information that is relevant to them. This kind of technology is perfect for trade because it maintains an unchangeable record of the transaction (including a description of the goods themselves, the cost, and any legal requirement) on one digital ledger. At the appropriate time in each transaction, the information required by participants can be shared with them for approval, HSBC said.http://www.sundaytimes.lk/180520/business-times/ogilvy-pr-sri-lanka-wins-prestigious-global-bulldog-pr-award-294174.html18 May 2018 @ 7:52 pmOgilvy Public Relations Sri Lanka won a coveted Bulldog Award at the Bulldog PR Awards 2018, which recognised outstanding PR and communications campaigns from 2017. The agency’s ‘Uncover the Truth’ campaign for Transparency International Sri Lanka (TISL) topped the ‘Campaign on a Shoestring Budget’ category winning the Gold Award, in a competition that saw a record number of entries from around the world, the company said in a media release. The globally-recognised campaign for TISL, focused on educating the Sri Lankan public on the Right to Information Act, which came into effect on February 4, 2017, after nearly two decades awaiting parliamentary sign-off. Speaking on the win, Irvin Weerackody, Chairman, Ogilvy Group Sri Lanka, said: “This is the fourth international accolade received by the ‘Uncover the Truth’ campaign. Winning the Gold Bulldog PR Award in a competition that is 100 per cent PR-focused and judged by an esteemed panel of senior journalists is affirmation of the campaign’s thinking, the results it has achieved and the role PR plays in matters of national interest.” In 2017, Ogilvy Public Relations became the first and only PR Agency in the country to win the Platinum ‘Best-in-Show’ Award at the SABRE APC Awards. The campaign went on to win Gold in the Global SABRE Awards 2017 and was ranked as the 6th best PR campaign in the world, by The Holmes Report.http://www.sundaytimes.lk/180520/business-times/coyle-chamber-team-meets-rajapaksa-294170.html18 May 2018 @ 7:51 pmThe COYLE chamber officials recently met former President Mahinda Rajapaksa to discuss improving the efficiency of the public sector for ease of doing business in Sri Lanka, the chamber said in a media release. From left: Aminda Rodrigo – Senior Vice Chairman COYLE; Dinuk Hettiarachchi – Chairman COYLE; former President. Mahinda Rajapaksa and Dinesh Jayawardena – Vice Chairman COYLE http://www.sundaytimes.lk/180520/business-times/new-management-strengthens-pelwatte-dairy-294168.html18 May 2018 @ 7:50 pmSri Lanka’s Pelwatte Dairy Industries Ltd (PDIL) recently strengthened its operations with the appointment of a new Managing Director and Operations Director at its state-of-the-art Buttala manufacturing plant. Akmal Wickramanayake, appointed as Managing Director of Pelwatte Dairy Industries in early 2017, is taking over management responsibilities of the company that was founded by his father Ariyaseela Wickramanayake. Under his guidance, Pelwatte Diary has undergone corporate restructuring to better streamline operations and reposition the brand in a highly competitive market, according to a company media release. “We compete in a highly volatile market and it has always been my father’s vision to make Sri Lanka self-sufficient in milk. As an organisation we strongly believe that this is an achievable dream and we constantly strive to better the lives of dairy farmers and their families, while also supplying a 100 per cent Sri Lankan product to consumers,” the MD said. PDIL has also recruited talented personal to senior management positions, one such being Toshan Wickramanayake, who took over as the Director of Operations at the Buttala Factory towards the latter part of last year. The operations director is a graduate of the University of Cambridge and brings with him a fresh new perspective to the company. Together with several other senior management appointees, PDIL is also putting much emphasis on expanding its procurement network in order to control supply and acquire raw milk for the increased production capacity. Under Toshan Wikramanayake’s guidance the Buttala factory has undergone several changes in staff, processes and technology. A lot of attention has been spent on existing product improvement and new product development. As a result of this emphasis, products such as butter, milk powder and ice cream have undergone product development leading to better products for customers, the release said.http://www.sundaytimes.lk/180520/business-times/resilient-hameedia-promises-to-rise-from-the-ashes-294164.html18 May 2018 @ 7:49 pmHameedia, the reputed Sri Lanka’s menswear fashion store following the massive fire that broke out on May 12 at the company’s main storage facility at Borupana Road, Ratmalana, causing extensive damage to the building and goods inside, has vowed to recover fast and swiftly to continue to serve the public. [caption id="attachment_294166" align="alignright" width="196" caption="Fouzul Hameed"][/caption] “Together with my undaunted team, I wish to thank everyone who supported us during this terrible catastrophe. We are determined to face this adversity with resilience and rapidly bounce back as we reminiscence our humble beginnings, when we started the journey with nothing,” said Fouzul Hameed, Managing Director of the Hameedia Group, in a public announcement on Wednesday, five days after the disaster. He said the company has sufficient stocks to cater to customers for more than three months. In fact its Wholesale sector, Adidas, Manufacturing and other sectors are already back in operation. The Hameedia Online Purchase option is also fully functional. Hameedia has also set up a Virtual Support Service/ Concierge Service where customers can immediately contact the following persons in case they are unable to find any specific item they are looking for: Hussain Sadique (0777355554 / hussain_s@hameedia.lk)// Chinthaka Wanigasekara (0777551057 / gm_hsm@hameedia.lk)// Chintana Meemaduma (0777122221 / mktint@hameedia.lk)// and A T M. Farzan (0777255888 / manager_operations@hameedia.lk). “Our journey which spans 70 years has had its share of triumphs and challenges. We have always resolutely faced everything that came our way. Ours is a multi-religious and multi-ethnic organisation. We are more than just a business since we thrive on giving back to the community, and this is the predominant reason for expansion despite years of facing various storms. Our success thus far has been primarily due to the commitment of our dedicated staff and also our thousands of loyal customers spread across the world,” said Mr. Hameed, considered the top men’s fashion designer in Sri Lanka, adding: ““We greatly appreciate the instant support rendered to us by our staff, customers, neighbours, Sri Lanka Fire Brigade, Army, Police, Air Force, STF, Disaster Management Unit, Electricity Board, political and religious dignitaries, the fire-fighting units from Dehiwala - Mount Lavinia, Moratuwa and the Colombo Municipal Council and many, many others.” During a span of 70 years, Hameedia has grown exponentially taking the brand beyond the shores to reach a worldwide clientele who value the eclectic fashion sense of Sri Lanka.http://www.sundaytimes.lk/180520/business-times/lanka-must-open-doors-to-skilled-professionals-expert-294160.html18 May 2018 @ 7:48 pmSri Lanka which lacks knowhow needs to find it from its immigrants willing to make the island their home and not set obstacles in their path to their arrival, observed a reputed globally-renowned economist. [caption id="attachment_294161" align="alignleft" width="400" caption="Prof. Ricardo Hausmann and Murtaza Jafferjee, CEO, JB Securities (right-moderator)."][/caption] Economist and consultant to the government on improving the Board of Investment (BOI), Prof. Ricardo Haussmann said that the immigration policy is the “lowest hanging fruit” which must expand to encourage more foreign knowhow. Prof. Hausmann is a Director of the Harvard University’s Centre for Development and Professor of the Practice of Economic Development at the Kennedy School of Government. He was delivering the speech on “Accessing know-how for development” at the Lakshman Kadirgamar Institute Auditorium on Wednesday organized by Advocata and Echelon Business Magazine. Spelling out a few examples, he noted that time and again it has been found that most people would have been trained in other countries and obtained their knowhow before working in the jobs that provided them with this training. These people would later vie for opportunities to establish businesses in the same sector thereby giving rise to a sharing of the knowhow learnt from other places, he said. He noted that if Sri Lanka was to become a destination that would allow the big guys to move in then there would be much more dynamics. Prof. Haussmann observed that working for the past three years he had found that things would take longer than expected to happen since the processes involved were more complicated. “It’s hard to do things in this bureaucratic sector. Public sector bureaucrats have to be empowered more,” he explained. Moreover, he pointed out that the global obsession with curbing corruption was “paralysing people all over the world.” Today the people were involved in the business of following existing procedures and not solving the problems, he said adding that this was not just the problem faced by the Sri Lankan bureaucracy but it was a “universal problem.” [caption id="attachment_294162" align="alignright" width="360" caption="Audience."][/caption] Prof. Haussmann has been working with the BOI on establishing industrial zones in the country and has also found that infrastructure development in terms of road construction needs to get underway in a bid to cut on travel time. Asked whether there would be opportunities for computer scientists or IT professionals from other countries to be attracted to Sri Lanka going by the wage structure in Colombo, he queried whether there would not be any firms ready to pay such fees to these experts to work in the country. In fact, he pointed out that it was not just about bringing down IT professionals to the country but about removing the obstacles in welcoming such experts to Sri Lanka due to legislation.http://www.sundaytimes.lk/180520/business-times/mas-kitchen-supports-fairtrade-to-improve-farmer-livelihoods-294156.html18 May 2018 @ 7:46 pmMA’s Kitchen, one of the country’s top food processors, has highlighted the importance of continuously supporting and integrating Fairtrade practices to create better livelihoods in recognition of World Fair Trade Day. [caption id="attachment_294157" align="alignright" width="400" caption="A Spice farmer with a solar panel donated by a MA’s Kitchen customer."][/caption] As the proud recipient of the Fairtrade Labelling Organisation’s Fairtrade Certification, MA’s Kitchen is certified for processing fairtrade materials and manufactures fairtrade certified coconut milk, curry pastes and other food ingredients for consumers around the globe, the company said in a media release. Not only does the endorsement ensure the company follows rigid certification requirements but guarantees not only that the farmers receive a minimum price above costs to ensure sustainable production, but an additional Fairtrade premium is also pledged to the farmer organisations for development activities. In the past year, MA’s Kitchen had facilitated over Rs 2 million in Fairtrade premiums to their supplier farmer organisation showcasing the company’s commitment to fair prices and a sustainable working environment. The company has guided the formation of the Sustainable Agri Farm Enterprise Network (SAFENET), a network of over 100 farmers in the south and central parts of Sri Lanka who are also Fairtrade certified and with the company’s assistance carry OUT Fairtrade practices. MA’s Foods has also been successful in mobilising their customers towards the ethos of fairtrade. One of the company’s longest-standing customer recently donated solar panels to some of its supplier spice farmers in the Matale district. These solar panels ensure the farmers receive continuous electricity supply reducing their daily costs and reliance on fossil fuels and also providing a safer light source in some hard to reach areas that the farmers work in, the release said.http://www.sundaytimes.lk/180520/business-times/baker-tilly-international-conference-in-sri-lanka-294154.html18 May 2018 @ 7:45 pmThe Asia Pacific Regional Conference of Baker Tilly International will be held in Colombo on May 18-22, hosted by Baker Tilly Edirisinghe & Co, the group’s local member, Baker Tilly International is one of the world's leading networks of independently owned and managed accountancy and business advisory firms. The conference will bring together over 100 expert consultants from 22 countries to Sri Lanka to share their insights on how to keep business growth on track when operating within a consistently evolving marketplace, the local firm said in a media release. A key highlight of the regional conference will be the Global Tax Forum, which will deliberate on International Tax Planning and how it affects the present global business environment. At this forum, Baker Tilly International’s regional advisors will share insights on the regional tax round-up covering China, Malaysia and Singapore, and conduct an introduction to Base Erosion and Profit Shifting (BEPS) and transfer pricing opportunities in Asia Pacific. D.R.S. Hapuarachchi, Senior Commissioner for Tax Policy, International Affairs and Secretariat, Department of Inland Revenue, Sri Lanka, will be a guest speaker at the forum. The conference will be presided over by Ted Verkade, Chief Executive Officer, Baker Tilly International. Baker Tilly Edirisinghe & Co. Partner Priyan Edirisinghe said: “We are honoured to host this year’s APAC Regional Conference for Baker Tilly International. With the changing legislative landscape and proposed tax reforms, it is especially important to understand the impact it plays on businesses”.http://www.sundaytimes.lk/180520/business-times/us-14-mn-fund-to-double-milk-production-in-sri-lanka-294151.html18 May 2018 @ 7:44 pmWhile the demand for milk is on the rise at 13 per cent per annum in Sri Lanka, there is shortage of processes and facilities in place to meet the demand. For this purpose the US Department of Agriculture (USDA) is providing US$ 14 million (approximately Rs. 2 billion) to Sri Lanka through a new Market-Oriented Dairy (MOD) project which would help the government to double dairy production. This project was launched in Colombo on Thursday by the USDA together with International Executive Service Corps (IESC) and the Government. Prime Minister Ranil Wickremesinghe, chief guest at the event, said that on average only four litres of milk is produced per day by a cow. “We want to double the number to 10 litres per day through the project,” he added. He noted that similar to developments in other sectors, the dairy industry, lifestyle of farmers and rural economy must also progress while increasing the income of the farmers. US Ambassador to Sri Lanka and Maldives, Atul Keshap stated, “This is the largest US funded dairy project in Sri Lanka. The fund is to help increase dairy production and modernize processing.” The MOD project will focus on commercial sustainability of the dairy sector addressing access to availability of quality and safety of dairy products, he added. Mr. Keshap said that the project will take place in Northern, North Western, North Central, Eastern, Central and Uva provinces and benefit more than 15,000 small and medium scale farmers. The project will also help small scale farmers strengthen livestock management capacity and adherence to quality and hygiene best practices while expanding access to veterinary services. MOD Project Director, Matthew Krause pointed out that there is a huge gap between the demand and supply of dairy farming in Sri Lanka. “The demand continues to grow at 13 per cent per annum in Sri Lanka,” he said while elaborating that correct farming practices can produce good quality and more quantity of milk to cater to market demand and needs. By improving the productivity and focusing on less cows with more milk, production can double. MOD will partner with dairy processes to ensure long term sustainability and transfer knowledge to provision training and technical assistance along with facilitation of financing and introducing new technologies. “We will upgrade farmers’ animal husbandry knowledge, hygienic practices and business management skills through robust extension and training, utilizing the government and private sector extensions,” Mr. Krause noted. The project will partner with banks and financial institutions to establish dairy investment funds and facilitate loans for upgrading farms, collection centers and processing capabilities while bringing IT into the dairy sector.

Importing heifers

The Ministry of Rural Economy has plans to import 15,000 pregnant heifers in six stages, this year, and in a May 3 public notice invited investors interested in dairy production. “Under the dairy cows’ importation project for developing commercial dairy entrepreneurs for expanding the local dairy industry, 5,000 pregnant dairy heifers were imported successfully in 2017. Another 15,000 pregnant heifers are planned to be imported by the Ministry of Rural Economy in six stages,” the notice said.

http://www.sundaytimes.lk/180520/business-times/slt-group-1q-2018-ebitda-up-by-8-5-to-rs-6-1-bln-294149.html18 May 2018 @ 7:42 pmSri Lanka Telecom PLC has reported EBITDA or Operating Profit before depreciation and amortisation of Rs. 6.1 billion during 1st quarter 2018, with a year-on-year (y-o-y) increase of 8.5 per cent. However, the company noted in a media release this week that … “Large investments made by the group during the recent years have continued to affect the company profits adversely due to mainly the increased charges in depreciation”. Group depreciation and amortisation increased by Rs.512 million in absolute terms showing a 12.8 per cent y-o-y increase to Rs.4.5 billion and this rise resulted in a marginal drop in group operating profit to Rs. 1.58 billion compared to Rs. 1.62 billion in the corresponding period of previous year. The release said that controlling of cost escalations while sustaining revenue growth resulted in better EBITDA levels. Group revenue for the quarter under review was reported at Rs. 19.8 billion with y-o-y growth of 5.9 per cent, while operating cost was reported at Rs. 13.7 billion, a y-o-y increase of 4.7 per cent. SLT has largely invested in new technology and capacity expansion of LTE, FTTH, IPTV, Global connectivity and Mobile services in catering the expanding customer base and providing more services. The gamut of SLT’s investments in the recent past also included the expansion of National Backbone Network, launching of its newly built state-of-the-art Tier 3 Data Centre the country’s first ‘Purpose built tier 3 Data Centre’, SEA-ME-WE 5 undersea cable system, and newly established cable landing station in Matara within the third quarter. SLT said it was also committed to further oversee South Asia’s first cutting-edge submarine cable depot in the Galle Port. The release said the holding company reported Rs.3.5 billion EBITDA or Operating profit before depreciation and amortisation with y-o-y growth of 13.2 per cent. Despite the higher depreciation and amortisation challenging the profitability, its investments have largely enhanced the company asset base. Further the company expects robust profitability in the future by sustainable growth in revenues through capacity utilisations and effective cost management, the release added.http://www.sundaytimes.lk/180520/business-times/foregoing-slfrs-9-saves-banks-bottomlines-294147.html18 May 2018 @ 7:41 pmA major trend seen in the recently released corporate results is that banks are taking larger impairments into the books. This is as a result of the banks taking a prudent measure on higher provisioning to prepare for the SLFRS 9 standard implementation in financial year 2018, as well as taking into account the rising Non Performing Loans (NPLs) caused by weak economic conditions experienced last year. SLFRS 9 on “Financial Instruments” is applicable for financial periods beginning on or after 1st January 2018. This standard replaces LKAS 39 – “Financial Instruments: Recognition and Measurement”. However, CA Sri Lanka has granted an option to prepare interim financial statements continuing the application of LKAS 39 during the financial year commencing on or after 1st January 2018, through “Statement of Alternative Treatment (SoAT) on the Figures in the Interim Financial Statements.” SLFRS 9 gives a new set of guidelines on how the impairment costs for financial liabilities should be recognised. Given the changes proposed in the standard, it’s certain that the impairment cost of the banks will increase structurally going forward when the standard is implemented, according to analysts. Therefore, what the banks did this quarter was take on more impairment into the books to prepare for the SLFRS 9 implementation. Some say that is being prudent. For the banks and finance companies, the impairments are a cost item – basically, similar to writing off bad debt. “Underlying results were good, so they were able to do this,” one analyst noted. Accordingly, these financial statements have been prepared by applying LKAS 39 in accordance with the said option granted. If SLFRS 9 was applied to the financial statements as at 31st March 2016, it would have reduced the Hatton National Bank's (HNB) net assets by approximately 3 per cent to 5 per cent and the Total Capital Adequacy ratio approximately by 50 to 60 basis points, HNB said in its recent results. “With the transition from LKAS 39 incurred loss method to SLFRS 9 expected credit loss method, it is expected that the overall cumulative impairment provision will increase by approximately 35 per cent to 45 per cent.” HNB said with its migration to SLFRS 9 on financial instruments which became effective 1st January 2018, it is in the process of quantifying the additional provisions required in respect of impairment charges for the three months ended 31st March 2018. “Looking ahead, we think the banks can continue to perform well on the top line, but can face some headwinds on the impairments which may moderate the profit growth which was seen in 1Q CY18,” another analyst said. Commercial Bank said with its migration to SLFRS 9 on financial instruments, it is in the process of quantifying the additional provisions required in respect of impairment charges for the three months ended 31st March 2018. “Based on the assessments undertaken to date, which are yet to be audited, the total estimated additional loan loss provision as at December 31, 2017 on adoption of SLFRS 9 is expected to be in the range of 25 per cent to 35 per cent compared to the total impairment provision determined as per LKAS 39,” it said.http://www.sundaytimes.lk/180520/business-times/seminar-by-borouge-on-flexible-packaging-294144.html18 May 2018 @ 7:40 pmBorouge a leading petrochemicals company and a joint venture between Abu Dhabi National Oil Company (ADNOC) and Austria-based Borealis, held a technical seminar at the Colombo Hilton on May 8 to showcase its diverse portfolio of differentiated and sustainable polyolefin solutions for flexible packaging. [caption id="attachment_294145" align="alignright" width="400" caption="Senior officials from Borouge"][/caption] The event was co-hosted by Falco International Trading Pte Ltd, the local agent for Borouge in Sri Lanka, Falco said in a media release. Shakir Lukmanjee, Managing Director of Falco International Trading Pte Ltd, opened the technical seminar by welcoming the invitees and introducing the visiting Borouge team. “The Sri Lankan plastics market is important to Borouge. We have been serving this market for more than a decade and this seminar gives us an opportunity not only to showcase our latest solutions, but also to connect with our customers, understand their needs and offer best possible sustainable solution,” said Anil Krishna, Borouge’s Vice President for Indian Sub-Continent. “Borouge provides differentiated solutions that unlock value and create positive impact especially for a growing market like Sri Lanka.” James Ong, Marketing Manager for Consumer Packaging, presented Borouge’s sustainable flexible packaging solutions. Leveraging Borealis’ 50 years of experience at the forefront of advanced packaging, Borouge today offers an innovative range of plastics solutions utilizing proprietary technology such as Borstar Bi Modal Technology to deliver unique property profiles. “Packaging converters are constantly looking for innovations that help provide new types of packaging options, improve the appearance of the goods, and enhance the shelf life of food. The company shared how Borouge’s plastics solutions are being used in advanced applications ranging from frozen food packaging, stand-up pouches, personal care, boutique bags, security and courier bag and agricultural films,” the release said. Mr. Ong also shared on sustainability challenges and Borouge’s work on possible sustainable solutions like PE-PE laminate, which are fully recyclable. Falco International Trading Pte Ltd was founded by Shakir Lukmanjee, a seasoned professional in the import and export trade, in April 1996 as a response to a growing demand for raw material sourcing in Sri Lanka.http://www.sundaytimes.lk/180520/business-times/digital-technology-in-place-once-port-city-develops-294142.html18 May 2018 @ 7:39 pmSri Lankans need to be digitally savvy and be in readiness when the Colombo Port City’s Financial Project is completed. Speaking at an event in Colombo, Minister of Telecommunication, Digital Infrastructure & Foreign Employment Harin Fernando also noted that Colombo will be next to Dubai and Singapore. There are also plans to develop six main key areas within the Ministry strategically on short and mid term and long term goals to bridge the digital divide. The Minister was addressing a ceremony to mark the signing of the Memorandum of Understanding (MOU) between Microsoft - Sri Lanka and the ministry at the Shangri la Hotel at Galle Face Colombo on Wednesday. He said that although fibre optic cable is now available and was digitally connected to each other, people still do not believe that they are connected. “Government servants do not believe it and do not want to use the fibre optic cable but prefers to do things manually than switching over to digital system.” The Minister said that as the world transforms and digitisation is seen across all industries, the public sector partnership of Sri Lanka and Microsoft becomes vital for Sri Lanka to harness connectivity, cloud computing and Artificial Intelligence. Referring to ‘tablets’ not being provided to Advanced Level students, the Minister said that he was unhappy about the move following the defeat of the government at the recently concluded local government elections. “The government however believed providing fertilizer to farmers was more beneficial than tablets to students. However I do not agree with the move,” he said. Secretary to the Ministry of Telecommunication, Digital Infrastructure & Foreign Employment Wasantha Deshapriya said digital transformation is a milestone for the public sector in Sri Lanka. He said Intellectual Property Law has to be observed when government employees use the Internet. He also cautioned that the government is vulnerable to attacks when genuine software is not used and government employees too are clueless on Internet security. “We also learnt that Microsoft has a programme to ensure government security, an area that we want to collaborate with,” he said The MOU will enable the Ministry to improve efficiency and to create good governance to ensure effective citizen services for it’s people. The MOU was signed by Mr. Deshapriya and Hasitha Abeywardena, Country Manager of Microsoft Sri Lanka and Maldives. The MOU is the realisation of the country’s e-Government policy and plans for digital transformation.http://www.sundaytimes.lk/180520/business-times/singer-quarterly-revenue-up-13-despite-challenges-294140.html18 May 2018 @ 7:39 pmSinger (Sri Lanka) PLC said this week that its quarter ending March 2018 saw revenue rise by 13 per cent to Rs. 13.6 billion from the 2017 quarter even though there were challenging business conditions. Pre-tax profit was Rs. 419.8 million, slightly up 3 per cent while corporate taxes increased during the period under review as subsidiaries declared dividends resulting in withholding tax. As a result the profit after tax for the period decreased by 14 per cent, the company said in a media release The accounting year of the group has changed to March 31 to be in line with the accounting period of Hayleys PLC. Group revenue for the 15-month period was recorded at Rs.65.1 billion while profit for the 15 months was Rs. 1.2 billion. Commenting on the results, Asoka Pieris, Group CEO said: “After a smooth change of ownership Singer is successfully continuing to retain market leadership in consumer durables. We believe that with synergies with Hayleys Group and with new strategies and initiatives a bright future augurs for the Singer Group and our stakeholders.” Mohan Pandithage, Group Chairman noted that: “Hayleys Group as the major shareholder is confident that Singer’s position as the leader in consumer durables will be strengthened as Hayleys and Singer have an excellent strategic fit to benefit from significant growth prospects.”http://www.sundaytimes.lk/180520/business-times/tri-rri-to-draft-new-import-rules-for-glyphosate-294138.html18 May 2018 @ 7:38 pmSri Lanka’s research institutes for tea and rubber are currently working on a new protocol to be adopted for imports of glyphosate specifically for these two sectors. With the ban on glyphosate lifted, the Tea Research Institute (TRI) and the Rubber Research Institute (RRI) have been asked to come up with a methodology on how to authorize and coordinate the imports of weedicide to the country specifically for these two industries, Sri Lanka Tea Board Chairman Lucille Wijewardena said. He noted that since glyphosate has been allowed to be used only on the tea and rubber plantations there needs to a controlled manner in which these imports could be carried out. In this respect, glyphosate would not be freely available in the market but managed to ensure it could be accessed only by the tea and rubber sectors alone. The tea industry has been fighting tooth and nail over the past three years to lift the ban since it adversely affected tea production on the plantations especially the Regional Plantation Companies (RPCs). Due to the large extents of land and the declining labour force that works on the plantations the estates have been overrun with weeds resulting in an unhealthy environment for workers to pluck tea and causing difficulties in removing them manually. Meanwhile, the global promotion campaign for tea at a cost of Rs.3.5 billion is expected to kick off in October in 12 countries, Mr. Wijewardena said. He pointed out that in addition to this the SLTB is carrying out a brand promotion for exporters that had obtained board approval. As part of the brand promotion, exporters would be asked to come up with their brands and the countries in which they carry out the promotions and be reimbursed 50 per cent of the cost. Currently the promotion funds stands at Rs.6 billion.http://www.sundaytimes.lk/180520/business-times/winds-of-change-sweeping-across-apparel-industry-294136.html18 May 2018 @ 7:37 pmWinds of change are blowing across the apparel industry in the world and Sri Lanka also needs to adapt to these reforms fast. Emeritus Prof Lakdas D Fernando, Chairman, Sri Lanka Apparel Institute, making this comment recently also noted that the apparel industry is thriving in the country. He was making the introductory remarks at last week’s inauguration of the ‘The Apparel Industry Suppliers Exhibition (AISEX) and Fabric and Accessories Suppliers Exhibition (FASE) 2018 that was held at the BMICH. The exhibitions held biannually was the 8th edition this year and for the first time a Conference themed “Helping local brands and manufactures compete in the South Asian Region” was held parallel to the exhibitions. Prof. Fernando said: “Earlier we used to say export or perish. Later we said, innovate or perish but all of them are included in the ‘Digitalisation’. Now we have to say digitalise or perish.” He said new technologies are fast adapted to every sphere of activity and this year also saw some of the Vesak pandals in Colombo using digital technology. He said while the industry has been talking about GSP + to Europe and GSP to the US for some time, it is necessary to also focus on how to maximise the benefits from these regained opportunities. To meet the challenges of the changing scenarios, the government too cannot be happy by saying they got GSP + as a lot needs to be done to get the best out of these concessions. All industry associations, he said, have a huge role to play at this juncture to support the industry and give the correct direction. A wind of change is blowing across the world of industry and its effects are very much evident in the apparel industry. In every sphere the way the business is conducted is fast changing and the apparel industry is no exception. Prof Fernando wanted the entire industry to digitalize and gradually get on the digital platform. Digitalization is the linking together of all digital information and automation to do the business. Continuation of old traditional methods is a waste of time and money which gives no visible improvements in the overall weak areas of the industry, he pointed out. Rishad Bathiudeen, Minister of Industries and Commerce, said that after regaining GSP + Sri Lanka’s apparel exports have increased with the hope that it would surpass the US$5 billion this year compared to $4.8 billion in 2017 and said that this trend is reflected considering the first quarter of 2018 apparel export performances. He pointed out that to move to the next level they should resolve the issues that confronts the industry. He said that Europe is a key market but the market is undergoing changes due to increasing unemployment and policy uncertainties after Brexit. Tuli Cooray, Secretary General, Joint Apparel Association Forum, said that Sri Lanka is at a critical stage as the country is on a reform agenda and observed that new export strategies, new facilitations, and new maritime changes are brought in to eradicate poverty. He said that in this process various industry sectors play a key role. Mr. Cooray pointed out that a majority of the labour force is in the apparel industry and is a major contributor to the GDP, but indicated that GSP + relief would offer benefits for a limited period. Dr. Ashan Amarasinghe, Chief Executive Officer, Centre of Excellence for Robotic Application, making a presentation said that in terms of key challenges when they come down to the apparel sector and look at what the key challenges of most of the manufacturers, whether they are SMEs or large organizations; there are five - labour shortage, high labour turnover, higher cost of labour and high mix and low volume.http://www.sundaytimes.lk/180520/business-times/illegal-tourist-restaurants-dismantled-293797.html12 May 2018 @ 5:59 pm The Coast Conservation Department (CCD) on Friday began dismantling illegal structures housing tourist restaurants and guest houses at Mirissa and Weligama following a Presidential order after some tourists were attacked. Seen here are structures being razed to the ground. (Inset) Police on duty. Pix by Krishan Jeevaka Jayaruk, Matara Correspondenthttp://www.sundaytimes.lk/180520/business-times/tus-rpcs-brace-for-stormy-weather-293795.html12 May 2018 @ 5:57 pmTrade unions and Sri Lankan plantation companies are bracing for a tough round of negotiations, starting later this month, on the once-in-two years wage hike amidst the controversial state takeover of hundreds of acres of plantation land which has resulted in lost jobs for workers. While the takeover of land to set up an industrial complex is becoming a thorny issue, both sides – unions and regional plantations companies (RPCs) – for the first thing, agree on one front; opposition to the ban on glyphosate. This week the Government decided to lift the ban with estates awaiting stocks to roll into the country even as the workers were pining for the same as its absence had posed a risk to their work environment. The two parties would be gearing up to work out the modalities of establishing a new model on the RPCs by engaging in discussions on a revenue sharing or out-grower system that would for the first time be introduced in the wage negotiations. Planters Association President Sunil Poholiyadde said that they would be holding discussions with workers very shortly as the Collective Agreement entered into with the estate employees would lapse in September this year. “We have amicably agreed to move forward,” he said about the discussions on the new out-grower model pointing out that they expect this new system to be worked out under the next agreement on wages. “Workers should be willing because they would be better off with that method,” Mr. Poholiyadde said adding that under the revenue sharing model workers would be able to earn more. S. Arullswamy, Vice President of the CWC, the largest estate worker union, told the Business Times on Friday that they would be proposing that discussions should initially be to ensure that all amounts paid to workers be brought under the living wage category without allocating it as productivity wage and tea sales allowance. He pointed out that last time’s discussions had led to wages being based on a revenue sharing basis in which workers would be paid Rs.500 salary and a productivity increase of Rs.140 based on their meeting the estate requirement and tea sale of Rs.130. Mr. Arullswamy noted that this has led to most workers being unable to earn the full wages and queried whether a person could live on a paltry sum of Rs.500 alone. “Unless you get the norm they don’t give (the productivity wage) and eight hour of work – this is the reason estate workers are migrating to Colombo and other places,” he said. However, it has been noted that workers leave the estates for varied reasons because they want to find employment in jobs outside the plantations to move out of the stigma of being branded as estate workers. Meanwhile workers were impacted by the recent government decisions taken to acquire the lands in the Southern tea and rubber estates as a result of which people were made jobless. It is learnt that the Kotagala and Horana Plantations have been issued with notices by the government that some of their lands are required for the establishment of an industrial estate. Already it is learnt the authorities have acquired about 4000 acres of land and one company is said to be making representations to the government with a view to stop such acquisitions. Despite opposition to the moves the state has also acquired about 393 hectares of land on the Millewa estate on the Kotagala Plantations in the Horana district. Moreover, in another move the state is learnt to be vying for the Bogawantalawa estate lands to establish a golf turf there. “They are trying to destroy the tea lands,” the union leader lamented. Commenting on the out-grower model, Mr. Arullswamy noted that employers make arbitrary decisions in allocating acreages to workers; as a result the trade unions want to ensure that all workers would be made allocations equally. Moreover, he noted that the lease period of the said lands allocated to workers should be extended for a period of about three years with government subsidies given to them and be entitled to operate as a smallholder. In addition, he said that the workers would be paid as RPC employees for their work on 15 days per month and the rest of the days would be used to look after their own blocks. Mr. Arullswamy also pointed out that they should be paid the market value for their teas and that the government should decide the price in this regard. In addition, trade unions are proposing to discuss issues pertaining to the welfare activities of workers like maintenance and extra pay for sprayers, pruners and factory workers including supervisory kanganis. He also explained that these skilled workers should also be paid overtime as well.http://www.sundaytimes.lk/180520/business-times/headless-slt-management-in-dire-straits-293792.html12 May 2018 @ 5:55 pmSri Lanka Telecom PLC (SLT) management is in dire straits as it has functioned sans a Group CEO since last December, SLT trade unions say. Attempts to recruit a suitably qualified and experienced person to head the management of the company by conducting interviews after calling for applications twice through newspaper advertisements were fruitless, union leaders alleged. The two main political parties, SLFP and the UNP, had an implicit agreement previously not to interfere with appointments made by each other. However this has led to political infighting for top posts by factions in the SLT representing both parties, they pointed out. Four senior officials earmarked by the SLT Chairman P.G. Kumarasinghe Sirisena to appoint one of them to the CEO’s post came under severe opposition of the employees due to these officials alleged involvement in malpractices and corruption, an committee member of the Telecommunication Engineers Union (TEU) said. At the Annual General Meeting of the SLT held at the BMICH in Colombo on Wednesday, Mr. Kumarasinghe assured shareholders, who were vociferous about the current situation of the company, that he will take necessary action to appoint a CEO within two months. It is also planned to hire a local or international head hunter at a fee of Rs. 20 million to look for a suitable candidate, the ITU member said adding that a plan has also been devised to outsource IT section, project management and several other key divisions of the SLT. The Executive Committee appointed to oversee the operations of the company following the resignation of the Group CEO has failed to bring expected results due to infighting, he revealed. The report of a 3- member committee headed by retired Appeal Court judge, N. Sunil Rajapaksha which was appointed five months ago to inquire into alleged malpractices and irregularities at the company since 2008 is yet to be released. SLT's profit margin is expected to dilute over 2018-2020 period, as improving profitability on fixed-broadband and mobile Internet usage will only partly offset margin dilution from a falling share of profitable fixed-voice and international operations, analysts said. However the TEU still believes that to re-establish SLT as a successful corporate entity, it needs more robust and speedy strategic measures including the removal of other remaining disruptive elements from SLT. (BS)http://www.sundaytimes.lk/180520/business-times/central-bank-not-taking-over-samurdhi-bank-293790.html12 May 2018 @ 5:53 pmThe Central Bank (CB) said on Friday that it’s not taking over the Samurdhi Bank, an issue that raised a lot of heat in the political arena this week. Instead, according to CB Governor Dr. Indrajit Coomaraswamy, the banking regulator will be assisting to strengthen the regulatory and management process of this bank helping the poor adding that the law does not permit any takeover of this institution, Earlier on Sunday, speaking at the UNP May Day rally, Prime Minister Ranil Wickremesinghe said that he would place the Samurdhi Bank under the CB for better supervision as there was no financial control and regulation in the bank. This statement drew a chorus of protests including from former minister S.B. Dissanayake, who handled the Samurdhi portfolio and who said the law doesn’t provide for such a takeover. A management committee comprising top CB officials, Finance Ministry and the Social Empowerment Ministry has been in existence, appointed under the law and tasked with regulating and monitoring the functions of the bank. He stressed that there is no need to take over the control of the bank. Elaborating further, Deputy Governor K.D. Ranasinghe said at a special meeting on Friday to discuss this matter, another committee was appointed to make necessary changes to improve, monitor and regulate the functions of the bank, as it was felt there were systematic weakness for the management committee to function.http://www.sundaytimes.lk/180520/business-times/banks-to-execute-ird-tax-deductions-tomorrow-293788.html12 May 2018 @ 5:52 pmIn the absence of an official communication from the Treasury or Inland Revenue Department (IRD) on taxes on public accounts, banks have decided to deduct these taxes and remit them to the IRD tomorrow, officials say. They said that banks have already deducted the taxes such as the 5 per cent withholding tax on interest income for children’s' savings accounts for April and they will remit these to the IRD tomorrow. “This is the law. We didn’t get any instructions from the Treasury as to not tax the children’s accounts for an example. So we need to adhere to the law,” a top bank CEO told the Business Times. He said that a document should have come to them by Friday (which is when the Business Times called him) but since it hadn't, they will send the cash to IRD tomorrow. Under tax reforms effective from April 2018, bank deposits were to be taxed at 5 per cent. The foreign currency accounts (such as NRFC) weren't exempt from taxes despite many understanding it to be not so. Finance Minister Mangala Samaraweera said at a recent media briefing that minors’ accounts won’t be taxed until they are 18 years, noting that under the earlier Rajapaksa administration they were taxed at 2.5 per cent for interest above Rs. 5,000. Another banker noted that despite the rhetoric, all proclamations need to be made official. "This is why we need to abide by the existing law."http://www.sundaytimes.lk/180520/business-times/akuregoda-defence-headquarters-building-becomes-a-white-elephant-293785.html12 May 2018 @ 5:49 pmIt will be a bitter pill for Sri Lankans to swallow as the controversial Pentagon-styled Defence headquarters building complex at Akuregoda, Battaramulla is becoming a white elephant spending millions of rupees from the country’s taxpayer money, a senior cabinet minister revealed in Colombo. The project was launched in 2011 at an estimated cost of Rs.8 billion to house the army, navy and air force headquarters moving from Galle Face Green and Fort to Battaramulla, under a Government plan to shift all government administrative complexes to the same area, Minister of Megapolis and Western Development, Patali Champika Ranawaka said, under whose purview the Urban Development Authority (which owns this land) comes. Under the plan of the former regime, the project should have been completed in 2018. However the Minister told the Business Times that a sum of Rs.64 billion has been spent so far on this ‘white elephant’ project while another Rs. 100 billion is needed to complete the massive project. Treasury sources said that project work will resume if and when money is raised for the project with the likelihood of work being disrupted on-and-or based on budgetary constraints. The project commenced during the tenure of former Defence Secretary Gotabaya Rajapaksa and the cost estimate went up to Rs.20 billion. Money for the project came from US$ 125 million earned in the sale of the Galle Face land to Shangri-La Hotel. Following the 2015 election, construction of this complex temporary halted due to non-availability of funds. Construction work resumed on the directions of the President but was suspended due to a probe into irregularities by the former regime, he said. In the meantime these forces have been provided with temporary accommodation in 15 rented buildings at an annual rent of Rs.5 billon, he said adding that the abrupt and unplanned decision taken by the previous regime to shift the Defence headquarters to Akuregoda has put future generations under a heavy debt burden.http://www.sundaytimes.lk/180520/business-times/rights-and-responsibilities-293778.html12 May 2018 @ 5:46 pmOften we speak of rights with the rights discourse dominating the newspapers, day-in, day-out; that our rights cannot be denied by governments, dictatorships, etc. However, what about the other side of the coin: Responsibility of the citizen to society, government and the state? I was reminded of this when Kussi Amma Sera (now in full swing after a few weeks of R&R in the village during the Avurudu holidays … I wish her ‘master’ had the same privilege of taking a few weeks of paid R&R leave!) was engaged in a heated debate in the garden with her ‘sweeper’ neighbour and comrade-in-arms Serapina. Both domestic aides often discuss, debate and gossip on today’s issues while sweeping their respective gardens. These chitchats invariably happen in our front garden, to which I conveniently turn a blind eye (without asking KAS to get on with her work, saying “I pay you to work, not gossip”) for the simple reason that there is an agenda behind (don’t we all have agendas?): Picking up good column topics from their gossip and there are aplenty. Like this bright and sunny Thursday morning where the first rays of the sun were drying up the leaves after a very wet and rainy Wednesday night and I was able to pick up some ‘nuggets’ from their garden-bench conversation. It went like this: “Aei bung, may campus kollo kello hemadama paare inne kolahala kara kara,” says Serapina. (“What men, why are these university boys and girls forever protesting or fighting on the streets.”) “Eka egollanta deviyo dunnu wagakeemak ne, hari deta saha aithiwasikam walata satan karanna,” KAS responds tersely. (“So, isn’t that their God-given responsibility, to fight for what is right?”) I could sense from the tone that she was bracing for the usual verbal, no holds barred duel with her friend. “Namuth egollo neda paradinne. Andu kattiya thadata kriya karanawa, egollo ekka katha karanne nethuwa. Ethakota me lamaita maasa gaanak, ne avurudu gaanak yanawa padam ivarakaranna. Eka egollanta loku paduvak, jathiyanthara vishva vidyalawala lamai samaga beluwama,” argued Serapina. (But aren’t they the losers? People running governments want to deal firmly with these protests than sitting down and discussing, and these students can lose months, nay years sometimes in completing their courses. This puts them at a huge disadvantage against students doing international university courses.) “Oya kiyana kathawa aththa wenna athi. Eth, egollo negita hitiye nethnam hari deta, kawda karanne,” retorted KAS. (Maybe. However, if they don’t fight for what is right, who would?). Tensions are rising in the garden and no one is willing to give in. Then came the stunning response from Serapina: “Ethakota anith ayage aithiwasikam ko, me kalabala nisa karadarayata pathvena ayage. Mage aithiwasikam, oyage aithiwasikam gena kathakarenna nethuwa, api balanna oney ape wagakeem saha yuthukam monawada kiyala. Eva thama vedagath.” (But what about the rights of others who are affected by these street protests? Rather than talk about ‘my’ rights or ‘your’ rights, what about the responsibility and duty of every citizen to society? Isn’t that also very important?) KAS was, for once, floored and began to mutter incoherently. Moving away from my ‘prime’ location (office room window where I eavesdrop on their conversations), I am again reminded of our role and responsibility in society after reading a news item this week where the government has said it planned to introduce the Right to Information (RTI) Act into the local education curriculum. Positive thinking, indeed. The report quoted a Ministry of Finance and Mass Media official, speaking at an event in Colombo to commemorate the first anniversary of the promulgation of the RTI Act, as saying: “We will be incorporating the RTI Act into the school curriculum of Grade 10 and 11 as a part of the subject in Civics Education.” The RTI has been a revelation – opening the doors to hitherto secret documents and files, which only officials and governing politicians were privy to, even though the public had a right to know. The road hasn’t been easy in the public seeking legitimate (through RTI) access to information that impacts on the people. Responding to a comment at the event that the process is slow in receiving information under the RTI Act, the official acknowledged that many officers in the Government were still under the impression that the public had no right to access such information. “However, this culture of secrecy within the Government cannot be changed overnight. It takes time for us to change this mindset among public officials,” she was quoted as saying. That’s quite true and while it’s not working fast enough, the fact that the RTI Commission has been able to remove ‘transparency’ barriers on many cases or complaints proves the system is working. More than the RTI Act, I was intrigued by the concept of civics education vis-à-vis rights and responsibilities. While the rights of individuals are ingrained in us - and reminded repeatedly by human rights champions, ubiquitous protestors on the streets and the once-a-year Geneva UN human rights annual discourse – missing is the citizen’s responsibility to society.  

•  For instance, while we complain of too high taxes, do we pay our taxes (the responsibility of every citizen) or seek refuge in various ‘concessions’ or grumble that governments and municipalities are wasting ‘our money’ when in reality, we are not paying a tax at all?
•  We argue about garbage collection but do we follow guidelines on separating the garbage or dumping it in the right place? Haven’t we seen numerous instances of the rich and mighty throwing garbage-filled bags on the roadside from fast-moving cars with the excuse that there is no place to dump their garbage?
•  We complain eternally about politicians and their ilk? But aren’t we also responsible for voting them into power and sending them to Parliament or local authorities?
•  We complain about laws and traffic on the road. But do we observe the laws or do we argue with a traffic policeman even though we are in the wrong?
•  We complain about water shortages but do we -- as responsible citizens -- take it upon ourselves to use water sparingly during a crisis? Or complain about corrupt governance and liberally wash our cars, sending water literally down the drain?
•  We complain about governing politicians and are also prone to complain about them when on an overseas trip. But will we defend the country – not a corrupt government – when it’s our responsibility to do so and when the need arises? This was very evident in a Business Times poll in 2014 when Sri Lanka was facing a lot of flak during a UN Human Rights session. In that poll, the majority working class population (from the street survey) was of the view that even though they may not support the actions of the government, one must stand together in international fora and defend the country. The response from email respondents (intelligentsia and professional class): “Good to teach a lesson to the government.”
•  We complain about services in the areas where we live but do we join the community and help uplift our area?

  This boils down to whether or not students (the first step in civic consciousness and learning lessons) are taught about rights and responsibilities, about not only (our) rights, but also (our) obligations to society? Civics education has happened over the years in local schools and a new syllabus for Civics Education in Grade 9 is in force (or yet to be implemented) in 2018 by the National Institute of Education (NIE). In 2015 onwards, the NIE formulated a new Civics Education syllabus for Grades 6-11. The objectives of this study seem noble; building future goals of life through the identification of one’s abilities, skills and potential; developing competencies to exist in society; learning to work in unity with social organisations and institutions that coordinate with the wellbeing of society; preparedness to face unexpected and confusing situations; building human qualities and social values to exist in a pluralistic society; conform to conventions on human rights and democratic principles; help in disaster management; understanding governance and economies; help build a society that values responsibilities and duties; and ensuring sustainable peace for Sri Lanka. However, does this deal with day-to-day issues like protests that inconvenience people; using water sparingly; observing road rules and that everyone has a right on the road including pedestrians; proper garbage separation and dumping; and finally paying taxes … on time? Going back to Serapina’s retort that rendered Kussi Amma speechless, it’s not only a case of rights AND responsibilities but rights WITH responsibilities, a good example being Singapore where everyone follows the law and want to (not being forced to) so that the entire community thrives.http://www.sundaytimes.lk/180520/business-times/oil-at-boiling-point-for-most-economies-293761.html12 May 2018 @ 5:42 pmIt is again time for “oily talk”, because world oil prices are on the rise. We are caught up in between economics and politics of setting oil prices and spending on oil bills. How we set the domestic oil price will determine who will pay for the oil bills. Well, we also have to cope with many oil blunders in the past; I am not surprised if we keep repeating the same. It is important to examine the current oil market issue to see where we might slip and float and, how much we have to bear as individuals and as a nation. World oil price volatility Last week the world price of Brent crude oil surpassed US$70 per barrel, while many speculate it to go up further. A year ago, it was less than $50 per barrel and, four years ago it was more than $100 per barrel. Just before the US financial crisis, that is 10 years ago, it was $150 per barrel. World oil prices are highly volatile. While oil price volatility causes panic in the world, in the past it has been at the source of several global economic crises as well. There are number of short-term or long-term causes of oil price volatility, while, depending on the intensity of one or more of those factors, world oil prices fluctuate. The first is, of course, either demand or supply shocks. Major oil producing countries decide what would be the limits on oil supply causing the instability of oil prices. On the demand side, seasonal variation in oil consumption or the rapid income growth in big economies such as China and India could exert pressure on oil prices. Secondly, geopolitical tensions cause oil trade disruptions which then affects prices. As at present, confusion over Iran’s nuclear deal with EU and US is said to have been a major factor underlying the current oil price hike. Thirdly, technological changes in oil industry and alternative energy technologies can affect oil prices. Fourthly, speculative attacks particularly through oil futures and options cause oil price volatility. Finally, changes in US dollar or tax policies or other policy changes among influential nations can also have some impact on world oil prices. Producers, importers, traders All the nations in the world are connected to the world oil industry either as oil producers, oil importers or oil traders. Sri Lanka is an oil-importing country; nevertheless, the country has a long-standing expectation to be an oil-producing country. Yet the country’s weak capacity in this particular industry, including the lack of investment funds, is a major bottleneck to realise this expectation. By the way, Sri Lanka would have become an “oil-trading country” if we hadn’t nationalised the country’s oil business in the early 1960s. With this nationalisation programme, multinational oil companies re-located their businesses to Singapore so that Singapore became the major oil-trading hub in Asia. Since then, it was our own choice to remain an oil-importing country. Even going beyond that, we choose to play with oil. Being a small oil-importing country, Sri Lanka does not have a free hand for a domestic pricing policy for oil; but that is exactly, what we have done in the past. By doing so, we have almost refused to believe that we are an oil-importing country. Consequently, Sri Lanka is in a fragile state of being highly vulnerable to world oil price volatility and oil shocks. [caption id="attachment_293771" align="alignright" width="400" caption="File picture of recent upgrading of the CPC's Sapugaskanda refinery."][/caption] Elections and local oil prices In many other oil-importing countries with good and transparent practices, domestic oil price reflects its world price so that there is no “third party” to pay for your petrol or diesel. Ideally, Sri Lanka’s domestic oil prices should be connected to the world oil prices, but we have attached it to the country’s election cycles. Just before the elections in December 2014, the government reduced the prices of petrol and diesel. After the elections, it was a different government. Going by an election promise, 92-octane petrol price was slashed from Rs. 150 to 117 and, auto diesel from Rs. 111 to 95. Thanks to the low world market prices, the reduction in oil price could be accommodated easily, but not for long. In 2017 the world oil prices began rising. Sri Lanka had to pay more to buy oil from the world market, but continued to sell in the domestic market at the same lower price. According to the Annual Report 2017 of the CB, average import price of a crude oil barrel increased from $46.30 in 2016 to $57.79 in 2017. But then someone else pays for your petrol and diesel. Sri Lanka’s oil prices are one of the lowest in the world, except for oil-producing nations. The world average price of petrol at the end of April was $1.15, but in Sri Lanka it was $0.81. The second feature is that most of the countries in the world let the domestic price to be responsive to the world price movements. But in Sri Lanka $0.81 per petrol litre has been there for the past three years. Fuel burdens in 2018 Although oil appears to be cheaper to the Sri Lankan consumer, it is not at all cheap for Sri Lanka as a nation. The country’s oil burden is much greater than many other countries. According to last year’s data, Sri Lanka has spent 30 per cent of its export earnings to buy oil. As oil prices begin to rise now in 2018, the country will have to spend more this year. This increased burden is due to be felt on two main financial accounts of the country. The first is the external finance account. The country will need increased foreign exchange earnings to pay for higher oil prices. We are already faced with a deeper problem there due to years of sluggish performance in export earnings and foreign investment flows. Besides, we need even more foreign exchange income to pay for the maturing foreign debt starting from this year. According to the CB’s 2017 data, Sri Lanka has already spent $4.6 billion for debt repayment last year, which was nearly 24 per cent of the country’s export earnings from both goods and services. The second is the internal finance account. The country will need more tax income to cover the losses of the state-owned Ceylon Petroleum Corporation. This means that the government’s fiscal operations will be under pressure too. Already in 2017, according to the CB, the government had also spent Rs. 1213 billion as debt repayment, which was two-thirds of the government’s total revenue. This means that, if the government is spending on meeting the losses from oil sales, its fiscal implications will multiply the country’s budgetary problem as well as debt problem. Way out Before we talk about the way forward, we have now come to a point of trying to find a way out of this quagmire! The easiest and urgent way out is a cost-reflective oil pricing. Being an oil-importing country, Sri Lanka does not have a free hand to decide on its local oil prices. If that is the case, then the domestic price should reflect the world prices as it does in most of the other oil-importing countries. Thus the way forward involves reforms in much more complex areas of the oil industry that would come under state-owned enterprises’ reforms agenda. (The writer is a Professor of Economics at Colombo University. He can be contacted at sirimal@econ.cmb.ac.lk) This column was written before Thursday's decision to resort to the fuel pricing formulahttp://www.sundaytimes.lk/180520/business-times/political-stability-the-hallmark-of-singapores-development-293409.html11 May 2018 @ 8:16 pmPolitical stability and the rule of law of the government was the cornerstone of Singapore’s stability with a strong leader like Lee Kuan Yew who wielded power for a long period, said Tilak Abeysinghe, Director of Research, Gamani Corea Foundation and Adjunct Professor of the National University of Singapore delivering a lecture on “Singapore's Development Experience: Lessons for Sri Lanka” at the BMICH in Colombo recently. It was organised by the Gamani Corea Foundation. Citing lessons learnt from Singapore, he said political stability alone does not guarantee the development of a country but has to seek the cooperation of the private sector to open up trade internationally. Referring to Switzerland, he said it was the role model of Singapore and there are lots of lessons that one can learn from Singapore as well. Having gone to Singapore about 30 years ago the guest speaker said that he was able to witness the spectacular transformation of that country from a backward underdeveloped economy to a modern state. Prof. Abeysinghe said the per capita income of both Japan and Sri Lanka was very close to each other way back in the 1950s and the income of Singapore and Sri Lanka too was close to each other in the early 60s. However Sri Lanka’s economy stagnated up until 1980 and again, the eruption of the civil war affected the country’s economy. Singapore’s economy too had stagnated before its independence but developed rapidly in 1965 following independence. He said Singapore has a very low infant mortality rate which is a reflection of the country’s health system and its development. Sri Lanka too has done remarkably well in that respect. In recent times the Singapore government has allocated vast sums of money on research and development and embarked on the electronic industry. But following competition from other quarters it deviated to other segments of the industry. Over the years Singapore has attracted vast sums of foreign reserves which they used to strengthen the state finances resulting in its people not being burdened with income taxes. But the corporate sector pays the highest income taxes in Singapore. Although the western media was critical of Lee Kuan Yew’s dictatorial policies, he never gave into them. He challenged them in courts where the western media had to pay huge sums of money to him as settlement (for defamation). Singapore also spends vast sums of money on upgrading its defence capabilities despite its relative peaceful atmosphere since its independence to forestall any internal threats. The country does not allow any racial tension to erupt and strict laws are enforced, he said. Economists Dr. Lloyd Fernando and Amal Sanderatne chaired the panel discussions.http://www.sundaytimes.lk/180520/business-times/wnps-helps-ndb-to-create-awareness-on-environmental-conservation-293407.html11 May 2018 @ 8:14 pmNDB’s Human Resources Department recently signed a Memorandum of Understanding with the Wildlife and Nature Protection Society of Sri Lanka (WNPS) to create awareness on environmental conservation in Sri Lanka among the bank’s staff and family members. While ensuring that corporate sustenance is vital, NDB simultaneously places importance on developing the society through many of the bank’s flagship sustainability initiatives. “NDB Bank has partnered many success stories of Sri Lanka and firmly believes that an environmentally responsible culture is essential for the development of a nation. With this in mind, the bank’s HR Department has arranged to conduct training and awareness sessions to educate its valuable staff and their family members on matters concerning the environment,” the bank said in a media release. Guest Lectures organised by WNPS will be conducted for the bank’s staff and families in order to achieve this goal. NDB is a customer centric organisation and the bank’s product development revolves around the customers’ wants and needs.http://www.sundaytimes.lk/180520/business-times/lankas-top-digital-brands-kapruka-and-grasshoppers-featured-at-un-event-293404.html11 May 2018 @ 8:13 pmUNCTAD recently hosted the 2018 edition of its UN E-commerce Week, bringing together the global e-biz community to discuss the future of e-com in developing nations and what it takes to unlock these countries’ untapped potential. [caption id="attachment_293405" align="alignleft" width="400" caption="Dulith Herath (3rd from right) speaking at the event"][/caption] Among the prestigious line-up of speakers was Dulith Herath, founder of Kapruka and Grasshoppers, who in his presentation pointed out that increased access to and activity on social networks and consistent improvements in terms of mobile Internet access are fostering greater opportunities in electronic commerce operations in developing nations like Sri Lanka. But, what really revolutionised the game is the innovation in delivery possibilities. “The last mile delivery in LDCs (Least Developed Countries) is often a problem that large couriers or post offices can’t handle. I co-founded grasshoppers to specifically address this. Cash on delivery being the no#1 preferred payment option on LDC e-commerce, I strongly advise and thrive to improve the last mile delivery in LDCs as it’s a key we need to unlock e-commerce potential in these countries,” Mr. Herath said, explaining how ‘Grasshoppers’ has revolutionised how Sri Lankans handled door-to-door delivery from online shopping and even selling, according to a media release issued by Mr. Herath’s team. Grasshoppers Pvt Ltd is a successful homegrown brand that managed to evolve into a leader in the local logistics services sector within a short span of time. It specialises in online shopping related deliveries, and was founded on the principles of the sharing economy amalgamated with the clever use of digital technology. Its co-founders Dulith Herath (the innovator behind Sri Lanka’s pioneering e-commerce player Kapruka.com) and Dr. Harsha Liyanage (creator of Sarvodaya Fusion promoting IT education across Sri Lanka), were looking to establish a business that leverages on the obvious need for a local end-to-end delivery handler that works seamlessly with online buying platforms, and in the process, plays a pivotal role in democratising e-commerce in Sri Lanka. Grasshoppers went on to earn the support of the renowned Aavishkaar Frontier Fund and was handpicked by UN’s E-commerce Week as an exemplary start-up. Grasshoppers’ unique standing as a turnkey solutions provider for last mile delivery in a developing country, its methods and practices were recognised as unusual and uniquely suited to emerging markets like those in South Asia. While speaking to the audience at UNCTAD’s e-commerce week, Mr. Herath stressed that when developing countries do get on board the digital revolution, it is important that the right people benefit from the change, which he attempts to do with Grasshoppers as an operation that benefits people from a wide spectrum of economic and social brackets.http://www.sundaytimes.lk/180520/business-times/malta-eyes-sri-lankan-exports-to-boost-eu-businesses-293402.html11 May 2018 @ 8:11 pmMalta, an island located in the Mediterranean sea with a small population of 450,000 people, has an eye on Sri Lankan exports to boost businesses in the European Union (EU). There are many opportunities for sectors such as logistics, aquaculture, information and communication technology (ICT), plantation exports and so on in the EU. Sri Lanka has a very good vision but the country as a whole lacks implementation, a top visiting official from Malta said. The European Chamber of Commerce of Sri Lanka (ECCSL) last week organised an event titled ‘Malta your gateway to Europe’ at the Kingsbury Hotel in Colombo. Two experts from a professional services firm, ARQ Group in Malta, David Borg and Jean Paul Fabri explained the opportunities for Sri Lankan exporters in the EU. “We believe that resilience-building has the potential of ushering a new era of growth in Sri Lanka. Our experience from other small states, primarily Malta, demonstrates that a policy effort towards building resilience can leave long-lasting effects on an economy and society. Resilience-building offers the potential for small states to not only build their capacity to absorb negative shocks but more importantly, allows countries to identify niche areas and to develop new economic sectors. Our experience demonstrates that resilience-building does contribute to economic development. Sri Lanka has a very good vision but the country as a whole lacks implementation,” said ARQ Group Managing Director, Mr. Fabri. Mr. Borg at the event mentioned that Malta has a GDP of 9 per cent while its unemployment rate is 1.2 per cent. The country’s foreign direct investments have risen to 1,489 per cent of the GDP. From the north of the country it has access to Europe and from the south to Africa. The country has no natural resources while it’s dependent on the UK. Malta is mainly into the financial services sector and today the country ranks third after London and Luxembourg, and has also moved into diverse banking sectors. Mr. Borg also stated that Malta has advanced on asset registration, aircraft maintenance, high value added manufacturing, production of genetic pharmaceuticals and so on. Memory chips of iPhones are produced in Malta while aquaculture is done on a small scale. The country has the busiest harbour in the region. “We want to develop the logistics sector of Sri Lanka to export goods into the EU market,” he noted. Mr. Fabri further elaborated that Malta has worked with nine governments around the world. For every improvement in governance, Malta’s economic performance has improved four times over. Some 84 per cent of economic development is contributed by the private sector out of which 98 per cent is contributed by the small and medium scale enterprises. In Sri Lanka the government and the private sector must carve out attractive regulations for investments, introduce e-Government and interact with other governments, he added.http://www.sundaytimes.lk/180520/business-times/pioneer-headhunter-and-marketing-personality-receives-prestigious-cmi-award-293399.html11 May 2018 @ 8:11 pmFayaz Saleem, a ‘Companion’ of the Chartered Management Institute UK (the highest form of membership for those who have made outstanding contributions to management and leadership), was recently recognised by the Chartered Management Institute Sri Lanka branch as the ‘highest Contributing’ CMI Management Professional. [caption id="attachment_293400" align="alignright" width="400" caption="Fayaz Saleem conferred with the award by Minister Sarath Amunugama."][/caption] Mr. Saleem, a past President of the Institute, and one of the founders of the local branch, was recognised by the Chartered Management Institute UK Sri Lanka branch at its award ceremony held at the Shangri-la hotel recently. He has been an active member of CMI UK for over 30 years, and was its President from 1999 to 2001. In his professional life he has been a pioneer in local employment placements, and has been a much sought after headhunter having pioneered this concept in Sri Lanka over 25 years ago. Mr. Saleem provides some of his time to employee counselling, executive coaching, and is often invited as guest speaker on leadership, corporate culture and motivation. He has also been a consultant to several reputed companies from 1980 to 1995.http://www.sundaytimes.lk/180520/business-times/firms-look-to-expand-at-home-region-as-protectionism-rises-hsbc-report-293397.html11 May 2018 @ 8:10 pmBusinesses are concerned about the cost of rising protectionism, yet are optimistic about their international business prospects, according to a new report from HSBC titled, ‘Navigator: Now, next and how for business.’ Of the 6,000 firms surveyed globally, three in five (61 per cent) think governments are becoming more protective of their domestic economies. This sentiment is strongest among companies in MENA (70 per cent), and Asia-Pacific (68 per cent). In the US, 61 per cent believe protectionism is on the rise, while in Europe, half (50 per cent) are seeing a rise in protectionist tendencies. The majority of firms are looking to regional partners to develop trade opportunities, with almost three quarters (74 per cent) of overseas trade in Europe and Asia-Pacific being conducted within their ‘home’ region. This trend is set to continue with regional ties being prioritised in firms’ expansion plans for the next three to five years. Focussing on the impact of government policies, those designed to strengthen regional ties such as China’s ‘Belt and Road Initiative’ (40 per cent) and ASEAN’s 2025 strategy (37 per cent) were cited most frequently as having a positive impact on international business, the report released to the media said. Firms are focused on growth, with more than three in four (77 per cent) businesses optimistic about their international business prospects, and expect the volume of trade to increase over the next 12 months. Reasons behind this confidence include an increase in demand for their products from consumers and businesses (33 per cent), favourable economic conditions (31 per cent) and the greater use of technology (22 per cent) in driving growth. Noel Quinn, Chief Executive, Global Commercial Banking, HSBC, said: “Overall, companies are showing remarkable agility in navigating the changing the trade policy landscape. They are getting on with adapting business plans, and relationships, to participate in shifting supply chains. Strategies include increasing regional trade, establishing joint ventures or local subsidiaries in more markets, and capitalising on trends in consumer demands and digital technologies. An increase in protectionist sentiment hasn’t hampered the optimism of firms globally, but is causing concern about the cost of doing cross-border trade and international business.” Economic analysis supports the strength of business confidence, pointing to a 7 per cent growth for trade values in 2018 (goods and services combined). Forecasts by Oxford Economics on behalf of HSBC show the economic indicators underpinning this estimate include an upturn in both investment and consumer demand, a weaker US dollar and recovery in the Eurozone.http://www.sundaytimes.lk/180520/business-times/dialog-drives-growth-in-2018-on-the-back-of-forex-losses-on-rupee-fall-293395.html11 May 2018 @ 8:09 pmThe Dialog Group, Sri Lanka’s largest mobile phone operator, continued its growth momentum across all key business segments including mobile, tele-infrastructure, digital pay TV and fixed line to record consolidated revenue of Rs. 26.1 billion for Q1 2018, up by 5 per cent Quarter-on-Quarter (QoQ) and 18 per cent Year-on-Year (YoY). “Underpinned by strong revenue growth coupled with disciplined cost management and operational efficiencies, Group Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew 9 per cent QoQ and 38 per cent YoY to Rs. 9.9 billion for Q1 2018, the company announced on Friday. The group said it adopted SLFRS 15, ‘Revenue from Contracts with Customers’, with effect from January 1 -2018. The adoption of the standard resulted in an EBITDA upliftment of Rs. 422 million for Q1 2018. Group Net Profit After Tax (NPAT) declined 10 per cent QoQ on the back of a non-cash translational forex loss of Rs. 369 million for Q1 2018 compared to a gain of Rs. 68 million in Q4 2017, as the Sri Lankan rupee depreciated against the US dollar by 1.5 per cent in Q1 2018. NPAT grew 84 per cent YoY to Rs. 2.8 billion. “Dialog continued to be a significant contributor to state revenues, remitting a total of Rs. 9.2 billion to the Government during the first three months of 2018. Total remittances included direct taxes and levies amounting to Rs. 2.9 billion as well as Rs. 6.3 billion in consumption taxes collected on behalf of the state,” the report said. Capital expenditure for Q1 2018 totalled Rs. 2.4 billion being directed mainly towards investments in High-Speed Broadband infrastructure to further strengthen the group's leadership in Sri Lanka's Broadband sector. The company further consolidated its market leading position in the Sri Lankan mobile space to surpass 13 million subscribers during the quarter. Company Revenue for Q1 2018 grew by 2 per cent QoQ and 13 per cent YoY to reach Rs. 20.6 billion. Dialog Television (DTV) achieved yet another milestone during the quarter, reaching 1 million households in the country. DTV revenue grew by 9 per cent YoY and QoQ to reach Rs. 1.6 billion for Q1 2018 driven by aggressive subscriber acquisition. “Leveraging its broader subscriber base, DTV introduced Sri Lanka’s first online media buying platform, adhub.lk, enabling small/medium entrepreneurs and corporates to advertise on Dialog Television,” it said.http://www.sundaytimes.lk/180520/business-times/womens-contribution-in-development-rhetoric-versus-practice-293392.html11 May 2018 @ 8:08 pmPresident Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, in statements made on Women’s Day which fell on March 8, emphasised the role women play within the socio-economic spheres of the nation. The underlying message of the statements is very clear: Women are considered “equal partners” because they play a pivotal role in Sri Lanka’s development and their efforts must be harnessed and channelled towards sustainable development. However even a cursory review of the status of women in Sri Lanka paints a rather negative picture, whether it is regarding their economic engagement or their participation in civic and political arenas – spheres that both statements highlighted. Sri Lanka has continuously been held as the role model for its South Asian counterparts on education, literacy and maternal health and at present, is the only country in South Asia to have closed the health and survival gender gap. But these indicators, while praiseworthy, have not necessarily translated into solid progression of women in the economic or social spheres. Rather disturbingly, women in Sri Lanka appear to be regressing while the rest of South Asia, particularly Bangladesh is increasing its female labour force participation. As the World Bank pointed out recently, women in Sri Lanka appear to be retreating from the labour force, rather than engaging in some form of economic activity. The female labour force participation rate which has remained traditionally low, is making few strides and has continued to remain around 36 per cent through the third quarter of 2017, compared to 73 per cent for men. Notably though, while the employment rate among women remains high, a more troubling element has also been highlighted. According to the 2017 Global Gender Gap Report, the gender wage gap in Sri Lanka has widened, specifically the wages paid for similar work, resulting in Sri Lanka falling down the ranks behind Bangladesh, the Maldives and India. For a country where the majority of the population constitutes women, the lack of opportunities to engage in a livelihood activity carries major repercussions, especially for women-headed households and those recovering from the effects of the civil war and natural disasters. Perhaps in response to the notion that persistent cultural norms place the woman within the household assigning her the primary responsibility of care giving for children and the elderly, the government has striven to “catch up” by offering flexible hours and planning to introduce affordable day care centres to attract women to the workforce. But how well these policy decisions are being implemented and whether such efforts would even be adequate to facilitate the entry of women into the labour force is not yet clear. On the other hand, the existent wage gap raises additional concerns. Not only are women opting not to join the labour force, but for those already in the workforce, their work is not adequately compensated. For women juggling multiple roles of caregiving and economic engagement, of which the former is rarely recognised, the inability to earn an equal wage for similar work de-incentivises them from seeking work. CEPA’s own research, on female migrant workers and women engaged in the fisheries sector, indicates that where women are currently finding work or engaging in livelihoods, government policies, rather than promoting and safeguarding the women’s livelihoods, are instead leaving women behind. For example, there is concern that women are being sidelined in the draft Fisheries and Aquaculture policy. The fact that women maintain a considerable presence in the largely male-dominated industry must be given due recognition and their specific needs and concerns addressed. Successive governments have also sought to prevent women from migrating for work overseas, introducing restrictions that have effectively pushed women to seek irregular methods to leave the country for work overseas. Unfortunately, in both these instances, rather than extending support to these women workers, state policies are increasingly posing a threat to their chosen form of work. On the other hand, where the government has introduced livelihood support mechanisms at the community level, the general complaint raised by women is that government officials do not visit the communities, leaving women unaware of the programmes being implemented. Political influence and favouritism therefore, are then seen as ways in which such services are provided to a select number of women. This inability, on the part of successive governments, to understand the ways and means in which women engage in some form of livelihood activity is therefore, quite troubling, especially given the urgency to ensure women have adequate access to engage in economic activities. Recognising women as equal partners in progress is not enough, especially if there is no clear understanding of the difficulties women encounter in engaging in the labour force and the policy frameworks that should ideally facilitate such participation is lacking. Unless these basic concerns, along with the more complex issues of the gender wage gap and mechanisms to help balance caregiving and work responsibilities are addressed, Sri Lankan women will continue to be under-represented or remain outside the labour force.http://www.sundaytimes.lk/180520/business-times/govt-to-revise-oil-prices-every-two-months-under-new-formula-293390.html11 May 2018 @ 8:06 pmSri Lanka on Thursday night introduced a cost-reflective transparent fuel pricing formula, based on international market prices while increasing the price of fuel with effect from midnight Thursday, Finance Minister Mangala Samaraweera revealed. He told a media conference in Colombo that fuel prices will fluctuate every two months in accordance with the new formula based on Platts Singapore benchmark prices, Sri Lanka’s fuel prices are among the lowest in South Asia, he said adding that it will help ease pressure on the state coffers owing to global fuel price fluctuations. He noted that after the present government came to power in 2015, action has been taken to reduce fuel prices despite the increase in global oil prices over the past three years, the government having to bear the losses and maintain prices at reasonable level. Petrol (92 octane) will increase to Rs.137 and petrol (95 octane) will increase to Rs.148. Auto diesel will go up to Rs. 109 while super diesel will be sold at Rs. 119 rupees Long queues of cars and three wheelers were seen at Colombo and suburban area petrol sheds for last minute buying fuel before the price hike. In this much-delayed fuel pricing formula, prices would change with international market prices similar to many other commodities people consume, Minister Samarweera said. The government was to introduce this fuel pricing formula last month in accordance with a prior commitment made to the IMF, but it had been delayed due to political upheaval faced by the ruling coalition. Sri Lanka is levying total taxes including, excise, import duties and port levies amounting to Rs. 58.8 per litre of petrol, State Minister for Finance Eran Wickramaratne said adding that the taxation on fuel was the lowest in the South Asian region. There was also a strong case to gradually introduce corrective taxes to both petrol and diesel to account for externalities, this can be done with increments of Rs. 0.5 a litre per month so that the consumer will not feel the effect of these revisions, Finance Ministry sources said. (Bandula)http://www.sundaytimes.lk/180520/business-times/services-sector-liberalisation-in-the-sri-lanka-singapore-fta-stirs-professional-groups-293388.html11 May 2018 @ 8:06 pmAmidst many allegations made against the signing of the Sri Lanka – Singapore Free Trade Agreement (SLSFTA) in January this year, the liberalisation of the services sector is creating chaos among professional organisations in the country. The perceived lack of restrictions on Singaporeans coming into Sri Lanka on business and work visas and non-transparency of the Schedules of Commitments (SoC) in the agreement is the root cause. Several members from the Institute of Engineers Sri Lanka (IESL), Sri Lanka Institute of Architects (SLIA), Institution of Incorporated Engineers Sri Lanka, Institute of Quantity Surveyors Sri Lanka, Institute of Town Planners Sri Lanka, Institute of Landscape Architects and Institution of Surveyors gathered for a media briefing last Wednesday at the SLIA, to raise concerns about the FTA and urging that it be presented to Parliament immediately. SLIA President D.H. Wijewardene told reporters that in 2015, a 42-page document was submitted to the government by the professional bodies in Sri Lanka to consider before the agreement was signed. But no response or progress was taken to discuss the document with the professionals. “Many areas in the FTA on professionals and investments coming into Sri Lanka remained open creating space for regulations potentially damaging the Sri Lankan economy,” he added. He also mentioned that the agreement was signed without disclosing or consulting any professionals in the country, a charge denied by government authorities. Many letters have been sent by the professional bodies to the government to consider for which none of them was responded to. IESL President Niranjanie Ratnayake stressed, being a well-developed country Singapore has gone into each and every detail of restrictions before signing the FTA. Sri Lanka has not done much of that. SoC is a very important document that the government should have consulted professional bodies. “When opportunities for Singaporeans are created by far in Sri Lanka, graduates here will not have many opportunities. There will be tough competition between the Sri Lankans and Singaporeans for jobs. The FTA states that Singaporean Permanent Resident (PR) holders can also come into Sri Lanka which in turn will allow citizens from other countries holding Singaporean PR to come and work here. There are no clear regulations stated in the agreement for who, the level of qualification and the period of stay in Sri Lanka,” noted Ms. Ratnayake. Sri Lanka doesn’t have proper employment based visa regulations. There are many foreigners who have come to Sri Lanka on business visas and have remained for long. There is no tracking mechanism for that, stated IESL Vice President Arjuna Manamperi.

“No liberalisation whatsoever.” Ministry says

The Ministry of Development Strategies and International Trade in a statement following concerns raised by professionals said that the “Movement of Natural Persons” from Singapore has not been opened except for intra-corporate transferees in senior management and business visitors linked to investments. There is no liberalisation whatsoever of independent movement of natural persons (not linked to investment), it said adding that business visitors will be permitted for a period of not more than 30 days for purposes such as market scoping, business agreements and so on. Extracts of the statement are as follows: “Corporate transferees (transferees from a branch of a company with an investment in Sri Lanka) are also limited to Managers, Executives and Specialists who are clearly defined in the relevant schedules of the agreement. Their period of entry is also limited initially up to two years or over the period of contract, whichever is less with an extension not exceeding a total of five years. No Movement of Persons either Singapore citizens or permanent residence has been opened in professional services. The concern that engineering and architectural services have been opened is also incorrect. This Ministry wishes to state that the only commitment is for cross border services (via the Internet – and not relating to movement of people) and that too limited only to predesign advisory and consultative services and does not include the practice of architectural or engineering profession. This is only through use of Internet and other means and not through investment, commercial presence, of movement of professionals to the country. Providing this type of services is already possible through the existing regulation and legislative framework. Thus, establishing a company for providing these advisory services in the country or Movement of Natural Person to provide such services is not permitted under this agreement. It should be emphasised that Sri Lanka has not undertaken any liberalisation exceeding the prevailing investment regime.” The new regulations under the Immigration Act in order to strengthen the regulatory framework have almost been finalized and will be submitted to the Cabinet shortly. When they come into force, they will address the concerns raised by the professional associations as well as other stakeholders. The regulations will stipulate procedures to be followed when employing foreign nationals, categories of employment, employer and employee obligations, and the roles to be played by the professional bodies on recognition of qualifications, etc. It has also been stated that this agreement would lead to several non-citizens of Singapore arriving into Sri Lanka including PR holders and citizens of India, Bangladesh and other countries. It should be mentioned that the entire permanent resident population of Singapore is only 527,000 in 2017. Second, the SLSFTA does not permit any permanent resident to work in Sri Lanka. The only permitted entrants are those who qualify as corporate transferees: i.e., persons employed by a Singaporean company with investments in Sri Lanka. Third, such persons would have to be employed in that company for at least 12 months. Furthermore, only the most skilled and highest tiered personnel are eligible – this is clearly defined in the schedules. Fifth, if a person has a ‘dominant and effective nationality’ in a third country, such persons would be excluded. Therefore, a Singapore company cannot send a citizen of another country to work in Sri Lanka.”

http://www.sundaytimes.lk/180520/business-times/safety-standards-lacking-in-most-lankan-factories-2-293386.html11 May 2018 @ 8:04 pmReference to last week’s story under the above headline, ILO Director for Sri Lanka and the Maldives, Ms. Simrin Singh, Director, ILO Country Office for Sri Lanka and the Maldives says she didn’t speak about “the case of around 100 workers suffering from a gas leak at a Jaela factory” as reported by the newspaper.http://www.sundaytimes.lk/180520/business-times/teejay-lankas-q4-pre-tax-profit-up-27-in-2017-18-293384.html11 May 2018 @ 8:03 pmTeejay Lanka PLC has reported a pre-tax profit of Rs. 501.7 million at group level for the final quarter of 2017-18, to end a challenging year. One of the region’s largest textile manufacturers, Teejay supplies fabric to some of the best international brands across the world. The Weft knit fabric specialist with manufacturing operations in Sri Lanka and India, achieved a 27 per cent growth in pre-tax profit for the three months ending 31st March 2018, an improvement of Rs 105.6 million over the corresponding quarter of the previous year despite higher raw material prices in global markets, according to a company media release. Teejay Lanka PLC Chairman Bill Lam said the momentum generated by the strong performance of the fourth quarter with investments in expansion during the year and a full order book are an indication of a promising first quarter of 2018-19 and a promising full year. Group revenue for the quarter reviewed grew 13 per cent to Rs 6.6 billion and gross profit improved by 11 per cent to Rs 731.8 million. Operating profit at Rs 486.7 million for the three months reflected a healthy growth of 31 per cent. Post-tax profit for the quarter totalled Rs 508.4 million, an increase of 3 per cent principally due to a 93 per cent increase in income tax which resulted in a deferred tax asset of Rs 97.6 million as a one-off gain in the fourth quarter of 2016-17 reducing to Rs 6.7 million for the three months reviewed. Mr. Lam attributed the group’s strong performance in the fourth quarter predominantly to capacity expansion, higher efficiencies, exciting innovations, the group’s growing product portfolio, its success in reducing administration costs by 15 per cent through cost control initiatives and containing the growth in distribution cost to a marginal 4 per cent with the increase in line with sales growth. “We are now well-positioned for 2018-19, especially with the completion of the expansion of our plant in India, which has doubled its capacity in anticipation of our foray into new markets,” he added. Looking ahead, Mr. Lam said the group has positioned itself during the year to reap the benefits of GSP + through its capacity expansion. Teejay’s manufacturing facilities are currently at optimal operating capacity and strategies have been initiated to pursue new opportunities from leveraging the group’s regional footing, providing flexible and better solutions and broadening its customer portfolio.http://www.sundaytimes.lk/180520/business-times/think-different-if-you-want-to-be-competitive-in-todays-connected-world-says-rainer-deutschmann-293379.html11 May 2018 @ 8:02 pmThink exponentially and not in the time-honoured linear habit if you are to make an impact in today’s world of technology, was the sage advice Dr. Rainer Deutschmann offered to the large crowd at the Google I/O Extended Sri Lanka 2018 hosted by Dialog Axiata and Ideamart in Colombo this week. [caption id="attachment_293380" align="alignright" width="400" caption="Dr. Rainer Deutschmann addresses the audience"][/caption] Dr. Deutschmann, chief operating officer at Sri Lanka’s largest telecommunications service provider (Dialog), was one of the keynote speakers at South East Asia’s largest Google I/O extension event where the underlying theme was “A connected world through IOT (Internet of Things)’. He dwelled on the Power of X(ponential). “We live in exciting times where we have to be conscious of the power of exponential and also the threats that come with it,” Dr. Deutschmann told the 3,500-strong young and tech-savvy audience. “We all have to leverage the power of exponential, the use of abundance, the use of fast learning, the use of constant reinvention and disruption, question existing business models, question the ways of doing things and the use of technology. We must do it not only in the lab but in the real world. The door is open and we are excited to work with you,” he added. As part of its overall digital strategy, Dialog set up a company earlier this year called Apigate which seamlessly combines its IOT, web and digital platforms under one umbrella. This service will boost faster engagement and partnerships, opening up a new way of doing business in the digital space. Dr. Deutschmann went out of his way to explain the difference between linear and the word ‘exponential’ as it was core to his message. “If for example I take 30 linear steps in one direction I would have covered 30 metres if each step is a metre long. If I likewise take 30 exponential steps where one step is double the size of the next step, I would have circled the earth 26 times,” Dr. Deutschmann pointed out. “The human brain is fundamentally unable to understand the implications of exponential growth because over billions of years we have developed in a linear manner.” He used the famous example of Kodak to illustrate his point of why many companies had failed due to its managers thinking in a linear manner. [caption id="attachment_293381" align="alignleft" width="400" caption="Entertainment between breaks- Pix by Sameera Weerasekera"][/caption] “Kodak used to be the dominant leader in photography in 1976. That year an engineer walked into the boardroom and showed the first self-contained digital camera. It weighed 3 and-a-half kilograms. When they (directors) saw the camera, they discarded the chance of developing it further as they felt the camera would not disrupt their business. In 2012 Kodak filed for bankruptcy,” Dr. Deutschmann related. “But the implications of an exponential world offer a tremendous opportunity for all of us, companies and individuals alike. This is due to a number of reasons one of which is abundance. Computing power rises exponentially, connectivity speeds broadband coverage, every mobile generation has doubled the spectral efficiency of the previous one and information can be accessed at the remotest part of the world by anyone. “Secondly, in an exponential world the only constant is change and change is only increasing. Look at the world today. Only 14 per cent of Fortune 500 companies that were there in 1955 exist today. At the same time new companies are rising at an increasing pace. “A typical Fortune 500 company took about 20 years to reach a market capitalization of US$1 billion. Google which started in 1998 took eight years. Facebook started in 2004 and took five years. Uber and Whatsapp both started in 2009 and took only two years. Snapchat which began in 2011 took just one year to reach a market capitalization of $1 billion.” Another facet of today’s exponential world was disruption. Businesses were constantly evolving with many cutting out the middle man – the hotel and the taxi industry being prime examples. Blockchain would see many new companies coming into the scene according to Dr. Deutschmann who added that “small is big” was the new mantra – Whatsapp when it started in 2014 had only 35 engineers. “We held this event for the first time last year and since then the world has changed tremendously. There are 250 million new Internet users and for the first time more than half the world’s population is connected to the Internet. “There are 360 million new social media users who have joined the community, the majority of them from only four countries – China, India, Indonesia and Iran. A massive 170 billion apps have been downloaded through App stores which is a 60 per cent increase Year-on-Year. This has generated $68 billion, 100 per cent more than the year before. This all shows the amazing growth of the Internet community,” Dr. Deutschmann revealed. The young generation at the Sri Lanka Exhibition and Convention Centre listened rapturously. They were probably dreaming of creating an application that would change the world upside down. The 12-hour long event also showcased a talk by Kumar Sangakkara who focused on insights of leaderships – “Leadership is a journey. You are not born or made a leader” – as well as the latest products from Google including Google News which will use AI (artificial intelligence) to help you learn more about stories that matter to you; the new voices to Google Assistant which will also help you draft emails as you type and best of all Google Lens where you will be able to browse the world round you just by pointing your phone camera on the object and answer any questions you have.http://www.sundaytimes.lk/180520/business-times/empowering-bangladeshs-female-garment-workers-293377.html11 May 2018 @ 8:00 pmDHAKA – For four decades, the garment industry has powered Bangladesh’s economy and put more people to work than any other sector. Women in particular have benefited from this hiring boom, and today, a majority of the industry’s four million employees are female. But while the textile trade has put money in women’s purses and challenged a patriarchal society to evolve, economic empowerment has not greatly improved gender equality and female wellbeing. On the contrary, women with jobs in Bangladesh’s largest industry are now imperiled on two fronts – at home and at work. While much has been written about exploitation in the garment industry, there is a paucity of data on the health and safety implications for women in this sector. Our organization, icddr,b (International Centre for Diarrhoeal Disease Research, Bangladesh), is working to change this. In a series of recentstudies, we explored the health and welfareissues – both physical and emotional – faced by women who produce clothing that they will never be able to afford. The women we spoke with shared markedly similar stories. Most were or had been married, are poorly educated, and migrated to cities from poverty-stricken households in Bangladesh to work and support their families. Most interviewees reported working at least 10 hours per day, every day. Many work overtime to meet their daily production quota of 100 shirts per hour. And, depending on their position, they spend the entirety of their shifts either standing (if they are quality inspectors), sitting (if they are machine operators), or moving (if they are factory-floor helpers). But what makes our studies unique is the information we collected about what happens after work. And here, the data is even more striking. For starters, most married female workers’ workdays don’t end when their shift at the factory does. Back at home, they are expected to cook, clean, and perform other household chores – work on top of work that leaves them exhausted and prone to illness. Pregnant women in particular suffer significant health problems, such as hypertension, owing to their brutal schedules. And yet most women, needing the income, continue working and hide their pregnancies as long as possible, out of fear that supervisors will fire them when they find out. This also takes an emotional toll. Working mothers from rural villages report experiencing high levels of guilt, anxiety, and stress caused by being away from the children whom they often have to leave in their home village, because they cannot afford – in terms of time or money – to care for them in Dhaka. Two out of five workers show suicidal tendencies. Yet the factory health-care systems that we have studied do not treat mental illness as a serious problem. In fact, most factories do not have any mental-health-care provisions at all for their workers. As a result, most women suffer in silence. Finally, our research identified a disturbing correlation between employment in the garment industry and violence (physical, emotional, and sexual) against women. A staggering 43 per cent of respondents said they had been sexually assaulted by a spouse during the previous year. To put this figure in perspective, the national average for this form of violence is 13 per cent. While we don’t have the data for a conclusive assessment of why rates of abuse are so high in the garment trade, the data is consistent with the prevailing popular view that women in this field are somehow associated with sex work and sexual promiscuity. There is no doubt that women in Bangladesh have earned a degree of autonomy and financial independence from their participation in the garment industry. But, as our data illustrate, these gains have come at a cost. And, although activists and industry insiders recognise that attitudes and abusive practices toward female workers must change, there is currently no consensus about how to proceed. We think it is time to change that, and a good place to start would be by pushing multinational firms to make gender equality a high priority. Many of the global brands that rely on Bangladesh’s factories have committed to gender parity in their corporate offices. They should do the same on the production side, where managerial positions are occupied almost exclusively by men, a disparity that reinforces the gender imbalance elsewhere in society. But perhaps the most important change to be made is to engage men in a dialogue on gender. In several African countries, gender-sensitization initiatives have reduced discrimination and violence against women. One programme in West Africa, for example, brings husbands and wives together for mediated “dialogue sessions” to improve women’s role in financial decision-making. To make similar gains in Bangladesh, profound changes in policies and programmes are needed. The garment industry and men more broadly must commit to the goal of women’s empowerment. After nearly 40 years on the job, women are the driving force behind Bangladesh’s most important industry. But at the moment, they are paying too high a physical and emotional price. (Ruchira Tabassum Naved is a social scientist and gender specialist at icddr,b while Sadika Akhter is an anthropologist working as a deputy project coordinator at icddr,b. Article courtesy www.project-syndicate.org)http://www.sundaytimes.lk/180520/business-times/homes-for-25-idp-families-from-tokyo-cement-293374.html11 May 2018 @ 7:59 pmTokyo Cement Group recently set up a housing scheme for 25 internally displaced families from the Trincomalee district on the company’s own land at Adampodai, Nilaveli. This, it said in a media release, is the initial phase of a much larger project to uplift the lives of Internally Displaced people in Trincomalee. [caption id="attachment_293375" align="alignright" width="400" caption="The new housing scheme"][/caption] While the foundation for the project was laid on May 5, 2017, in commemoration of late A.Y.S. Gnanam, Founder Chairman of Tokyo Cement Group, the scheme was opened in March 2018 by R. Sampanthan MP, Leader of the Opposition in Parliament in the presence of Mr. N.A.A. Pushpakumara, Government Agent and District Secretary of Trincomalee, Dr. Harsha Cabral P.C., Tokyo Cement Chairman and Christopher Fernando, Executive Director of Tokyo Cement among others. Mr. Sampanthan, who handed over keys to part of the 25 families, reminisced how he requested the late Mr. Gnanam to provide job opportunities to people from the area on the day former President J.R. Jayewardene laid the foundation for the Tokyo Cement Factory in 1984, and thanked the company for unreservedly fulfilling that request. Each house costing around Rs. 2.3 million is built on a 10-perch plot of land and the scheme has all basic amenities along with paved roadways, a community centre and a children’s park.http://www.sundaytimes.lk/180520/business-times/cyber-security-services-from-securmatic-293372.html11 May 2018 @ 7:57 pmCanada-based SecurMatic has announced the launch of SecurMatic (Pvt) Ltd, a cyber-security services company supporting organizations in Sri Lanka and South East Asia, with the opening of its Development and Global Security Operations Centre in Colombo. “SecurMatic provides end to end information security and compliance solutions that are affordable to companies of any size and can be deployed across multiple industries,” said Lindsay Pereira, General Manager of SecurMatic in a media release. The information security solutions comprise cyber threat detection, threat intelligence and security analytics via a proprietary security incident and event management tool (SIEM) monitored by security experts manning the Security Operations Centre. In addition, SecurMatic provides Managed Security Services relating to firewall, intrusion detection/prevention (IDS/IPS) devices on behalf of clients. The Compliance/Advisory Services supports organizations to build their security programs, perform risk and controls assessments, framework assessments (NIST), GDPR and PCI compliance etc. The overall cyber security threat landscape has become more complex for many organizations to manage on their own due to sophisticated and targeted cyber-attacks that bypass traditional controls. It takes minutes for a breach to occur and weeks/months for companies to discover they have been compromised. “SecurMatic hopes to address the inflexibility and high cost of cyber threat detection and monitoring solutions by making these services affordable and accessible to companies of any size (small to large),” said Ranjika Manamperi, CEO of SecurMatic.http://www.sundaytimes.lk/180520/business-times/truth-about-defaced-currency-notes-293369.html11 May 2018 @ 7:56 pmThe Central Bank of Sri Lanka (CB) recently adopted a clean note policy which has caused some anxiety among the public. Originally it was to come into effect on December 31, 2017 but then it was postponed indefinitely. [caption id="attachment_293370" align="alignright" width="400" caption="File picture of some old, 5-rupee currency notes"][/caption] With an effective campaign which had CB adverts at every cash counter, the public have been made to understand that any ink on the currency note is not acceptable. I was once held up in a supermarket queue with the customer arguing with the counter clerk about a Rs. 5000 note with ink. When I tendered an old Rs. 20 note to the Railway ticket counter it was returned to me with the statement; “Don’t you know that banks don’t accept even a little ink”. An independent check on a bundle of 1000 notes from a bank showed that about 5 per cent of notes in circulation have some ink. Mostly from lazy cashiers who sign or write a total directly on the note, rather than a slip of paper. I have been also told of significant defacement notes with a political image. Any collector of Ceylon currency notes would have seen notes with multiple post marks stamped by post offices, before around 1970. It is an old habit which CB is trying to break. In mid-March when I was given 50 high denomination notes from a bank teller, I decided to check and found that three of the notes had ink, and I had them replaced. I was told that the counting machines at the bank had been calibrated to CB guidelines, and if it went through the machine it was OK. I was clearly intrigued when they informed me of a document sent by the CB to LCBs (local commercial banks) with specifications. There was clearly a difference between what the public understood and what was legally acceptable. I found a Sinhala video online on how to remove ink from Currency Notes using a stain remover. Social Media was seeking solutions. On March 19 I submitted to the CB a RTI request to find out the specific details which had not been issued to public. On March 29 the CB put advertisements in all the major newspapers saying “currency notes have been mistakenly marked in the form of a small dot or a line are not considered as willfully mutilated”. The same day a CB press release said; “CBSL has decided to continue the service of exchange of willfully mutilated, altered and defaced currency notes from CBSL until further notice.” The public were informed to submit such currency notes to the few CB offices or send the same by registered post together with a duly completed application form. However the Sri Lanka Post office website says “Currency notes may be sent in registered letters, the insurance of which is compulsory.” The post office has discontinued rarely used postal insurance back in 2007. The PMG has informed me, that SLPost is now talking with the CB to resolve this issue. I am not sure why the more extensive branch network of LCBs as a customer service can’t be instructed to accept the notes with the CB form, accumulate and forward to CB through bank channels. Else who will pay the costs of postage, registration and insurance, both ways? Finally after seven weeks, although it was acknowledged to send a reply in two weeks, I got a reply on May 9 to my RTI with the statement that: “The parameter/guidelines issued to LCBs to calibrate currency processing machines to detect willfully mutilated, altered and defaced currency notes is given below: a. Currency notes defaced with drawings, words, numbers, signs or symbols where the serial number, date, signature, value, or security feature of the currency note has been altered in any significant way and/or; b. Willfully mutilation, alteration and defacement in the currency note exceeds the below area: All Denominations. In Watermark Area 10 x 10 mm. In Printed area 15 x 15 mm Clearly that amount of defacement is rarely seen on currency notes and I was relieved that more than a “small dot or a line” will be accepted by LCB counting machines. Thus I don’t need to look carefully through all the notes I get from a Cash Teller or ATM. Although that maybe a safe practice as a close friend informed me that he got a fake Rs 1000 note from a Bank ATM, and only discovered when it was declined at a local shop. That is lot worse than getting defaced currency.http://www.sundaytimes.lk/180520/business-times/miracleofasia-lk-sri-lankas-largest-travel-website-showcases-local-miracles-to-the-world-293366.html11 May 2018 @ 7:54 pmMiracleofAsia.LK, aiming to be Sri Lanka’s largest travel website in the form of a content magazine and website, was launched at the recently held Sancharaka Udawa travel exhibition in Colombo. [caption id="attachment_293367" align="alignright" width="400" caption="MiracleofAsia team"][/caption] The magazine contains feature articles on the country’s best attractions, fun activities, top places to shop, abundant offers and also offers a sneak peak on whether the high end fine dine restaurants and cafes really walk the talk, the company said. Focus on content marketing to promote the miracles of Sri Lanka globally will be a winning strategy to attract tourists from Europe, West Asia and China into the country while contributing towards the overall growth of tourist arrivals, it said in a media release. MiracleofAsia Founder and CEO Prageeth Hewage said: “We invite hoteliers and tour operators to sign up with the MiracleofAsia.Lk to increase their revenue by attracting more tourists. The company is trying to fulfil the gaps of travel information to instant bookings by bringing them together onto one platform. Unlike any other OTA, the company is differentiated by its strength in search and content marketing. The company also has more than 20 content writers working on this project.” Armed with latest technologies, the website is targeting to attract more visitors to the island by connecting people through promotion while providing them instant booking facilities for hotels and experiences as well. MiracleofAsia Digital marketing consultant Aravinda Premarathna stated: “We will give more focus on search marketing and social media strategies to attract travellers to visit the platform, I will use the knowledge and experience that I have gained in previous similar digital marketing projects for this to be successful. Our strategy here is to use 'content' as the main marketing tool to be found in Meta searches through the search engine optimisation (SEO). Social media users over the world will also be invited to browse the platforms and later will be converted to bookers by offering tangible values.”http://www.sundaytimes.lk/180520/business-times/viber-assures-sri-lankan-users-of-more-secure-stronger-connections-293364.html11 May 2018 @ 7:53 pmViber, the global messaging and voice app, says it has taken careful steps to ensure data remains secure and private, following a recent outcry over privacy options on social networks by users. Growing concerns have also risen about certain social and messaging apps harvesting private messages and using them as valuable data for their systems’ algorithms—or for their advertisers. “Given that there are over eight million Viber users in the country and the phenomenal growth of Viber stickers with more than 100 million being sent and received monthly among Sri Lankans, Viber assures all users of having automatic protection through encryption,” Viber, part of Rakuten Inc - a world leader in e-commerce and financial services-, said in a media release on Tuesday. Viber’s default end-to-end encryption provides stronger security in every voice or video call, message, video and photo, in both group and one-on-one messages where not even Viber can see, read or have access to them. Anubhav Nayyar, Head of South East Asia Viber said, “Sri Lanka is a major market in South Asia for Viber and we understand privacy and security is a serious concern among our many users. While other messaging applications may require users to manually enable encryption, end-to-end encryption on Viber is on by default so users don’t have to worry about turning it on and has been standard on the app since the feature was made available.” When a Viber message is sent, whether on mobile or desktop, the data travels from the device to the recipient’s as a scrambled code so that only their device has the unique key to translate to plain text. Once the message has been delivered, none of the data is stored on Viber’s servers. In case the device is offline, Viber stores only the encrypted version of the message for a limited time, still safe and secure, until their device connects to the internet and is able to receive what has been sent. As a result users have little concern or worries about suddenly receiving a targeted ad related to the subject of their private conversation—Viber cannot and will not, in any way, share their personal messages with anyone. “Viber is all about making sure our users can enjoy better ways of communicating every day, and a big part of that is assuring that the connections made are strengthened by secure measures users can always count on,” Mr. Nayyar noted.http://www.sundaytimes.lk/180520/business-times/indias-jet-airways-to-buy-75-boeing-jets-in-multi-billion-dollar-order-293362.html11 May 2018 @ 7:52 pmIndian airline Jet Airways has entered into an agreement to buy 75 Boeing 737 MAX aircraft in a deal that could be worth more than $7 billion, the country's second-largest airline said recently in an announcement to the Mumbai stock exchange. The company did not specify which model of the narrow-body jet it planned to purchase, or whether it had placed a firm order rather than a memorandum of understanding. The deal could be worth anywhere between $7.2 billion and $9.7 billion, depending on the type of jet acquired and based on list prices. Airlines often negotiate discounts on major orders, the statement said. India is witnessing a boom in air travel as its growing middle class takes to the skies. Airlines are rapidly expanding their fleets to capture a slice of this market. There has been a six-fold increase in passenger numbers over the past decade as Indians take advantage of better connectivity and cheaper fares thanks to a host of low-cost airlines. The Centre for Aviation based in Australia predicts India will overtake Britain as the world's third largest market by 2025 and will have 478 million fliers by 2036. India's largest airline IndiGo last year announced a deal to buy 50 small planes from French manufacturer ATR. The majority of Jet Airways' fleet is Boeing aircraft. Boeing says the 737 MAX is the fastest-selling airplane in its history, with more than 4,300 orders received. Vinay Dube, Chief Executive Officer, Jet Airways said, "This additional order re-emphasises our trust and confidence in Boeing and also reaffirms our commitment to operate extremely modern, reliable and fuel efficient aircraft as part of our fleet. He added: “Jet Airways' partnership with Boeing goes back 25 years ever since the airline was conceived and took to the skies. This order underscores Jet Airways' commitment to the growth and sustainability of the Indian aviation market." The 737 MAX family of airplanes offers 130 to 230 seats with the ability to fly up to 3,850 nautical miles (7,130 kilometers). They incorporate the latest CFM International LEAP-1B engines, Advanced Technology winglets, the Boeing Sky Interior and large flight deck displays.http://www.sundaytimes.lk/180520/business-times/emirates-announces-1-bn-profit-in-2017-18-year-293360.html11 May 2018 @ 7:51 pmDubai-based Emirates Group, one of the most powerful airlines in the world, this week announced its annual results saying it posted a profit of AED 4.1 billion (US$ 1.1 billion) for the financial year ended 31 March 2018, up 67 per cent from last year. The group’s revenue reached AED 102.4 billion ($27.9.billion), an increase of 8 per cent over last year’s results while the cash balance increased by 33 per cent to AED 25.4 billion ($ 6.9 billion) supported by the bond issued in March and strong sales due to the early Easter holidays at the end of March. In line with the overall profit, the group declared a dividend of AED 2 billion ($545 million) to the Investment Corporation of Dubai. In a media release, Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said: “Business conditions in 2017-18, while improved, remained tough. We saw ongoing political instability, currency volatility and devaluations in Africa, rising oil prices which drove our costs up, and downward pressure on margins from relentless competition. On the positive side, we benefitted from a healthy recovery in the global air cargo industry, as well as the relative strengthening of key currencies against the US dollar. We have always responded to the challenges of each business cycle with agility, while never losing sight of the future, and this year was no exception. In 2017-18, Emirates and dnata delivered our 30th consecutive year of profit, recorded growth across the business, and continued to invest in initiatives and infrastructure that will secure our future success.” In 2017-18, the group collectively invested AED 9 billion ($ 2.5 billion) in new aircraft and equipment, the acquisition of companies, modern facilities, the latest technologies, and staff initiatives. Emirates announced two significant commitments for new aircraft during the year: a $15.1 billion agreement for 40 Boeing 787-10 Dreamliners which will be delivered from 2022, and a $16 billion agreement for 36 additional A380 aircraft, including 16 options. dnata’s key investments during the year included: acquisition of AirLogistix US, marking its entry in the US cargo market; expansion of cargo handling capabilities with new warehouses and equipment at London Gatwick, Amsterdam-Schiphol, and Adelaide; new catering facilities in Dublin and Melbourne; and new marhaba lounges in Karachi and Melbourne. Across its more than 80 subsidiaries, the group’s total workforce declined by 2 per cent to 103,363, representing over 160 different nationalities, as part of the overall productivity improvement initiatives in Emirates and dnata.http://www.sundaytimes.lk/180520/business-times/central-bank-probes-foreign-exchange-market-transactions-293358.html11 May 2018 @ 7:49 pmThe Sri Lankan rupee is on the verge of being stabilised following the intervention of the Central Bank (CB) in the domestic foreign exchange market to control the unexpected pressure and volatility on the rupee (against the US currency), Governor of the Bank Dr. Indrajit Coomaraswamy told a media conference convened to brief journalists on the third Monetary policy review in Colombo on Friday. The rupee had lost ground stridently in late April and May after the CB resorted to money printing during the New Year festive period. Dr. Coomaraswamy noted that they have spent US$ 136.5 million while purchasing $30 million to tackle the situation. On Thursday the rupee closed at a new low of 157.80/158.10. He vowed to probe market transactions to get some insight on those activities with the aim of giving more flexibility to the foreign exchange market. Export and import are the main factors that decide the exchange rate, only if it is allowed to float as per the market forces, supply and demand in the foreign exchange market. Rupee depreciation is good for exports and bad for imports, he said adding that exports have maintained a positive momentum with export earnings growing during the first two months of 2018. However, this was outweighed by the increase in import expenditure, largely driven by gold and vehicle imports, which resulted in a widening of the trade deficit, he said. Export earnings grew by 16 per cent to $1.6 billion during the period of January to April this year while imports increased by 3.5 per cent to $2 billion during the same period. According to the monthly Monetary Policy Review, core inflation remained subdued indicating contained demand pressures, while inflation expectations continued to decline. However, a temporary uptick in inflation is expected in the short term due to the impact of upward price revisions to domestic petroleum products, LP gas and milk powder. Nevertheless, with the dissipation of these transitory supply driven price pressures and further improvements in domestic food supplies, inflation is expected to stabilise in the desired mid-single digits in the second half of 2018. Inflation is projected to remain within the 4-6 per cent target range over the medium term. Referring to the resurrection of the Edirisinghe Trust Investment (ETI Finance) with the financial infusion of $73 million, Dr .Coomaraswamy said that the foreign investor has already remitted the first tranche of $43 million and the balance $30 million will be paid following the conclusion of legal matters relating to EAP Broadcasting Company Ltd.http://www.sundaytimes.lk/180520/business-times/mobitel-hosts-google-io-extended-sri-lanka-2018-for-5th-year-293356.html11 May 2018 @ 7:48 pmMobitel recently hosted the ‘extended event’ of the Google I/O 2018 on May 8 at the Stein Studio Complex in Ratmalana, for the 5th time in Sri Lanka. This was the local extension of Google I/O - an annual global developer event. The local event of the global one brings local developer communities together to experience the I/O keynote and sessions with one another in real-time, around the globe. A highlight included was the keynote session conducted by Sundar Pichai - Chief Executive Officer of Google on the latest product and platform innovations at Google, Mobitel said in media release. Participants at the event comprised over 2300 developers, ICT professionals, industry leaders, university students and young tech-savvy innovators. The exciting and interactive overnight event featuring a live stream from San Francisco focused on next-gen technology, mobile innovation and was moderated by renowned local speakers.http://www.sundaytimes.lk/180520/business-times/ntb-says-profits-up-by-30-per-cent-in-1stq-293354.html11 May 2018 @ 7:48 pmNations Trust Bank has closed the first quarter ending March 2018 with a post-tax profit of Rs. 939 million, up by 30 per cent over the corresponding period in the previous year with pre-tax profits increasing at a higher rate of 36 per cent. Post tax profit growth for the group was lower owing to additional tax provided for the inter-company dividend payments which also resulted in the bank posting a much higher operating income, according to an NTB media release. “Profitability growth was underpinned by a 7 per cent growth in loans and advances during the period under review along with improving net interest margins,” it said. Net interest income increased by 43 per cent as Net Interest Margins (NIM) climbed up steadily due to a drop in cost of funds over the corresponding period coupled with improved portfolio yields. Non fund based income including fees, commission and operating income increased by 16 per cent for the period under review with trade and transactional fees contributing to a larger portion of the increase. Net trading losses for the year amounted to Rs. 203 million which is reflective of the swap cost arising from an increased funding forex SWAP book (up by 30 per cent) coupled with an increase in forward premiums (up by 50bps) as compared with the comparative period. Commenting on the results and achievements, Renuka Fernando, CEO/Executive Director, Nations Trust Bank stated, “I am extremely pleased with the performance of the first quarter, well balanced across the business pillars with the strategies embarked upon moving in the right direction. It is also quite an exciting time for the bank as we put in place many digital initiatives to bring about transformational change across the enterprise for the long term”.http://www.sundaytimes.lk/180520/business-times/ndb-completes-impressive-first-quarter-2018-293352.html11 May 2018 @ 7:47 pmNational Development Bank PLC (NDB) completed the first quarter ending March 2018 on a high note with impressive growth in profitability and business volumes. Q1 performance was recorded in the aftermath of a highly successful financial year in 2017, the bank said in a media release adding that gross income grew by 20 per cent to Rs. 11,943 million, reflecting the enhanced business volumes recorded during Q1 2018, compared to Q1 2017. Net Interest Income (NII) recorded an impressive growth of 44 per cent to Rs. 3,351 million. Net fee and commission income also grew by 28 per cent to Rs. 710 million for the quarter. “Growth in the loan book, particularly in leasing and credit cards, and the accelerated penetration of the bank’s mobile banking app were instrumental in generating enhanced fee based income,” it said. Operating profit before tax on financial services increased by 40 per cent to Rs. 2,678 million while post-tax profit was Rs. 1,561 million at the bank level. On the liability aspect, customer deposits grew by 4 per cent to Rs. 284 billion, a quantum increase of Rs. 11 billion. With the increase in the deposits base, the loans to deposits ratio further improved to 101 per cent in Q1 2018 from 102 per cent in 2017. Return on equity (Group) was 14.03 per cent, an impressive increase from 11.09 per cent in 2017. The same ratio for the bank was 16.78 per cent. Bank earning per share also improved to Rs. 27.62 from Rs. 24.52 in end 2017. Return on average assets recorded a marginal improvement to 1.26 per cent from 1.21 per cent in 2017. NDB CEO Dimantha Seneviratne, commenting on the quarter’s performance said the results mark a sound beginning for the year and thanked all the stakeholders of the bank for the support. He noted that the bank continues to be guided by its mid-term strategy and is meticulously pursuing the targets with the ultimate goal of becoming a systemically important bank by 2020.http://www.sundaytimes.lk/180520/business-times/riu-investor-forum-gathers-momentum-293350.html11 May 2018 @ 7:46 pmThe Research Intelligence Unit, a Colombo-based research and consultancy with a global presence, is gearing up to host its annual edition of RIU Investor Forum on Thursday May 17 at the Sri Lanka High Commission in London, UK. RIU hosts these annual events with the aim of promoting and channelling investment into Sri Lanka from among the high net worth individuals (HNI) living overseas while also building strong interest among the investor community based in key global financial hubs, a company media release said. “A special feature at this years’ event would be the endorsement of the event by Sri Lanka’s minister of Finance, Mangala Samaraweera, whose statement will be read at the event. The keynote address at the event will be made by the Sri Lankan High Commissioner to the United Kingdom. The event will also include guest speakers who will make presentations on real estate in Sri Lanka as well as London. Among them would be Sri Lankan Architect Nilesh De Silva of KDS, who will make a presentation on trends in design for villas and luxury property in the island,” it said. Foreign investors have shown confidence towards investing in Sri Lanka as foreign direct investment (FDI) into Sri Lanka has grown to over US$1.63 billion in 2017, doubling the 802 million dollars achieved in the previous year, the release said. “The island has also in order to facilitate FDI, accelerated investment allowances over and above normal depreciation until companies recover their total fixed investment through its recently approved new Inland Revenue Act while the foreign exchange regime too has been liberalised to improve the investment climate via the new Foreign Exchange Act.” “The UK is easily the most significant diaspora market for Sri Lanka both in terms of quality and quantity. We look forward to concluding yet another successful event in the UK together with our sponsors and associates,” Roshan Madawela, RIU head was quoted as saying, commenting on the upcoming event. “The UK has over 436,000 UK citizens with Sri Lankan origin and they maintain a regular financial or real estate related presence in their country of origin.” Altair, the 68-storey luxury residential apartment complex which fronts the Beira Lake in Colombo, Prime Lands (Pvt) Ltd, a leading company in property development and Royal Property Holdings, a building construction firm based in Colombo, Sri Lanka will be the lead sponsors of the event. Event partners include Lamudi, an international property portal, the Oxford Business Group, a research firm based in the UK, the Big Issue Sri Lanka, a Sri Lankan magazine and Eye-Travel.http://www.sundaytimes.lk/180520/business-times/gated-communities-in-despair-without-proper-laws-293345.html11 May 2018 @ 7:45 pmGated communities are popping up all over Sri Lanka and while they certainly can boost security, a few issues have been cropping up. Unlike apartment owners, those in gated communities which are a rapidly growing phenomenon in Sri Lanka, don't have laws or any authority that govern them. A gated community (or walled community) is a form of residential community or housing estate containing strictly controlled entrances for pedestrians, bicycles, and automobiles, and often characterised by a closed perimeter of walls and fences. On the surface, it's easy to see the appeal of buying property in a gated community, but without any proper law residents are helpless, many who own gated community housing say. "There is no place we can make complaints against the developer for not keeping their promises or when they start mismanaging the facilities that were promised to the buyers after they sold the homes,” Mario Wijesekera, an owner of a house in a well known gated community, told the Business Times. He said that things such as maintenance of the complex, operating of the club house, etc aren't done at all and it’s frustrating. “The only place a complaint can be made is the police but the police say these are civil matters and advice us to file private civil cases which are costly and time consuming. Knowing this fact often the developers try to bully the home owners by not answering their mails, letters, and sometimes not even answering the phones,” he said adding that all these projects were started with BOI approval for the developers to get tax concessions but the BOI also doesn't continue to monitor the developers to see if they have kept to the conditions and promises that the developers signed when seeking permission for the projects. Mr. Wijesekera said that amongst the issues with the developers are sale of land within the perimeter to outsiders; improper handover of management, club house sports and recreation facilities not running etc, are prominent. “When our project was completed, we were informed as home owners that more construction will not happen within the complex. However blocks of land that were not built on are being offered for sale. If blocks of lands within this community are offered to home owners of adjoining lands we don’t see any issues. The problem is if these blocks are purchased by outsiders who will then start constructing new houses, which will be a big disturbance to all the residents,” he said. He said that the number one reason people choose to live in gated communities is the security element. Because a gated community is private, it is more difficult to access than a standard community. He said promised facilities aren't anywhere near expectation. “In all the marketing material this builder used to sell the bungalows claiming that there is a functioning club house with all the facilities. These claims are blatantly untrue,” he added. [caption id="attachment_293347" align="alignright" width="400" caption="File picture of an overseas gated community complex."][/caption] Another owner of the same complex told the Business Times that this developer promises all between the sky and the earth when they are selling but once they have sold all the houses they disappear without any proper handing over or stop continuing with the facilities that they promised the buyers when they were selling the homes. He added that despite all their claims, residents aren't provided facilities such as a swimming pool, gymnasium, tennis and squash and other recreational units. Facilities such as a promised restaurant serving traditional Sri Lankan and international cuisine, well maintained pool and a separate kiddies pool with swimming lessons from an experienced coach, special packages for individuals and families for one month, six months, annual and lifetime membership aren't available, he stressed. He added that home owners were not provided with the plan/drawings of the houses despite repeated requests. As a result maintenance and repairs are a nightmare for the homeowners. “We have been having a continuous battle with the developer because they are not providing the services that they promised, for example they closed the restaurant at the club house. I think it would be of great help to many buyers who are planning to buy homes in gated communities in the future to know what they are getting into.”http://www.sundaytimes.lk/180520/business-times/april-sales-down-due-to-false-vat-alarm-may-looks-good-293343.html11 May 2018 @ 7:43 pmWhile the month of April wasn’t as good as March for apartment sales, builders say May looks promising. The 15 per cent value added tax (VAT) on sales of apartments from projects after April 1 won’t be effective from April 2018, as planned earlier, but this notion that it ‘will come’ had hastened many sales for condo builders in March. Before the start of April the buyers were rushing to make the most of it. A major developer told the Business Times that March was the month they had the highest sales. Another builder said his sales increased at a considerable rate in March. “Many were buying in March, but April was slow due to the confusion on this taxation and also holidays,” he said adding that March buyers were mostly doctors, engineers, entrepreneurs and those working abroad earning a good income. He added that most sales for April were exhausted in March as buyers and builders had both rushed into the sales owing to the supposed taxation. Another builder added that their apartment sales in March were mostly generated from the diaspora. “We had about 30 per cent sales from the diaspora and less than 10 per cent are foreign buyers." All builders said that this month seems to be fine and they are getting many sales requests. Developers opposed the budget proposal to impose a 15 per cent VAT on the sale of condominium housing units from 1st April 2018. Developers said that whilst they are aware of the need for bigger revenue to the Government and the intent to abolish selective exemptions, they are of the view that the re-imposition of VAT on the sale of condominium housing projects which has already started construction and sales will be counterproductive and cause a serious negative impact on the industry. The Treasury then deferred this tax for a year and it will now be enforced from next year April, Finance Minister Managala Samaraweera confirmed at a recent media conference. This VAT was in effect a few years earlier and was removed in the 2015 budget. It was deferred mainly since the amending legislation to enable this process hasn’t been presented to Parliament as yet, the Business Times learns.http://www.sundaytimes.lk/180520/business-times/real-estate-awards-judging-their-authenticity-293340.html11 May 2018 @ 7:42 pmMany industries dispense gongs to the ‘superstars’ during an awards season. It is like a build-up to the festive season, a shot at building the feel-good factor and what's more, everyone loves a celebration. So anyone who has accomplished something brag-worthy, now’s not the time to be humble, they say. [caption id="attachment_293341" align="alignright" width="400" caption="File picture of awards from a different event."][/caption] The obvious gains from these awards are the marketing opportunities, flaunting your achievements in gold, silver or bronze amazingly on your printed marketing materials, nonchalantly dropping the success into the tête-à-tête when gaining press coverage locally or even nationally. This is all marvelous. Also add to this, we, the consumer constantly seek firms boasting four or five stars in ratings or with a “Best Of” award under their belts. In this type of environment, it is critical for any business to get credit for its dazzling achievements and innovative services or products in turn to discern themselves from competitors. In the case of real estate sector these awards will be highlighting the tremendous growth prospects and potential that the sector offers and confirming the country’s growth potential in the real estate sector, most awards claim. And all say that they are the premier industry awards. But when awards are judged on whether you can afford it then there's something that's not right about it. Especially in sectors such as real estate. An award or assessment should be a reward for a good respectable real estate builder and it should do something to raise the standards of the whole real estate industry. They should encourage a high level of ethics, education, and professionalism among members in the industry and advocate on behalf of the profession. A lot of accolades around today are much diluted with far too many winners all over the world, an apartment builder told the Business Times. When the awarding brand charges for the award, it carries no real weight as numerous other properties will carry the same award, he said. “A recent awards scheme seems absurdly awful. Why would anybody pay for the privilege of being awarded a logo from an awarding body? Why would we want to pay for the Awards Package? Shouldn’t it be free? Any award needs to be unbiased and fair in all respects. Any award means nothing unless it provides the end user (the landlord, the vendor, the buyer or the tenant) with something of value, something helpful to them,” he charged. But an award awarding body has a different story. For starters, there's no compulsion to enter any awards scheme. But without any cost nothing can be done. Nothing comes free. “If we didn’t cost participants something these awards would not exist. We add a great deal of value to the packages with extra benefits from local media partners and exclusive exposure and promotion across our websites,” an awarding body website says. So there should be a meeting point. But with all that’s going on in this sector – especially in terms of lawlessness and buildings collapsing -, it seems distant.http://www.sundaytimes.lk/180520/business-times/iconic-galaxy-sells-50-of-its-apartments-293338.html11 May 2018 @ 7:41 pmIconic Developments says that they sold 50 per cent of their apartments at the soon to be completed, housing project, Iconic Galaxy. Located in the prime of Rajagiriya's upscale locality, the sale of half of the 261 apartments, within a span of 14 months has been the developer's highest in the quarter, beating demand slowdown in the real estate market, a media release by the company said. "We are delighted with the interest shown in these apartments and the sales are extremely encouraging. Iconic Galaxy apartments offers buyers the unique opportunity to live in one of the best new build developments in Rajagiriya's,” Pranav Desai, Executive Director Iconic Developments was quoted as saying. There is a demand for high quality, well-designed and spacious residential property, he has said noting that they spotted the potential of this area when they first began working on Iconic 110, Parliament Road, which is rapidly becoming one of the capital's most desirable locations. A company official told Business Times that 30 per cent of the units were bought by Sri Lankan expatriates and only one foreigner, a Chinese national had bought one apartment. He said that locals bought the rest. "This has been a very strong quarter for us,” Mr. Desai has elaborated saying that sales have grown tremendously from the same quarter of last year, adding that the company has been able to achieve healthy sales because of a strong focus on project execution along with partners MAGA Engineering. Iconic Galaxy project will be completed by the end of November 2021 and its home loan options are available with several leading banks in Sri Lanka, the release noted. "We are strongly focused on delivery, which is a critical reason why customers are happy and investing in our project," Mr. Desai has said, adding that the overall focus on execution is also helping in employment generation. “We believe that a quality product is always appreciated and the unprecedented sales of our apartments are testament to that mantra,” he has said. Iconic Galaxy, accessible from two roads in Rajagiriya and perched on the trunk route of Buthgamuwa Road, will have 272, super-luxury, two three and four bed-roomed apartments amidst a plethora of world class amenities and services to compliment the lifestyles of the buyers. Iconic Galaxy, spread in an area of a little over 2 acres of land (over 87,000 square feet), offers customers all the trappings of high-end living at an affordable prices, according to the release.http://www.sundaytimes.lk/180520/business-times/ccd-bulldozes-presidential-orders-292917.html5 May 2018 @ 5:37 pmSri Lanka’s coastal protection agency is determined to tear down illegal structures on the beaches of Negombo, Dehiwala, Mt. Lavinia and Mirissa according to plan amidst Presidential orders to temporarily suspend such operations on the Southern belt. “We are planning to go ahead with it (removing illegal structures) and it will be on the coasts of Negombo, Dehiwala, Mt. Lavinia and Mirissa,” Coast Conservation Department(CCD) Director General Prabhath Chandrakeerthi told the Business Times on Friday. No date, however, has been fixed for the demolition assignments. Mr. Chandrakeerthi said that he had suspended the order to demolish the illegal structures in Mirissa in a bid to allow those owning these places to voluntarily remove them as per requests from those owning these structures. Hoteliers have rung alarm bells over the menace of beach boys and the growing concern of unauthorised constructions on the coast of Sri Lanka that has particularly affected the country’s tourism industry due to the recent attacks against tourists both physically and sexually on April 8. This has led to authorities engaged in cleaning up the coast to become actively involved despite political pressure to refrain from removing the livelihoods of so-called “small entrepreneurs.” However, following complaints from government politicians, Tourism Development Minister John Amaratunga said this week that the President had issued orders to suspend the removal of the illegal structures in Mirissa which were scheduled to be carried out on May 1. The Minister also noted that this suspension was likely to be in place until the said unauthorised constructions were removed by their owners and registrations of these places were undertaken by the Sri Lanka Tourism Development Authority (SLTDA). The unauthorised restaurant whose owner was questioned by the tourism authorities following the attack on tourists has been issued instructions to close the surf bar called Water Creatures Restaurant and Surf Bar on the orders of the SLTDA until investigations were concluded. Nine persons have been arrested in connection with the case and produced before the Matara Magistrate and remanded. Police Spokesman SP Ruwan Gunasekara told the Business Times that the removal of unauthorised constructions in Mirissa had been postponed by the CCD on May 1 and that police was unaware of the reason; and added that they had agreed to send the required police personnel when requested. The decision to suspend the removal of unauthorized Mirissa structures, angered the trade. The Sri Lanka Association of Inbound Tour Operators (SLAITO) said in a statement that it was “disturbed to learn, that days (after the decision to remove these structures), the Coastal Conservation Department (CCD) has decided to suspend the removal of illegal constructions on the Mirissa and Weligama coastal belt until further notice, going against assurances given to the tourism industry, the previous week”. SLAITO said its members were disappointed to hear about the suspension as this issue is being monitored by tour operators who are waiting to see a swift response from authorities as they are responsible for the safety of tourists they send to Sri Lanka.

New weapon against tourism mafia
New beach-friendly police vehicles appear to be Sri Lanka’s response to problems faced by tourists in Mirissa and other areas. Tourism Minister John Amaratunga with Sri Lanka Association of Inbound Tour Operators President Harith Perera watch a policeman display its functions at the 2-day, annual “Sancharaka Udawa” tourism fair on Friday. Pic by Amila Gamage.

http://www.sundaytimes.lk/180520/business-times/cse-told-of-director-resignation-18-months-later-292915.html5 May 2018 @ 5:35 pmThe resignation of a board director of a listed Sri Lanka company has been announced to the Colombo Stock Exchange (CSE), more than a year after he stepped down, probably the first instance where there has been a long delay in such a disclosure. AFA Corporate Services Ltd, secretaries to troubled Blue Diamonds Jewellery Worldwide PLC, said Xia Liqland, a former chairman, resigned as board director with effect from September 30, 2016. “We apologise on behalf of previous company secretaries for the delay in forwarding the announcement,” it said in an April 27 communication to the exchange. CSE officials said no action was being taken against the company for the delayed disclosure as it has explained the reasons for the delay. The company is currently under investigation by the SEC over mismanagement and the misuse of Rs. 165.25 million raised through a rights issue. Mr. Xia stepped down from the chairmanship in June 2016 to take up the mantle as Deputy Chairman/Managing Director of Blue Diamonds Jewellery Worldwide PLC. Dr. Dayanath Jayasuriya, PC was then appointed as chairman with effect from June 20, but in less than 24 hours after the appointment he tendered his resignation.http://www.sundaytimes.lk/180520/business-times/cb-intervenes-to-arrest-rupee-depreciation-292913.html5 May 2018 @ 5:34 pmSri Lanka’s Central Bank (CB) this week intervened in the local money markets, for the first time in 16 months, to halt pressure on the rupee against the US dollar. The last time such intervention happened was in January 2017. Money market dealers on Friday confirmed comments to a foreign news agency by CB Senior Deputy Governor Dr. Nandalal Weerasinghe that the banking regulator pumped dollars on Tuesday and Wednesday to control the volatility of the currency. “Yes intervention happened and will continue to happen in the future as the rupee is under pressure,” one dealer said. The rupee has been under pressure and hit a high of Rs. 158 per dollar earlier in the week. On Friday it was selling at Rs. 157.80. The CB, which has been reluctant to intervene in the market and artificially prop up the rupee, has come under criticism for allowing the currency to depreciate at levels which impact on the cost of living.http://www.sundaytimes.lk/180520/business-times/state-hotels-sale-held-up-on-ag-capacity-jam-292911.html5 May 2018 @ 5:33 pmThe Ministry of Public Enterprise Development is among many institutions affected by inadequate capacity at the Attorney General's (AG) Department, Ministry sources say. Under fire for delayed action by many institutions that they are dealing with, the AG is strapped for capacity and is gearing to fill some 200 vacancies, AG officials confirmed. They said that a lot of work is held up owing to the dearth of legal assistants at the department. They are yet to fill these positions. One such case is the issue that the Ministry of Public Enterprise is facing in finalising a transaction advisor (TA) in the scheduled divestment process for the Hilton and Hyatt Colombo Hotels – via a possible amendment to a connected law. The AG’s opinion had been sought on this matter earlier this year but the Ministry is yet to receive a formal response. In mid-April, four parties were shortlisted for the final selection of a transaction advisor. They are Hotelivate Pvt Ltd-India, Jones Lang Lasalle Property Consultants (India) Pvt Ltd, KPMG-Colombo and Lazard Asia Ltd -Singapore, official sources said. However this process too is likely to get delayed till an amendment is made to a vital piece of legislation. According to legal opinion from the AG, there is no provision for the sale of state assets that come under the Underperforming Enterprises Or Underutilised Assets Act 43 of 2011 including Hilton and Hyatt, unless there is an amendment to this law. (DEC)http://www.sundaytimes.lk/180520/business-times/foreign-buying-sinks-rs-1-7-bn-in-apr-2018-vs-rs-10-8-bn-in-apr-17-292909.html5 May 2018 @ 5:32 pmColombo shares, amid continued political uncertainty, have seen low foreign buying spilling into this month from April with some analysts saying the situation seems to be going down without any remission in sight. Foreign investors bought shares worth Rs.1.7 billion in April, sharply down from the 2017 April data which showed buying worth Rs. 10.8 billion. There's no support to the market in terms of policy or concessions which is causing this, stockbrokers said, adding that Colombo's share market is desperately calling for political stability and clear direction. A host of issues including increasing liquidity, listing state-owned enterprises (SOEs), speeding the Dollar Board and the Small and Medium Enterprises Board, Delivery Versus Payment (DVP) and new products such as Exchange Traded Funds, structured warrants, REITS and equity-linked derivatives etc, are still at large. Add to this, the delay in the commissioners of the Securities and Exchange Commission (SEC) being appointed has rendered the SEC rudderless on its fourth month. Ranel T. Wijesinha, a well-known accountant and corporate director, is said to have been appointed as the new chairman of the SEC, informed sources said but the appointment is yet to be announced. Mr. Wijesinha takes over from Thilak Karunaratne whose term ended in mid-January 2018.http://www.sundaytimes.lk/180520/business-times/workplace-accidents-ticking-time-bomb-292906.html5 May 2018 @ 5:29 pmKussi Amma Sera was disconsolate. Pointing to a news item from her favourite newspaper, she told her friend Serapina – during a conversation on the garden bench: “Mona aparadayakda, meka (what a tragedy).” Their discussion was over the recent deaths of five workers from ammonia poisoning at a rubber factory in Horana, south of Colombo. It was too far for me (the ‘respected’ nosy parker), from my office room window to pick up the rest of the conversation, as I normally do when the two women are in agitated mode. However, these few words were food for thought on this gloomy Thursday morning. For instance, are local workers adequately protected in factories and other workplaces against health, safety standards and/or hazardous work? These issues were also brought to the fore at an International Labour Organization (ILO) discussion on April 27 in Colombo to mark ‘World Day for Safety and Health at Work’ which is celebrated across the world on April 28. This year’s commemoration of this day centred on the safety and health of young workers. The ILO says that certain sectors and occupations are more dangerous than others and it’s important to protect workers in hazardous conditions – in what is often known as the “3D”, dirty, difficult and dangerous, jobs. The unfortunate deaths of the five Horana factory workers, two others at a spices factory at Dambulla and dozens of workers being hospitalised due to a gas leak at a garment factory at Ja-ela are some recent incidents that drew public attention. Raising these concerns, Ms. Simrin Singh, Director, ILO Country Office for Sri Lanka and the Maldives, told the Colombo meeting that situations like this arise since there is no proper occupational safety and health (OSH) mechanism in workplaces, particularly for the protection of young workers. Approximately 2.78 million workers die every year due to work-related accidents and disease, according to the ILO with more than 85 per cent of these cases being due to occupational illnesses. In the case of Sri Lanka, there are more than 4,000 accidents reported every year but this is far below the actual picture with the Labour Commissioner General, lamenting that the number should be much more since many accidents go unreported and reporting happens only when deaths occur or workers are hospitalised. Accidents of a ‘minor’ nature go unreported by workplaces – to avoid action or public attention -- and thus makes it difficult for policy planners to strengthen the framework to minimise accidents through stiffer penalties and upgrading safety measures. According to the latest Labour Department data, the number of industrial accidents (settled through compensation payments) rose to 439 in 2016, sharply up from 247 in 2015 and 249 in 2014. The number of (settled-compensation paid) fatal accidents also rose to 141 in 2016 from 125 in 2015 but was unchanged from 141 in 2014. However, as discussed earlier, this is just the tip of the iceberg and doesn’t reflect the actual numbers of industrial accidents. The voices of residents protesting against the Horana factory where five workers died are an echo heard across the country but muffled due to political interference. In the Horana case, residents had complained about the factory vis-à-vis environmental concerns but no action was taken because the factory owner was politically powerful and the residents and workers, powerless. Haven’t we heard this before – in every sphere of life where the authorities are slow to react or are inactive? Such cracks will happen, blatantly, since Sri Lanka is desperately wooing investment and politicians and officials could be persuaded to turn a blind eye to an investor ignoring laid down local and international standards in the safety and health of workers. The transparency of investments should not suffer at the expense of wooing investment at any cost. All investment-promoting agencies like the Board of Investment (BOI) or state tourism agencies (where investments) must strictly adhere to such, laid down guidelines in approving new investments. This is particularly so in the case of the booming construction sector where apartments and condominiums are multiplying at dizzy levels like the dizzy heights of the buildings. Are proper safety standards followed by building contractors particularly so when cheap foreign labour is hired? Reputed contractors would follow the rules but what about the others who are prone to bend regulations by greasing the palms of corrupt local officials – the collapse of a couple of buildings in Colombo and the loss of lives, being a case in point? Unlike years ago when the builders were unable to get a certificate of conformity (COC) quickly from strict local authorities to certify that the building has been built according to accepted standards (in some cases two to three years), today COCs are being handed so quickly that one wonders whether these constructions are ‘perfect’ or has money changed hands to fast-track the process. Many years ago, residents went to court against a building construction by a tuition master complaining that the partially completed staircase without a railing was a hazard to students. Rather than being praised for their concern for public safety, the petition was thrown out on a technical point. The residents in fact should have complained about the tuition class – like many classes in Colombo – being a nuisance to the neighbourhood, but opted to act as responsible citizens. For the record, here are the latest labour statistics from the Central Bank’s 2017 annual report released last week. In the country’s population of 21.4 million people, the workforce (described as the ‘economically active population’) reached 8.6 million and out of this 8.2 million persons were employed. This is made up of 26 per cent in agriculture, 28 per cent in industry and 45.5 per cent in services. While there may be enough laws to deal with imposing safety standards, penalties should be stiffer, offences made non-bailable and jail terms mandatory -- that is if they are already not in place. Interfering politicians and corrupt officials should be made to pay – as accessories to an industrial accident that failed to follow proper standards by bending rules through political meddling or bribes. In today’s environment, however, where politicians sway over laws (notwithstanding the arrest of a key presidential aide on Thursday while allegedly accepting a bribe, which is a rare case), the plea for action against politicians and officials is what one would describe as a ‘potta’ shot -- hitting blindly and, to the amazement of others, reaching the target! Kussi Amma Sera, as usual, has the last say on the subject. Coming into the house and listening to a tele-conversation (this time she is the nosy parker) I was having with my friend, good-for-nothing ‘Somey’, on this issue, she says (just as I finished the call): “Mahattaya, meka hari nehe. Mehema hariyanne nehe. Naththung, aanduwa paradai (Sir, this is not right. If this continues, the government will lose the election).” I laughed off her suggestion, telling her that this is the least of the problems of the political hierarchy in an unstable administration that is struggling for survival, and instead, picking up my guitar, sang Sunil Perera’s ‘Lankawe//I don’t know why song’, as she went to the kitchen to fetch my morning tea. The lyrics went like this: “Paga gahana hora amathila godak inne mona rateda? Engalanthe engalanthe !! (Only in England do you have corrupt politicians), or “Suddanta enna kiyamu//Ape rata balanna kiyamu//Balala igena ganna kiyamu api//Suddanta tuition demuko api (Invite the English to learn from great Sri Lanka// We can give them tuition on how to run a great nation).” The Horana issue is a classic case of a time bomb ticking away and the safety of workers at stake. Proper safety and health standards in workplaces are a must and should go hand in hand when promoting investments. Don’t wait for another tragedy.http://www.sundaytimes.lk/180520/business-times/ipencil-and-iphone-292901.html5 May 2018 @ 5:25 pmLeonard Read; I am not sure whether he was a poet or an economist, probably a “poetic economist”. He has published a lot. Among them, a famous short story titled “I, Pencil” which he published in 1958 in the magazine The Freeman, explaining the power of “invisible hand” or market mechanism. As this character in the story - the Pencil -, tells us, don’t lose market freedom that you enjoy: “If you can become aware of the miraculousness which I symbolise, (the Pencil talks), you can help save the freedom mankind is so unhappily losing.” I thought of taking a bit from this story to distinguish between old production and trade patterns and their modern emerging patterns. In doing so my purpose is to stress the importance of getting to know the global economic dynamics; otherwise when we realised that we have been left out from global dynamics, it might be too late for us. I do not intend to talk about market mechanism or economic freedom, as the Pencil does, but the underlying truth of my story is also the same. In the good old days… A lead pencil in Leonard Read’s story explains its genealogy: “Pick me up and look me over. What do you see? Not much meets the eye—there’s some wood, lacquer, the printed labelling, graphite lead, a bit of metal, and an eraser.” At that time - mid-20th Century, there were about one-half billion wooden lead pencils of this kind which were produced each year in the US. The wooden part of the pencil is made of a cedar of straight grain that grows in Northern California and Oregon. The cedar logs are shipped to a mill in San Leandro, California to cut into tiny and shiny dried pieces. The graphite lead comes from Ceylon (Sri Lanka) by ships. Graphite is mixed and blend with other chemicals such as clay from Mississippi and, wax from Mexico. Substance for its eraser is a rubber-like product made by reacting rapeseed oil from Indonesia. The pumice comes from Italy, and so on. As in this story, the pencil, seemingly simple, is made by millions of people working in different parts of the world who actually respond to nothing but the invisible hand or the market mechanism. All their responses were guided solely by an “invisible hand” resulting in a simple manufactured product - pencil. International trade at that time My point here is about the world’s international trade in the old days: The pencil is manufactured in one location. For its manufacturing process, “raw materials” are supplied and shipped from many other locations around the world. After the manufacturing process, the pencils are shipped back to many different parts of the world, including to those countries which supplied its raw materials. This is a main feature of the world trade pattern that dominated until the 1980s. The raw material suppliers were known as the countries in the South or “underdeveloped” countries. The producers of manufactured goods were known as the countries in the North or “industrialised” countries. Underdeveloped countries exported their agricultural produce and mineral resources as raw materials of manufactured goods to the industrialised countries. Manufactured goods were produced by industrialised countries and exported underdeveloped countries. It was the North-South trade pattern or trade between industrialised countries and developing countries. It was an exchange between raw materials and manufactured goods. Modern trade patterns [caption id="attachment_292903" align="alignright" width="400" caption="Garment factories like this are examples of how raw materials are sourced from others."][/caption] A main feature of the emerging modern trade patterns in the world is dominated by global value chains: most of the manufactured commodities are no more produced by a single company in a single country. Therefore, today it is difficult for us to find our favourite “authentic brands” produced in one country. Let me take a little-sophisticated manufactured good for an example - iPhone. Probably, iPhone is the most studied case and, the most quoted case study in respect of “globalised supply chains”. This is because Apple in the US is one of the companies that has used the globalized supply chain for the cost advantage of its iPhone without compromising on the quality. If Apple’s i-products such as iPhones, iPads and, iPods are made in the US, not only the cost would have been higher (causing higher price of the devices), but also the tax spending would have been higher (causing lower profit margins). Global outsourcing Apple’s iPhones are produced in and exported by China, according to international trade statistics. But in reality, they are produced in “parts and components” by many different companies located in many different countries, and finally assembled in China. Software development and product design takes place in the US. Then, different parts and components are produced and supplied by Japan, Germany, Taiwan and, South Korea. Companies in these countries are also said to have outsourced the fabrication of parts and components to some other companies located in the countries such as Singapore, Malaysia, Thailand and, Philippines. Apple’s i-products as well as many other electronic and electrical goods of different brands are now assembled in and exported by China. According to a study of the Asian Development Bank Institute in 2012 by Yuqing Xing, in 2009 China exported over 25 million iPhone units; each one was priced at US$ 179 out of which China had added $6.5 only. Similarly, in the same year China exported over 108 million units of laptops; each one was priced at $484 out of which China had added $14.5 only. What made it possible? Global outsourcing is the growing trade pattern today. In old trade patterns, as in the case of “I Pencil”, there is one manufacturer located in one country (most in an industrialised country), while other countries (particularly developing countries) are connected to it by supplying raw materials. In modern trade pattern that is still growing, countries are manufacturers producing “parts and components”, each one undertaking a task that it can perform at best: hence, the product is “Made in the world”. Even in our familiar manufacturing products such as apparel, footwear, sports goods, and rubber products, there is the presence of global supply chains. Apparently, global supply chains have multiplied the world’s capital flows, trade flows, transport, communication, and technology transfers. The cost of these activities of global connectivity should be small enough to make the global outsourcing more advantageous. In fact, with technological progress in these areas of connectivity and liberalisation policy reforms in developing countries it has been so and global outsourcing in production has been progressing. Policy implications Globalised supply chains allow countries to grow as groups rather than individuals. When China was growing there were many other countries that were growing together with China. Even a tiny increase in import duties or taxes can completely wipe out the possibilities of connecting to global supply chains. Therefore, trade liberalisation is an important condition that enabled developing countries to integrate with global supply chains. The development of global supply chains has made the old argument for “value added production” a redundant one. This might make some of us even angry about it. But what is important now is not the unit value addition, but the volume that is produced and exported. Sri Lanka South Asia has not performed well enough with respect to the development of globalised supply chains. According to the estimates by Prof. Premachandra Athukorala (2016), more than half of manufacturing exports from ASEAN countries comprised “parts and components” to global supply chains, while in South Asia it remains just a little more than one-tenth. The role of India in the South Asia region is also different from the role that was played by China in the East Asian region. India’s development is more of its own traditional lines; other countries in the region have not integrated with Indian supply chains. Even though it is not much, Sri Lanka has exhibited signs of integrating into global supply chains more than many other countries in the region. But Sri Lanka’s potential in this particular area production and trade is huge and not exploited yet. It requires policy reforms for global integration by recognising the global dynamics in production and trade. (The columnist is professor of economics at the University of Colombo. He can be reached at sirimal@econ.cmb.ac.lk).http://www.sundaytimes.lk/180520/business-times/india-remains-sri-lankas-major-trading-partner-followed-by-china-in-2017-292664.html4 May 2018 @ 9:01 pmSri Lanka’s exports surpassed US $1 billion for the fifth time propped up by apparel which topped $5 billion and considerable growth of 42 per cent in seafood, the Central Bank (CB) said in its 2017 report. However a year-end increase in imports hiked the trade deficit to over $1 billion for the first time since 2012, CB sources said. India remained Sri Lanka’s major trading partner last year, followed by China and the US - all these three countries contributed to around 40 per cent of total trade with island nation. Trade between Sri Lanka and India surpassed $5 billion in value in 2017 recording a share of 16.1 per cent of the country’s external trade, CB statistics showed. Trade with China and the US exceeded $4 billion and $3 billion respectively during the same period. In addition trade with countries like UAE, Singapore, the UK and Japan exceeded $ 1 billion. Trade between Sri Lanka and countries like India, Singapore, the UAE, Japan and the US increased in 2017 compared to the previous year while trade with China and UK declined. Continuing the trade patterns observed in previous years, western countries especially the US and the UK continued to be the main destinations for Sri Lankan exports, while India and China in Asia dominated local exports. Despite a double-digit growth in exports surpassing $1 billion for the fifth time in the year, Sri Lanka's trade deficit also widened to exceed $2 billion mark in December 2017, according to the CB data released in its External Sector Performance Review. On a cumulative basis, exports earnings during 2017 was up by 10.2 per cent (year-on-year) to $11.36 billion, with higher earnings from tea, rubber, garments, seafood exports, spices, petroleum products and minor agricultural products. Last year the trade deficit increased by 8.4 per cent to $9.62 billion from $8.87 billion recorded for 2016. Despite earnings from exports rising at a higher rate, the increase in import expenditure has resulted in a widening trade deficit in December 2017 by 7.5 per cent to $1.029 billion. Earnings from exports increased by 18.7 per cent in December 2017 to $1.02 billion from $ 859 million in December last year. Earnings from textiles and garments exports contributed largely for this growth. Revenue from textiles and garment exports continued to increase significantly in December 2017 with increased exports to the European Union (EU) following the restoration of the GSP+ facility in May 2017.http://www.sundaytimes.lk/180520/business-times/ntbs-open-api-to-disrupt-the-financial-services-industry-292658.html4 May 2018 @ 9:00 pmThe future of banking as a whole is in for some serious disruption and it will be challenging to stay as a key player in the financial services sector if you don’t go digital, a top official in the banking sector emphasised. Nations Trust Bank (NTB) for the first time in Sri Lanka launched the Open Application Programming Interface (API) banking platform. NTB’s customers can integrate the bank’s services directly into their own systems and workflows with the Open API. It’s a set of clearly defined rules of communication that allows customer’s systems to efficiently communicate with the bank’s systems securely. At a media briefing held at the bank’s’ head office in Colombo last Tuesday, NTB Director and CEO, Renuka Fernando said, “If we are to stay relevant as a key player in the financial services industry, it is imperative that we go digital. Our assessment of the future of banking indicates that the sector as a whole is in for some serious disruption. The disruption will not come from who we consider as competitors but from those who are not even banks.” If you look at the retail transactional traffic, about 50 per cent is on digital channels, she added. Ms. Fernando elaborated that the historical attitude and behaviour of banks was more like a fortress, very closed mainly because of security, secrecy laws and confidentiality. Banks traditionally do not share information or give access to their systems and are very shy to collaborate with partners. But the trends in the future of banking will be one of safe public spaces, openness and inclusivity. “We will have no choice but to collaborate with it if we are to stay relevant,” she noted. Nations Open API platform will allow third party systems to directly interact which will lend itself to creating a framework for collaborative innovations and progress. The potential for open banking is unlimited. It can be used by start-ups, large corporates, small and medium size enterprises, independent application developers and even tech savvy individuals in their own businesses providing third party solutions. Typical use case scenarios include online purchases, fund transfers,Enterprise Resource Planning (ERP) integration, cash flow management and white label services, Ms. Fernando explained. As more banks begin to open up their systems through Open API banking, the real potential of this mechanism will be unleashed. Customer credit worthiness for lending will be easily assessable as the information will be available and customers will be able to secure the best rates and terms. Managing money across accounts at different banks will also be possible through a single access point of the customer’s choice in the future and the customer will be able to decide whether or not to share their information.http://www.sundaytimes.lk/180520/business-times/safety-standards-lacking-in-most-lankan-factories-292655.html4 May 2018 @ 8:58 pmRecent incidents like the horrifying deaths of five workers from ammonia inhalation at a Horana rubber factory and two others at a spices factory at Dambulla also due to poisonous gases, are due to lack of proper safety and health standards. Flagging these concerns, Ms. Simrin Singh, Director, ILO Country Office for Sri Lanka and the Maldives, also referred to the case of around 100 workers suffering from a gas leak at a Jaela factory and said that there is no proper mechanism available in the country where occupational safety and health (OSH) is concerned. She was speaking at a workshop on “World day for Safety and Health at Work – ‘Improving the safety and health of young workers” held last week at the Galadari Hotel Colombo. This year’s campaign focusses on improving the safety and health of young workers and is part of a joint campaign linked with the 2018 World Day against Child Labour on June 12 to focus on hazardous child labour. She said that the news of these tragedies should bring the issues of health and safety of workers to the forefront and indicated that these worker deaths have brought the working conditions in the factories across the country under scrutiny and spotlight and stressed the importance of improving OSH for young workers. Ms. Singh said that OSH for young workers has two benefits: Creating safe and healthy workplaces that meet the needs of young workers, and reducing the number of children engaged in hazardous child labour. Young workers are identified as those between the ages of 18 and 24 years and ILO statistics show that they suffer much higher rates of non-fatal occupational injuries than adults. In the EU countries it is 40 per cent higher and in the US it is double the amount. Employers-formal and informal enterprises, and family businesses, need guidance on the risk factors to young workers. It is also essential that young workers are to be able to exercise their rights and voice their concerns. Many countries are making significant investments in young people’s employment, education, training, skills development and job creation. It is critically important to include occupational safety and health (OSH) in these programmes. Some trade unionists present at the forum told the ‘Business Times’ (BT) that the Labour Department is one place infested with bribery and corruption where decisions against the workers could be manipulated. During the discussion, Leon Joseph, Secretary, National Free Trade Union pointed out that in one incident there were 350 workers taken to hospital, 100 were treated in-house, three were treated in the intensive care and one died. Mysteriously, the medical officer who held the post-mortem on the death of the worker ruled that the death was due to natural causes, but when the family of the worker protested and a second post-mortem was held, a completely different verdict was returned. This shows the extent of corruption and even such professionals like medical officers could be influenced. Mr Joseph said that most of the employers do not want to reveal these accidents and in many instances they try to hide them as they are usually caused due to their negligence. Making a comment, Tissa Jayaweera, Managing Partner, TJ Associates stated that the biggest fault in this country is education and as though this country boasts that it is a country of 98 per cent literate, it doesn’t reflect that the people are educated. He said: “That is where the industrial safety and health comes in. If people are educated on the importance of their own life we will have less accidents”. He said that all available data on these issues in the Health Ministry, etc should be published as such data can be used to educate people of the importance of protecting themselves. The presentations followed a ‘Panel Discussion on the multidimensional approach to improving occupational safety and health for young workers” moderated by Ms. Simrin. Ananda Wimalaweera, Commissioner General of Labour conceded that though the Labour Department is responsible to enforce the legislation with regard to the industrial accidents, the complaints made by the people that his ministry is inactive is true. He said that they do not have sufficient factory inspection engineering officers, though they receive many complaints from all over the country.http://www.sundaytimes.lk/180520/business-times/move-over-miami-vice-new-look-tourist-police-to-help-safeguard-foreigners-292652.html4 May 2018 @ 8:57 pmIt will not be exactly Armani, but our tourist police will soon be wearing more public-friendly uniforms and they will have gear to match, including jet-skis, as the government attempts to raise its game in the face of growing criticism from the tourism sector that the industry lacks the infrastructure to provide visitors a safe and friendly environment. The sartorial overhaul for the long arm of the law was one of the few nuggets of information to come out of a long-winded seminar titled ‘Managing Issues, Change and Reputation for the Future of Tourism in Sri Lanka’ organised by advertising agency Bates Strategic Alliance and its consultancy NGage, last week. The recent sexual harassment and assault of Dutch tourists in Mirissa had prompted Nimal Gunewardena, chief executive of Bates to take on the onerous task of highlighting the challenges facing the tourism industry. Nine stakeholders, including Bates who have been involved in the promotion of tourism in this country for a long time, addressed a packed seminar at the Lakshman Kadirgamar Institute. Each speaker – many leaders from the industry - was given a seven-minute time limit to make their presentation. Many went over the allotted time. Nine times seven minutes is more than an hour. Yes, the seminar dragged on and it was hard to pick out the rare gems of information for most were calls for the government to act. Action plans are many, but whether it will be implemented is another matter was the cry from the audience. But one plan which will be implemented shortly will be the refurbishment to the wardrobe of the tourist police. Goodbye khaki, instead the Cops will be attired in a “less-threatening’ uniform, according to Kavan Ratnayaka, chairman of the Sri Lanka Tourism Development Authority. “It will not be Armani or any Italian style, but we will get help from Hameedias who will provide the uniforms which will be more attractive and look less threatening,” Mr. Ratnayaka revealed. Apart from looking good, the Tourist Police -to be bolstered by 300 officers - will also feel good as they will soon learn the rudiments of key languages spoken by the majority of visitors to Sri Lanka with the British Council giving a helping hand (in English) as well as the Indian and Chinese embassies providing lessons of Hindi and Mandarin. “We have also bought equipment which will help the Tourist Police in their duties, things like jet-skis,” Mr. Ratnayaka disclosed. Miami Vice move over. Mirissa Vice is on the scene. But will our lawmen be as good as Don Johnson? Many foreigners, and indeed locals, feel there is no rule of law in this land and that on some occasions, they are indeed hand-in-hand with the local government officials and toughs of the area. How to get rid of the political influence and implementation of well-meaning plans was the chorus from the audience. Already Mirissa has come under the microscope. The perpetrators of the Dutch assault are under custody, the restaurant where the incident happened has been closed and the beach is patrolled by police diligently. Sanath Ukwatte, president of The Hotels Association of Sri Lanka (THASL), welcomed the damage limitation and called to strengthen the rule of law. “The recent incident in Mirissa has left a bad impression on the country but having said that Sri Lanka is safer than most other tourist destinations,” Mr. Ukwatte, chairman and managing director of Mount Lavinia Hotel said. “We have to impose severe punishment on the culprits (Mirissa incident) as an entire livelihood is at stake. There are more than 200,000 people employed in the tourism industry and they have to be educated too. But I feel Mirissa is also a blessing for it has created awareness that we need to act fast on getting so many things right,” Mr. Ukwatte added. Hiran Cooray, chairman Jetwing Hotels, called for a positive attitude from the movers and shakers in the industry. “We have to talk positively of our country, not doom and gloom. We need people to come and invest in the tourism sector and they must go into areas where tourists are not going at the moment.” Addressing the subject of uncontrolled over-visitation and inadequate facilities, Srilal Miththpala, a past-president of THASL and a wildlife enthusiast pointed out that the country’s tourist hotspots Sigiriya, Kandy and Yala had reached a plateau and saturation point in terms of numbers of visitors. “The leopard in Yala is now so used to vehicles that he even comes out and powders his nose in front of them. Every day 340 vehicles enter the park and this number reaches 700 on holidays. In 2016, 273,000 people visited Yala and the revenue earned was Rs. 7.4 billion with six billion going to hotels in the area. Rs. 500 million was earned by drivers so we cannot just close shop as an entire community is dependent on tourism,” Mr. Miththpala disclosed. Sri Lanka should take lessons from Kenyan wildlife parks according to Mr. Miththpala. “In Kenya there is a sighting protocol. When an animal is sighted, a jeep is given 10 minutes so that the tourists can take photos then they have to move on. In some parks in Costa Rica, they allow 50 people to go in only when 50 people come out.” Harith Perera, president of Sri Lanka Association of Inbound Tour Operators revealed how digitalisation had turned the industry upside down. “There are 2,131 hotels listed by the SLTDA but on Bookings.com the number is 12,500. SLTDA has 36,000 registered rooms while this number is 90,000 online.” The Mirissa incident could be used as a launching pad by tourism authorities in the country, according to Jean-Marc Flambert who used his years of experience in Saint Lucia as a case point. Mr. Flambert said the tiny Caribbean island had turned around its industry despite a number of bad events including killings of tourists. “There was a lot of bad publicity but despite this the island has a vibrant tourist industry. Sri Lanka can also use Mirissa as a turning point to help more this country’s tourism industry into the future.” Hotelier Amal Goonetilleke said Sri Lanka had a lot to do if it was to sell itself as a luxury destination saying: “We lack proper destination branding and there is no marketing strategy.” On the same subject, former Sri Lanka Tourism Promotion Bureau chairman Rohantha Athukorala said that despite all the advantages the country had – diverse, compact size and authenticity – it had never been innovative. “The last good product we had was brought out in 1972, the Pinnawela elephant orphanage. We have got to tell our story to the world and be innovative like the tea and apparel industry,” Mr. Athukorala said. The last word came from Nimal Gunerwardene, whose company is celebrating its 25th anniversary this year. “This is a huge subject and the Sri Lanka Tourist Development Authority has brought out a four-year strategic plan which requires close collaboration between the private and public sectors.” And in this plan is a new-look tourist police force. Suave, sharp and smart. Hope they can keep those beach boys in place – and allow the tourists to roam free.

Tourism industry dismayed by reversal in order to dismantle illegal Mirissa structures

Sri Lanka’s premier group of travel agents have expressed concern and dismay over a decision to suspend the announced removal of unauthorized structures in the southern coast town of Mirissa after attacks on tourists. The Sri Lanka Association of Inbound Tour Operators (SLAITO) said in a statement that it was “disturbed to learn, that days (after the decision to remove these structures), the Coastal Conservation Department (CCD) has decided to suspend the removal of illegal constructions on the Mirissa and Weligama coastal belt until further notice, going against assurances given to the tourism industry, the previous week. SLAITO members are disappointed to hear about the suspension as this issue is being monitored by tour operators who are waiting to see a swift response from authorities as they are responsible for the safety of tourists they send to Sri Lanka. It said that in the wake of the brutal attack on Dutch tourists at a beach bar in Mirissa, Tourism Minister John Amaratunga proactively called all stakeholders to meet together without delay. “The Sri Lanka Police, the Ministry of Law and Order, the SLTDA and the CCD were present at the meeting where the Minister assured them and the tourism fraternity as a whole, that swift action would be taken to ensure the removal of unauthorised constructions in the area,” the association said. On receiving his assurances, SLAITO in turn assured foreign tour operators that the issue was under control and is being appropriately managed by the relevant authorities. Days later came the suspension order. The illegal establishments identified for removal are a compliance and safety risk and have resulted in creating a dangerous and unsafe perception of Sri Lanka tourism. “This is probably the worst public relations for the country at a time when the government is relying on the tourism sector to bring in precious foreign exchange,” SLAITO added. The association urged the Government to proceed with the initial decision, as not coming down hard and strong on such attacks against tourists will effectively kill the industry and keep tourists away for fear of more such attacks. Undoubtedly, by suspending the effective and punitive measures that were taken, other disruptive elements will be emboldened to copy such attacks which go against the culture and hospitality of Sri Lanka itself, it said. “Any leniency in implementing the law, especially in a high profile case such as this; which has received worldwide attention, will result in negative word-of-mouth publicity that will take years to correct,” the association added.

http://www.sundaytimes.lk/180520/business-times/hutch-etisalat-merger-will-ease-competitive-pressure-fitch-292650.html4 May 2018 @ 8:55 pmThe merger between Hutchison Telecommunications Lanka (Pvt) Ltd and Etisalat Lanka (Pvt) Ltd is likely to relieve some competitive pressures that have undermined Sri Lankan telecom companies' revenue and EBITDA growth in recent years, says Fitch Ratings. But it is unlikely to affect the ratings on market leaders Sri Lanka Telecom PLC (SLT) and Dialog Axiata PLC. This is because SLT's 'B+' Long-Term Issuer Default Rating will continue to remain constrained by the Sri Lanka sovereign rating, while the 'AAA(lka)' National Long-Term Ratings on SLT and Dialog are at the highest level of the scale, the ratings agency said in a media release on Tuesday. The long-overdue industry consolidation, announced on April 26, is likely to provide some relief from pricing pressure, especially in the data segment, where telcos have not been able to fully capture the strong growth in data traffic. However, Dialog and SLT's free cash flows will continue to be negative, despite potential of larger cash generation, because they need to invest to expand their fibre networks and infrastructure to address fast-growing data demand. “We expect the merged Hutchison-Etisalat entity to also accelerate its 4G capex investment to strengthen its network position to catch up with Dialog and SLT. The Hutch-Etisalat merger will create the third-largest telco and reduce the number of participants in the mobile market to four from five. The merged entity will rank behind Dialog and SLT in the mobile market and ahead of Bharti Airtel Ltd's (BBB-/Stable) Sri Lankan subsidiary, Airtel Lanka. The combined entity will benefit from greater revenue share of around 10 -12 per cent in the mobile market, below the 24 per cent of second-ranking SLT. It will boost its spectrum portfolio to 50MHz, higher than Dialog's mobile spectrum portfolio of 47.5MHz but the same as SLT. Importantly, it will have 15MHz of spectrum in the cost-efficient 900MHz band, compared with 7.5MHz each for SLT and Dialog, which it will likely use to roll out 4G networks,” Fitch said. “We do not foresee the Hutchison-Etisalat merged entity threatening more price competition or taking significant market share from Dialog and SLT in the short to medium term as they each have struggled to make meaningful EBITDA profits and have high capex requirements. Both Dialog and SLT benefit from entrenched market positions, backed by solid network positions and established customer bases. Hutchison-Etisalat may lose some market share in the process of integrating their operations, as it is natural when such large telcos combine. The merger requires regulatory approval and is expected to complete in 2H18,” it added. Sri Lanka's telco industry is characterised by intense competition, with mobile operators fighting for a share of the relatively small addressable population of 21 million people. Smaller telcos have struggled to gain meaningful market share as a regulatory-mandated tariff floor on voice at Rs. 1.5 per minute provides them with little flexibility to compete in the voice segment. Further, telcos have faced frequent bouts of tax increases, which have hastened the industry consolidation, Fitch said.http://www.sundaytimes.lk/180520/business-times/chinas-chec-to-construct-blue-mountains-iconic-7-star-achilleion-project-292648.html4 May 2018 @ 8:55 pmSri Lanka’s Blue Mountain, has signed an agreement with China Harbour Engineering Company Ltd. (CHEC) to build Achilleion, its Seven Star Luxury Project, which will be a landmark development in the country and the South Asian region, the company said in a media release. Currently, CHEC operates in over 80 countries around the world and in Sri Lanka is responsible for building the eagerly awaited Port City project. “By coming onboard the iconic Achilleion project, CHEC is affirming the credentials of the project and the vision of Blue Mountain. Located in the heart of Colombo 4, Achilleion is set to make an iconic appearance on Colombo’s skyline and will feature all-new levels of seven star luxury and innovation. The 50-storey twin tower apartment complex will consist of 584 luxury units of one, two or three bedroom apartments, duplexes and penthouses with more than 85 per cent of the apartments enjoying glorious view of the Indian Ocean,” the release added. This state-of-the-art complex will also feature Sri Lanka’s first-ever sky bridge, the tallest sky restaurant by sea and an infinity pool, which will offer breath-taking views of the Indian Ocean and the vibrant Marine Drive stretch. Other facilities include a 24-hour medical centre – the first of its kind to operate in a private residential complex, a comprehensive library and a private theatre.http://www.sundaytimes.lk/180520/business-times/boardpac-ranked-among-top-25-global-collaboration-technology-cos-292646.html4 May 2018 @ 8:53 pmBoardPAC, the Colombo-based developer of the award-winning iPad-enabled paperless board communication and meetings solution of the same name, has been ranked among the global Top 25 Collaboration Technology Companies in 2018 by CIO Applications, US, a leading media brand and sought-after magazine. This accolade is based on BoardPAC’s success in providing collaboration technology solutions to help clients build competitive advantage and transform their businesses. It recognises the value of the BoardPAC solution in enabling businesses to move a step ahead by adopting the best in technology to streamline the process of sharing information seamlessly and making decision making more efficient, the company said in a media release. Commenting on this recognition, Ms. Lakmini Wijesundera, Director and CEO of BoardPAC, said: “BoardPAC was founded to revolutionise board meeting procedures and to enhance convenience, security and speed of decision making. For a Sri Lankan multinational company to be named among the Top 25 globally in this sphere is a significant achievement and recognises the extent to which our product has transformed ways in which board meetings are conducted in many parts of the world.” Chief Operating Officer of BoardPAC, Rajitha Kuruppumulle added: “Collaboration Technology is an exciting field that challenges us to look for ways to innovate meaningfully using the latest developments in ICT to make a significant difference in processes and to promote eco-friendly practices like going paperless. In a relatively short period of time, BoardPAC has been adopted by companies in economically and culturally diverse markets around the world, affirming the solution’s universal appeal.” BoardPAC is an effective and highly secure method for Board Directors and Management Committee members to access board and committee papers and supplementary information directly from their iPads, thereby eliminating the need for printing multiple copies of each document and couriering such documents to the directors. It also provides an easy way for directors to view all documents related to a board paper in a clear manner.http://www.sundaytimes.lk/180520/business-times/privacy-laws-will-come-into-play-soon-292644.html4 May 2018 @ 8:53 pmMany companies in Sri Lanka are unaware of the knowledge of Cyber Security Protection and that is why it is important to acquire knowledge on data protection and privacy application, according to Manish Sehgal, an industry leader of the Deloitte of India and in the Asian subcontinent, delivering a lecture on Cyber Security at the Galadari Hotel in Colombo recently. The event was sponsored by Deloitte Risk Advisory team at a round table conference on “General Data Protection Regulation” known as GDPR, borderless sector with neutral legislation that applies to any organisation (located even outside the EU) that collects, processes, transfers, stores or destroys EU customer’s data. With a compliance deadline of May 2018 fast approaching. Topics such as “GDPR Overview”, “Approach to Compliance”, and “Privacy by Design” was discussed. Mr. Sehgal said that the word privacy is being interpreted in different ways by many persons and therefore it was important to know what privacy is all about. Illustrating a point, he said that privacy was like that of a tag being put on the door outside of the hotel room cautioning others that they should not enter his world without his permission or not to disturb the occupier. He said the same principle applies to corporate bodies when it comes to private data. Referring to SMS messages, he said many who receive SMS do not have any inkling from where they get it from or who sends it to them especially by marketing promotional campaigns. “From where did they obtain mobile numbers to send such messages have now become a puzzle to its recipients.” Alas the consumer community is now paying much more attention to it as it revolves privacy.” He said when someone sends his individual data to a corporate body does that mean that it belongs to corporate or to the sender. In fact when an individual provides data to a corporation, he assumes the corporate to be the sole custodian of such data and the data will not be misused at any cost. It also empowers an individual to be the rightful owner of such data.” However the consumer community is now losing faith in corporate bodies. “When somebody engaged in a marketing campaign asks for my mobile number I am a bit apprehensive because I do not know for what purpose my mobile number will be used or to whom it will be sold for an illegal purpose.” He said privacy promotes an individual to own his own data. "If my private data is used for a commercial purpose without my consent, it is a breach. But as long as long as the intention to use data is correct everything will be alright.”http://www.sundaytimes.lk/180520/business-times/world-bank-100-mn-support-to-help-sri-lanka-modernise-education-292642.html4 May 2018 @ 8:51 pmThe World Bank Board of Executive Directors last week approved a US$100 million credit to support Sri Lanka’s efforts to strengthen and modernise its education system. The General Education Modernisation Project (GEM) will modernise and diversify the curriculum of general education in keeping with the transformation taking place in Sri Lanka’s society and economy. Greater emphasis will be on strategic subjects that are key for economic development such as English and Mathematics. The project will help broaden choices at the GCE A-level grades so that students have the flexibility in selecting subjects from among the arts, management, science, technology, and vocational streams. Learning material for English language and Mathematics will be developed digitally and the focus will be on children from schools located in more disadvantaged regions, the bank said in a media release. “Sri Lanka has made impressive progress in expanding access to education. However, to reach the status of an Upper Middle-Income Country, it needs to further improve the overall learning outcomes. Sri Lanka’s education policy makers recognize that a high-quality general education system will enable students to meet the demands of 21st century jobs,” said Idah Z. Pswarayi-Riddihough, World Bank Country Director for Sri Lanka and the Maldives. “We are happy to partner with the government to ensure that all children have the opportunity to gain foundational skills, especially in Mathematics and English, needed to participate in Sri Lanka’s economic growth,” she added. The project will benefit school students both at the primary (grades 1-5) and at the secondary (grades 6-13) levels. Technical education and vocational training institutes, academic and managerial staff of the schools will also benefit from this project. The World Bank has been a longstanding partner of Sri Lanka in the education sector. The Transforming School Education System Project (TSEP), supported by the World Bank, has helped the country increase the survival rate of students from grades 1–11 (ages 6–16) to over 87 per cent; introduced a regular cycle of national assessments of learning outcomes, and started School Based Management (SBM) to support the administration of schools in all zones. In addition, TSEP helped in strengthening the capacity of the decentralized tiers of education administration. “GEM will support the government to modernize the primary and secondary education system in line with international standards established in middle-income and high-income education systems.” said Harsha Aturupane, Lead Economist and World Bank’s Task Team Leader for the project, according to the release. “Successful implementation of the overall general education reform program and the key priorities supported by GEM should lead to improved learning outcomes and higher socio-emotional skills among students,” he added. The General Education Modernisation Project will build on the experience and lessons learned from TSEP and strengthen the World Bank’s support to the general education sector.http://www.sundaytimes.lk/180520/business-times/dfcc-post-tax-profits-drop-in-1q2019-but-positive-on-growth-292640.html4 May 2018 @ 8:51 pmThe DFCC group, for the quarter ended 31 March 2018, recorded a pre-tax profit of Rs. 1,545 million and post-tax profit of Rs. 1,110 million, down from Rs.1,647 million and Rs. 1,301 million respectively in the comparative period in 2017. In terms of the bank alone, the post-tax profit was Rs. 1,074 million compared to a higher Rs. 1,267 million in 2017, the group said in a media release. A growth of 17 per cent was recorded in total operating income amounting to Rs. 4,093 million for the quarter ended 31 March 2018 compared to Rs. 3,503 million in the comparative period in 2017. However due to the higher charge for impairment as a result of the bank’s prudent provisioning policies, the net operating income recorded a growth of just 4 per cent. DFCC said it achieved a notable growth in its core business operations during the quarter under review. During the current period, net interest income grew by 29 per cent to Rs.3,342 million from Rs. 2,581 million in the 1st quarter of 2017. Operating expenses increased by 18 per cent to Rs. 1,579 million due to branch expansion and business promotions that were carried out during the first quarter 2018. The bank’s loans to and receivables from other customers (loans and advances) grew by Rs. 35,475 million to Rs. 222,588 million, up by 19 per cent. An increase in the bank’s deposit base was due to increased growth in time deposits versus savings which is reflected in the first quarter. Commenting on DFCC Bank’s financial results, Lakshman Silva – CEO, DFCC Bank, said, “The overall performance of the quarter indicates that DFCC Bank is well positioned to serve the nation as a commercial bank through a range of financial services that will promote wealth creation across the country. Whilst planning our growth strategy we have set into motion an array of financially prudent measures, digitalisation initiatives, customised financial solutions coupled with convenience, branch expansion and other innovative products and services to position ourselves to becoming the preferred consumer bank in the banking landscape.”http://www.sundaytimes.lk/180520/business-times/ifc-invests-in-melwa-hotels-hilton-brand-292637.html4 May 2018 @ 8:50 pmIFC, a member of the World Bank Group, is investing US$27 million in Melwa Hotels and Resorts Pvt Ltd towards the development of three hotels across Sri Lanka. The investment will increase Sri Lanka’s capacity in the tourism sector, create jobs, and generate more foreign exchange. The hotels will be operated by Hilton Hotels, IFC said in a media release. [caption id="attachment_292638" align="alignright" width="400" caption="Both parties after the agreement was signed."][/caption] The investment will help Melwa Hotels develop three new hotels outside of Colombo, in Yala, Kosgoda, and Negombo. A subsidiary of Melwire Rolling Pvt Ltd, the company is a new entrant to Sri Lanka’s tourism sector. “In addition to the funding, Melwa will also benefit from IFC’s expertise and advice as we diversify into tourism,” said P. P Muruganandhan, Managing Director of Melwa. “The access to global experts and sectoral knowledge and best practices will be key to ensure that we build hotels that are profitable, sustainable and contribute to the local economies where they are located.” The tourism industry is a key pillar of growth for Sri Lanka’s economy. However, much of the country’s tourism potential remains under-developed, while other parts are growing in an unsustainable way. This project fits well with the Government of Sri Lanka’s goal to grow the tourism industry while minimising potential negative environmental and social impacts, the release said. “Investments in tourism lead to job creation, generation of revenues and foreign exchange and strengthens local suppliers,” said Amena Arif, IFC Country Manager for Sri Lanka and Maldives. “IFC will also provide advice to Melwa Hotels on how to manage environmental and biodiversity matters to minimise their environmental footprint.” The tourism industry is a major contributor to employment, foreign exchange earnings, and tax revenues for emerging economies. Hotels and tourism generate economic activity for small- and medium-sized businesses which supply goods and services both during construction and operations. IFC invests in hotels and tourism because of its strong development impact along the value chain, for employees, and the economy. Sri Lanka is a priority country for IFC. IFC’s committed portfolio in Sri Lanka covers projects across a range of sectors, including infrastructure, tourism, renewable energy, finance, and healthcare. IFC also provides advisory services to promote sustainable growth among small and medium enterprises by facilitating access to finance and by offering capacity-building and training opportunities.http://www.sundaytimes.lk/180520/business-times/aia-invests-in-creating-world-class-financial-advisors-292635.html4 May 2018 @ 8:49 pmAIA Insurance recently launched its AIA Premier Agency Circle (PAC), inaugurated by Regional Chief Executive Bill Lisle, CEO Pankaj Banerjee and Deputy CEO/Chief Agency Officer Upul Wijesinghe. Located in the plush office premises in the centre of Colombo’s business hub, the PAC office will be home to AIA’s new high performing sales personnel. AIA’s PAC office was opened with the objective of developing a fulltime Agency sales force with a focus on achieving Million Dollar Roundtable Table (MDRT) membership. This is intended at motivating higher performance with improved category achievement as well as the development of a professional full-time agency force to cater to Sri Lanka’s mass affluent clientele, the company said in a media release. AIA’s Chief Agency Officer/Deputy CEO Upul Wijesinghe noted that “newly recruited sales personnel will be trained at a fully digitised, wireless and paperless distribution office which is a dedicated training centre for PAC agents. AIA’s PAC is a pioneer and as of now the only one of its kind, ‘full time Agency’ concept in Sri Lanka.” Head Premier Agency Circle for AIA Sri Lanka, Shermal Fernando added, “MDRT is internationally recognised as the standard of excellence in the life insurance and financial services business. Its members are required to generate a higher level of production and demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service. Notably, AIA Sri Lanka had the highest number of MDRT members from Sri Lanka for two consecutive years. But we want to do more to ensure the best quality of sales personnel to serve our customers better. This is our endeavour to create a newer, better calibre of agency, as we accelerate our efforts be more customer centric.”http://www.sundaytimes.lk/180520/business-times/foreign-sentiment-signals-confidence-in-lankan-economic-performance-cb-292631.html4 May 2018 @ 8:48 pmSri Lanka’s Central Bank (CB) has stepped in to defend the Government against negative vibes and criticism of the economy. In a lengthy statement it said that in recent days, serious concerns have been expressed regarding the performance of the Sri Lankan economy. “In this context, it is instructive to gauge the level of external support for the Sri Lankan economy from international capital markets. This would be an independent barometer of the health of the Sri Lankan economy as international capital markets are hard-nosed in their assessments,” it said. Referring to several positive endorsements of the economy, the bank cited the following:

•  An International Sovereign Bond (ISB) amounting to US$2.5 billion (the largest ever) was successfully issued. It was 2.6 times over-subscribed. Large orders were placed by some of the world's largest and most reputed investment funds.
•  With the receipt of ISB proceeds, gross official reserves have increased to $9.9 billion which is historically the highest level.
•  There has been a very favourable response to the RFP for a term loan of $1 billion. The Government is considering upscaling this loan and to utilise the incremental proceeds to repay more expensive existing debt.
•  There have been foreign portfolio investments in equity, through primary and secondary market investment in the Colombo Stock Exchange to the tune of $9.6 million to-date in 2018. In 2017, inflows amounted to $278.5 million.
•  FDI flows of $1.9 billion in 2017 were an all-time record, albeit from a low base.

  In addition, staff-level agreement has been reached on the 4th Review of the IMF EFF, subject to Cabinet approval of the automatic fuel pricing formula. The 5th tranche of the IMF facility is expected in June 2018. “After June 2017 the IMF has issued several positive statements regarding improving macroeconomic stability and outlook. Last year two ratings agencies namely S&P and Fitch changed the outlook to stable from negative,” the CB said. “The above reflects positive sentiment regarding the performance of the Sri Lankan economy and its prospects on the basis of independent assessments made by external parties who have backed this by inflows of their money into the country. It is imperative to build upon this by persisting with sound macroeconomic policies: fiscal consolidation, prudent monetary policies and a flexible exchange rate which supports the competitiveness of the economy. This should be supported by the acceleration of structural reforms to strengthen factor markets; improve the investment climate; boost investment promotion, introduce trade facilitation measures; and complete trade negotiations,” the statement said.http://www.sundaytimes.lk/180520/business-times/lankan-angel-network-and-ideamart-present-iamher-startup-spotlight-292629.html4 May 2018 @ 8:47 pmOnly 4 per cent of Sri Lankan start-ups have female founders, according to the “Start Up Sri Lanka 2015” report. To aid in bridging this gap, Lankan Angel Network and Ideamart recently presented the #IAMHER Startup Spotlight. Kicking off with a panel made up of well-respected industry leaders like Linda Speldewinde, Founder of AOD Colombo and Fashionmarket.lk; Indira Malwatte, Chairperson of Sri Lanka’s Export Development Board; Chitranganie Mubarak, former Chairperson of Sri Lanka’s ICT Agency; Anoji De Silva, Partner at Ernst & Young and Lakmini Wijesundara, Co Founder and CEO of Iron One Technologies, the introductory session of this half-day program focused on the common challenges faced by women entrepreneurs. The audience, comprising female founders of startups, as well as other women entrepreneurs, also received valuable advice on how they could overcome issues and thrive in the local marketplace, according to a media release from the organisers. Geared towards building and supporting a gender balanced startup ecosystem, #IAMHER is an initiative by the Lankan Angel Network, Sri Lanka’s largest network of angel investors, and Ideamart, a web-based platform where anyone can utilize telco APIs to create their own services and make it a revenue generating tool. It is the aim of the #IAMHER initiative to foster and give due recognition to women led ventures, while at the same time increasing the participation of female angel investors in the startup ecosystem. Endorsing the #IAMHER initiative, Ms. Speldewinde noted that stories of strong and impactful women entrepreneurs were positive messages that were particularly important today. Women must take the initiative and inspire each other, striving to become change makers instead of being portrayed as victims. Ms. Speldewinde is also a patron of the Lankan Angel Network, which also features other highly-respected women leaders as members, including Padmaja Ruparel, President of Indian Angel Network; Anarkali Moonesinghe, CEO Sri Lanka of CIMB Investment Bank, Shehara Jayawardana, Group Joint Managing Director of McLarens Group and Tamara Dunne, Project Director at Unity Group (Singapore). Speaking at the event, Ms. Malwatte brought in both public- and private-sector viewpoints, urging the assembled audience of young women entrepreneurs to be professional, pursue their dreams, and never let being women become a barrier. Adding to this, Ms. Mubarak commented that getting more women involved in the workplace made sense from an economic perspective, going on to indicate that studies show that when more women are included in decision making roles there was a 15 percent value addition.http://www.sundaytimes.lk/180520/business-times/jude-fernando-new-janashakthi-life-ceo-292626.html4 May 2018 @ 8:46 pmJanashakthi Insurance PLC has announced the appointment of Jude Fernando as the company’s Director / Chief Executive Officer with effect from May 1. “Having divested its General Insurance business earlier this year, Janashakthi has focused its efforts on the country’s underpenetrated Life Insurance segment. With Jude at the helm, Janashakthi Life is set to embark on a major growth drive to further strengthen its position as a significant player in the Life Insurance industry,” the company said in a media release. Mr. Fernando succeeds Stuart Chapman who resigned as Director/CEO of Janashakthi Insurance PLC due to personal commitments. “It is my great pleasure to welcome Jude Fernando back to Janashakthi Life as he takes charge as the Chief Executive Officer of Janashakthi Insurance PLC. Jude has had an illustrious track record, both within Janashakthi, and previously at leading local giants such as Cargills Manufacturing Brands, Hemas Group and Kotmale Holdings PLC. Coming in at a time when we look to bring renewed focus on our Life business, I look forward to seeing him build on its strong fundamentals and drive it to greater heights,” said Prakash Schaffter, Managing Director of Janashakthi Insurance PLC. The Board of Directors of Janashakthi Insurance PLC comprises Husein Esufally, Chairman; Prakash Schaffter, Managing Director; Jude Fernando; Ramesh Schaffter; L. C. R. de C. Wijetunge; Ms. Anushya Coomaraswamy; Ms. Manjula Mathews and Eardley Perera.http://www.sundaytimes.lk/180520/business-times/sri-lanka-in-tough-negotiations-to-finalise-trade-agreement-with-india-292624.html4 May 2018 @ 8:46 pmSri Lanka is currently in tough negotiations on finalising a new trade agreement with India this year and the two countries so far have conducted eight rounds of negotiations, a senior cabinet minister said adding that the proposed arrangement will encompass trade in Services, Investment, and Economic and Technology Cooperation. The country needs a longer-time period to negotiate a free trade agreement with China as it is concerned about the economic impact of a hurried deal, he pointed out. The two countries have already conducted seven rounds of negotiations, and some issues in the negative list should be sorted out, he added. Large and smaller Singapore companies looking to invest in Sri Lanka will benefit from the new free trade agreement signed in January this year with the approval of the cabinet, Minister of Development Strategies and International Trade Malik Samarawickrema told a media conference in Colombo on Friday. It will see Singapore companies enjoying potential tariff savings, among other benefits while deepening economic ties and facilitates greater trade flows between the two countries, he claimed. Sri Lanka will, over 15 years eliminate tariffs on 80 per cent of Singapore’s exports and the agreement also includes one of the most liberal rules of origin, which will allow more exports from Singapore to qualify for the lower tariffs Singapore and Sri Lanka are also committed to granting better access to each other’s services markets. In the meantime Foreign Direct Investment (FDI) into Sri Lanka grew to US$1.9 billion in 2017, more than double from the $802 million achieved the previous year, Minister Samarawickrema said. This FDI growth was a direct result of the Government’s reorientation of economic policy towards investment and export driven growth, rather than debt-funded public infrastructure spending, he noted. The FDI target for this year is $2.5 billion and of this the country has been able to attract $465 million during the first three months although the target was $315 million, he revealed. The Board of Investment (BOI), the agency tasked with promoting and facilitating FDI, has approved $1 billion worth of projects during the first quarter of this year with considerable growth across key sectors, Minister Samarawickrema said. Among the highest growth sectors were export-oriented Manufacturing (+27 per cent) and Services which includes Tourism and IT (+50 per cent) and Infrastructure (+190 per cent). The highest FDI came from China, followed by Hong Kong, India and Singapore. Over the past two years, the BOI has targeted both new investors, leveraging the country’s strengths and advantages, as well utilizing existing investors to increase reinvestments and to utilize their external networks to bring in new investors in sectors such as export-oriented manufacturing. The BOI will set up new export promotion zones in a 400 acre land in Bingiriya and in another 165 acre site in Mawathagama and separately in Milleniya shortly and the budgetary allocation for the new zones will be Rs. 2.5 billion, he disclosed. Sri Lankan merchandise exports have also grown to over $15.1 billion in 2017, while this year’s target will be $17.4 billion, he said adding that Sri Lanka reached 1$ billion in export revenue during the first quarter of 2018.http://www.sundaytimes.lk/180520/business-times/keells-and-cargills-food-city-to-increase-buying-vegetables-direct-from-farmers-292621.html4 May 2018 @ 8:45 pmThrough the intervention of Minister Dr.Sarath Amunugama, the two biggest consumer products trading organizations in Sri Lanka, Keells and Cargills Food City have commenced the purchase of vegetables direct from farmers as an immediate solution to the serious problem farmers in the vegetable growing areas in the hill country and other areas like Polonnaruwa, Anuradhapura and Dambulla were facing in recent weeks. [caption id="attachment_292622" align="alignright" width="400" caption="Minister Sarath Amunugama and officials at the discussion."][/caption] A meeting was held recently at the Presidential Secretariat under the chairmanship of the Minister, to discuss the problem faced by vegetable farmers. Austin Fernando, Secretary to the President, other relevant Ministry Secretaries and Government Agents participated at this discussion. “The Minister went into this problem in detail at this conference. The Minister directed the Government Agents regarding the course of action they should take in regard to this matter,” a media release from the Minister’s office. During the course of the discussion, the Minister contacted heads of the two biggest consumer trading chains, Keells and Cargills Food City and requested them to begin purchasing vegetables direct from the farmers. Accordingly these organizations have now started purchasing vegetables from the farmers. Informed sources said that these supermarkets with Cargills Food City setting the trends are already sourcing their produce direct from farmers.http://www.sundaytimes.lk/180520/business-times/dialog-axiata-ideamart-to-host-south-east-asias-largest-google-event-292615.html4 May 2018 @ 8:44 pmSri Lanka’s most anticipated tech event of the year, ‘Google I/O Extended Sri Lanka 2018’ will be hosted by Dialog, Ideamart and the Google Developer Group Sri Lanka. It is expected to draw crowds in excess of 3,500, as South-East Asia’s largest Google I/O event. Dialog will kick off the event under the theme ‘A Connected World through IoT’, at the Sri Lanka Exhibition and Convention Centre on May 8 from dusk till dawn. [caption id="attachment_292617" align="alignright" width="192" caption="Keshan Sodimana, Country Engineering Consultant – Sri Lanka, Google"][/caption] [caption id="attachment_292616" align="alignright" width="192" caption="Prashanthan Balakrishnan – Google County Consultant – Sri Lanka"][/caption] A panel of speakers from Google, including Paul Ravindranath, Developer Relations Regional Lead, Google Inc; Keshan Sodimana, Country Engineering Consultant – Sri Lanka, Google Inc; Lim Shang Yi, Google Developer Expert, Singapore; Prashanthan Balakrishnan – Google County Consultant – Sri Lanka, Google Inc and Richa Singh, Architect, Google Crowdsource, Google Inc. will take center-stage as they share their global expertise and experiences, a media release from Dialog said. A promising Google Hangout session awaits aspiring and mature developers, as Google experts showcase developer tools. In addition, well known tech industry professional, Peter De Almeida, Chief Executive Officer, N-Able and Kumar Sangakkara, former Sri Lanka Cricket captain will focus on business skills and insights on leadership for developers and digital businesses. Dialog and Ideamart together with the Google Developer Group Sri Lanka, will partner to inspire and showcase the future of technology and IoT applications. Building on its theme to connect the world through IoT, a variety of kiosks will feature IoT as a platform for building smarter cities and a connected nation. Dialog’s connected/smart life portfolio will be transposed through an IoT village comprising of connected weather stations, a smart home setup and a hydroponics station, the release said. The event will also feature Sri Lanka’s first connected event engagement setup with the use of kinetic bulbs that have been programmed to an algorithm. [caption id="attachment_292619" align="alignleft" width="168" caption="Lim Shang Yi, Google Developer Expert, Singapore"][/caption] [caption id="attachment_292618" align="alignleft" width="240" caption="Paul Ravindranath, Developer Relations Regional Lead, Google"][/caption] The event will be underscored by the introduction of an awards segment, held in recognition of the growing developer and digital community in Sri Lanka. The awards will include multiple categories such as, YouTuber of the Year, Sri Lankan Android App of the Year, Tech Startup of the Year, Tech Blogger of the Year, Best Ideamart App Based on Google Technologies, and Tech Startup Female Entrepreneur of the Year etc. The award recipients will be nominated by the community and selected based on the most amounts of votes received online, quality of the work and the significant impact they are making in the country.http://www.sundaytimes.lk/180520/business-times/permanent-vesak-pandal-made-of-insee-sanstha-cement-292611.html4 May 2018 @ 8:41 pmA large number of Vesak sightseers thronged Ranmuthugala, Kadawatha this year witnessed a unique Vesak pandal. It was illuminated with the customary flickering coloured lights, but what was most unusual was that perhaps for the first time in the world the Vesak Pandal was artistically moulded out of cement. Pradeep Kumara created the pandal along with his friend W. Siripala who designed the murals depicting inspiring Jataka tales etched out and crafted out of cement, according to a media release from INSEE Cement. [caption id="attachment_292613" align="alignright" width="400" caption="The Vesak pandal made out of cement"][/caption] Mr. Kumara, a mason, has been creative and innovative even as a child. This Vesak, he was inspired to make a long lasting pandal out of cement and commenced the task in February. At the end of three months of painstaking work, he had completed a 45 foot tall pandal. “Pradeep used around 50 bags of INSEE Sanstha Cement bags because, as a mason he appreciated the unique features and high quality of the Sanstha Blended Cement he worked with on a daily basis. When the pandal was nearing completion, he inquired from INSEE Cement whether they would support his innovation. The management of INSEE Cement was happy to learn about the project and appreciative of his efforts. They extended a contribution, even if that did not do justice to the passion, time and effort put into the magnificent creation,” the release said. “While most Vesak decorations would perish soon after the festival and barely last until the following full moon day of Poson, our cement pandal would be a lasting decoration that can be used over many years, making it a cost-effective investment in the long term as it will withstand rain or shine without any protection or cover,” said Mr. Kumara.http://www.sundaytimes.lk/180520/business-times/chinese-travel-partners-to-boost-sri-lanka-tourism-292609.html4 May 2018 @ 8:39 pmOutside of the big cities of China like Beijing, Shanghai and Guangzhou, most Chinese are unaware that they could vacation on an island called Sri Lanka and this needs talking about. So, travel firm Green Leaves Leisure with its Chinese partner is promoting the destination to generate, on their own, at least 10,000 tourists monthly. Tourism Minister John Amaratunga addressing the media at the briefing held to introduce the company, said that the government has an intention of doubling or trebling the number of arrivals from China. In this respect, he endorsed companies like this that had previously brought down Chinese couples for a mass scale marriage ceremony in Sri Lanka last year to also attract the right travellers from the Far Eastern bloc to visit the island and “make Sri Lanka a second home.” The company’s Chairman Harindra Rodrigo noted that they carry out a number of programmes on promoting Sri Lanka on the Chinese television channel CCTV to lure more travellers to the country. In addition he pointed out that they had entered into an agreement with the Chinese travel firm Yingke Travels which is a subsidiary of Vanta Field Industrial Shanghai Co. Ltd to attract 10,000 Chinese travellers per month for the next 10 years to the country starting from this month. Yingke Travels is said to have over 12, 000 branches all over China that could carry out the necessary promotions to attract the tourists to Sri Lanka. They hope to target visitors from high spender, mid spenders and even low spenders, it was pointed out. Meanwhile, the company is also planning on bringing down two more groups of 50 couples each to the country to celebrate the mass wedding ceremony. China currently has about 12 million outbound travelers per year visiting destinations worldwide and this number is being attracted more as there has been a recent trend among them to tour the world.http://www.sundaytimes.lk/180520/business-times/seven-things-you-didnt-know-about-the-deep-web-292607.html4 May 2018 @ 8:37 pmAPRIL 20 - It is estimated that only 4 per cent of the Web is visible and 96 per cent of the Web is invisible or Deep Web. You’ve probably heard about the Deep Web; it becomes more well-known circa 2013 when the FBI took down the Silk Road drug marketplace. This brought widespread attention to the level of underground activity that goes on in this place on the Internet that’s not accessible to anyone using a standard browser. In essence, the Deep Web refers to any Internet content that, for various reasons, can’t be or isn’t indexed by search engines like Google or Bing. This includes dynamic web pages, blocked sites, limited access networks, intranets, and more. It is estimated that only 4 percent of the Web is visible and 96 percent of the Web is invisible or Deep Web. Here are some of the things you may not have previously associated with the Deep Web: 1. Cannabis, cannabis everywhere – light drugs are the most-exchanged goods, with cannabis being the most traded drug. This was followed by pharmaceutical products like Ritalin and Xanax, hard drugs, and even pirated games and online accounts. 2. Hitmen for hire – hitmen are available on the Deep Web with prices varying based on the preferred manner of death or injury and the target’s status. 3. Doxing information is widely available – which is a huge concern if you’re a public figure. Doxing is the act of researching and broadcasting an individual’s personally identifiable information such as date of birth, address, emails and phone numbers. One site—Cloudnine—lists possible dox information for public figures, political figures, and celebrities. 4. Child exploitation is rampant on the Deep Web – as a father of two girls, this is one of the most horrifying findings to me. It includes sites which host child pornography or snuff films that feature children. 5. The Deep Web is a match made in malware heaven – as it hosts command-and-control infrastructure for malware. The hidden nature of sites like TOR and 12P and other services makes it easy to host and hide malware controlling servers on the Deep Web. One such malware is CryptoLocker, a ransomware which encrypts victims’ personal documents before redirecting them to a site where they have to pay to regain access to their files. 6. Bitcoins – are the currency of the Deep Web, frequently used when purchasing illegal goods and services. To ensure it maintains its anonymity, Bitcoin-laundering services have surfaced to help increase the anonymity of moving money throughout the Bitcoin system. By “mixing” Bitcoins through a spidery network of micro-transactions, users end up with the same amount of money but a harder-to-track transaction trail. 7. Unfortunately, it’s too huge for law enforcement to track – as everything is encrypted, determination of attribution is difficult, and constant fluctuations mean that law enforcement agencies face a tough job when it comes to regulating and monitoring the Deep Web. What does this mean for security? While a majority of normal Internet users will not find the use for the Deep Web, organisations need to understand the goings-on beneath the surface of the Deep Web so that they can protect their customers from the cybercriminal activities happening within it. Organisations need to implement a means of early detection and countermeasures against these threats, as they will, sooner or later, find their way to victimise users. Future of the Deep Web There is an ongoing race between the criminals who inhabit the Deep Web and law enforcement agencies, with the criminals working on technological developments to improve the stealth of their activities and finding new ways to become even more anonymous and untraceable. One thing that will definitely grow in the future is the “shadow marketplace” which was previously brought to light by the FBI sting on Silk Road. Transactions on the Deep Web guarantee high anonymity, with Bitcoin technology allowing both sellers and buyers of illegal assets to bypass any external regulatory financial authorities. In fact, Bitcoin technology will probably develop to more advanced levels, making the cryptocurrency even less traceable than it is today. The anonymity offered by the Deep Web will continue to raise a lot of issues and be a point of interest for both law enforcers and Internet users who want to circumvent government surveillance and intervention. As such, IT security pros need to continue keeping tabs on the Deep Web as its role on the Internet grows. Source: This article was published by https://www.cso.com.au/article/579375/seven-things-didn-t-know-about-deep-web/)http://www.sundaytimes.lk/180520/business-times/lankan-hotel-rates-on-the-rise-despite-supply-surge-report-292605.html4 May 2018 @ 8:36 pmHoteliers have managed to maintain pricing power despite slowing demand for hotel rooms in Sri Lanka, according to an analysis from STR, but growing supply especially in the upper-scale segments could begin putting pressure on rates. Over the 12 months ending March 2018, Sri Lanka’s supply (room nights available) grew 6.2 per cent, while demand (room nights sold) increased 2.1 per cent, TTG Asia magazine has said quoting the STR report. While this saw occupancy fall 3.8 per cent to an annualised rate of 65.1 per cent, the average daily rate (ADR) was up 7.2 per cent to Rs. 17,334 (US$109). With growing supply especially in Colombo, STR says rates may come under pressure going forward . “The last few years saw Sri Lanka become very popular with developers,” said Jesper Palmqvist, STR’s area director for the Asia-Pacific region. “Supply growth reached 6.8 per cent last year, and that came with demand basically flat year over year (+0.1 per cent). Hoteliers will need to develop impactful marketing campaigns to increase that demand and avoid a continued occupancy slide.” Still, overall ADR has seen growth year over year for 30 consecutive months in Sri Lanka. The 1Q absolute level in the metric (Rs. 19,868) was the highest for any first quarter in STR’s Sri Lanka database. Occupancy for 1Q grew one per cent after dropping 6.2 per cent for the whole of 2017. “Hoteliers have been able to increase room costs to counter the declines in occupancy,” Palmqvist noted. “It will be key for those hoteliers to monitor the market performance in order to react prudently to more new supply. “The Colombo skyline in particular continues to be busy with construction cranes. A lot of the new supply set to come online will be in luxury and upper upscale segment, so we foresee interesting market dynamics ahead that will pressure occupancy and rate levels,” he cautioned, according to TTG. STR’s hotel performance sample in Sri Lanka has grown to nearly 50 per cent of the 14,806 rooms in the country. Its census database shows 146 properties with another 26 across the under contract phases of the pipeline. STR’s March Pipeline Report showed 15 properties in construction comprising 3,450 rooms.http://www.sundaytimes.lk/180520/business-times/movenpick-hotels-internal-vesak-lantern-competition-292602.html4 May 2018 @ 8:35 pmThe Mövenpick Hotel Colombo team of employees displayed their creative side at the hotel’s Vesak lantern competition last week. The event was judged by both Dr. Stephan Anthonisz, CEO/ Director Softlogic Properties Pvt Ltd and Udaya Indrarathna, CEO, designation with the F&B team emerging winners. All departments participated in this event, from Sales & Marketing to Human Resources, Finance, Food & Beverage, Kitchen, Housekeeping and Reservations to name a few. [caption id="attachment_292603" align="aligncenter" width="400" caption="The winning lantern with its architects"][/caption]http://www.sundaytimes.lk/180520/business-times/cold-storage-of-broker-licences-likely-to-be-approved-soon-by-sec-292600.html4 May 2018 @ 8:35 pmHad the ‘cold storage’ process of broker licences, where stockbrokers are able to retain licences without doing any trades, been approved by the Securities and Exchange Commission (SEC), certain brokers may not be in the dumps now, market analysts say. Clients of Nation Lanka Equities, Navara Securities, TKS Securities and Claridge Stockbrokers whose trading activities were barred due to non-compliance, were requested by the Colombo Stock Exchange (CSE) last week, to transfer their portfolios to any other firm if they want. This could have been avoided if a strong policy decision had been made two years ago when the CSE proposed to the SEC to ‘cold storage’ struggling stockbrokers' licences, an analyst said. The risk based Capital Adequacy Requirement (CAR) of 1.2 times the risk requirement of stockbrokers subject to a minimum liquid capital requirement of Rs. 35 million that was made applicable to all stockbroker firms in 2016 prompted the CSE to propose the ‘cold storage’ process of broker licences. The CSE in its recent circular further revealed that these barred broker firms will only be permitted to resume all trading actives no sooner they comply with the minimum Shareholders’ Fund Requirement which was implemented in January this year as applicable. SEC officials told the Business Times that the ‘cold storage’ process is expected to be approved at the next SEC commission meeting, after the commissioners and the chairman are formally appointed. The SEC is without a chairperson after Thilak Karunaratne completed his 3 –year term in January 2018, and, owing to this, many policy decisions including the deactivation or what’s commonly called ‘cold storage’ of licences have been held up.http://www.sundaytimes.lk/180520/business-times/sri-lanka-tourism-leverages-atm-for-major-push-in-me-292598.html4 May 2018 @ 8:34 pmSri Lanka Tourism participated at the Arabian Travel Market (ATM) with the addition of three road shows, B2B and industry meetings in Dubai last week in a major push in the West Asian market. The country was showcased as an attractive holiday destination at the 24th Arabian Travel Market (ATM) which took place on April 22 to 25 at the Dubai International Exhibition & Convention Centre. It was Sri Lanka’s 16th consecutive year of participation at this event Sri Lanka Tourism Promotion Bureau (SLTPB) said in a media release. The event coincided with three roadshows, the first time the SLTPB organised three consecutive roadshows in UAE. A press conference was held parallel to the travel fair to keep the international media well informed about the new developments in the tourism industry in Sri Lanka and the many attractions for the Middle Eastern travelers. Minister of Tourism Development and Christian Religious Affairs, John Amaratunga, who attended the event, also held discussions with a cross section of industry professionals on boosting bilateral tourism traffic. The B2B meetings which were held on the sidelines of the fair proved to be fruitful and had a positive impact especially in encouraging investment opportunities in Sri Lanka. The Arabian Travel Market (ATM) 2018 is the largest annual exhibition for the tourism trade in the Middle East. Sri Lanka Tourism has been participating at this event since 2003 along with members of the travel and tourism industry. ATM now facilitates $2.4 billion in industry deals and attracts 2,800 exhibitors from 86 countries and over 26,000 influential visitors. The Arabian Market is important for Sri Lanka as it helps to source a large number of visitors from the region. During the month of March 2018 there were 15,894 tourist arrivals from the Middle East.http://www.sundaytimes.lk/180520/business-times/idea-group-unveils-fully-furnished-recycling-plant-292595.html4 May 2018 @ 8:33 pmThe Idea Group of Companies, that offered local consumers revolutionary trend setting roofing solutions and other construction supplies, recently commissioned a recycling plant to recycle discarded and leftovers of their i-Roof and i-Panel products. [caption id="attachment_292596" align="alignright" width="400" caption="Recycling plant."][/caption] The recycling plant was commissioned at the same premises at Katana where the main factory, renowned as South Asia’s largest ASA sheet manufacturing factory, is situated. Being the only recycling plant in the country of this nature it was commissioned with a view to contributing towards a green economy by mitigating any possible effects on nature, the company said in a media release. Consumers who use i-Roof and i-Panels can now handover leftovers of those products to their nearest SIVILIMA showroom and contribute towards this generous venture. The Idea Company will transport these leftovers to their recycling plant. Sampath Mayakaduwa, CEO/Managing Director, Idea Group Ltd, speaking at the occasion of unveiling the first recycling plant for ASA polymer products in Sri Lanka, said Idea Company’s products are truly 100 per cent green oriented. “When using i-Roof and i-Panels it is inevitable that consumers end up with leftovers. But as a socially responsible and green oriented company we took measures to rectify this by commissioning this newest recycling plant,” he noted.http://www.sundaytimes.lk/180520/business-times/steady-growth-in-seylan-banks-1q2018-amidst-challenges-292593.html4 May 2018 @ 8:32 pmSeylan Bank made a steady start in 2018 by posting a post-tax profit of Rs. 1,053 million in Q1 despite less than ideal market conditions. Net interest income increased by 17.21 per cent as the volume growth outperformed the impact arising from the narrowing of NIMs, the bank said in a media release. Net fee and commission income witnessed a growth of 14.61 per cent to reach Rs. 995 million in 1Q 2018, against Rs. 868 million for the comparative period. Initiatives put in place to harness fee generating business across various customer and market segments such as card related income, trade finance related fee income and fees from guarantees, remittances is progressing rapidly as reflected by the increases shown in fee based income. Other operating income comprising gains from trading, gains from financial investments, gains on foreign exchange and other income were reported as a net gain of Rs. 366 million compared to net gain of Rs. 238 million in 1Q 2017. The bank said it continued to focus on widening the roll-out of lean initiatives, workflow methods and automation across the bank in its pursuit towards rationalising expenditure on key controllable cost lines and inculcating a culture of working smarter across all the functions by the employees. Loans and advances portfolio of the bank dropped marginally by 3.01 per cent to 289,302 million during the 1Q 2018 amidst rising interest rates. The overall deposit base recorded a marginal growth of 1.24 per cent to Rs. 310,904 million by 1Q 2018 and a shift from low cost CASA to term deposits was noted which is partly due to increase in interest rates.http://www.sundaytimes.lk/180520/business-times/lankas-private-sector-professionals-up-in-arms-against-new-paye-tax-292591.html4 May 2018 @ 8:31 pmSri Lanka’s private sector professionals are set to lose a large portion of their take-home pay after a PAYE tax hike to 24 per cent from 16 per cent came into effect on April 1 prompting them to find greener pastures in foreign countries, a recent CEO’s forum in Colombo revealed. An appeal calling on the government to withdraw the 2018 budget proposal of increasing the PAYE tax by 8 per cent has already been made in a letter sent to the President, several top officials serving in leading firms in the country told the Business Times. They warned that the country’s public sector will collapse as a result of the impending dearth of professionals heading the business entities due to migration of top management personnel for overseas jobs in countries like New Zealand, Australia, West Asia and the African region. Chief Executive Officers (CEO’s), Chief Financial Officers (CFOs), Chief Administrative Officers (CAOs), top level accountants, and senior executives as well as senior managers and technical officers, etc will be taxed at 24 per cent of their take-home pay following the imposition of the new PAYE tax, Inland Revenue Service Union Joint Secretary H.A.L. Udayasiri, told the Business Times. He said that the increase in tax revenue was the aim of this move of the government, but it should also consider the grievances of a handful of taxpayers before burdening them with heavy taxes as the cost of living is sky rocketing alarmingly. Although PAYE tax rates will increase for individuals with high incomes (monthly income of more than Rs. 300,000), the number of taxpayers with such high incomes is low, he said adding that the revenue will be decreased as a result. One reason for the decrease in tax revenue was the higher threshold at which individuals are taxed, he claimed. Less people pay taxes due to the higher threshold and the new tax regime has also removed concessions given in the earlier tax regime which provided a lower tax rate for professionals, he disclosed. Taxpayers will be burdened with new taxes and the government will lose, not gain, revenue till tax officials familiarise themselves with the new law and procedures, he added. “Tax Department trade unions will be taking up the matter with the President. If that fails, we’ll have to take to the streets,” he said. Under the new tax regime the annual tax free threshold for PAYE tax has been increased to Rs. 1.2 million from Rs. 750,000, a senior tax consultant told the Business Times. Under the previous tax regime, the first Rs. 750,000 is tax free, the next Rs. 500,000 is taxed at 4 per cent and every subsequent Rs. 500,000 earned is taxed at 8 and 12 per cent, till a maximum tax rate of 16 per cent is reached, he disclosed. With the new tax regime, the first Rs.1,200,000 is tax exempt, and every subsequent Rs. 600,000 earned is taxed at 4, 8.12, 16, 20 per cent upto a maximum of 24 per cent. Citing an example he noted that, the tax rate of a person with an annual income of Rs. 1.5 million is 8 per cent previously but with the new tax regime it will be only 4 per cent. The Rs. 50,000 tax free vehicle allowance which was there prior to the budget has now been made liable to PAYE, a CEO of a leading company said adding that any private sector official having a company vehicle will have to pay an additional sum of money as PAYE tax. Until April 1 2018 the first vehicle was exempted from the tax. But now they will consider it for taxation, he claimed. Under the old rates a person earning Rs.100,000 and a transport allowance of Rs.50,000 had to pay Rs. 1500 as taxes. A transport allowance of up to Rs. 50,000 for a car and petrol was tax free. Under the new tax rates, the employee deemed to be earning Rs. 150,000 will be taxed at Rs.2000 a month while a person earning Rs. 150,000 and a transport allowance of Rs. 50,000 would be taxed Rs. 5,501 a month. Further, the Inland Revenue Department has released a circular to consider non cash benefits (vehicle, driver and fuel) to add it to the salary before calculating PAYE. These measures had led to the frustration of private sector professionals which prompted them to leave the country for greener pastures and it will disturb the smooth functions of the private sector, he said. At least an average of 40 senior executives are entrusted with the task of managing a corporate with around 1300 employees, he said pointing out if the majority of them leaves the entity then it well collapse. On the other hand it is difficult to recruit competent senior managers with required skills as the present education system is not producing personnel to suit the job market.http://www.sundaytimes.lk/180520/business-times/sampath-bank-achieves-post-tax-growth-of-41-in-1q-292589.html4 May 2018 @ 8:30 pmStarting the year 2018 in a positive note, Sampath Bank says it has achieved a post-tax profit (PAT) of Rs. 3.3 billion for the quarter ended 31st March 2018, up by 41.4 per cent from 1Q 2017. “The results stem from higher profit before tax (PBT), which grew by 39.6 per cent YoY to reach Rs. 4.9 billion in 1Q 2018. The Sampath Group, which includes the bank and four fully owned subsidiary companies, also posted a strong performance for the quarter, with PBT and PAT growing by 39.3 per cent and 41.1 per cent respectively compared to 1Q 2017,” the bank said in a media release. Net Interest Income (NII), which is the main source of income representing more than 70 per cent of the bank’s total operating income, recorded an increase of Rs. 2 billion (31 per cent up) during 1Q 2018 in comparison to 1Q 2017, and accordingly, NII for the quarter was Rs. 8.3billion. The bank’s deposit base recorded a 3.6 per cent (annualised 14 per cent) growth while net advances increased by 7.4 per cent (annualised 30 per cent). Net fee and commission income, which largely comprises credit, trade, card and electronic channel related fees increased to Rs. 2.3 billion, a year-on-year growth of 18.7 per cent. Other operating income was up by 64.2 per cent. The bank’s operating expenses, which amounted to Rs. 3.9 billion in 1Q 2017, increased to Rs 4.7 billion with the rise attributed to higher personnel expenses triggered by salary increments and an increase in other operating expenses driven by business expansion. Additionally inflation-led general price hikes were the main reasons for this cost escalation, the bank said. Sampath’s total asset base grew by 6.5 per cent (annualized 26 per cent) in 1Q 2018 to reach Rs. 846 billion while the total asset position as at December 31, 2017 stood at Rs. 795 billion. Gross loans and receivables from other customers grew by 7.5 per cent during the period to Rs. 612 billion by end March.http://www.sundaytimes.lk/180520/business-times/pabc-sees-improved-growth-this-year-292587.html4 May 2018 @ 8:29 pmPan Asia Banking Corporation PLC (PABC) reported Rs.498 million in profit before tax for the quarter ended in March 31, 2018 (1Q2018). The bank, in a media release, said these results were “powered by a steady growth in new loans and improvement in overall margins which was due to prudent asset – liability pricing amidst rising market interest rates”. This enabled the bank to increase its net interest income by 11 per cent to Rs.1.34 billion for the quarter from Rs.1.21 billion recorded in the same period last year. The income tax charge for the quarter was Rs.185.16 million, up 16 per cent from the same period last year which resulted in a profit after tax of Rs. 312.8 million, down 11 per cent from the same period last year. The release said that net trading gains rose sharply to Rs. 199.58 million during the quarter from Rs.69.83 million in the same period a year ago as the bank sold its short term investments in the trading portfolio realizing a sizable capital gain. “The sound top-line performance was somewhat softened by the higher provisions made against possible bad loans and the higher tax liability for the period. The collective impairments rose sharply to Rs.183.83 million from a previous year reversal of Rs.38.32 million due to the relatively strong growth in the new loans across all segments – Corporate, Retail, SME and Credit Cards. Collective impairments rise as new loans grow,” the bank said. Speaking on the first quarter financial performance, Pan Asia Bank’s Director/ Chief Executive Officer Nimal Tillekeratne said although the bank witnessed a temporary slowdown in the bottom-line during its first quarter, the bank is now on a path of steadfast growth with built in resilience across all areas of operations which will reflect positively in the financial results in the coming quarters.http://www.sundaytimes.lk/180520/business-times/idea-groups-i-homes-showrooms-soon-in-some-countries-292584.html4 May 2018 @ 8:29 pmAnother home-grown Sri Lankan product, which has met a lot of success, is now boldly aiming to capture sections of the international market. [caption id="attachment_292585" align="alignright" width="400" caption="Signing the MoU by officials from both parties."][/caption] After its successful signing of the Maldives, ‘i-Homes’ showrooms are planned to be open in some countries including Ghana, Malavi, Madagascar and Egypt. The locally-successful ‘Sivilima’ showroom chain by the IDEA Group is slowly expanding to a network of showrooms branded as ‘i-Homes’ in foreign countries, the company announced this week. Senior managers of the company recently signed a business contract in Colombo with a leading building materials marketing company in Maldives to set up ‘i-Homes’ showroom in Maldives. Accordingly, all products of Idea Group including i-Roof and i-Panel will be traded in Maldives. i-Roof manufacturing under the theme of “Roof with the highest benefits” is the only ASA polymer roofing tile produced in Sri Lanka with the ISO 9001:2015 international standard certification, the company said in a media release. i-Roof is a green product which does not contain Lead (Pb) or asbestos in its composition and is considered as the best solution for Sri Lankan roofing requirements. In estimates made by building contractors on fixing the roof, i-Roof contributes to the lowest cost per square foot that include; fixing the frame, using heat resisters and fixture of thatching sheets. There are over 400 ‘Sivilima’ showrooms in the country.http://www.sundaytimes.lk/180520/business-times/steady-progress-at-ua-in-2017-292582.html4 May 2018 @ 8:28 pmUnion Assurance PLC (UA) reported steady progress in 2017, recording Rs. 10.1 billion gross written premium, a 22 per cent growth compared with the previous year. Regular new business premiums grew by 25 per cent compared to the previous year and UA was the third largest new business producer with the highest growth amongst the top seven players in the industry for the year, the company said in a media release. UA recorded a profit after tax (PAT) of Rs. 7.4 billion compared with Rs. 1.3 billion in 2016. The PAT included Rs. 3.4 billion one off surplus transfer from non-participating life fund and Rs. 188 million as UA’s share of profits from the general insurance business of Fairfirst Insurance Ltd. Investment income recorded a 38 per cent growth, mainly due to increase in interest rates of government securities in the first half of the year and unrealised gains from equities, it said. Net insurance benefits and claims increased by 75 per cent mainly due to increase in maturities and surrender payouts. “Maturity payouts are in line with UA’s contractual obligations and surrenders have increased due to the challenging economic environment. Underwriting and net acquisition cost increased by 28 per cent to Rs 1.8 billion due to an increase in GWP and changes in variable incentive structures. Other operating, administrative and selling expenses increased by 21 per cent to support growth,” the release said. As a result of the above, as at December 31 2017, UA’s life fund stood at Rs. 29 billion, a 4 per cent decrease from previous year. UA maintained a capital adequacy ratio (CAR) of 352 per cent indicating the financial strength of the business. The minimum regulatory requirement is 120 per cent with a regulatory intervention CAR of 160 per cent.http://www.sundaytimes.lk/180520/business-times/sri-lanka-pakistan-trade-huge-potential-to-grow-292580.html4 May 2018 @ 8:27 pmThe potential for trade between Pakistan and Sri Lanka is somewhere between US$ 5 to $10 billion but based on the current annual results of just $350 million, the two countries need to work harder to achieve this potential. Maj. Gen (Rtd) Dr. Shahid Ahmed Heshmat, Pakistan High Commissioner in Sri Lanka, made these remarks, when he addressed the Forum ‘Bilateral Trade between Sri Lanka and Pakistan’ at the National Chamber of Commerce of Sri Lanka (NCC) auditorium in Colombo last week. He said that planning for trade should not be limited to just two, three or five years but should be planned well ahead for 25 years. Sujeewa Samaraweera, President, NCC made the opening remarks. Continuing Maj. Gen. Heshmet noted that there has been access problems from both sides which is known and could be improved. He indicated that Pakistan and China are working out a common corridor between the two countries which would see a massive investment of $60 billion, one of the highest in global terms. This could possibly spark apprehensions but these apprehensions are common in such situation, he said while pointing out that there were also apprehensions in Sri Lanka when such issues cropped up in Hambantota and in the Port City. As far as Pakistan and China is concerned this economic corridor is a tremendous investment where, alongside many other developments, the 1000 km of road and railway network development connecting Indian Ocean and China would reduce cost and time in accessing exports. During the question and answer time, some businessmen present pointed out the difficulties they have encountered in obtaining visas to Pakistan. The high commissioner was emphatic that Pakistan and Sri Lanka has been connected by very strong historical relations between the two countries dating back to more than 2,000 years and only very few people knew that deep in the North of Pakistan there lies Buddhist civilization and excavations which have proved that there are Stupas at every 5 to 10 km and pointed out the need to intensify and diversify these relations, based on a common heritage. He reminisced on the events of the freedom movement in Sri Lanka prior to 1948 Sri Lanka gaining independence and said that his country has supported the freedom movement in this country. He said that there is a place called Jinnah Hall set up in Kandy in commemoration of these events. The activities between both countries are not confined only to traditional diplomatic ties, but he said that recently a ceremony was held at the BMICH to award 182 Jinnah Scholarships to 182 students at Rs. 45,000 each the total of which amounted to several millions of rupees.http://www.sundaytimes.lk/180520/business-times/threadsol-to-launch-intellocut-v2-at-lankan-apparel-fair-292578.html4 May 2018 @ 8:27 pmThreadSol, the technology leader in material management solutions for the apparel industry, has announced the launch of their flagship product IntelloCut, Version 2.0 for Sri Lanka. It will be available for live demonstration at the Apparel Industry Suppliers Exhibition on May 8-10 at the BMICH in Colombo. IntelloCut Version 2.0 is the world’s first artificial intelligence based system in the apparel industry that automates fabric planning, tracks fabric usage, improves utilization and helps manufacturers ship more garments in the available fabric resulting in direct topline benefit, according to a company media release. “The advent of diversification in global apparel sourcing has brought renewed focus into skill based manufacturing. This is alongside the requirement from brands for vendors to handle more styles in short lead times. Automation and dynamism is the next stop for the garment manufacturing industry and with version 2 we aim to achieve just that,” said Manasij Ganguli, Founder CEO, ThreadSol. ThreadSol has partnered with the large manufacturers including, Crystal Martin Brandix, MAS, Hirdaramani in Sri Lanka; HS Fashions, Jiaxing New Rimei, Tomwell in China; Urmi, Bimexco, Fakri, Epic in Bangladesh; PAN Brothers, Metro Group in Indonesia, Luenthai, Saitex, Dewhirst in Vietnam, and many more from these regions. ThreadSol solutions include intelloCut and intelloBuy, currently planning 1.5 billion garments annually in 16 countries having already set standards amongst Sewn Products’ automation solutions worldwide. IntelloCut is the world’s first AI based fabric planning system. intelloCut impacts topline and enables manufacturers to cut more and ship more with the same fabric. The revolutionary solutions are presently benefiting more than 150 apparel factories helping them boost topline and bottomline by upto 1 per cent.http://www.sundaytimes.lk/180520/business-times/dining-cashback-offer-from-standard-chartered-292576.html4 May 2018 @ 8:26 pmStandard Chartered says it is the first bank in the country to give its clients 20 per cent cash back on their dining spend. The campaign is set to run over a period of two months (May/June) and is extended to all card holders, the bank said in a media release. The mechanics of the promotion is simple. A card holder is expected to have a minimum retail spend of Rs. 50,000 to be eligible for this benefit. Thereafter, 20 per cent cash will be reimbursed to the card holder on all their dining spend. This will take place on the 20th of the following month. “This is an exciting time for all Standard Chartered Cardholders as we will be launching many exciting offers in the months to follow. We are happy to be the first in the country to introduce this proposition to our clients as we recognise just how much our clients enjoy experiencing various cuisines. We are confident that when our customers think of dining their go to card will be Standard Chartered,” said Bingumal Thewarathanthri, Country Head of Retail Banking, Standard Chartered Sri Lanka. The promotion is extended exclusively to all Standard Chartered Cards issued within Sri Lanka. The maximum cash back per card will be Rs. 4,000 for all Infinite card holders and Rs. 2,500 for all other cards. “Whilst you can dine in any restaurant anywhere in the country, hotel restaurants however will be restricted to Cinnamon Grand Colombo, Cinnamon Lakeside, Hilton Colombo, Shangri La hotel, Galle Face Hotel, Taj Samudra, Mount Lavinia Hotel, The Kingsbury Hotel and Mövenpick,” the release added.http://www.sundaytimes.lk/180520/business-times/thrice-proposed-exim-bank-plan-on-the-back-burner-292574.html4 May 2018 @ 8:25 pmSri Lanka has put the proposal made to establish an EXIM Bank on the back burner despite a pressing need of export finance for the acceleration of the country’s exports, a study conducted by an independent think tank revealed. The government has repeated this 2016 budget proposal in 2017 and 2018 budgets respectively carrying forward the financial allocations made for this purpose. The Treasury appears reluctant to implement the thrice- made budget proposal as it demands massive capital requirement, a senior Finance Ministry official who wished to remain anonymous told the Business Times. A sustained export development will not be possible till the establishment of a specialised financial institute such as an EXIM Bank, he said, adding however that the country cannot also afford to rush in to setting up this institution although it has allocated Rs.10 billion for the proposed bank in 2018 budget. Sri Lanka's budget for 2018 has announced plans to build a bank for start-ups and small and medium enterprises with a tax payer funding of a massive Rs.10 billion. Finance Minister Mangala Samaraweera said start-ups and SME lacked capital when they did not have collateral. “The government’s objective is to ensure that no entrepreneur is ever denied credit due to the lack of collateral, but is able to access financing given the viability of the project proposal," he has said. "Towards this end, the Treasury will facilitate the establishment of a Development Bank with an EXIM window, to enable the much needed long term financing for private sector ventures,” he disclosed. "Until the bank is established, the government will continue with the targeted, existing and the proposed loan schemes," he revealed. The proposal to set up the EXIM Bank, with an initial capital of Rs. 25 billion, subscribed jointly by the government and the industry was made in the 2016 budget. It had also been proposed to allocate Rs. 50 million as seed capital being the contribution of the Government to the EXIM bank that was supposed to operational from April, 2016. According to the budget proposal, it was also envisaged to list this company in the CSE. However the very same proposal was included in the 2017 budget without mentioning that this same proposal was passed in parliament in 2016. Finance Minister Ravi Karunanayake told parliament during his 2017 budget speech in end 2016 that a sum of Rs.10 billion would be allocated as initial contribution for the establishment of the EXIM Bank. This bank is a government or semi-government agency which commonly provides insurance cover to exporters against losses from non-payment by the importers, as a means to promote the country’s foreign trade. Other services offered by EXIM Bank may include marine insurance, post-shipment discounting of invoices, pre-shipment advances against confirmed orders, and help in finding new markets, the Finance Minister revealed in parliament last year. Making the matter more controversial, the government has presented a supplementary estimate in parliament in 2018 allocating Rs.10 billion to set up the bank. A supplementary estimate should be presented in parliament to provide funds to the Government to meet new or increased costs. But it is unclear as to why the government has presented a supplementary estimate with a view of allocating a sum of Rs. 10 billion for the setting up of EXIM Bank when the money has been allocated for it from two previous budgets and passed in parliament, an economic analyst said. The government should find out other solutions to tackle the export finance issue if the establishment of the EXIM Bank proposed in three consecutive budgets is further delayed, Research Director of Verite Reseach, Subhashini Abeysinghe pointed out. She noted that the money allocated to set up this bank could be utilised for alternate financial instruments that could help mitigate risks borne by exporters. This function is becoming more important in the international market, where buyers with higher bargaining power set the payment terms, she added. Infusing capital needed to set up an EXIM Bank has become a difficult task although a sum has been set aside for this purpose; a the senior Finance Ministry official said pointing out that the government’s revenue is not sufficient to meet day-to-day expenses and repay the massive debt. The Commonwealth Secretariat will help formulate the proposed Exim Bank of Sri Lanka, he said disclosing that the Commonwealth Office in London gave the first Exim Bank concept paper to the Government of Sri Lanka after it was proposed in the budget. Export finance is a policy tool available to the government to assist in overcoming these challenges and reviving the export sector. However this is one of the most underutilised policy instruments in Sri Lanka, he said.http://www.sundaytimes.lk/180520/business-times/veteran-plantations-industry-official-wins-best-ceo-award-at-cmi-event-292571.html4 May 2018 @ 8:24 pmHayleys Plantations Managing Director, Roshan Rajadurai was presented with the ‘Best CEO - Agriculture Sector’ award at the recently concluded CMI Management Excellence Awards 2017. [caption id="attachment_292572" align="alignright" width="400" caption="Hayleys Plantations Managing Director Roshan Rajadurai accepting the award for Best CEO from Minister of Science, Technology and Research, Skills Development and Vocational Training, and Hill Country Heritage, Sarath Amunugama at the CMI Management Excellence Awards 2017."][/caption] “It is truly an honour to receive this award. However at the outset, I must emphasize that a CEO can ultimately only be as good as the team of employees behind him. The decisions that we have made – taking into account both profit and sustainability over the long term - have been instrumental to the success that Hayleys Plantations continues to enjoy through times of prosperity and adversity alike,” he said. A product of Trinity College, Kandy, Mr. Rajadurai gravitated to leadership roles from a young age, having excelled in both academics and sports. He was a Triple Coloursman and a Trinity Lion representing and captaining teams at Trinity, Central Province, JEDB and Planters . Commencing his career as a Trainee Assistant Manager in 1983 in JEDB at Diyagama West Estate, Agrapatana, Mr. Rajadurai steadily rose to prominence for his extensive technical knowledge, performance and unwavering commitment to constantly refining his work. He then took over as Manager of KVPL’s flagship property, Pedro Estate, Nuwara Eliya becoming the youngest-ever Manager at Pedro at just 34 years of age.http://www.sundaytimes.lk/180520/business-times/excel-restaurants-takes-over-floor-by-o-and-shore-by-o-292569.html4 May 2018 @ 8:23 pmExcel Restaurants Pvt Ltd, a subsidiary of Browns Investments PLC (BI), has been granted franchise rights of FLOOR by O! and SHORE by O!, two leading pub and restaurant brands owned by Pubs ‘N Places Pvt Ltd, a sister company of Lion Brewery Ceylon PLC. The strategic move of Excel Restaurants gives it a substantial opportunity to increase its presence in the entertainment sector, the company said in a media release. As a result of the new alliance, Excel Restaurants together with Browns Hotels and Resorts – a part of the BI arm, will manage the operations of the FLOOR by O! and SHORE by O! which were re-opened on April 27 and May 5 respectively, increasing their presence in the entertainment industry. Conveniently located in Maitland Crescent and Mount Lavinia, FLOOR by O! and SHORE by O! are popular for their splendid selection of beverages, top quality food, finest bands and DJs and the vibrant atmospheres. The two venues have been trendsetters in the pub prospect in Colombo and have retained a large following of regular customers, the release said. “We have upgraded the features of the two venues and continue to offer an unprecedented entertainment experience to their customers,” said Eksath Wijeratne, Group General Manager of Browns Hotels and Resorts. Shamal Boteju, Director of Pubs ‘N Places Pvt, said they considered the partnership with Excel Restaurants as being a strategic fit due to their in-depth knowledge and experience in the hospitality industry over the years.http://www.sundaytimes.lk/180520/business-times/inside-a-cybernetic-newsroom-reuters-robots-are-great-at-research-but-not-at-writing-articles-292566.html4 May 2018 @ 8:23 pmReuters, the historic news agency that once delivered its reports by pigeon courier, is building what it is calling the world’s first 'cybernetic newsroom'. The 166-year-old organisation is a global pioneer in using Artificial Intelligence (AI) in news gathering and has created two major programmes; one that enables it to laser in on breaking news from clusters of comments on social media, and another to unearth business stories by using algorithms to comb its vast banks of financial data. Yet Reuters has concluded that early 21st century automatons still have significant journalistic deficiencies. “Machines write bad stories,” says Reginald Chua, Reuters executive editor for editorial operations (data and innovation). So the cybernetic newsroom is developing into a hybrid operation, in which the robots do vast and increasing amounts of laborious data-sifting, while real people remain in charge of composing articles. “Where humans bring incredible value – and it is very hard to replace this in the short run – is in judgment about what’s newsworthy, and how audiences are changing in what they are interested in,” says Chua, speaking from the Reuters offices in New York. “Humans can talk to people and understand greater context and nuance and, of course, they are storytellers and to a large extent the job of journalism is to tell stories and engage people.” This realisation, which must come as a relief to the agency’s army of 2,500 journalists, doesn’t diminish his excitement at the agency’s embrace of automated journalism. “Machines can dig through a lot of data, language generation is improving every day and stories can be more finely tuned towards audiences,” says Chua, a news veteran who spent 16 years with the Wall Street Journal and is a former editor-in-chief of the South China Morning Post. In niche areas of Reuters financial journalism the robot is already writing the whole story. “We do full automations, where we automate headlines and we automate very short stories,” says Chua. “We do that mostly in the interests of speed where there are certain things that no human can do; where we need to get a headline out in a second.” These computer-generated snap articles are usually in relation to economic data that needs to be relayed immediately to the Reuters client base. “We serve a financial audience and they expect those numbers to come to them in frankly less than a second, we are working on millisecond ranges there.” Somewhat worryingly for the future of journalism as a career, Chua says that “in some cases, when it’s a very straightforward story, readers have preferred the machine-written story to the human-written story”. But generally that’s not the case. “We are not looking to determine between the two (machine-written and human-written), for us the issue is simply ‘How can we make a better story?’ What readers really want is information, context and insight. And the best way to do that, I think, is to marry machines and humans.” At Reuters the robot operates for the most part in the role of researcher, feeding material to real life correspondents. It is an editorial assistant with specialist knowledge, reliability and no inclination to complain at being tasked with drudge work. Using AI to break news At the hub of the cybernetic newsroom is the Reuters News Tracer programme, which has been designed to sift social media and flag up indicators of breaking news, from natural disasters to terror attacks. Chua and his team claim that this early warning system has given Reuters journalists between eight minutes and an hour “head start” on other global news outlets in identifying major stories, depending on the type of incident. It was Tracer’s constant monitoring of social media keywords that instantly alerted Reuters journalists to the September murder of Belgian city mayor Alfred Gadenne, whose throat was slashed in a cemetery where he worked as a caretaker. When eyewitnesses in Moscow posted on social media that fire had broken out in a building used by Russia’s foreign spy service, Tracer picked out the story. It also scooped human journalists on the murder by gunmen of a Pakistani diplomat outside his residence in Jalalabad, Afghanistan in November. In the Western world, Twitter is where Tracer focuses most, he says. “If you are standing on a street corner and a bomb goes off, heaven forbid, then your first instinct is not to go on Facebook, it is more likely be to take a photo and put it on Twitter. Twitter is the place where news breaks.” Tracer scores over Twitter’s integrated notification service TweetDeck because it monitors accounts which could not be predicted as sources of news. “You don’t know what you don’t know,” says Chua. “But Tracer uses enough language and understanding that if a number of people start talking about the same subject in the same place that becomes a cluster which is then evaluated against newsworthiness.” Tracer’s algorithms are designed to measure “newsworthiness” and “credibility” by matching geographical clusters of references to an incident with mentions by verified accounts. It’s a difficult science when fake news is rampant and the Reuters robot has to contend with other bots designed to corrupt social media with propaganda and fabrication. But waiting too long for official confirmation from verified accounts can defeat the object. “If you tune [Tracer] only for extremely credible events the problem is that it will filter out lots of things you might want to know about,” says Chua, who seeks an “optimum signal to noise ratio” for the algorithm. Ready-made sentences It is Reuters’s new Lynx Insight programme that has the potential to be the real game changer for automated journalism. Robots may still struggle with compiling elegant and evocative prose but Lynx Insight has language generation software capable of creating chunks of usable copy that can be used to build out a story or even provide a news angle. These robot-created sentences are structured in pre-prepared templates with relevant statistical information harvested and inserted by computer algorithm. The journalist simply pastes them into an article, a valuable tool in a job where speed is often at a premium. Programmed with questions chosen by journalists to generate stories, Lynx Insight mines a vast trove of data to deliver up alerts that reveal “patterns, outliers, interesting nuggets of information” about any company that is being reported on, says Chua. For example, in relation to Johnson & Johnson, Lynx Insight highlights that in the three months to 22 February, company insiders sold $20.17m worth of shares (excluding dispositions of indirectly held shares). It also records, in a ready-to-use sentence that “Among the 23 analysts that cover Johnson & Johnson, the breakdown of recommendations is 12 'strong buy' or 'buy’, eight 'hold' and three 'sell' or 'strong sell'." The journalist can take these ready-made sentences and “pick out a nugget worth dropping right into a story or use it as a tip to go off and investigate something”. Reuters is currently using these computerised tips to support its journalists who cover the markets but Chua says that Lynx Insight can be extended to other areas that Reuters covers, notably in sports and political coverage (Reuters has a long history in political polling). “We have a ton of polling data,” says Chua. “And down the road who knows what data is going to become available? As a species we are being inundated with data of all kinds.” In an article last month in The New European, Geoff Sutton, a former journalist who became a Microsoft executive, recalled sardonically how “I had a brilliant genius of a boss at Microsoft who believed that we would be able to replace all journalists and editors with algorithms.” The process of automation, Sutton noted, “is continuing”. But Reuters has decided this can only go so far. “We’re placing a bet that the future of automation in the newsroom is less around using machines to write stories than in using machines to mine data, find insights and present them to journalists,” Chua has decided. The Reuters “idea”, he says, is “to marry the advantages we have as a newsroom and as a technology developer to create a system that will help our journalists get better”.http://www.sundaytimes.lk/180520/business-times/negombo-tourism-in-the-hot-seat-291949.html28 April 2018 @ 6:12 pm Locals relaxing on the Negombo beach. This popular tourist town is faced with many issues, including harassment and intimidation, that are affecting many hotels. (Full story on Page 7). Pic by Priyantha Wickramaarachchihttp://www.sundaytimes.lk/180520/business-times/us-dollar-gains-on-political-uncertainty-291943.html28 April 2018 @ 6:11 pmThe US dollar hit dizzy highs this week against the rupee due to demand from mostly foreign banks amidst a likelihood of the Central Bank (CB) intervening in the market to stabilise the local currency. The demand for dollars was not to feed imports but based on an exit by foreigners from stock and debt portfolios owing to political uncertainties in Sri Lanka and expected US Fed rate cuts this year. The rupee hit an all-time high of Rs. 158.50 on Wednesday and then eased to Rs. 157 per dollar on Thursday. There appeared to be less pressure on the dollar on Friday morning after reported comments by CB Governor Indrajit Coomaraswamy to reporters on Thursday, in an event to mark the release of the banking regulator’s 2017 annual report. The Governor’s view that the CB has enough ‘firepower’ to deal with pressure on the rupee “implied that the rupee won’t be permitted to deteriorate further,” one money market dealer noted. “There is no reason for the rupee to be under pressure. Even if it does come under pressure we have the firepower to ensure that the currency maintains its fair value,” the Governor was quoted as telling reporters. He did elaborate on what these steps would be. However, the possible stabilisation of the rupee was short-lived later on Friday when the dollar began climbing again, gaining to Rs. 157.40 and onwards at Rs. 157.85 levels by around 3 pm. “The demand seems to be rising and that’s why the market is reacting even though banks believe some intervention in the market may happen, eventually,” the dealer said. The CB hasn’t intervened – pumping in dollars to keep the rupee down when there is a shortage of dollars – since January 2017. At that point the banking regulator had been intervening in the market whenever the dollar reached Rs.153. “We see money going out of equity (stocks) and debt markets and when these rupee sales happen, this has to be converted to dollars to be sent out,” the dealer said. In the absence of intervention, the CB has resorted to ‘moral suasion’ (gentle persuasion) - instead of issuing any direction - to banks found pushing the US currency up.

Colombo shares see low foreign buying

Colombo shares amid continued political uncertainty have seen low foreign buying with some analysts saying that the situation seems to be going down without any remission in sight. There's no support to the market in terms of policy or concessions which is causing this, stockbrokers said. Foreign investors bought shares worth Rs.1.7 billion this month (as at April 27) compared to Rs. 10 billion in the same 2017 period. Colombo's share market is desperately calling for political stability and clear direction, analysts say. A host of issues including increasing liquidity, listing state-owned enterprises (SOEs), speeding the Dollar Board and the Small and Medium Enterprises Board, Delivery Versus Payment (DVP) and new products such as Exchange Traded Funds, structured warrants, REITS and equity-linked derivatives, etc are still unresolved. Adding to this is the delay in appointing a chairman and commissioners to the Securities and Exchange Commission (SEC). While Ranel T. Wijesinha, a well-known accountant and corporate director, is said to have been appointed as the new chairman of the SEC, the move is yet to be to be announced. He will take over from Thilak Karunaratne whose term ended in mid-January 2018.

http://www.sundaytimes.lk/180520/business-times/five-rpcs-under-the-scanner-291939.html28 April 2018 @ 6:09 pmThe Government is keeping a check on at least five regional plantation companies (RPCs) over their performance threatening to cancel their lease agreements if they did not meet expectations, and thereby making way for new investments to enter an already ailing sector. Plantation Industries Minister Navin Dissanayake told the Business Times that he had had discussions with regional plantation companies about the underperformance observed in some RPCs. As a result they are being monitored, he said adding that the authorities would adopt certain measures to deal with the RPCs “who are neglecting their duties” and “if they continue to underperform then we will have to ask them to go.” Moreover, authorities are looking at working out a new model for the RPCs by breaking down the large estates and fragmenting them while calling for bids to lease out the properties to smaller businesses on the second and third tiers. It is learnt, that Prime Minister Ranil Wickremesinghe had queried from the relevant authorities in the sector how they propose to find large companies to invest in these properties today. This is the reason for coming up with this new model. Meanwhile, ministry sources said that there were Indian and British investors already engaged in the agriculture sector in other countries that had made enquiries regarding investing in the RPCs in Sri Lanka. It was found that those companies identified as underperforming required capital infusion that was lacking and were struggling to bring in the required yields onto the estates. It is learnt that these companies at one time or other had brought in investors through joint ventures and other partnerships to run the plantations but even then the plantations had performed badly. Some plantation companies had not sought out investors and were struggling to even pay workers their wages and but would somehow pull through, it is believed. However, sources noted that some of the RPCs that were under the scanner had even pulled out of their joint ventures and others were trying to continue on the road they had started out on without backing off. One of the concerned RPC companies contacted by the Business Times said that while they had problems in plantations like rubber, their tea sector had now picked up. Previously they were faced with some financial issues but pointed out that they were now on the “road to recovery”. They were also working on increasing their business in the oil palm crop as well, it was noted. Meanwhile, the authorities will put forward the proposed Governance Act under which the plantations would be handled in future. At present the proposal law has been sent to the Legal Draftsman following cabinet approval. Moreover, the World Bank funding of US$50 million to restructure the plantations although delayed is now expected to be submitted to the Prime Minister. The restructuring plan is in the pipeline for 2019/2020 and there would be a separate model for disbursement.http://www.sundaytimes.lk/180520/business-times/hutch-etisalat-merge-sri-lanka-mobile-ops-291937.html28 April 2018 @ 6:08 pmHutch Sri Lanka, which overcome a near 3-month hurdle to clear its 4G equipment from the Colombo Port, is merging with Etisalat, according to an official announcement on Thursday. It said Hong Kong-based CK Hutchison and UAE-based Etisalat have agreed to merge their mobile businesses in Sri Lanka, operating under the names Hutch Lanka and Etisalat Lanka. The companies said that the combined business should be better positioned to serve their Sri Lankan customers. The deal is part of Etisalat's stated strategy of portfolio optimization, according to an official statement on Thursday. Official sources said Hutch, ready to launch its 4G offering in 2019, was allegedly blocked in the release of the equipment and finally succeeded in March. Meanwhile Hutchison will have the majority and controlling stake in the combined entity. The completion of the transaction is subject to a number of conditions precedent, including securing the necessary competition and regulatory approvals in Sri Lanka. The takeover would see the market reduced to four from five mobile operators – Dialog (the market leader) Mobitel, Hutch and Airtel.http://www.sundaytimes.lk/180520/business-times/epf-follows-streamlined-methodology-in-investing-in-cse-and-unit-trusts-291934.html28 April 2018 @ 6:07 pmThe Employees Provident Fund (EPF) has been directed to follow a transparent and standardised methodology in making investments in Colombo Stock Exchange (CSE) and Unit Trusts following an evaluation made during a period of seven years from January 1 - 2010 to December 31 - 2016. The criteria followed by the fund and operating procedures accepted by the fund when purchasing or selling unit trusts and which quotes were called from the public had been investigated during the evaluation, Labour Ministry sources revealed. The establishment of accepted operating procedures for the sale or purchase of unit trusts for which bids are called by private limited companies and at the Colombo Stock Exchange has also been taken into consideration during this 7-year period, a senior official of the ministry told the Business Times. The basic information pertaining to the buying and selling of shares of companies such as Ceylon Grain Elevators, Vallible One, Central Finance, Hotel Galadari, Hotel Lighthouse, Laughs Gas, Dimo, Browns, LOLC, Sri Lanka Capital Holdings and The Finance Co. had been vigorously scrutinised. The aim was to find out as to whether the EPF had violated any law of the Colombo Stock Exchange or Securities and Exchange Commission when engaging in the transaction of shares, especially in the transactions related to buying and selling of shares of commercial banks, he said. Capital losses or gains sustained as a result of those transactions and details of officers who issued orders for the purchase/sale of unit trusts and details of officers who carried out those transactions as well as the transaction values of the EPF during the seven period have been compiled. These details are to be submitted to the Committee on Public Accounts for its consideration, he disclosed. However with the introduction of new methodology all investments are now being made with the approval of an Investment Committee while the Monetary Board’s prior approvals were obtained for investments outside government securities. The ministry’s Risk Management Department has been entrusted with the responsibility of overseeing the investment activities of EPF and formulates risk parameters for investments including revision of the investment and trading guideline, he added. Some of the investments by the government’s two funds (EPF and ETF) during the former regime were made in companies that were not doing too well, raising questions from the then opposition.http://www.sundaytimes.lk/180520/business-times/latest-2017-data-on-suspicious-financial-transactions-next-month-291932.html28 April 2018 @ 6:05 pmThe 2017 study on Suspicious Transaction Reports (STRs) – particularly money laundering attempts -, probed by the Financial Investigation Unit (FIU) of the Central Bank (CB) will be released next month, officials say. They said that FIU suspended funds amounting to Rs. 146 million in 2016, but declined to comment on how much it was for 2017. Since the end of the internal conflict of the country in 2009, STRs on terrorist financing have not been significant, while STRs relating to Money Laundering (ML) have showed a significant increase specially relating to drug dealing, frauds, cheating, etc. Last year too, the number of STRs relating to ML was the major component of STRs received, they said. During the year 2016, the FIU referred 94 STRs to relevant authorities such as the Bank Supervision Department (BSD), Department of Supervision of Non-Bank Financial Institutions (DSNBFIs), Exchange Control Department (ECD), NGO Secretariat, Insurance Board of Sri Lanka (IBSL), and Securities and Exchange Commission of Sri Lanka (SEC) for further investigations. Majority of the STRs referred to the ECD were on the suspicion of the violation of exchange control regulations. Additionally, 22 STRs were reported to the Inland Revenue Department on the suspicion of tax evasion. Most STRs referred to law enforcement authorities (LEAs) were on frauds and drug trafficking, with STRs relating to suspected scams also referred to LEAs for the investigations; they said but didn't comment on how many are being wrapped up. In 2016, the total number of ML convictions in Sri Lanka was three, including the country's first ML conviction for drug trafficking. In 2016, Rs. 29 million worth fraud saw the FIU imposing 20 years of imprisonment on this case and thrice the value of this amount as a fine and all properties of the fraudsters confiscated. The report did contain the names of the guilty. Earlier this month the FIU in a public notice said that designated non-finance businesses (DNFBs) are now obligated to implement proper policies and procedures to stop money laundering and terrorist financing attempts using these businesses and professions under the customers due diligence rules. The notice referred to stringent Anti-Money Laundering / Combating Financing of Terrorism (AML/CFT) criteria in five sectors which also included professionals and accountants.http://www.sundaytimes.lk/180520/business-times/if-only-we-were-squirrels-291929.html28 April 2018 @ 6:02 pmSri Lankans have faced so many shocks that nothing surprises them anymore. The 26-year conflict (1983-2009) along with two violent insurrections (1971 and 1988-1991) insulated the country's people so much so that nothing shocks or startles them now -- even the struggle for power and greed by today's powerful politicians. It was, therefore, a welcome respite from the daily drudgery of these bitter squabbles of politicians fighting for power (no more are they interested in the country) and intra-party fighting (while the country slips down the ladder of progress) faithfully recorded in the daily newspapers, when Kussi Amma Sera turned up earlier this week after a prolonged Avurudu holiday with her neighbour and comrade-in-arms in tow, Serapina. And on this Friday morning, as the sun’s rays streamed through the leaves of the giant 'kos' tree in the garden creating patterns of light and shade on the ground, Kussi Amma Sera was angrily pointing to an article in a newspaper she was carrying during a conversation with Serapina. It was like a boisterous street market argument over prices between a female vegetable seller and a buyer. KAS not only provides food for thought to these columns, but subconsciously engineers ideas for me and today her 'friendly-but-noisy' anger was directed towards the trajectory of the US dollar. The dollar has been on a roll in recent times at the expense of the 'poor' rupee and this sharp depreciation of the local currency has stirred widespread anger and frustration. She was not the only one. Social media was on fire with the dollar hitting record highs (and record lows for the rupee) as it was pegged at Rs. 158 per dollar this week with the upward movement, even by a few cents, being a (hourly) record high. Suddenly, everybody was becoming an expert on the dollar from the mobile bakery ‘karaya’ (trader), street shoemaker, newspaper delivery man to the politician. Everyone had an opinion including once politically-powerful people who were coming out of the woodwork and gleefully pointing out the weaknesses of the current regime vis-à-vis the dollar. In the past two decades public concern has grown when the dollar hit Rs. 75, Rs. 90, Rs. 100, Rs. 110, Rs. 125, Rs. 150 and now nearing Rs. 160. While nobody gave a damn about the dollar in the 1970-1980s, it is now on everybody's plate (literally) impacting on everything you buy including your usual vegetables, meat or dhal. At this point, shouts from the garden broke my reverie. "Nangi, dollar-eka naginawa. Api evarai neda (Sister, the dollar is rising, we are finished, No)?" says Kussi Amma Sera with both hands on her hips, in a typical confrontational posture. "Aei bung, eka prasnayak-de (So, is that a problem?)," responds Serapina "Aney, mei .. mage kata avusaganne epa, apey badu mila wediwei, pol thel wediwei (Don't get me started with that response, prices of goods will rise)," said KAS. "Hari, Uber gastuwath wediwei (Ok, so Uber taxi rates will also go up)," replied Serapina and then, both broke into laughter with the conversation mellowing into softer tones and becoming harder to catch what they were saying. As I pondered on this conversation and whether or not KAS was passing some hints on increasing her wage, I recalled a remark by Central Bank (CB) Governor Indrajit Coomaraswamy the previous day about the bank not planning to intervene and artificially control the downslide of the rupee. The CB's position in recent times is that exports need to expand and grow for a proper dollar-rupee parity rate and ensure the value of exports will be equivalent or more than the value of imports. For ages, the cost of imports has been double that of export earnings and in such a situation a galloping dollar hurts essential imports and the rising cost is passed to the consumer. Just to get a clearer idea of the dollar-rupee movement, we tracked the currency through CB data since 2005 when it was Rs. 102. In 2005/2006, the dollar appreciated by 5.5 per cent; just 1 per cent in 2006/07; 4 per cent (2007/08); just 1.1 per cent (2008/09) to a sharp 15.4 per cent at Rs. 127.60 in 2012. The dollar then stabilised to a 1.2 per cent hike (2012/13) and 4 per cent (2014/2015). By end 2016 it was pegged at Rs. 145.60 (showing a 7 per cent rise as against 2015) and 6.56 per cent the following year (2017) at Rs. 152.15. Today the dollar is hovering at Rs. 157-59. There are many reasons for a marginal appreciation of the dollar in some previous years and that includes intervention in the money markets by the CB pumping in dollars to artificially keep the currency low. Such intervention also means borrowing dollars in the market at huge cost or selling bonds. The current administration is opposed to such artificial intervention and hoping (against hope) that exports will grow to balance the equation (enough dollars earned -- rather than borrowing -- to pay for imports). Does this make sense? Maybe it doesn’t…….nothing makes sense these days for that matter. But at this point the phone rang …. "triiing …. triiing" as I was about to finish my column. I was in for another shock. It was ‘Kalabala’ Silva, the often agitated academic, who abhors the mobile phone and prefers to call on my noisy, old landline. "Machan, api evarai (we're finished). Have you heard … we are heading for another power crisis?" I hadn't spoken to Kalabala for a long time and was pleasantly surprised at the call. "Why, what's happening," I asked after exchanging the usual "hi, how are you doing" courtesies. If we were meeting face-to-face, we would have stumbled through the new-found greetings of exchanging high-fives and probably missed the target! Apparently the power gurus in the country say with demand sharply rising annually, Sri Lanka is losing Rs. 50 billion a year due to the inability to install new power plants. The losses are owing to using costly fuel-generated power as hydro-power generation is waning while solar power and other energy sources are still in their infancy (to match the demands) and there are protests against any more coal power plants. Unlike in the late 1990s when Sri Lanka was forced to resort to power cuts due to a shortage of hydro power, today it is a case of switching to costly thermal power with the additional cost either passed to the consumer or added to mounting losses and debt by the state. On this crisis, I was reminded by an article by energy specialist Tilak Siyambalapitiya whose tongue-in-cheek pieces are often a nice Sunday read. In a December 31, 2017 piece titled ‘Thank you Govt, for the mess in the power sector’, he wrote: "So when the electricity costs increase, the Government will say (and has already said) that electricity prices will not be increased. What they do not say is that costs of additional diesel power plants would be paid for possibly from telecom taxes or by cutting off expenses on health and education. Either way, the customer and the economy will surely be the losers. I do not have to explain who the winners are." After the 'shocks' this week, it was relaxing to watch a couple of squirrels playing with the ubiquitous ‘kurumbatti’ (the tiny preliminary stage of a coconut which sometimes falls off from the coconut flower) in the garden, with not a care in the world, not even the 'tick-tock, clockwise' movement of the dollar or the ‘electric shock’ from power realities. On top of Kussi Amma Sera's return to her 'city' home, the mischievous squirrels were soothing to the nerves and allowed me to relax, just like every Sri Lankan who gets excited over uncertainty but settles down to the evitable being inevitable. Story of our lives!http://www.sundaytimes.lk/180520/business-times/wave-that-changed-the-shape-of-the-world-economy-291921.html28 April 2018 @ 5:58 pmTen years ago by this time - that was early 2008 -, people in the US were living happily, earning more than a quarter of the world’s total income. They were also the biggest consuming nation in the world; their household consumption alone accounted for 30 per cent of the world total. In fact, it was much more than what they earned. They had another reason to be happy: They can print dollars or dollar-denominated assets and present to the rest of the world as collateral for loans and, import what they want to consume. As a result, the US has been maintaining massive trade deficits. Their exports were only little more than half of their US$ 2 trillion imports. Excess imports were financed by borrowings from abroad. Everybody else in the world loves to lend to the US and accumulate US dollar assets. More money from others’ money The US was not only borrowing, but making more money out of borrowings. Banks and financial institutions knew how to make money by multiplying credit. The wheels of their money-making machines (which were free from regulatory barriers, thanks to financial liberalisation), were revolving fast and getting accelerated. The government (federal, state and local), the household sector, the financial business sector, and the non-financial business sector; all these sectors of the economy had been borrowing. In fact, private debt grew faster than government debt. Money economy was growing too big in terms of funds, investments and credits so that all who play with money were happy. Since there was no “real” backing for part of the growing money, the money that grew were just the numbers in computers. Smart guys leave A few years before 2008, some smart fellows who were playing the game foresaw the money and credit bubble blowing too big. If the “money economy” was growing faster than the “real economy” and, if it was due to “debt piling up”, then a tsunami was nearby. During the Great Depression times in the 1930s, total US credit market debt was about 250 per cent of GDP; but this time it had gone up to 350 per cent of GDP already by 2005. Those smart fellows started shifting their investments (in stock market, bond market, derivative markets and, other so-called toxic assets markets) to futurist commodity markets. Demand shifted to gold so that gold prices started soaring. Part of the demand shifted to fossil fuel so that the world fuel price hike was also contributed by soaring demand for futurist options. For multiple reasons, fuel prices and food prices move closely. Thus as fuel prices were rising too high (reaching $150 a barrel in 2008), food prices started soaring too. Birth of global economic crisis 2009 Only a few can leave a money and credit market at once, but not everybody. Finally the tsunami - US financial crisis - swept the market in late 2008 as everyone wanted to leave at the same time; panic depositors, investors and lenders all wanted their money back on the one hand and, borrowers were unable to repay their loans at that rate on the other hand. The intermediaries - banks, funds, and all types of financial institutions - mediated between the two parties as they were in trouble facing a liquidity shortage (no money in the market) and a credit crunch (no one in a position to lend to each other). [caption id="attachment_291923" align="alignright" width="400" caption="Wind surfing in Sri Lanka. Global tourism was one of the sectors badly affected by the 2008 crisis."][/caption] The money that grew in the computers evaporated overnight! Together with that consumer prosperity was gone! Almost overnight people became poor and, financial institutions were bankrupt. Financial crises soon turned out to be an “economic crisis” on the one hand and, transformed from a US crisis to a “global crisis” on the other hand. Bankrupt US financial institutions saw their global operations and investments collapse. People who were poor now had to cut down their spending so that aggregate demand fell down. Countries that exported goods and services had to cut down their exports. Global production and trade fell down. As the global economy was shrinking, people lost jobs and work and, consequently their incomes, making the crisis worse day by day. When the US sneezes… The world economy had its worst performance in 2009 ever after the so-called Great Depression in the 1930s. With 1.7 per cent negative rate of growth, the world economy lost $1 trillion real GDP from what it had in the previous year 2008. Interestingly, almost the entire loss was in high income countries by a negative 3.4 per cent - $1.5 trillion from their real GDP. Now here is even more surprising news: During this time, Asia was growing fast and, precisely East Asia was the fastest growing region in the world. Economic growth in Asian developing countries recorded a little slowdown, but it did not turn to negative growth rates. This is contradicting what we have learnt to believe: when the US or the rich Western countries experience a problem, developing countries have to suffer more. Yet this time it was not so; why? It was because the slowdown of the West and the rise of Asia, both to a great extent are the two sides of the same coin. Roots of the crisis Most of the writings on the causes of the crisis were basically concerned with either policy failures or market failures or speculative problems, as we have already seen above. If you dig deeper into the root causes, however, you might be able to conclude that all these are bits and pieces of the core issue - the big waves of the world economy. Economic growth of the high-income countries gradually slowed down, while that slowdown started much earlier than the time of the crisis since the 1980s. Crisis was the end of the problem. During the period of a slowdown, capital investments in high-income countries started flowing out seeking new locations mostly in developing Asia. World foreign direct investment (FDI) outflows that amounted to about $200 billion about 25 years ago has surpassed $1,000 billion a few years before the crisis, and remained around $1,700 billion now. While capital moved away in recessions, that process itself made the recession faster, as the countries started losing part of the output, income and jobs. Precisely, this is what the Trump administration in the US is now trying to reverse. It was many Asian countries which attracted the outflowing capital in the West. As Asia was growing and expanding, they could also expand their market share in the region for their expanding trade. All these divergent new forces converged at the end of the day, enabling many Asian developing countries to grow fast in the midst of economic recession that ended with the crisis in the West. Concluding remarks About 200 years ago the world economic power was with England (which was subsequently shared by some other countries in Western Europe as well). About 100 years ago, the emerging economic power of the US superseded England. About 30 years ago, Japan was about to overtake the US (in fact, it did in terms of higher per capita income than in the US in the 1990s), but missed the opportunity as Japan was plunged into a long recession. Today, in the early 21st Century, that world economic power is moving into developing Asia. By the way, you may have an important question to ask: Where does little Sri Lanka figure in this whole equation? My short answer is that we are not yet ready to go with the fast-moving Asian countries. It is true that most of the fundamental conditions of development are already in place. But we need to be patient as we have other issues to be sorted out first, before taking the development matter into consideration. (The writer is professor of economics at Colombo University. He can be reached at sirimal@econ.cmb.ac.lk).http://www.sundaytimes.lk/180520/business-times/sri-lankan-political-unrest-testing-reformsfitch-291919.html28 April 2018 @ 5:52 pmRecent political developments in Sri Lanka have triggered uncertainty over reform momentum and fiscal consolidation while prolonged upheaval could undermine investor confidence ahead of large external debt maturities in 2019-22, Fitch Ratings warned in a report on Thursday. “That said, the unrest has had limited economic impact so far, and Sri Lanka's 'B+' sovereign rating already factors in a degree of political risk,” the rating agency said. Fitch said the ruling coalition suffered heavy losses in local elections in February, pointing to waning support amid signs of friction within the ruling coalition. The prime minister survived a vote of no confidence in early April, before parliament was effectively suspended until May 8 upon the resignation of coalition ministers. The coalition leadership is now discussing a cabinet reshuffle. The government has shown strong commitment to the IMF programme that began in June 2016. Progress on IMF-proposed reforms may still continue if recent political problems can be resolved and the government keeps in place an economic team that prioritises reform and stability. Some positive efforts have continued even amid the upheaval. For example, in March 2018 an Active Liability Management Act was passed and the cabinet approved amendments to the Monetary Law Act (MLA), which facilitate flexible inflation targeting. Fitch said the risk of political instability disrupting policy continuity might be mitigated by the election schedule. The presidential election is not due until end-2019, and parliamentary elections will follow. Early elections would require approval from a two-thirds majority of Parliament and the president. The current administration is therefore likely to remain in power for at least another 18 months. However, policy implementation looks likely to become slower and more challenging. Reform distractions and pressure for more populist policies might also rise as Sri Lanka enters an election cycle. Fuel and electricity price reforms to create automatic adjustment mechanisms were an IMF structural benchmark to be completed by end-2016. Approval of the fuel price reform is a requirement of the completion of the IMF's next review, and further delay in implementation could raise risks to the fiscal outlook. Large upcoming debt maturities and low reserve coverage make Sri Lanka vulnerable to shifts in global investor confidence, which could be affected by an extended period of political unrest or signs of waning commitment to the IMF programme, Fitch warned. Gross external debt was equivalent to 59 per cent of GDP in 2017, and a quarter of this - around US$15 billion - is due to be repaid in 2019-22. The Active Liability Management Act may allow the authorities to smooth debt repayments, while foreign reserves were bolstered by a sovereign bond issuance of $2.5 billion in April. However, reserves stood at just $7.3 billion in March 2018 and Sri Lanka's international liquidity ratio of 69 per cent is well below the 147 per cent median for sovereigns rated at 'B' or below. A high proportion of public debt is denominated in foreign currency, which could weaken repayment ability should there be sustained rupee depreciation. The rupee has weakened by 2.4 per cent against the US dollar so far in 2018.http://www.sundaytimes.lk/180520/business-times/central-bank-pledges-to-sustain-the-rupee-at-a-reasonable-value-291915.html28 April 2018 @ 5:49 pmDefending the current flexible exchange rate policy, the Central Bank (CB) this week pledged to sustain the rupee against the dollar at a reasonable value but assured intervention in the financial markets if the pressure was ‘unbearable.’ Governor Indrajit Coomraswamy told a media conference in Colombo convened in connection with the release of the bank’s 2017 annual report, that the current rate of the rupee is competitive and the monetary policy could be adjusted accordingly while the CB’s priority is inflation targeting. He said, “because Sri Lanka is a highly indebted country in terms of foreign debt, and we need to boost exports to get out of that problem, it is important to have a competitive currency which is slightly undervalued at present.” The present exchange rate will help to meet the government’s priorities in terms of exports and FDIs, he added. He was of the view that, “there will be political pressure to undermine the framework but it is very important that this fiscal consolidation continues and the progress the Government has made is reflected in the recent Staff Level agreement with the IMF on the fourth review of the Extended Fund Facility ).” Explaining the factors behind the current economic situation, he pointed out that the country’s exports came come down to about 12.4 per cent of GDP in 2014 from 33 per cent in 2000. At the time where exports were collapsing, external borrowings increased to an extremely large amount from nothing in 2007. The present situation has been due to allowing exports to come down so sharply and go on a commercial borrowing spree by the former regime, he argued. The country’s current trade deficit must be contained through the depreciation of the currency and an increase in interest rates, he said adding that the depreciation of the rupee will increase import prices and thereby curtail import expenditure. He was of the view that the depreciation of currency will be helpful for the country’s export competitiveness and if it is not done then it would increase the trade deficit further. The market works pretty well except for the last four days, he said adding that if there is a misalignment between the trends in the market and the economic fundamentals the CB “would definitely intervene.” He said “there was no reason why there should be volatility in the exchange rate because our foreign reserves were around US$10 billion and in addition the government has just closed bids of term loan of a further $ 1 billion which the response was so good and the consideration is being given to up-scaling it.” Reserves have been increased in quantity and quality as the short-term swaps while commercial banks have reduced from $ 2.5 billion to $ 1.5 billion, he said pointing out that non debt creating reserves have been boosted with the purchasing of $1.6 billion. Dr. Coomaraswamy noted reserves will further increase with the receipt of the last tranche of $600 million from the Hambantota port lease. He noted that external debt liabilities will not increase by rupee depreciation as the borrowings and repayments are being done in US dollars and it has nothing to do with the rupee. But he noted that, “when the borrowing takes place, for accounting purposes, it is recorded in rupees and when you depreciate the currency that amount does increase but you pay back out of inflows into the country”. The flexible exchange rate policy of the bank and its non-intervention stance in the market has resulted in the volatility of the rupee against the US dollar, Senior Deputy Governor Nandalal Weerasinghe said. It has allowed the foreign exchange market to determine the exchange rate without intervening; he said adding that more volatility in exchange rate was evident at present.

Economic growth in 2017 fell to 16 year-low

Sri Lanka’s economy grew by only 3.1 per cent last year, the lowest in 16 years with the fall blamed mostly on adverse weather conditions, according to the Central Bank (CB). Though this data was contained in the CB's annual report for 2017 released to the public on Thursday, CB officials have indicated in the past few months that economic (GDP) growth was expected to fall to 3 per cent from 4.5 per cent in 2016. The worst year before this was in 2001 when the economy contracted and recorded negative growth of 1.4 per cent after being hit by a series of global and domestic economic issues. The CB said the growth rate was significantly below projections of the Sri Lankan authorities as well as international agencies. “In spite of the low real GDP growth, the economy created sufficient employment opportunities that induced a further reduction in the unemployment rate to 4.2 per cent during the year. In terms of expenditure, growth was supported by the expansion of both consumption and investment expenditure in 2017, while net external demand continued to weigh on growth negatively. Both services and industry related activities, which together account for 92.4 per cent of gross value added, recorded growth rates of below 4 per cent. The agriculture related activities recorded a negative growth for the second consecutive year, although estimates for 4th quarter 2017 indicated a recovery in the sector,” it said.

http://www.sundaytimes.lk/180520/business-times/union-bank-37-growth-in-post-tax-profit-in-1q18-291913.html28 April 2018 @ 5:48 pmUnion Bank has reported a pre-tax profit and VAT of Rs 246 million in the first quarter 2018, up by 47 per cent from the same 2017 quarter, the bank said in results released to the market. “A significant growth in core banking operations contributed to the robust performance of the bank during the period under review, while prudent cost and revenue management drove growth in profits over the corresponding period in 2017,” it said. Fee and commission income which mainly comprises of deposit related fees, trade and remittances, loans, cards and other fees increased by 18 per cent to Rs. 224 million “A strong performance by the Treasury function resulted in capital gains of Rs. 69 million against Rs. 11 million in the corresponding period last year. Total operating income rose to Rs. 271 million,” the statement said. Post-tax profit was up by 37 per cent to Rs. 130 million. The group, comprising the bank and its two subsidiaries, UB Finance Company Ltd and National Asset Management Ltd reported a post-tax of Rs. 154 million, up by 28 per cent year-on-year. Commenting on the latest results, Union Bank’s Director/CEO Indrajit Wickramasinghe said, “strengthened by its three-year growth strategy, Union Bank is now ready to take on the next phase of its expansion and growth”.http://www.sundaytimes.lk/180520/business-times/john-keells-foundation-interaction-with-morawewa-farmers-291910.html28 April 2018 @ 5:47 pmJohn Keells Foundation (JKF) recently organized a “Govi Hamuwa” for the benefit of farmer organizations of the Morawewa DS Division in collaboration with Morawewa Irrigation Project Management Office (Morawewa Major Irrigation Projects) and World Vision Lanka. [caption id="attachment_291911" align="alignright" width="400" caption="A farmer discusses an issue"][/caption] This initiative was organised under the village adoption project of Livelihood Development focus area with the aim of poverty alleviation at village level through sustainable and integrated development programmes for all communities, planned and implemented in collaboration with relevant stakeholders, JKF said in a media release. JKF, the corporate social responsibility entity of the John Keells Group has been working in Morawewa North in collaboration with World Vision Lanka supporting the lives and livelihoods of the villagers since 2014. Addressing the gathering and explaining the objective of the session, Charitha Subasinghe, Retail Sector Head and CEO of Jaykay Marketing Services (Pvt) Ltd of John Keells Group and Project Champion of Village Adoption Project noted that, “since the area is known for water scarcity - Govi Hamuwa, was organized to introduce cash crops which require less water for cultivation as well as to facilitate market linkages with potential buyers. We hope to uplift their livelihoods and empower them to build and develop themselves and their communities in a sustainable and entrepreneurial manner.” The Govi Hamuwa was attended by 72 farmers from 11 farmer organizations. The forum concluded with a panel discussion that discussed various aspects of cultivation including fruit and vegetable cultivation, maize cultivation, groundnut cultivation and quality standards of post harvesting providing the farmers with valuable insights and information, the release added.http://www.sundaytimes.lk/180520/business-times/extensive-overhauls-at-cpcs-sapugaskanda-oil-refinery-291908.html28 April 2018 @ 5:45 pmThe Ceylon Petroleum Corporation’s (CPC) Sapugaskanda Oil Refinery successfully completed a colossal 35-day overhaul and renovation programme recently, aimed to boost efficiency, reliability and productivity of the refinery. The 50-year-old facility, which is the only oil refinery in Sri Lanka, refines imported crude oil to supply 30 per cent of the energy demand of the nation. The scheduled renovation in 2018 is a procedure commissioned every three years and it focuses on maintenance and replacing critical facilities and equipment to operate the refinery at optimum levels. The renovation project took place in the three main sections of the plant, namely the Process Plant, Utilities and the Tank Farm. The large-scale overhaul of the refinery saw the complete shutdown of the facility. The supply gap due to the shutdown of the facility was filled by procuring imported oil by CPC, months ahead of the scheduled 2018 maintenance project, the CPC said in a media release. The Sapugaskanda Oil Refinery Facility overhaul saw around the clock inspections, quality testing and maintenance of equipment. This year’s maintenance of the refinery importantly replaced several critical equipment in the Crude Distillation, Naphtha Hydrotreater, Reformer and Gas oil Hydrotreater units that were nearly 50 years old. Simultaneously during this period, maintenance work took place in the Utilities and the Tank Farm areas. CPC Chairman Dammika Ranatunga commenting on the critical refinery overhaul, said, “We have adopted a long term strategy to uplift the quality and productivity of the Sapugaskanda Oil refinery by installing the latest high-end equipment and renovating key facilities this year. It is a very important project for us as on the long run it ensures we supply uninterrupted energy in an efficient and productive manner. Our vision is to build and strengthen our country’s energy security. We plan to incorporate modern standards and processes to transform Sri Lanka’s energy landscape to one of the best in Asia.” The renovation process began on February 19 with over 1200 employees including engineers and mechanics of the refinery working often round the clock during a 35 day period to complete renovations as per schedule. Further, the entire renovation process was monitored closely by a quality assurance team and stringent safety standards and global quality testing procedures by The American Society for Testing and Materials (ASTM) and the American Petroleum Institute (API) were followed. Situated on a 165 acre land, the Sapugaskanda refinery currently produces 50,000 barrels per day and consists of five large oil tanks with a capacity of 40,000 metric tonnes each. The refinery imports crude oil from West Asian countries such as Saudi Arabia, Oman, Abu Dhabi, etc. The imported crude oil is distilled by the stipulated refinery standards and processes. The Sapugaskanda Oil Refinery produces 92 Octane petrol, auto diesel, kerosene, Jet A1, Bitumen and LPG and supplies energy to Sri Lanka’s major industries.http://www.sundaytimes.lk/180520/business-times/almost-a-quarter-of-the-2017-budget-proposals-became-broken-promises-291906.html28 April 2018 @ 5:44 pmThe government’s transparency in disclosing information on the progress of 2017 budget proposals has improved significantly although some ministries and state institutions were reluctant to reveal details despite its public obligation to do so, two researchers of Verité Research, a think-tank revealed in Colombo on Tuesday. Almost a quarter of the promises made in 2017 budget have not been fulfilled and about one third of the promises completed half way, they said at a media conference adding that the think tank’s research was based on 37 expenditure proposals of Rs 1. billion and over. Only 22 per cent of the promises in the 2017 budget have made substantial progress and 8 per cent have been fulfilled, the research report disclosed. There was a very little disclosure on the revisions made to the promises prior to approval or the progress made on implementing them thereafter, Research Director Subashini Abeysinghe said. Government’s budget credibility depends on better planning and setting of targets, she pointed out adding that it is vital to gain more public support for the country’s taxation policies. According to the Verité Research report, around 46 per cent of the budget proposals worth Rs. 61.5 billion have come under the “Undisclosed, Broken or Poor” categories. The project proposals worth Rs. 55.4 billion were partially or completely fulfilled. The information on ministry websites is minimal and attempts to obtain more information from government agencies had been unsuccessful despite repeated requests, she added. People should be made aware as to how their tax monies are used and what purposes, then there would be less tax evasion, she noted pointing out that the government will lose the confidence of the people if it fails to fulfill promises given in the budget. Tracking the budget’s implementation increases transparency about the government’s delivery on its promises, she said adding that the lack of openness allows the government to make grand promises to the public in the budget speech that are then frequently unfulfilled. Nilangika Fernando, an assistant analyst at Verite Research, said that halfway through the year, they were unable to get information on 51 per cent of the largest budget proposals costing Rs. 57 billion. No one knows where this money is going, she said adding that this means the proposals have been implemented or the money had been used for other purposes outside the budget. She said that they were unable to find out even through requests filed under the Right to Information Act. The Information and Communication Technology Agency (ICTA), Fisheries Ministry, Department of National Budget and Presidential Secretariat were the most responsive institutions for the requests for information made by Verite Research, for their exercise, she revealed.http://www.sundaytimes.lk/180520/business-times/epf-office-beneficiaries-subjected-to-a-lot-of-inconvenience-291738.html27 April 2018 @ 8:37 pmI spent three days at the Labour Department trying to hand over the EPF benefits claim and in the interest of thousands of others who would be filing their claims, I thought of relating the inconvenience that one goes through. [caption id="attachment_291742" align="alignright" width="400" caption="View of the 9th floor of the EPF office."][/caption] I took the claim form and went to the Labour Department ground floor counter along with a statement of fund availability collected from the Central Bank (CB), with accurate details in it, i.e. correct name, correct employer/employee number and with my NIC number on each statement. On February 14, 2018 at around 9 am after checking the records, the counter clerk said that though the monies have been deposited in my name by the CB, there are some records missing in the Labour Department system. Remember, none of the errors was attributed to either employer or employee! According to the counter clerk on the ground floor where applications are accepted, though the funds are available in my name, no money would be released till these “errors” are corrected no matter what difficulties the innocent retiree has to go through - in my case at 60 years of age. I was asked to go to the 9th floor (central filing section) to do a “RN check”. At this point, there was a huge crowd of people waiting patiently. On top of that a security person was trying to control the people while there was no clear explanation on the process and directing them to relevant officers. Affluent people breaking queues The number I got was 49 and by 12 noon only number 22 had entered the internal lines in front of different tables. It was very disturbing to see how some were trying to break the queue and these “ill-mannered” persons included well-dressed men and women with an air of affluence. After waiting patiently for my turn, I finally entered the room around 3.10 pm but there were still about 8-9 people around one clerk. Only two officers had been assigned to handle the work on rotation basis while a large crowd waited. You need more than two officers to deal with public complaints on the 9th floor. Since I was the person (involved in HR) who handled the EPF registrations with the department in all the companies I have worked in respect of the claims, I was confident there were no errors on my part or by my employers. I have in the past handed over the A, B, H forms to the EPF department for due registration, and each time after 3-4 months I used to collect the registered B cards after visiting the department. What had apparently happened was that the officers in the department have randomly entered those documents in their registers allocated for each employer which was not the proper way. Due to these inefficiencies, innocent retirees are compelled to run from one department to another or go back to their former employers, to start the process from the beginning by re-doing the A-B-H forms to correct the department’s faults. As far as the employer and employee concerned, the documentation I produced had been done accurately and I had the registered B cards with me from all my past employment. I explained to the counter clerk the fault was with the EPF department. This was when I was able to speak to the officer around 3.40 pm and when he asked me what my issue was. I requested him to give a solution for what the ground floor officer had asked for in the internal document. My issue was about amalgamation error in one of five EPF numbers and another issue involving two other numbers. I saw the tension on the face of the officer with overwhelming demands and unresolved issues of the people. He too was helpless. He asked me to come on another day that he will look into it. I also must give due credit to the officer who did the work from morning till 2 pm working at a stretch who and going out to lunch only at 2 pm. Knowing how the department works I met another officer known to me and asked for help in the matter before going home. Pregnant women forced to wait Two days later my contact said the said documents were untraceable. Luckily I had captured copies of all my documents on my phone and on February 16 went to the department at sharp 8.30 am. My number was 35 but the line moved slower than the previous day. There were over 75 people, some carrying children, some pregnant, some in crutches and some walking with the aid of a helper, etc. Department officers passing are not bothered or concerned by those standing in the line and checking on their welfare. After all this is public money that we are talking about and staff of the department are paid from funds that come from us. EPF claimants should be treated with respect instead of abuse, harassment and compelled to plead with officials. At a 4th floor office where I had to go, the section is mostly females and there a group of about 10 employees were either enjoying a cup of Yoghurt for dessert, collecting money for a function, reading papers or chatting while the public patiently waited. Because my papers couldn’t be found (no fault of mine), I was compelled to go back to the 9th floor and to the original officer whose advice was to get a direction from an officer on the 8th floor. The 8th floor officer was kind and understanding but had to follow the process and after several more steps, they promised to give me a proper update. On February 22, I was back in the office, I was informed that some errors had been corrected but was told to get a new set of forms completed by one of my former employers. At this point I appealed to the earlier kind officer and explained the hassle of walking several floors up and down. She tried to help and asked a 9th floor officer to attend to my matter. Eventually after a long struggle of three days, I was able to handover my claim form but yet to see whether all my monies would be returned to me safely as expected of them. At the Labour Department there are notice boards informing of a monthly religious programme inviting employees to take part during valuable office hours running for two hours, adding more unproductive time for these clock watchers. Those who approve this type of nonsense are engaging in a crime! What if I was living far away out of Colombo and in having an illness, etc? How many people go through this ordeal on a daily basis without being able to voice their issue? I hope this article will reach the Minister, Commissioner of Labour and his deputies, and action taken to formulate ways and means to simplify the process, if the fault lies in the hands of the department. These government departments are huge white elephants and should be privatised so that all stakeholders get a decent and speedy service. Claimants should be treated with more respect particularly since it's their money that sustains departments like this. (This is a first person account of a person who experienced this inconvenience. He can be reached at arunajaya2018@gmail.com)http://www.sundaytimes.lk/180520/business-times/surge-in-sea-street-due-to-hindu-festival-gold-rush-290409.html21 April 2018 @ 5:50 pmDespite a tax hike on gold, hundreds of customers countrywide especially women, made a beeline on Wednesday to gold and jewellery shops in Sea Street, Pettah to buy glittering gold jewellery to celebrate the Akshaya Tritiya Hindu festival, an auspicious day for buying gold and other valuable items. [caption id="attachment_290410" align="alignright" width="400" caption="Crowds at a Sea Street jewellery store on Wednesday."][/caption] Jewellery merchants, who had announced a slew of discounts and attractive offers mainly through TV advertisements for the past two to three weeks, reaped maximum benefit drawing a large number of customers with cash registers ringing merrily, several customers told the Business Times during a visit to the area. With the belief that buying gold on Akshaya Tritiya augurs well and brings fortune throughout the year, jewellers offered discounts, gold coins, and gifts as well as a free, one night stays in a hotel for honeymoon couples to entice clientele. The imposition of a 15 per cent tax on gold imports by the Treasury with effect from midnight Tuesday didn’t deter customers or sales, several jewellers said. Some of the leading jewelers who advertised heavily over local TV channels had given an opportunity to their customers to reserve their desired piece of jewellery from its collection (by paying an advance of 25 per cent) between March 12 and April 17 and have the items collected on the day of ‘Akshaya Tritiya’, April 18. These advertising and marketing campaigns have resulted in over 100 per cent increase in footfalls on Wednesday, a leading jewellery merchant told the Business Times adding that most of the jewellery shops were kept open till late night on Akshaya Tritiya day. "The response has been in line with more than our expectations this time," another leading jeweller said. “The demand is quite good this year and the sales are likely to surpass last year’s figures,” a small jewellery shop owner said. The number of customers to one of the leading jewellery shops in Sea Street exceeded 5,000 and many of them thronged there from early morning around 6 a.m, witnesses revealed. The Finance Ministry has imposed a 15 per cent tax on gold with the aim of limiting imports which has affected the trade deficit and the exchange rate, a senior Treasury official disclosed adding that the a large number of people had been able to buy gold items at old prices on this special day. “A large quantity of gold imported to Sri Lanka duty free is smuggled out to neighbouring countries especially to India with high customs duties,” he pointed out adding that this move will put an end to that practice as well as re-exporting of gold. Excessive gold bullion imports posed a risk to the Sri Lankan banking industry as gold is frequently used as collateral against banking loans and that a drop in the gold price has led to the increase in the number of loan defaulters, he claimed. However the gold tax hike will affect Sri Lankan jewellers and other citizens who wished to purchase gold as the price of a gold sovereign will go up by Rs. 8,000, analysts said. Addressing a recent media conference in Colombo, Parliamentarian Bandula Gunawardana noted that gold smuggling will increase to avoid the 15 per cent tax. He noted that the government’s move would definitely decrease the demand greatly affecting the local gem and jewellery industry. The former Rajapaksa regime imposed a 10 per cent tax on gold imports in 2013 while the present Government not only eliminated the 100 per cent tariff on gold, but also took the additional step of reducing the previous 10 per cent tax to 7.5 per cent on the directions of former Finance Minister Ravi Karunanayake. The removal of gold buying restrictions was working well at that time and the end result for gold investors was an increase in demand for the yellow metal, analysts said.http://www.sundaytimes.lk/180520/business-times/heat-wave-switch-on-the-fans-289786.html12 April 2018 @ 6:13 pm As temperatures soar during the country’s scorching heat wave these days, there has been a run on electric fans, boosting average daily sales at shops. This picture shows a cart full of electric fans brought to a retailer in Pettah. (Pix by M.A. Pushpa Kumara)http://www.sundaytimes.lk/180520/business-times/four-parties-to-handle-hilton-hyatt-sale-289783.html12 April 2018 @ 6:11 pmFour parties have been shortlisted by the Ministry of Public Enterprise and Kandy Development for the position of advisor to seek suitable investors for the sale of government stakes in the Hilton and Grand Hyatt hotels. The four are Hotelivate Pvt Ltd-India, Jones Lang Lasalle Property Consultants (India) Pvt Ltd, KPMG-Colombo and Lazard Asia Ltd -Singapore, official sources said. They were picked from a list of 15 companies that earlier submitted an RFP as “Transaction Advisor” for the two hotels. The others were Fenek Ltd, Dubai; PWC, Singapore; Colliers International (Singapore) PTE Ltd Singapore; Mayer Brown JSM Singapore PTE, Singapore; Acuity Partners (Pvt) Ltd, Colombo; RKF Hotel Experts GMBH, Austria; Savills (Singapore) PTE Ltd; Deloitte Touche Tohmatsu India, LLP, India; CIMB Investment Bank Berhad, Malaysia; Capital Alliance Partner Ltd, Colombo and YSP Advisors (Pvt) Ltd, Colombo.http://www.sundaytimes.lk/180520/business-times/consumer-financial-protection-authority-takes-off-289779.html12 April 2018 @ 6:07 pmIn the face of the recent debacle of several finance companies, Sri Lanka is set to take more effective financial consumer protection measures to protect local and foreign consumers in the sophisticated and complex financial market at present, a senior Finance Ministry official divulged. A Consumer Financial Protection Authority (CFPA) will be established to control Non-Bank Finance Institutions (NBFI) including finance companies as this sector has grown 20 percent at present and some of these firms are facing liquidity issues. At present, Sri Lanka does not have a dedicated authority to protect the interest of the financial customers, promote fairness and transparency for consumer financial products and services. The 2017 budget proposed to establish a CFPA which will have the capacity to protect the consumers, by improving the financial consumer rights, promote financial literacy, ensure competitiveness in the financial markets and firms thereby enhance integrity of the financial system of the country as a whole. The establishment of this independent authority will not duplicate the Central Bank’s regulatory functions of Non Bank Financial Institutions, in fact it will facilitate the monetary regulator's financial inclusion strategy, a top level CB official told the Business Times. However he noted that modalities of the setting up of this authority are yet to be finalised as it requires cabinet approval and the enactment of necessary legislation in Parliament. Its job is to stand up for consumer interests and ensure their fair treatment in the consumer financial marketplace and it will not duplicate the regulatory functions of the Central Bank, he added. The main aim of the proposed authority is to protect the consumers, by improving the financial consumer rights, promote financial literacy, ensure competitiveness in the financial markets and firms thereby enhancing integrity of the financial system, Finance Ministry official said. It will also help to increases bargaining power of consumers and further regulates banks in terms of marketing financial products. The availability of information has grown both in quantity and complexity and the pace of change, in terms of new product developments, product innovations, and technological advances, has prompted the Finance Ministry to set up this agency. Under the present circumstances, it is essential to build and maintain consumer confidence and trust in financial markets while promoting efficiency and stability to create positive outcomes for both financial institutions and their customers, he claimed. Central Bank reiterated the need for continued strengthening of the existing regulatory framework of non-bank financial institutions to ensure the soundness of the sector and contain its spill-over effects on the whole system. An independent CFPA would make and enforce clear rules for everyday financial products. It should vigorously enforce those rules; pay real attention to preventing the growth of harmful practices; be accountable to the public; and provide real consumer protection in financial products and services, several leaders of disgruntled depositors associations of failed finance companies said.

CB’s protection for finance firm customers

As a precursor to the Consumer Financial Protection Authority (CFPA), the Central Bank (CB) has issued directions to all Licensed Finance Companies (LFCs) to ensure the protection of rights and interests of all financial customers. According to these directions issued recently, customers should be given complete, clear, concise and not misleading information about financial products and services, and they should have the right to access and to have fully understood the terms and conditions of such products and services. Employees and appointed agents will have to act professionally with due skill and diligence when dealing with customers. Under this initiative, all customers shall be treated equitably, honestly and fairly at all stages of their relationship with the financial entity. All LFCs have been directed to take necessary steps to protect customer data and privacy.

http://www.sundaytimes.lk/180520/business-times/public-financial-literacy-improves-to-tackle-online-loan-sharks-289777.html12 April 2018 @ 6:05 pmSri Lankans’ financial literacy is being improved to prevent them falling prey to online loan sharks creeping into the Internet, top Central Bank (CB) officials said. This money lending menace has now gained a new outlook through its operations on online platforms, an independent check carried out by the Business Times revealed. The peer to peer online money lending operations could be tackled only through creating awareness on the risk and dangers associated with the system, CB Governor Dr. Indrajit Coomaraswamy recently disclosed. It is quite tough for the CB to crack down on such online money lending operations because it has the regulatory reach only on licensed financial institutions, banks and several micro finance firms, he said. However a new resolution and enforcement department has been established at the bank to take action against unauthorized deposit mobilisation, he said adding that it cannot interfere into money lending as it was the responsibility of the borrower to obtain loans from formal or informal channels. A separate police unit attached to this department will carry out raids to crack down on unauthorised deposit mobilising institutions, he revealed pointing out measures have also been taken to create awareness on fraudulent pyramid schemes among the public via media campaigns, etc. But there is no law to prevent the operations of money lenders; he added pointing out that the only way to tackle online money lending was to create awareness on negative consequences in borrowing at high interest rates. Cashwagon.lk is one such online money lending platform that is now in operation using cutting edge technology to enable easy access for borrowers obtain loans via its web portal. Cashwagon focuses on online consumer financing where it offers online cash loans without any collateral, complex approval procedures or prolonged time durations within 24 hours. “This service by Cashwagon makes it convenient for online customers to apply via computer or smart phone and obtain the required cash deposited in their accounts,” the web site indicated. It assured that, through this service, Sri Lankans can enjoy benefits of new technology to satisfy their urgent financial needs without collateral and complex procedures and paper work. Dr. Nandalal Weerasinghe, Senior Deputy CB Governor, noted that there was no prohibition in the lending of personnel money to persons in need of cash. He noted that Sri Lanka has a regulatory framework for banks, finance companies, rotating savings and credit associations, savings and credit cooperatives. But the money lenders, online or otherwise do not fall into the above categories and there was no regulatory framework in existence, he said. The Money Lending Ordinance was enacted in 1918, with subsequent amendments in 1954 and 1963. The opening sections of the Ordinance prohibit persons who are not citizens of Sri Lanka from carrying out the business of money lending. Foreign firms and companies are also prohibited but there are certain exceptions provided in the ordinance. (BS)http://www.sundaytimes.lk/180520/business-times/insurance-takeovers-the-next-big-thing-289775.html12 April 2018 @ 6:03 pmAt least two insurance firms are for sale, while many foreign and local buyers are setting the stage for consolidation in this sector, insurance industry officials say. HNB Assurance PLC has approached many local parties to buy them over while Janashakthi Insurance PLC’s (JINS) life arm is being courted by multinational insurer, Germany’s Allianz who in February bought its general insurance business, they say. Insurance sector has seen many deals in the past four years and this year will see much consolidation, analysts predict. The insurance sector has got global insurance players eyeing local insurers, analysts say. JINS’s general arm went in a Rs. 16.4 billion deal to Allianz. Earlier this month Japan’s Mitsui Sumitomo Insurance Company Ltd increased its stake in Ceylinco Insurance PLC to 10.5 per cent. Mitsui Sumitomo held 6 per cent stake as of end December 2017. Sumitomo is now the third largest shareholder in Ceylinco Insurance after Global Rubber Industries (22.25 per cent) and Banque Pictet and Cie SA (12.73 per cent). Ceylinco Insurance PLC saw a total of 289,717 shares traded on Monday and this was a purchase by Tundra Frontier Opportunities Fund. Insurance was a sector that has always been trading at book value (the amount that the share holder will get for each share after selling out all assets and paying liabilities), but the value of recent transactions such as the JINS one for Rs. 16.4 billion saw that these stocks should be trading at a higher multiple, according to analysts.http://www.sundaytimes.lk/180520/business-times/nuwara-eliya-season-tourist-traffic-hit-by-40-slump-289773.html12 April 2018 @ 6:00 pmThe Nuwara Eliya season has been left hurt oiling its bruises from the recent violence that erupted in Kandy, resulting in an expected drop of about 40 per cent in both local and foreign tourist traffic, hoteliers said. Kandy Hoteliers Association President Samantha Ratnayaka told the Business Times that this is in the wake of the recent violence that occurred in the hill capital. The industry is now looking at carrying out an aggressive campaign in promoting the areas as a destination together with the Sri Lanka Tourism Promotion Bureau (SLTPB). The Association also covers Nuwara Eliya and Bandarawela hotels. Grand Hotel General Manager Rifan Razeem said that they did experience a drop in occupancies this year and said it was mainly the local traffic that was down by around 12 per cent. Moreover, he pointed out that while they would have been full by this time last year, the occupancy levels had reached about 75 per cent this week. The Nuwara Eliya season is mainly from April 12 -22, he said adding that the hotel has planned a number of events for this year’s visitors with a Romanian artiste performing throughout the period; a potato festival; 100 metre long and 500 kg potato cake to be distributed to their neighbours including government offices and orphanages on April 15; ice carving competition with Chefs Gerard Mendis, Dimuthu Kumarasinghe and Martin from Dubai on April 18 along with a serving of noodle soup from the hot pot for 1000 people. Black Pool in Nuwara Eliya General Manager Mutu Ramesh noted that currently their occupancies were at 65 per cent and they expect a 4 per cent drop in overseas traffic. But due to the Avurudu celebrations some hotels have increased their occupancies and are expecting only about 7 per cent cancellations from the Middle Eastern market that is scheduled to visit after June. Some hoteliers noted that there would be an overall drop of about 55 per cent compared to the seasonal traffic experienced last year. Meanwhile, as part of the drive to promote the destination the industry has invited social media bloggers to visit the country in a bid to boost the image of Kandy in the aftermath of the violence. During the meeting with Tourism Development Minister John Amaratunga there were discussions held to invite Ambassadors of the various countries that imposed travel advisories. A site visit for diplomats mainly from the European Middle Eastern countries would be held on May 13-14 with cultural events and tours to assure them about the country returning to normalcy. In addition, the industry together with the SLTPB is expected to conduct a travel mart in September similar to Sancharaka Udawa with the venue being Kandy.http://www.sundaytimes.lk/180520/business-times/young-talent-against-experience-289770.html12 April 2018 @ 5:56 pmThis was the topic of the telephone conversation I was engaged in on Wednesday. My (Thursday) deadline had changed because the printing of the newspaper had been brought forward, ahead of the Sinhala and Hindu New Year (our chaps at the printing presses who churn out millions of newspapers daily need a break, no! What about the printing machines; it’s stop the presses for once, at this delightful time of the year). Anyway as I was saying, it was ‘human resource’ pundit HR Perera trying to convince me, over the phone, that maturity, experience and seniority are better than young talent. I had begged to differ, disagreeing that young talent is better than maturity but agreeing that young talent is better than seniority. Confusing? Read on, but also remember, HR Perera belongs to the old school where seniority matters and comes over efficiency and/or talent. Before I proceed on this telephone conversation, it must be stated that Sri Lanka is at a crossroads on how to effectively manage its human resource capital. Actually, we are at sixes and sevens! Consider this: We are building mega cities with massive construction of infrastructure on and in the pipeline and building potentially South Asia’s main business hub – the Colombo Financial City -- where nearly 250,000 will work or enter for business and other purposes while another 75,000 will live there. For all this, you need human capital but there lies the problem in Sri Lanka’s HR planning to meet these exigencies when one policy is to encourage Sri Lankan professionals to go abroad. Thus to meet the shortage, foreign labour and skills are hired. This is the reality. Consider, as explained earlier, the state policy on outward migration for work: The focus is to encourage more professional and skilled migration and less unskilled labour like domestic workers so that their capacity to send more foreign exchange is much higher, and reduces the worrying social costs when unskilled women find jobs abroad. What kind of policy is this? The shortage of unskilled workers – given the massive construction underway – has compelled companies to import labour from India, China, Bangladesh and Nepal. Another issue that arises – and something not considered so far by the authorities – is proper contracts and conditions of employment for these foreign workers, sound conditions of employment Sri Lanka is desperately campaigning for, for its own workers in West Asia. What is sauce for the goose must be sauce for the gander. Leaving that discussion aside on decent working and residential conditions for foreign workers, the issue at stake is whether Sri Lanka has a proper labour needs and assessment policy in place to take us comfortably into the middle of the 21st century. I was reminded of this by HR Perera’s reference to a Business Times story last week on the government considering infusing young blood into key positions in the state sector due to the lack of efficient administrators. “Hello, Machan,” says HR, in a rare exuberant way, as he is always grumpy; nay cautious, typical of people in his fraternity. “Yeh, why”, I respond cautiously, wondering what surprise he is about to spring on me. “The labour issue that your papers have been talking about is all because there would be a lack of senior persons in the administration when the present lot retires.” “Well yes …,” I say, again waiting for his full explanation. “This is a serious issue. Who will run the country after the present lot retires?” he asks. It appears that quite a few secretaries of ministries and heads of departments are about to retire and that the second level of management who would eventually take over lack the competencies and skills, particularly proper English language speaking and writing abilities and digital capabilities – which are important in today's public sector and particularly in a wired society. Government thinking, according to last week’s story, is to bring in some young blood into the sector, give them positions of authority but working under the senior officials (so that the latter doesn’t get offended as they are ‘seniors’) to drive the development agenda. The challenge today given the pace of development in economies that are speedily getting digitised is for officials coming up the ladder and those who joined the public service in the ’70s and the ’80s (in Sri Lanka) to keep abreast of these developments. Their junior counterparts are more alive to these trends and engaging with such technology, giving them a head start over their senior colleagues and bosses. What they (younger staff) lack in experience is amply compensated with their knowledge and effective use of technology, which is a kind of drawback to the older generation of public servants. While there are many reports and new ones coming out on assessments of human resource needs, there doesn’t appear to be a clear understanding of Sri Lanka’s human resource needs in the next 10-30 years. Often these assessments are catering to short-terms of 3-5 years. If not, why are we promoting Sri Lankan professional migration courtesy the Sri Lanka Bureau of Foreign Employment, essentially to make up for possible shrinking of foreign exchange remittances due to a policy of reducing the number going abroad for domestic work? So while on one hand, Sri Lanka needs to build its foreign reserves through remittances from workers abroad, on the other hand, this results in a shortage of skilled and professional manpower at home. Thus, foreign remittances via professional migration come ahead of retaining this talent at home with jobs and attractive employment conditions. In the absence of skilled workers, Sri Lanka is compelled to import labour – unskilled and eventually skilled. Then to import skilled workers, which Sri Lanka is likely to face in the near future if professional out-migration continues and intensifies, there are problems; professional associations here which are not in favour of the various trade agreements like the Sri Lanka-Singapore FTA and the upcoming Sri Lanka-India and Sri Lanka-China FTA’s which have provision to allow services in the form of professional workers. While this is still under debate as to what the right fit (and numbers) in terms of allowing foreign workers should be, already there are hundreds of workers from 3-4 countries working on construction sites. These have been permitted under Board of Investment rules which also allow a certain number of professional categories. The authorities also have to be mindful of not allowing hotshot, young turks to upset the old guard in ministries and departments with ‘bull in a china shop’ approaches; rather it should be creating an environment of live and let live. Managing this human capital of seniority and experience versus talent and up-dated skills should be the order of the day, particularly with Sri Lanka moving up the ladder of development and aiming to reach middle-income status. Does all this sound boring for a Sunday read? To be honest, I found it too, myself, yawning a couple of times while writing. HR is not the most exciting subject though the new science of HR is a different ball game. However, it is an important economic issue and the reason why we need to bring these issues to the table. But something else is missing this week in providing that extra energy and zest to the column. Ah! It’s the absence of Kussi Amma Sera who has gone home for the Avurudu holidays. Silence is golden, they say but this is one time, I wish, she were around with the noisy racket in the kitchen and over-the-fence loud gossip with her comrade-in-arms Serapina providing that inspiration for good Sunday topics.http://www.sundaytimes.lk/180520/business-times/modern-mercantilism-289761.html12 April 2018 @ 5:51 pmAll of us would like to see Sri Lanka’s exports growing. For that matter, we want other countries to open their markets for our exports; if possible they can even grant us some concessions like GSP +. We appreciate the EU and the US for extending the GSP + and other concessions for Sri Lanka. However, at least for some of us - I believe there are many- the flip side of international trade is different. There are those who would like to see curbs on imports; that we should not open our market for exports from other countries, although we want their markets open for us. Trade hypocrisy It might be surprising and even embarrassing to know what the US has to say about Sri Lanka’s tariff regime, while extending the GSP concessions to Sri Lanka. The following is the way that International Trade Administration of the US Department of Commerce provides advice to their exporters who consider exporting to Sri Lanka: “Sri Lanka imposes a variety of import duties, which combined can result in high duty rates. US exporters should be aware that fees incurred when exporting to Sri Lanka include the customs-import tariff, Export Development Board levy, Value Added Tax (VAT), Port and Airport tax, Nation Building Tax, Port Handling charges, and agent commissions, all of which could add up to more than 100 per cent of the cost-plus-insurance-plus-freight (CIF) value for items at the higher tariff bands. The Embassy has received complaints from U.S. exporters regarding this “prohibitive” tariff regime.” [Source: https://www.export.gov/article?id=Sri-Lanka-Import-Tariffs] We want others to follow “open market” policies for us, but also want “closed market” policies for them. The two ideas, taken separately look sincere and patriotic. But actually they are hypocritical, when they are put together. Apart from this moral issue, we might easily get caught up in our own argument when we want to believe in a strategy of export promotion plus import protection. This economic sentiment, which is known as a “mercantilist idea” is, however, not a new thing. It is historical and global. With recent global economic crises and the new US trade policies, the old mercantilism has been gaining momentum, opening the door for a new global economic rivalry. Medieval mercantilism Mercantilism, as it was called by the Scottish Economist, Adam Smith who attacked it in his pioneering book Wealth of Nations (1776), prevailed in Europe during 1600s - 1800s. It was the dominant economic perspective of the then European businessmen who believed that the economic power of a nation should be built up by maintaining a positive trade balance; that is, exporting more and importing less. Because international payments were in gold, exporting more and importing less would keep the country’s gold stock growing. It was the sign of increasing economic power of a nation state. The contemporary economic policies in Europe were based on this mercantilist ideology: It would ensure always a positive trade balance by exporting more and importing less. One might ask a simple question: When every nation is trying to export to other countries and not to import from other countries, wouldn’t world trade diminish and come to an end? The answer is clear if you look at European Mercantilism in the context. It was the time of European expansion and colonization over the rest of the world so that a few European nations were able to sustain Mercantilism. Old mercantilism withered away after 1800s, and free trade gained momentum up this date. We are in a different world now. But we still hear that a modern version of Mercantilism has revisited from both political and business grounds. Modern mercantilism Modern mercantilism has two aspects as individualist and nationalist dimensions. A producer of a particular commodity might demand for protecting his particular product from competing imports. This is good for that particular producer at least temporarily, but bad for the economy as a whole. It is good for the producer because it keeps him from competition and efficiency with a guaranteed market. It is bad for the economy because, on the one hand the consumers have to pay for it with higher prices. On the other hand, industrial expansion and economic growth would be retarded. The flip side is that the same producer under different circumstances might have to take a contradictory ideological position: If he starts exporting the product he will choose the “open market” economies where he can easily get into business. If he has to import a part or a raw material which has come under tight import controls, now his own protectionist idea might be an obstacle to his own production; perhaps, he might consider moving his business to a more open economy where there is less import protection. I should also emphasise that competitiveness and efficiency of production is determined by not only the degree of import controls. This is a result of multiple factors, while the quality, quantity and cost of many other inputs will affect it. [caption id="attachment_289766" align="alignleft" width="400" caption="A drought-affected paddy field. Local producers want protection against cheap imports while exporters want less protection in their source markets."][/caption] Nationalist dimension Nationalist dimension of mercantilism is the development strategies based on mercantilist ideology, anticipating that it is the road to prosperity. Countries having trade deficits are often seen pointing fingers at the lack of import controls. This is a familiar case for us in Sri Lanka too, as we have a persistent trade deficit. I don’t think Sri Lanka is a country with an “open economy” because we have tariffs, para-tariffs, and domestic taxes on imports on the one hand, and numerous and complicated taxes and tax mechanisms on the other hand. In fact, sometimes I wonder why we introduce Sri Lanka as an open economy. It may be comparable with South Asian standards, but Sri Lanka’s competitive position as an established “open economy” in the Asian region has eroded over the years. While Sri Lankan government collects about 18 per cent of its revenue from taxes on international trade, it is 2 to 3 per cent in most of the Asia countries, listed in the above table. Singapore and UK have zero per cent share in taxes on international trade, and in the US it is only one per cent. This shows that, despite rhetoric, Sri Lanka is not so open; you may compare Sri Lanka with other South Asian countries, but not with fast-growing export-oriented economies in East Asia. Wrong diagnosis Let me give the economic explanation of Sri Lanka’s trade deficit; in short, I would call it “living beyond means”. This means that Sri Lanka has a trade deficit because our aggregate demand - mainly consumption expenditure and government expenditure, exceeds the level permitted by our income (GDP). It is similar to saying that when you keep spending more than what you earn, it is reflected through your growing loans. Let me also elaborate another valid point here. Economic growth can be influenced either by growing exports or by growing government expenditure:

•  The countries which were able to sustain the former (growth influenced by exports), are able to maintain healthy trade performance and sound government budget; many East Asian countries fall under this category.
•  The countries which used to push their economic growth through government expenditure gradually plunge into the problem of both trade deficit and budget deficit; Sri Lanka falls under this category.

  It is absurd to address the problem of trade deficit with mercantilist policies; it is based on a wrong diagnosis. Neither would such policies bring prosperity to the country. What is needed for Sri Lanka is to make a decisive shift from the latter to the former group of countries - from fiscal expansion to trade expansion as the driving force of sustainable economic growth. (The writer is Professor of Economics at the University of Colombo. He can be reached at sirimal@econ.cmb.ac.lk).

Taxes of International Trade as % of Government Revenue

China ... 2.8 Indonesia ...     2.8 Japan ... 1.5 South Korea ... 2.0 Malaysia  ... 1.7 Thailand  ...  3.3 Singapore  ...  0.0 India  ...  13.2 Sri Lanka ...  17.8 UK  ...  0.0 USA  ...  1.0 South Asia (average)  ... 16.7 East Asia & the Pacific (average)  ...  2.7 Source: World Development Indicators Note: Figures are for the latest year as available, while for most of the countries it is for 2016.

http://www.sundaytimes.lk/180520/business-times/stax-launches-digital-offering-289452.html11 April 2018 @ 8:11 pmSTAX, the leading management consultancy in Sri Lanka, recently announced the launch of a new suite of digital solutions geared towards unleashing the full potential of Sri Lankan corporates. Regardless of whether a start-up or a long-established business, the newly developed offering is aimed at delivering continuous value throughout the digital value chain, the company said in a media release. The STAX offering comprises of a comprehensive suite of services aimed at addressing the core digital requirements of Sri Lankan businesses. Their proprietary Digitisation Index is an entry-level solution aimed at assisting companies to identify their current digital positioning in relation to their competitors and global industry benchmarks. This allows these businesses to understand where they currently stand on the digitisation spectrum, and take corrective, or in some cases, proactive steps to ensure long term sustainability. Stax also supports clients in developing end-to-end digital roadmaps which cover every aspect of an organisation— from digitalising customer interactions to optimising internal operating processes. To ensure value realisation, STAX offers implementation support across all its services, ensuring the effective operationalisation of strategies, the release said. Stax believes that to remain competitive in today’s world, radical digital reinvention is needed. Simply having an e-commerce platform or digitizing customer interactions is insufficient. Real digital reinvention requires rethinking the business itself. “These circumstances create unprecedented challenges, but are also capable of yielding organisation-defining success for those firms that can analyse trends and understand their meaning; taking agile decisions that will redefine their core value proposition,” Stax Managing Director, Dr. Kumudu Gunasekera said, according to the statement. Geared towards providing Sri Lankan corporates with the tools necessary to evaluate, launch and grow their digital presence, the Stax approach to digital strategy allows for businesses to analyse key demographics, refine product offerings and accurately gauge consumer behaviour to generate unmatched returns on their digital investments. “With the types of technological advancements that have been steadily entering the Sri Lankan market over the recent past, most corporates are keenly aware that now is the best time to be making investments into the digital space, and to explore opportunities for future growth. There are already numerous examples of how the changing face of digital is driving economic growth and levelling the competitive playing field, enabling anyone from start-ups to established players to disrupt and compete head-to-head with market leaders through the deployment of a smart digital strategy. Therefore, Stax is confident of a major boom in digital investments over the short to medium term,” Dr. Gunasekera explained. Founded in Boston almost 25 years ago, Stax has earned a reputation for delivering rich insight-driven consulting solutions that open-up incremental and transformative growth opportunities for clients. Its clientele spans a diverse range from mid-sized corporates and family businesses to some of the world’s largest investment funds and Fortune 500 companies.http://www.sundaytimes.lk/180520/business-times/central-banks-amended-monetary-law-act-ready-by-end-2018-289449.html11 April 2018 @ 8:10 pmThe Central Bank (CB) is seeking to amend the Monetary Law Act to support flexible inflation and these amendments will be ready by the end of the year, CB Governor Indrajit Coomaraswamy has said. The cabinet has approved the framework for the amendments and the amended law will come into force by the end of this year, he added. “The legal and accountability framework built into the amended act involves greater independence to the Central Bank. Greater accountability on one hand and greater independence on the other hand is the ideal way forward,” noted Dr. Coomaraswamy. He made these remarks at a recent, well-attended gathering in Colombo. The occasion was the Colombo Development Dialogues on ‘Integrated Development impact through partnerships and innovations’ organised jointly by UNDP Colombo, Dilmah and South Asia Centre of London School of Economics. Dr. Coomaraswamy stressed that Sri Lanka has been a twin deficit economy because there has been a large demand in the system. “The fiscal consolidation and the forward looking monetary policy is a cold turkey that we have to go through. It’s not enough to do the stabilisation measures, you need to have aggressive reforms. The reason why Sri Lanka’s growth rate is low is that in my view our economic reforms have lacked stabilisation,” he noted. Elaborating further he mentioned that it would have been better if the country was more aggressive in strengthening the growth rate of the economy. “The great mistake would be to go for artificial pumping up growth which is what we do all the time. You have to break that cycle and the only way to do that is to do the stabilisation and the economic reforms side by side,” he added. He also stated that adoption and adaptation of technology are the key determinants for the success of countries in the East and South East Asia. They had clear policy frameworks which Sri Lanka has not done in a coherent way. Often innovation in an economy is driven by Foreign Direct Investment (FDI) and this is why Sri Lanka has been very unsuccessful in relation to countries in the East in attracting FDI. “You need angel investors, venture capital private equity up the chain to support these start- ups,” he noted.

SL never misses an opportunity, to miss an opportunity

While the people and the country leaders keep harping about a missed opportunity of what the country and the government should have done at some point, the country is grappling with weak institutional structures. Also while the education system is not equipped to face sustainable development in the country, no measures are taken to retain the young talent leaving abroad.A panel of experts shared these concerns at the Colombo Development Dialogues titled ‘Integrated Development impact through partnerships and innovations’ organised by UNDP Sri Lanka together with Dilmah and South Asia Centre of London School of Economics (LSE) at the Cinnamon Grand in Colombo. “In Sri Lanka we never miss an opportunity to miss an opportunity,” said Dr. Rajesh Venugopal from LSE, in his opening remarks. Back in the days when the country was known as Ceylon, people tasted the fruit even before the tree was planted and there was lot of positivity and enthusiasm among the people. Today things have changed a lot where the country needs to cope up with, additionally, the adverse climate changes. While the country is in between two large economies in the world India and China, better governance, effectiveness and inclusion of all society is required, he added. UNDP Sri Lanka Policy and Design Specialist, Sonali Dayaratne explained that involvement of a civil society is always a positive sign for growth. “We need to inculcate a value system and revisit the education system,” she noted. Sri Lanka is currently grappling with weak institutional structures. The education system is not equipped to face sustainable development in the country. In the 1960’s Sri Lanka was ahead of all East Asian countries, she added. European Union Ambassador to Sri Lanka and Maldives, Tung-Lai Margue stressed, “If Sri Lanka doesn’t manage to retain the talented youth from going overseas, the country will have big problems in the future.” The country has now moved from being a developing country to a middle income country, he added. Unilever Sri Lanka Chairman Carl Cruz elaborated that with science and technology you can move forward in leaps and bounds. Think of innovative ways of working in an organisation and look at the challenges and opportunities. “There are no CSR functions at Unilever: 50 per cent growth is generated by brands whereas sustainable practices make more people join the firm. If you don’t change you will be irrelevant,” noted Mr. Cruz.

http://www.sundaytimes.lk/180520/business-times/condominium-construction-on-raymond-road-289447.html11 April 2018 @ 8:07 pmAs concerned public interest citizens, we are writing on a matter of great importance which if not controlled immediately, could lead to grave consequences. We have been made aware that apartments are going to be built at No 10, Raymond Road, Nugegoda. The residents of this road have suffered immensely due to the corruption and negligence of authorities to grant approval previously to set up a private international school (by a politician currently holding a portfolio in the education sector), in a purely residential area. In addition, business establishments have been set up in residential houses down this road. This has caused immense traffic congestion due to school and business traffic and people have no space to walk on the road. Garbage trucks are unable to collect garbage as vehicles are parked on the road to pick up school children. An emergency ambulance or fire engine cannot enter the road during peak hours as many drivers park their vehicles on the road and go. We cannot understand why the sovereign rights of citizens are violated and voice of the people are not listened to by our politicians who seem to only look after the interest of their cronies in the business sector. We strongly believe that these approvals have been established without proper quantification of the traffic flow, utility and other requirements of citizens. Citizens will have to pay for additional fuel expenses, loss of privacy, noise, structural damage to their properties, time wastage in traffic jams causing lost opportunities in earning additional income, diseases in chest and lungs due to pollution resulting in higher medical charges, etc. We have seen the fires in London, Dubai and Singapore in apartments resulting in loss of life and property. This should be a good example to government and buyers of apartments. Can our fire brigades go into small roads such as Raymond Road and douse fires in apartments. It is definitely “No” especially in the Dehiwela Mount Lavinia Municipality area. Apartment construction should be banned in residential areas. They should be constructed only in areas with large land mass available (like Havelock City) or outside Colombo in non-urbanised areas where open large extent of lands are available. Over to you, Honourable Minister Champika Ranawaka for immediate action to halt this construction. Residents of Raymond Road, Nugegoda.http://www.sundaytimes.lk/180520/business-times/advantis-handles-logistics-for-sls-first-10mw-biomass-power-plant-transportation-289443.html11 April 2018 @ 8:06 pmAdvantis Projects has been appointed as the logistics solutions provider for COSCO Shipping Project Logistics Co, Ltd which has secured the total transportation of the country’s first 10MW biomass power plant project, being commissioned in Kalawaaragama, Moneragala by Green Watts (Pvt) Ltd. [caption id="attachment_289444" align="alignright" width="400" caption="Advantis Projects’ trailers transporting the heavy cargo through rural Sri Lanka"][/caption] Advantis Projects in partnership with Chinese shipping major, COSCO Shipping, managed the movement of plant and machinery required for the project from the Port of Shanghai. The consignment of cargo of 7000 CBM (cubic meter), reached the Hambantota port on board a Multi-purpose vessel operated by COSCO Shipping, Advantis said in a media release. This is the first break bulk cargo to arrive at the port of Hambantota post the recent transfer of operations to Hambantota International Port Group and Hambantota International Port Services. Speaking on this occasion, Managing Director of COSCO Shipping Lines Lanka (Pvt) Ltd. Joe Meng said, “We are proud to be engaged in the movement of the first 10MW biomass power plant to Sri Lanka from Shanghai, China. It is indeed a great honour to contribute towards the green energy sector of Sri Lanka.” The cargo was unloaded at site using Advantis Projects’ new 250T heavy lift crane and transported by land to the project site in Kalawaaragama aboard the logistics provider’s trailers. Having worked on similar cargo movements both within Sri Lanka and around the world, Advantis Projects has extensive experience in managing large scale projects for the power and energy sector. Some of the noteworthy projects in recent times include handling the ship to shore ground logistics of windmill cargo for the successful installation of 16 wind turbines in Pallali, the transportation of four 100 ton diesel engine generators from the Horana BOI zone to Lahore, Pakistan and the relocation of the 24MW Lakdhanavai power plant from Sapugaskanda to Nyala, Sudan.http://www.sundaytimes.lk/180520/business-times/ifc-invests-in-senkadagala-finance-targeting-women-entrepreneurs-289440.html11 April 2018 @ 8:04 pmIFC, a member of the World Bank Group, is investing US$15 million in Senkadagala Finance PLC to help the company expand access to finance for women entrepreneurs across Sri Lanka. [caption id="attachment_289441" align="alignright" width="400" caption="Exchanging the agreements -Sanath Bandaranayake, Director/Additional CEO-Senkadagala Finance and Amena Arif, IFC Country Manager for Sri Lanka and Maldives."][/caption] This loan is part of the Women Entrepreneurs Opportunity Facility (WEOF), launched by IFC through its Banking on Women (BOW) programme, and Goldman Sachs 10,000 Women, IFC said in a media release last week. This loan is expected to expand access to affordable financing for women-owned micro and small businesses over a five-year period, helping to narrow the credit gap for businesswomen. Of Sri Lanka’s one million businesses, over 250,000 are headed by women. Little over 90 per cent of these are micro and 4 per cent are small sized. The IFC Enterprise Survey in 2011 estimates that up to 65 per cent of small enterprises do not have access to a bank loan or credit. “Having started our relationship with the IFC in 2014, this project is timely given the expansion plans of the company. It will enable Senkadagala Finance to further extend credit to women entrepreneurs,” said Sanath Bandaranayake, Director/Additional CEO of Senkadagala Finance, in the statement. This is IFC’s first investment in Sri Lanka targeted exclusively at women-owned entrepreneurs, and IFC’s first local currency loan in the country. “This project fits well with IFC’s strategy to promote sustainable, inclusive growth, and we are keen to help create more and better jobs for women and narrow the credit gap for women entrepreneurs,” said Amena Arif, IFC Country Manager for Sri Lanka and Maldives. “IFC’s second investment with Senkadagala Finance will create opportunities for female entrepreneurs in Sri Lanka, enabling them to grow and prosper.” The WEOF is the first-of-its-kind global facility dedicated to expanding access to capital for 100,000 women entrepreneurs. It aims to help close the credit gap for women-owned businesses around the world. IFC’s BOW programme is playing a catalytic role in helping financial institutions meet the needs of women entrepreneurs in a sustainable and profitable way. The programme has committed 53 investments globally, totalling $1.68 billion, and undertaken 39 advisory projects since its launch in 2010. Of these, WEOF has supported more than $930 million in commitments to financial institutions in 19 countries. “Goldman Sachs research shows that closing the credit gap for women-owned SMEs in emerging markets could push income per capita an average of 12 per cent higher by 2030; women entrepreneurs have real potential to impact Sri Lanka’s future growth. Through this partnership, we will help to build resilient, women-owned businesses and enable women entrepreneurs to reach their full potential with the capital and support they need,” said Charlotte Keenan, Head of 10,000 Women.http://www.sundaytimes.lk/180520/business-times/workers-remittances-improve-in-jan-2018cb-289438.html11 April 2018 @ 8:02 pmWorkers’ remittances from West Asia which was on the back-foot in 2017 for a number of reasons including lower oil prices, registered considerable growth in January 2018, the Central Bank (CB) said in its review of import/export data for that month. In a media statement, the CB said remittances grew by 8.8 per cent, year-on-year, to US$729 million in January from $670 million in January 2017. While earnings from merchandise exports increased, expenditure on imports also increased significantly outweighing the performance in export earnings during the month. Tourism earnings also recorded a notable growth during January 2018. However the deficit in the trade balance expanded in January surpassing $1 billion for the second consecutive month due to significant level of imports offsetting the increase in export earnings, it was stated. The CB statement on January 2018 data, said: Earnings from exports continued to record double-digit growth (year-on-year) reaching $965 million in January, partly driven by the impact of the low base as export earnings contracted by 3.8 per cent in January 2017. Export earnings from food, beverages and tobacco, petroleum products, rubber products and tea contributed largely to the growth in exports. Further, export earnings from rubber products increased due to improved performance in almost all sub categories, particularly export of tyres. In addition, export earnings from textiles and garments increased moderately during the month due to the increase in earnings from garment exports to the EU and the US by 4.9 per cent and 1.7 per cent, respectively, although there has been a reduction in exports to non-traditional markets such as Canada, UAE, China, Saudi Arabia and Japan. Earnings from tea exports increased due to higher prices and volumes. However, earnings from coconut exports declined significantly along with the decline in volumes of coconut kernel products such as desiccated coconut, coconut oil and copra as a result of the low domestic production of coconut due to drought conditions. Import expenditure crossed $2 billion in January for the second consecutive month mainly due to high import bills incurred on fuel. Despite the reduction in the volume of refined petroleum imports, expenditure on fuel imports increased significantly during the month owing to high volumes of crude oil imports and significant price increases recorded in all categories of fuel. Average import price of crude oil increased to $72.04 per barrel from $57.39 per barrel in January 2017. Further, import expenditure on fertiliser increased significantly reflecting the combined impact of higher average import prices and volumes of fertiliser, particularly urea. Expenditure on gold imports continued to increase significantly in January 2018. In addition, following the reduction in taxes on electric motor vehicles in the Budget 2018, import expenditure on personal vehicles increased owing to high imports of electric motor vehicles. Despite the decline recorded in average import prices of rice, import expenditure on rice rose due to high import volumes of rice. Financial Flows Long term loan inflows to the government recorded a net outflow of $2.5 million during the month. In terms of foreign direct investments (FDIs) including foreign loans to BOI companies in 2017, Sri Lanka received $913 million, registering the highest ever FDI inflows in history. The level of gross official reserves of the country declined to $7.7 billion at end January 2018 compared to $8 billion at end 2017, primarily due to a periodic payment for the obligations at the Asian Clearing Union (ACU) during the month. The Sri Lankan rupee depreciated by 2 per cent against the US dollar up to April 5, 2018. Furthermore, reflecting cross currency movements, the rupee also depreciated against other major currencies during this period.http://www.sundaytimes.lk/180520/business-times/fipbox-all-the-info-you-need-to-make-an-informed-choice-on-fds-289434.html11 April 2018 @ 7:59 pmWho offers the best rates for a fixed deposit (FD) in banks or financial institutions? Don’t look any further: Fipbox is a website that provides all the collected information about FD rates, returns, and various benefits offered on the FD investments, by banks and financial institutions in Sri Lanka. All the updated, current information is presented to you in an easy-to-understand format and you can decide where to open your FD after having seen all the information, the web company (www.fipbox.com) said in a media release last week. The Fipbox platform was created and launched in February 2018 by Fipbox (Pvt) Ltd, a financial technology company that is committed to creating technology tools to develop and enhance financial services. It is subsidiary of the Capital Alliance Group, a leading financial services company in Sri Lanka. Fipbox is the online information portal, where you can find information and get in touch with the banks and financial companies offering FDs, so that you can avoid filling in individual application forms. “But your FD is made directly with – and processed by and held by – the bank or financial company you select to make your deposit with,” the statement said. It said with Fipbox on your desktop, you can make fast, efficient and informed decisions about where to open your FD within the Range of FD investment options available. Fipbox is a centralised digital market that allows financial institutions to list their rates and investors to easily access these potential FD options. This eliminates time wasted on phone calls and inquiries, where usually an investor needs to individually contact various banks and financial institutions to obtain FD rates on offer at a given time. “Often, individual investors don’t have the time to spend on gathering comprehensive information from all banks and financial companies, and make their FD decision based on only the details they have found. But with Fipbox, now they can shop around for the best rates and deals for their FD. By bringing everyone to a single marketplace, Fipbox says it has broadened the scope for both financial institutions and investors. Fipbox allows FD issuers to reach out to more investors and the investors – whether corporate or individual investors - enjoy a hassle-free and larger pool of potential investment opportunities. “Fipbox also removes all the tedious paper work and form-filling that has to be done with each fixed deposit. With Fipbox, you only need to provide your complete information once, and that information is stored securely and used with every investment option you make through Fipbox. As a registered investor, you can also track your FD from end-to-end including maturities, re-investments and other aspects of your investment,” the company added.http://www.sundaytimes.lk/180520/business-times/asia-siyakas-rs-650-mn-tea-warehouse-improves-storage-options-289429.html11 April 2018 @ 7:58 pmWarehousing is reaching new heights by maximising on space in a bid to provide the tea industry with an improved service to house their stocks found only at the Asia Siyaka facility at Wattala. [caption id="attachment_289430" align="alignright" width="400" caption="Pictures by Indika Handuwala show the inside and outside of this modern warehouse."][/caption] Improving on the previously established 110,000 sq. ft storage facility with seven levels, Asia Siyaka has increased its warehousing within 87,000 sq. ft area with eight levels with a complete computerisation of the location investing Rs.650 million, Asia Siyaka Managing Director Anil Cooke said in an interview with the Business Times. He noted that the company was looking at logistics as a way forward and would be eyeing more expansion plans in time to come. Mr. Cooke explained that the new facility opened in 2016 allowed for free airflow that ensured the teas were stored under dry and cool conditions. There are currently 10 bays to be used for stacking from a floor clip or large sized stacker vehicle that is manually operated with the operator clearly given a number and letter code on where to stack the teas as mentioned on each palette. There are four small stacker vehicles and four large stackers or floor clips in use currently at the facility. Mr. Cooke claimed that the freshest teas were available as the time from manufacture to sale is considered the shortest in the world at Asia Siyaka since the value chain is short from the point of manufacture to being sent to auctions and then distributed to buyers is done in quick time. He noted that many other warehouses had studied their systems and had developed their own facilities accordingly. He also explained that in order to design this system in Sri Lanka they had travelled to a number of countries like Dubai and Singapore to review practices employed in other parts of the world. However, the loading and unloading is carried out manually by workers from Asia Siyaka and those employed by lorry owners sent from the respective companies. Almost all brokers and manufacturers continue to store their stocks at the Asia Siyaka facility it was pointed out. Three weeks before the auctions the teas are sent by manufacturers to the warehouse and two weeks prior to the auction samples are sent to the main buyers that could even increase to about 1400 while some request for only a few samples. The wooden pallets used to store these tea bags are being treated in a bid to ensure they would not be infected by insects. As part of maintaining cleanliness the store is vacuum cleaned with a sweeper machine as it would ensure that all dust particles are swept out. The facility has also been given a green certification for its use of LED bulbs, solar panels, grass on the outside and recycling the water sent out from the sewage system. With the complete computerisation of the warehouse, it is possible to determine where each stock of teas could be accessed immediately by checking through the computer files. About 25,000 to 30,000 packages of tea are being stacked at both warehouses sent from around 80 companies that comprise tea smallholders and the regional plantation companies as well.http://www.sundaytimes.lk/180520/business-times/disposal-of-unproductive-non-financial-assets-289427.html11 April 2018 @ 7:55 pmI refer to an article in the Business Times on April 1 under the above headline where it is stated that a Comptroller General (CG), appointed under the Finance Ministry, has been entrusted mainly to prepare and maintain a list of central assets covering all non-financial assets of the government for monitoring purposes. While appreciating this move, which should have been initiated long ago, I wish to mention that apart from disposing unproductive non-financial assets, there are unproductive financial assets as well in the government organisations and public enterprises controlled by the state (SOBE). Unproductive financial assets include the inventories as well and there are redundant and old inventories in most of the SOBEs and other departments. Hence it is advisable for the CG to collect data on such assets as well for monitoring purposes in addition to the unproductive non-financial assets. This fact would assist some of these organisations to get away from liquidity crises and assist to maintain their liquidity positions to satisfactory levels. Secondly, I feel that this exercise should cover the non-productive military assets as well maintained by all three forces and the Police, if so far not captured under this exercise. Thirdly, I feel that a sound budgetary control system should be placed under the CG to monitor government expenditure for purpose of cost management. At least a quarterly variance report should be prepared and reviewed for minimising costs and to avoid wastage, theft, corruption and such other unproductive costs. For this purpose the CG may establish budgetary control sub committees at ministry levels covering all establishments as a preventive measure. Also, it is advisable for copies of the CG's quarterly reports to be forwarded to the Auditor General and the COPE for their observations and suitable action in order to maintain transparency. I wish and hope that when preparing regulations for the above purpose, the CG would consider these items as well, among other areas. Mahinda Wimalasena Kiribathgodahttp://www.sundaytimes.lk/180520/business-times/sli-felicitates-long-serving-employees-through-harasara-awards-289423.html11 April 2018 @ 7:54 pmSri Lanka Insurance (SLI) recently recognised and felicitated employees who had served the company over a 25 and 35-year period at an event titled the “Harasara 2018” awards. In a media release, SLI recognised and felicitated 104 members of its staff for their loyal service, dedication and commitment to the company: 11 of the recipients had completed 35 years of service while 93 had completed 25 years of service. All awardees received a personalised plaque, certificate and gold coins as a tribute. At the event, SLI Chairman Hemaka Amarasuriya spoke on the contributions made by the staff to the growth and development of the company over its 56-year history and commended them for their loyalty and dedication to the organisation. [caption id="attachment_289424" align="aligncenter" width="400" caption="Ms. Shreema Vithanage (left) is congratulated by SLI Chairman Hemaka Amarasuriya while SLI Director Nilu Wijedasa and DGM – HR/ER Rohitha Amarapala look on."][/caption]http://www.sundaytimes.lk/180520/business-times/audit-bill-gazetted-but-long-way-before-parliamentary-sanction-289421.html11 April 2018 @ 7:53 pmThe politically-beleaguered government is facing another challenge of establishing the office of the national audit office and the Sri Lanka state audit service; to specify the role of the auditor general over public finance and to make provision for matters connected to it, official sources said. Minister of Lands and Parliamentary Reforms and the Chief Government whip Gayantha Karunatileka recently presented the National Audit Bill in Parliament. The new bill will come up against strong opposition in Parliament as it has diluted certain important provisions, political analysts said. If the National Audit Bill is not passed urgently by Parliament, incorporating strong deterrent oriented surcharge provisions along with further strengthening of the independence, professional capability and powers of the Auditor General, the establishment of an Audit Commission Office and the Sri Lanka State Audit Service will be further delayed, a senior government official said. Several provisions included in the original bill which was to be enacted in Parliament by March 19, 2015 had to be changed due to pressure exerted by top officials of ministries and parliamentarians. Amendments to the bill were approved by the Cabinet last October, removing the provisions in the bill, which allow the Auditor General to impose personal surcharges on public officials for financial misappropriation. According to amended provisions, the powers to recover monies related to any fraud, negligence, misappropriation or corruption, have been vested in the Chief Accounting Officers (CAOs - e.g. Secretary to a Ministry or Department Head) instead of the Auditor General. The new bill will vest vast discretionary powers in CAOs in determining the final surcharge. Persons subject to an inquiry by the Auditor General are entitled to nominate others to appear on their behalf in accordance with the provisions of the new bill. Furthermore, in the event that the CAOs themselves are subject to an inquiry, powers of imposing a surcharge have been vested in the President as the appointing authority. However, if the President decides to impose a surcharge, the Bill does not provide a right of appeal to the CAO. Although the Audit Service Commission investigates and reports on the amount of loss incurred and the individuals determined to have caused the loss, the CAO has the power to reduce the amount to be recovered, with no restriction and providing no justification, with the State not given an opportunity to appeal such action. These amendments to the original bill have diluted the objective of strengthening accountability in public finance, analysts said.http://www.sundaytimes.lk/180520/business-times/video-interviews-speeding-up-the-process-for-hr-289418.html11 April 2018 @ 7:51 pmTechnology is disrupting the way companies recruit and the way human resource departments evaluate candidates. One innovation that is important to consider is the use of a video interview. In a media release, Sixer Video, a specialist in video interviews for recruitment, identifies three key reasons why video must be part of your HR strategy: 1) Video interviewing allows hiring managers and recruiters to conduct first-round interviews more quickly and efficiently, since arranging face-to-face meetings or even phone calls can be expensive and inconvenient. Not only does the interviewing process become faster, but it becomes more cost effective as well. Video interviewing completely eliminates transportation costs by allowing you to meet candidates face-to-face virtually, anywhere, at any time. And also allows HR staffs to effortlessly share candidate profiles and other relevant information, a clear example of the old adage that time saved is money saved, too. 2) It doesn’t take a rocket scientist to know that if your hiring process is smooth, easy, and efficient, candidates will more likely want to work for your company. A company’s recruitment style is usually a good way to judge one’s future employment experience, and it’s the first impression your business will make on future hires. With more dynamic, qualified candidates taking part in a streamlined, applicant-friendly recruiting process, the chances of a perfect match rise exponentially. 3) The global population becomes more acquainted and comfortable with technology, the web recruitment industry will continue to grow precipitously. Companies are now using video recruitment to hire at all levels of employment, from entry-level workers to experienced professionals. Sixer Video is a Sri Lankan start-up focused on the HR-tech space that is launching its product to a global market. “We at Sixer Video help recruiters screen a candidate better than a CV. How do we do it? Before calling in a candidate, we instruct them to upload a video via our app. Our platform helps you to know your candidates better before calling him/her in and to know whether they will fit to the company's culture and for the job position’s requirements,” the release said. Already many companies, such as McDonalds, have trialled recruiting through existing video messaging platforms like Snapchat, Whatsapp and Facebook. However, recruiters lack control over critical elements such as the duration of the video pitch and the ability to organise the incoming video submissions, rate them and easily share with other colleagues. “We are heading towards a unique step in recruitment for Sri Lanka. The platform can save a lot of time and help companies to recruit remote talent. Companies like Stax, UPS and Hayleys are currently saving time and being the pioneers in ushering the new era in recruitment.” says Sixer Video Co-Founder Imthiyaaz Hassim.http://www.sundaytimes.lk/180520/business-times/dfcc-forging-partnerships-abroad-289413.html11 April 2018 @ 7:47 pmThe DFCC Bank is concentrating on getting into more focused areas to collaborate with markets abroad, officials said. DFCC will explore a range of opportunities in consolidation and offshore markets and the bank will also leverage on its group relationships particularly in the area of Public Private Partnerships," Lakshman Silva, CEO/Director DFCC told the Business Times. He said DFCC has done some investments in Bangladesh through its associate firm, Lanka Ventures PLC. "We are also in close partnership with SAARC Development Fund and are lending through this to corporates,” he said. He added that DFCC will step up its initiative to develop a sizable offshore lending portfolio focusing on emerging markets in South Asia and East Africa. The bank granted a US Dollar term loan facility to part finance the construction cost of a 7.6 Mega Watt (MW) mini-hydro power project in Uganda with a majority holding by Sri Lankan investors. The bank is also in the advanced stages of negotiations on two term loan facilities for hotel companies in Maldives, Mr. Silva added noting that DFCC will continue to actively pursue further offshore lending opportunities in these regions. Last year the bank continued to explore new avenues in financing renewable energy projects. In 2017, the bank granted term loans to establish two waste-to-energy projects which will generate electricity using municipal solid waste collected within the Western Province. With each project generating 10MW, a total of 1,100 metric tonnes of municipal solid waste will be consumed per day, waste which would otherwise be dumped into landfills resulting in the creation of garbage mountains which led to events such as the Meethotamulla tragedy which resulted in the loss of human lives in April 2017. The second 10 MW ground based solar power project at Hambantota financed by the bank was commissioned during the year. Both these projects have posted impressive operating results. [caption id="attachment_289415" align="alignright" width="252" caption="Lakshman de Silva."][/caption] Recognising that the Ceylon Electricity Board offers competitive tariffs for small scale solar photovoltaic installations under the Net Plus and Net Accounting methods, providing a lucrative opportunity for owners of large rooftops to reduce their electricity costs and generate economic returns, DFCC financed rooftop solar projects of 10 MW distributed across several factory buildings during the year, and anticipates providing financial support for many more projects, Mr. Silva said. He said that state-of-the-art "Payments and Cash Management" (PCM) solution launched by the bank will in see more focus on the promotion of this solution to corporate clientele, which will improve the bank's CASA position and fee-based income opportunities. DFCC Bank implemented the EIB SME and Green Energy Global Loan credit line in March 2014 and 70 per cent of the credit lines were allocated for SME projects and the balance 30 per cent for renewable energy and energy efficiency projects, Mr. Silva added. The entire loan of EUR 90 million was allocated within the stipulated period. This amounted to approximately Rs. 14,478 million for 171 projects (net of cancellations) from three participating intermediary banks, including DFCC Bank. During 2017, supplementary allocations were granted to existing beneficiaries to finance cost overruns and expansions of approved projects with a view of utilising additional funds made available due to prepayments and gains from foreign exchange fluctuations. SME projects in a variety of sectors including auto services and repair, bakery products, construction, education, healthcare, manufacturing including agro-processing, printing, retailing, tourism, and trading have been funded by this credit line. A total of 18 renewable energy-based power generation projects with 56.7 MW of total planned capacity via solar, wind, bio-mass, and mini-hydro technologies were financed by the credit line. By year end, a total of 16 projects with a capacity of 53.7 MW were operational. When asked, Mr. Silva said that DFCC hasn't ruled out expanding into other countries and setting up shop, but it'll be a longer term plan.http://www.sundaytimes.lk/180520/business-times/pdl-will-be-delisted-eventually-289409.html11 April 2018 @ 7:44 pmDespite shareholders ‘nay’ to delisting to Property Development PLC (PDL) from Colombo Stock Exchange (CSE), at an Extra Ordinary General Meeting held recently, CSE – according to its latest rules - will eventually do so, CSE officials noted. PDL in a stock market filing said a resolution towards delisting the shares of the company was not passed by the shareholders last Wednesday amidst questions by minority shareholders of PDL about the low rental rates the company had been charging from Bank of Ceylon (BoC). The principle business activity of PDL is to own, maintain and manage the Bank of Ceylon (BOC) headquarters building, which the company has rented to BoC. CSE officials told the Business Times that PDL has not complied with CSE's minimum public shareholding requirements and that they will be following the due course of action in this regard, which would see PDL being delisted in the long run. The majority shareholder, BoC has 95.55 per cent in PDL leaving the public float at an alarming, less than 5 per cent. The Securities and Exchange Commission last year tightened the noose on listed companies not adhering to norms with regard to minimum public shareholding. Companies found non-compliant with the minimum public holding requirement as of July 1, 2017 were transferred to CSE’s Watch List on July 1, as directed by the SEC. As at this January, 59 listed companies were non-compliant with the minimum public float rule of the CSE. Of this, between 30 to 40 firms are likely to exit the exchange through this mechanism which is meant to weed out bad eggs, officials say. The PDL EGM followed PDL's stock market filing on February 9 communicated to the market a decision made by the PDL director board to de-list the shares of the company subject to shareholder and regulatory approval. This announcement also offered the BoC to acquire the balance shares of the minority shareholders who may wish to divest at a price of Rs.123 per share – in anticipation of the minimum public holding requirement rules being enforced.http://www.sundaytimes.lk/180520/business-times/ndb-shareholders-profit-grows-by-30-per-cent-289407.html11 April 2018 @ 7:43 pmAt NDB’s group level, Profits Attributable to Shareholders (PAS) grew by 30 per cent to Rs. 3.5 billion, as a result of new legislation. The PAS was affected by the cumulative deferred tax provision on the revaluation gains from investment property in line with the new Inland Revenue Act which came into effect from April 1 2018, officials at the recently held NDB 'Investor Forum' said. It was held in Colombo to discuss the full year financial results for the financial year 2017. The Investor Forum marked the release of the bank's 2017 NDB Annual Report "Take a Closer Look", to the Colombo Stock Exchange March 5 and also marks the bank's endeavours in facilitating discussions and access to management for the stock broking and investment fraternity. The PAS, excluding this tax impact would have been Rs. 3.7 billion, an increase of 38 per cent. Net Interest Income (NII), the vital contributor within total operating income grew by 27 per cent. Profit after Tax (PAT) exceeded Rs. 4 billion to Rs. 4.4 billion which was an impressive growth of 37 per cent compared to 2016. The bank's Net Interest Margin of Rs. 10.8 billion drew strength from a combination of factors, such as the enhanced Net Interest Margin up to 3 per cent (from 2.6 per cent in 2016), substantial volume growth in the loan book and the exponential growth in the deposits base, thereby reducing the reliance on high cost funding sources, NDB Director / CEO, Dimantha Seneviratne said. Total impairment charges for loans and other losses was Rs. 1.3 billion, a reduction of 8 per cent compared to 2016. "Prudent risk management and credit underwriting standards, proactive credit follow ups and robust recovery efforts resulted in one of the best NPL ratios in the industry for the bank in 2017, at 1.83 per cent,” Mr. Seneviratne said. This NPL ratio compares very well with the industry average of 2.5 per cent for 2017 and NDB's own NPL of 2.63 per cent 2016. The event was also attended by NDB Chairman, Ananda Atukorala; NDB Vice President Corporate Banking, Buwaneka Perera; Lalith Fernando, Group Chief Financial Officer; Sanjaya Perera – Vice President – Personal Banking and Branch Network Management and CEO of NDB Holdings Ltd, Vajira Kulatilaka. The bank PAT was at Rs. 4.35 billion, an increase of 37 per cent over 2016, while the group profit attributable to shareholders was Rs. 3.49 billion, an increase of Rs. 30 per cent over 2016. The bank saw a total assets growth of 15 per cent up to Rs. 383 billion, including loans and receivables growth of 20 per cent to 274 billion and a quantum growth of Rs. 46 billion which resulted in a growth rate ahead of industry loan growth. The customer deposits growth of 34 per cent to Rs. 273 billion was seen, a quantum increase of Rs. 70 billion. The forum was well attended by a gathering of stock brokers, investment and research analysts fund managers, institutional investors and financial press as well as the senior management of the bank and the NDB capital markets cluster companies.http://www.sundaytimes.lk/180520/business-times/elephant-house-flavoured-milk-launched-finally-289404.html11 April 2018 @ 7:42 pmLate, but it’s never too late. Ceylon Cold Stores (CCS), manufacturers of the Elephant House brand has launched Chocolate, Strawberry and Vanilla UHT flavoured milk variants this season. A strong brand with widespread distribution network, but a late entrant into a relatively crowded market with products such as Anchor Newdale, Nespray Nutri Up, Richlife, Daily, Kotmale, Highland, Ambewela etc, analysts say that it will not be easy for CCS to stand out and gain material market share in the medium term. CCS is also slated to open their new ice cream plant in May this year. Analysts say that with this plant operational, will give CCS improved capacity particularly on their range of sticks and cones which will strengthen their position in the impulse segment of the market. They also are cottoning onto a new bottling plant which will strengthen their position, analysts predict. The consumption level of ice cream is quite low in the country compared to other more developed countries in the region but analysts believe CCS’s volumes will increase as disposable incomes grow. CCS, a subsidiary of John Keells Holdings PLC has been trying to balance its focus on carbonated soft drinks (CSD) substitutes after it launched Fit-o fruit drink in 2016. Analysts say that CCS’s challenges are many with increasing number of consumers opting to be more health conscious. In a bid to combat this CCS replaced sugar with natural sweeteners for selected products. The company competes strongly with Coca-Cola in the beverages business. CCS accounts for more than 55 per cent of market share in CSD and ice cream segments. Founded as the Colombo Ice Company, which imported and used the country’s first ice making machine, the CCS moved on to build cold storage for frozen products of all kinds and introduced aerated water with the distinctive “Elephant” trademark on the bottles, which remained a popular household name for the brand. For over 150 years, CCS has expanded and refined a range of popular soft drinks and ice cream products that are sold across the island today.http://www.sundaytimes.lk/180520/business-times/esg-investment-the-new-hotspot-289399.html11 April 2018 @ 7:40 pmWhile investing in Environmental Social and Governance (ESG) has become more popular over the last 20 years; to the millennial generation, it's almost a prerequisite. [caption id="attachment_289400" align="alignright" width="400" caption="CSE and GRI (see box story). From left - Ms. Rubina Sen - Senior Coordinator GRI South Asia, Dr. Aditi Haldar Director - GRI South Asia and Rajeeva Bandaranaike - CSE CEO"][/caption] Investors such as Tundra Fonder emphasises on ESG standards and Socially Responsible Investing (SRI). This has prompted the Colombo Stock Exchange (CSE) to promote local listed firms to adopt ESG factors in a bid to attract such foreign investors. Tundra has US$ 150 million in its Frontier Sustainability Fund, which has invested $ 20 million (12 per cent) of the fund portfolio in Sri Lanka. SRI is growing at over 16.5 per cent a year, over twice the 8 per cent rate for other funds, according to statistics. The CSE recently launched a manual - Communicating Sustainability: 'Six Recommendations for Listed Companies' to assist listed companies in addressing environmental, social and governance factors in their capital market communication. Sustainable investors aim for strong financial performance, but also believe that these investments should be used to contribute to advancements in social, environmental and governance practices. They may actively seek out investments – such as community development loan funds or lean tech portfolios – that are likely to provide important societal or environmental benefits. Some investors embrace SRI strategies to handle risk and fulfil fiduciary duties; they review ESG criteria to judge the quality of management and the likely resilience of their portfolio companies in dealing with future challenges. Some are seeking financial outperformance over the long term. A growing body of academic research shows a strong link between ESG and financial performance, Tundra Fonder AB Founder/CIO Mattias Martinsson told the Business Times when he was in Colombo recently. He said that 37 per cent of asset growth during 2012-2016 came from SRI assets and that SRI assets grew by twice the rate of conventional assets during 2012-2016. “The growth will accelerate.” He added that since autumn 2016 all Tundra's funds are screened for violations of international conventions (guidelines from UN Global Compact, OECD, and ILO) and they focus high on this aspect. Tundra has an in-house ESG research team and external screening consultant. There're two dedicated analysts working exclusively with ESG analysis where they communicate with all portfolio companies and focus on a systematic, scientific and thematic approach. Analysts say that foreign investment can be driven by ESG and that specifies the underlying mechanism of foreign investors' stock picking behaviour. They say that ESG compliant firms can attract foreign investment. According to the Global Sustainable Investment Alliance (GSIA), assets valuing over US$ 21.4 trillion have incorporated ESG concerns into their investment selection and management globally, representing 30.2 percent of the total assets under management. The CSE guide is meant to help companies on how to approach the topic of sustainability when they incorporate it into their capital market communication. CSE in collaboration with the Global Reporting Initiative (GRI) hosted a workshop on Sustainability Reporting and Corporate Social Responsibility last Thursday. The event, which was exclusive to representatives of companies listed on the CSE, addressed the business case for adopting sustainable business practices in listed entities and provide insight into monitoring, managing and communicating sustainability related performance effectively.

CSE and GRI

The Colombo Stock Exchange (CSE) recently formalised an arrangement with the Global Reporting Initiative (GRI) to provide guidance to listed companies on ESG disclosures in Sri Lanka. Director, GRI South Asia Dr. Aditi Haldar, and CEO CSE Rajeeva Bandaranaike were present at the event.GRI is an independent international organisation that has pioneered sustainability reporting since 1997. GRI helps businesses and governments worldwide understand and communicate their impact on critical sustainability issues such as climate change, human rights, governance and social well-being. The GRI Sustainability Reporting Standards are developed with true multi-stakeholder contributions and rooted in the public interest and are the first and most widely adopted global standards for sustainability reporting, a CSE media release said. GRI and the CSE will jointly undertake surveys and studies among listed companies and investors to gauge their knowledge, determine their capacity on sustainability reporting and identify the types of technical assistance and capacity building needed to improve awareness and institutionalise sustainability reporting within their organisations, it said. CSE and GRI will also collaborate to conduct workshops, seminars and other forms of training for representatives of listed companies. Commenting on the collaboration, Mr. Bandaranaike stated “As a member of the United Nations Sustainable Stock Exchanges (SSE) initiative, the CSE actively engages in its commitment to promote improved ESG disclosure and performance among listed companies. Through our collaboration with GRI, the CSE intends to foster greater awareness among our listed entities on the fact that ESG practices can be as beneficial to companies as they are to investors and that a strong focus on ESG can provide a basis for strong business results.”

http://www.sundaytimes.lk/180520/business-times/gearing-for-new-trade-laws-in-sri-lanka-289397.html11 April 2018 @ 7:37 pmCOLOMBO - Everyone was on the same page when it was agreed that the new laws on trade remedy which would protect the local industry were both “tedious and technical.” It surely is, if a seminar to enlighten local businesses held at the Ceylon Chamber of Commerce in Colombo last week was held up as an example. Even one of the two key speakers, Ms. Gothami Silva, a director at the Department of Commerce, was apologetic after her near hour-long address to the audience most of whom struggled to keep awake as the government official explained the process of how the two pieces of legislation would help the local industry. “I’m afraid it is a very technical subject,” Ms. Silva said almost contritely. “We need to build more awareness and provide technical resources (so that the full benefits of these two laws can be felt).” The government recently passed two pieces of legislation, one to provide for the conduct of investigations and the application of safeguard measures on products imported into the country and the second to provide for the investigation and application of Anti-Dumping and Countervailing duties on imported products. The latter is effectively an Anti-Dumping tax on imported goods at a price lower than their actual value. Potatoes, imported from India, were used as an example by Ms. Silva in her speech. That was one topic I could relate to as such it was not Greek to me - how local potato farmers are hit because the imported spud is cheaper, even if the costs of production was high back in India. It reeks of politics because the Indian government provided subsidies to its farmers so that they could export potatoes to Sri Lanka at a lower price. Husein Esufally, Chairman of Hemas PLC, summarized the dreary seminar well: “Like others have mentioned today, this is a tedious and technical process and we (the local industry) do not have the technical capacity to benefit from these pieces of legislation. I’m here to understand how these laws will support local industries,” Mr. Esuafally said. He hoped businesses could “lean on” the industry of commerce for assistance and urged for a close partnership to be built. That will be the case assured Ms. Silva who has only been in charge of the trade division at the Department of Commerce for nine months. “Without domestic legislation, no WTO member country can make use of these instruments when the need arises,” explained Ms. Silva. “There are a lot of fears over the FTAs (Free Trade Agreements) Sri Lanka will sign with countries and there is worry that with this liberalization, tariffs will come down and the local industry will have no protection.” The two laws will provide protection, but only if users knew how to properly use them the audience was informed. While she explained or, tried to explain, the two Acts in the limited time made available to her, Mr.Rajiv Goonetilleke, a senior state counsel in the Attorney General’s Department, explained the legal ramifications. “These are two timely pieces of legislation as it enables us to protect our industries as well as help consumers. The consumer is concerned with price and quality of products while the producer is concerned about profits and market access. “With these acts, both importers and exporters can benefit but we need more awareness about what these laws will provide and what it can do in terms of fair trade. This is a very technical subject and we must build up our technical resources,” Mr. Goonetilleke stressed. Tuli Cooray, Secretary General of the Joint Apparel Association Forum, remarked during the panel discussion that Sri Lanka was a country still trying to come to grips with international trading practices and requirements. “In a situation like this, how do we get sufficient information to say goods imported into Sri Lanka have a lower value, or if the goods are transshipped, do we have the capacity for that information? “We must make sure the private sector is ready to use this legislation. But are we ready?” asked Mr. Cooray.http://www.sundaytimes.lk/180520/business-times/expediting-the-land-registration-process-in-sri-lanka-289395.html11 April 2018 @ 7:35 pm‘Mea culpa’ – there was a soul searching self-confession by powerful government departments on the delay of getting any land registered. To expedite this process and to work on it the government has set up a ‘Registering Property Task Force’. To explain as to how the Task Force involved and set about their task and get their findings across to the public knowledge, a media briefing was organized by the Ministry of Development Strategies and International Trade, on Monday at Galadari Hotel, Colombo. The major state agency involved in this process of registering properties is the Surveyor General’s Department and the Task Force (TF) is headed by P.M.P. Udayakantha, Surveyor General and the TF consisted of the representatives of the Surveyor General’s Department, Registrar General’s Department, Colombo Municipal Council, WP Revenue Department, Valuation Department, and ICTA Agency of Sri Lanka. Acknowledging the lackadaisical and inefficient way state agencies deal with property registration, Mr. Udayakantha said: “Sri Lanka is not good as even though we are at 111 in the ranking of doing business in all the activities out of 193 countries; in the case of registering property in 2018 we are ranked as low as at 157 and that means under registration of property activity it is rather weak.” He said that the easiest country doing business and which ranked number one is New Zealand, but noted that in Sri Lanka it is very difficult to do business though the government is keen to improve the situation to make Sri Lanka a good country to do business. He said that there are nine processes to be fulfilled and to get these attended by various state agencies it takes as long as 51 days and he agreed that it is a very lengthy process. The World Bank, he indicated prepares a report on doing business each year, evaluating the situation on each country deciding on how good a country to do business making a list and ranking. This would, he said, help encourage the investors and added that Sri Lanka has to improve the aspects involved. He went on to explain various hassles involved in the process and to clear the nine processes involved. The TF, he said, goes through the whole situation, evaluates and finds remedial action to improve the status of registering property. In the Task Force what they are envisaging is to digitalize the processes with IT. When registering, he said, 5.1 per cent of the value of the property has also to be spent. Initially, the TF goes through the manual process to identify the shortcomings to cut down and improve the time and thereby was able to achieve a number of milestones in the improvements and work on a broader concept. The 51 days, he indicated, is now brought down to 26 days. He said that by the end of the year it is planned to bring it down to five days and probably to have a single window rather than one to shuttle from one agency to another and said they strived hard to bring it further down to a mere two days. Making the opening remarks, Wasantha Deshapriya, Secretary to the Ministry of Telecommunications and Digital Infrastructure and Foreign Employment said that in the e-Government rankings by the UN Sri Lanka is 73 out of 193 countries in 2017 and improvements have to be worked while examining as to why the country cannot further improve in the rankings. Only better ranking, he said is in the e-Servicing where Sri Lanka ranked 33 out of 193 countries – a remarkable achievement. He pointed out that the state agencies have been very selfish and do not want to collaborate while they required another mechanism to sit at organizational level and coordinate among them, which they now lack – a high level direct body to coordinate and a group of committed officials ‘to get the things done.’ The necessity he said is the digital transformation.http://www.sundaytimes.lk/180520/business-times/brandix-rated-no-1-corporate-export-brand-by-brand-finance-lanka-289393.html11 April 2018 @ 7:34 pmLeading apparel exporter Brandix, for the fourth consecutive year, clinched the number one position under the ‘Corporate Export Brand’ category in the ‘Sri Lanka Brands 2018’ ranking conducted by Brand Finance Lanka. Brandix successfully emerged at the forefront in a ranking featuring some of the best export brands in Sri Lanka across an array of industries such as Apparel, Tea, IT Services, Manufacturing, Printing, Coconut and Rubber. Significantly, this recognition was bestowed on Brandix at the 15-year celebration of Brand Finance Lanka’s publishing of Sri Lanka’s most valuable and strongest brands, the company said in a media release announcing its achievement. Brandix attributes its success to the combined effort, relentless passion and positive ‘can do’ spirit of its employees, who are considered the lifeline of the organisation. The company said it remains committed to delivering ‘Inspired Solutions’ to their customers and communities throughout its entire network of operations, while focusing on strengthening its position in the local and global market landscape, year on year. The ranking of Sri Lanka’s most valuable and strongest brands was announced by Brand Finance Lanka following detailed analysis of data obtained through an exclusive market research study carried out by an independent market research firm, as well as through publicly available financial information available on companies listed on the Colombo Stock Exchange. Brand Finance Lanka, the pioneering brand valuation and strategy firm, is the local representative for Brand Finance Plc, the world’s leading brand valuation consultancy that advises strongly branded organisations on maximising their brand value through effective management of their brands and intangible assets.http://www.sundaytimes.lk/180520/business-times/colombo-port-city-journey-begins-with-the-unveiling-of-dcr-289389.html11 April 2018 @ 7:33 pmThe Colombo Port city journey began with the unveiling of the project’s Development Control Regulations (DCR) at a gala ceremony in Colombo on Tuesday providing a clear mechanism for the implementation of the master plan and refined it further through urban design guidelines. [caption id="attachment_289390" align="alignright" width="400" caption="Construction at the Port City."][/caption] Participating at the ceremony as the Chief Guest, Minister of Megapolis and Western Development Patali Champika Ranawake said that it is essential to bring systematic changes and development processes into the urban community in Sri Lanka to be on par with the massive development drive taking place in the rest of the world. That will ensure that inhabitants of urban areas become a part of socioeconomic development of the country while maintaining high levels in quality of life. He noted that the Port City Master Plan’s vision and objectives could be fulfilled through the directives of the DCR for public and private sector developments. Urbanisation and urban development have assumed a key role in development of the modern world. For the first time in history around 70 per cent of the world’s population resides in cities and the world’s urban population is expected to double by 2050. Cities are engines of economic growth and cultural development and can offer many benefits to their inhabitants, he pointed out. Towards this end, the proposed urban development and Megapolis initiative should extend beyond the mere notion of building structures or creating isolated urban enclave, but well established and balanced ecosystems which supports socio, cultural, economic and spiritual wellbeing of all citizens, he pointed out. The DCR was prepared by Singapore-based Subrana Jurong , one of Asia’s largest urban , industrial and infrastructure consulting firms and UK based Atkins Company to the existing master plan which was originally done by Swedish-based planning consultant SWECO. The urban structure of port city is designed for livability, social security, tolerance and inclusion, thereby contributing to a high quality of life “It emphasies a well-balanced relationship between the public, semi public and private sectors where different kind of spaces give rise to a wide range of uses and activities,” Anandan Karunakaran, Director Urban Planning and Design of Subrana Jurong Consultants Pte Ltd said. The Port city would be an extension of the existing city’s central business district, with 5 new districts including, the financial district, the marina, international island, central park living and island living. He told the large and distinguished gathering that each district offers a good mix of uses for a “live + work+ play” environment. Parks and open spaces, water front promenades, public plazas and active street edges all along the central boulevard allow for recreational facilities, within walking distances and promote healthy lifestyles that will appeal to all ages and all people, who aspire to live in the heart of the city. The DCR was devised very carefully in 18 months to create a more connected community with provision for spaces for people to interact and socialise in, he said.http://www.sundaytimes.lk/180520/business-times/insee-partners-with-pim-to-develop-business-leaders-289386.html11 April 2018 @ 7:31 pmINSEE Cement recently partnered with the Postgraduate Institute of Management (PIM) to complete the Executive Leadership Development Programme (ELDP) for 2017/18. The objective of ELDP is to transform INSEE cement’s functional leaders into business leaders by moving them from mastery in their own individual functional areas to broader multi-dimensional roles. From over 40 self-driven middle managers who applied for the programme, 24 were selected based on their individual development needs. After going through a challenging 8 months programme, 23 participants successfully completed the programme, the company said in a media release. The ELDP course framework includes three types of skills that are essential for a successful management process namely, Technical, Human and Conceptual skills development. The programme is designed to go beyond a standard ‘class room’ learning experience in which participants used learning diaries, case study methods and a final project which was directly linked with specific organizational objectives. Its uniqueness is that it allows participants to learn and apply new concepts, while making a direct contribution to the company showing the real Return on Investment (ROI). Buwaneka Dushyantha - Health and Safety Engineer from Puttalam Cement Plant topped the batch, closely followed by Asha Dissanayake - Accountant (Treasury and Tax) Finance, who came second and Amila Batagalla - Mining Engineer, Puttalam Quarry Operation and Sahan Chamruk- Operations Engineer of INSEE Ecocycle who came third. Organisation and Human Resources Director of INSEE Cement, Prasad Piyadigama said, “Apart from the knowledge and the skills that were acquired, the unique value of this programme was the opportunity to apply the learning thereby adding value to themselves and the organisation.”http://www.sundaytimes.lk/180520/business-times/congrats-or-deepest-sympathies-288963.html7 April 2018 @ 6:04 pm The new board of directors of struggling SriLankan Airlines and officials at the first meeting with the media on Thursday. From left: Thilan Wijesinghe, Chairman/ acting CEO of the Finance Ministry’s PPP Unit and Convenor of the Officials Committee on the airline; Directors - Susantha Katugampala, Mano Tittawella, Ranjit Fernando (Chairman), Air Marshal Kapila Jayampathi and Dr. Roshan Perera. Pic by Amila Gamage.http://www.sundaytimes.lk/180520/business-times/national-carriers-new-lifeline-288961.html7 April 2018 @ 6:02 pmAfter many twists and turns, Sri Lanka’s national carrier appears ready for take-off, at least in three years’ time. Faced with losses of US$100 million this year, $160 million in 2019 and a total debt of $700 million, the new board of directors is preparing – so they say – to cut at least 2000 jobs out of the 7000-strong workforce, among other matters. “No easy task,” noted an airline analyst. The new board comprising retired banker Ranjit Fernando (chairman), Mano Tittawella, Dr. Roshan Perera, Air Force Commander - Air Marshal Kapila Jayampathi and Susantha Katugampala - an immigration lawyer based in Australia) has promised a turnaround in three years. The decision to co-opt a serving military commander was an unusual move, the analyst said. Among the steps planned in the restructure is route rationalisation, re-negotiating debts and re-negotiating aircraft leases with Airbus. Other airline sources said that the previous attempt to privatise the airline (during 2015-2018 February) was mishandled for the simple reason that every time the board made a decision, it was shot down by the cabinet. The process is going to be different this time with the already, prepared restructuring strategy by consultant Nyras being presented to the board, thereafter to the cabinet and only after it’s approved, it would be implemented. “However the proposal will go quickly to cabinet after it is approved by the board,” one source said, adding that the first steps are to cut costs and re-negotiate on leases, rationalise routes and find a way to cut staff. “Only after that will the airline seek a foreign partner,” he said.http://www.sundaytimes.lk/180520/business-times/young-professionals-add-zing-to-lankas-public-sector-288959.html7 April 2018 @ 6:00 pmAfter the triumph against the joint opposition’s no-confidence motion, Sri Lanka’s beleaguered government has been advised to infuse young blood into the senior public bureaucratic segment with the aim of accelerating rural and urban development activities, a top official told the Business Times. The country’s second tier public bureaucratic workforce needs a fresh impetus to continue the government’s development activities, carry out efficient service for the people, and engage in effective policy formulation activities; expeditiously, he said. The second tier public sector officials who would soon take up the key responsibilities as heads of ministries and public institutions – with many incumbents due to retire soon - were lagging behind their present superiors in competency, communication skills and decision-making ability as well as knowledge in administrative procedures, an in-house official survey revealed. Without a pipeline of young talent, the government risks falling behind in an increasingly digital world, a top level human resource survey report highlighted. The government should immediately appoint a new generation of young professionals both in the public and private sectors for filling gaps and supplementing the career based bureaucracy in the public sector, several senior government officials told the Business Times. They said: “This matter was brought to the notice of the prime minister during their discussions with him on immediate reforms that should be made in the public administration by replacing lethargic and old guards of red tape.” Young professionals should be inducted to supplement the work of career bureaucrats, a senior cabinet minister said adding that they should not be confined to the junior executive level, but to the top-level as officers on special duty or policy specialists. A competency framework has been developed by the National Human Resources Development Council of Sri Lanka to be used for the public sector to define the skills, behaviours and attitudes that officers need to perform in their roles effectively. The main objective of the framework is to improve the efficiency, effectiveness and the quality of public sector delivery. The need of the hour is to improve quality of service delivery in the public sector and therefore, it is necessary to develop and groom young professionals with the required skills, knowledge and attitude to run public sector organisations, one official added.

45-point short term plan proposed to accelerate rural development

A 45-point short term strategic plan has been proposed to accelerate rural development within the next 18 months, a top cabinet minister said. This development process will be covering social, economic and environmental fields specially targeting the rural masses, Minister of Megapolis and Western Development Patali Champika Ranawaka revealed to the Business Times. He has proposed to allocate at least a sum of Rs.10 million each to 6000 electoral units Pradeshiya sabhas towards strengthening development in rural areas. According to this development plan, a suggestion has been made to grant a monthly allowance of Rs.5000 to low income families for three years by restructuring the Samurdhi poverty alleviation scheme. Financial and other assistance will be provided to 10,000 new entrepreneurs with public investment in accordance with the new plan, he disclosed. The government has to go for radical reforms handing over the responsibilities to young MPs replacing the old guard, he said adding that senior ministers have failed to perform their tasks and as a result the country was on the verge of collapsing.

http://www.sundaytimes.lk/180520/business-times/foreigners-eye-insurance-stocks-288957.html7 April 2018 @ 5:57 pmTwo large buys by Janashakthi Insurance PLC (JINS) and Japan’s Mitsui Sumitomo Insurance Company Ltd (MSIC) have got global insurance players eyeing local insurers, analysts say. The Business Times reported this in February when JINS in a Rs. 16.4 billion deal sold its general insurance business to multinational insurer, Germany’s Allianz. Analysts say that global insurers have re-rated the insurance sector at the Colombo stock market which is now seeing rising foreign investor attention. This was confirmed when nearly a month later MSIC increased its stake in Ceylinco Insurance PLC to 10.5 per cent. They bought 900,000 shares at Rs. 1,800 each last Monday. Mitsui Sumitomo held 6 per cent stake as of 31 December 2017. Sumitomo is now the third largest shareholder in Ceylinco Insurance after Global Rubber Industries (22.25 per cent) and Banque Pictet and Cie SA (12.73 per cent). Insurance was a sector that has always been trading at book value (the amount that the share holder will get for each share after selling out all assets and paying liabilities), but the value of the JINS transaction was Rs. 16.4 billion - which means that this transaction was done at 2.4 times, they noted adding it showed insurance stocks should be trading at a higher multiple. Growth in the general insurance segment is projected to be slow and result in a tight battle for smaller players in years to come as insurance giants – especially foreign firms - consolidate the general segment. Local firms are divesting their general insurance segment and focusing on life as competition is intense with 62 per cent of the premiums coming from motor insurance. The life industry also has strong bottom line potential, according to industry analysts who say that gross written premium growth as well as favourable tax implications is another reason why foreigners are showing interest in this sector.http://www.sundaytimes.lk/180520/business-times/dubai-investor-group-in-town-288955.html7 April 2018 @ 5:55 pmA group of high profile Dubai investors met Development Strategies and International Trade Minister Malik Samarawickrama this week for talks on investing in Sri Lanka. They also met the Prime Minister. The delegation led by Mohammed I. Al Shaibani, Executive Director/CEO of the Investment Corporation of Dubai (IC) and Chairman of Dubai Islamic Bank, included Dr. Soonyoung Chang - Founder and Chairman of Midas International Asset Management and Senior Advisor - IC; Khalifa Hassan Al Daboos - Executive Chairman of Deira Waterfront Development LLC and Majid Saif Al Ghurair – CEO of Al-Ghurair Group of Companies and Chairman of Dubai Chamber of Commerce.http://www.sundaytimes.lk/180520/business-times/credit-ratings-now-compulsory-for-finance-companies-288946.html7 April 2018 @ 5:53 pmCredit ratings by reputed rating agencies have been made compulsory for all licensed finance companies by Sri Lanka’s banking regulator with the aim of ensuring financial stability and operational excellence while creating healthy competition, Central Bank (CB) sources divulged. The CB has directed all licenced finance companies to enter into an agreement with reputed credit agencies by April 30 and obtain credit ratings for the entities and inform the bank’s non bank supervision department soon. In a circular issued by the department’s Acting Director W. Ranaweera, it stated that all licenced finance companies should obtain the credit rating for the entities and publish it by October 1. According to Mr. Ranaweera, these companies should publish the rating in all of their advertisement soliciting deposits and debt from the public in newspapers, the corporate website, financial statements and at the business places. Credit ratings should be updated at least annually and the rating report should be submitted to the department, within one month from the date of issuance of the report, he added. Finance and leasing sector is under asset quality pressure arising from competitive environment, unfavourable weather conditions and profit decline due to higher funding and credit costs. Some of these companies are engaged in term or capital financing and facing risk due to larger transaction amounts and poor collateral such as third-party guarantees or post-dated cheques, CB sources said. The CB’s directive is favourable and should be welcomed by all stakeholders as it gives an independent opinion on the credit-worthiness of the entity, Kithsiri Wanigasekara, immediate past president of the Finance Houses Association of Sri Lanka (FHASL) said. The credit rating is an independent and unbiased opinion on the ability and compliance to honour debt commitments on schedule; he said adding that it gives the necessary checks and balances. Credit rating from a reputed agency will be beneficial for finance companies when issuing debt instruments such as debentures and bonds as well as when going for listing in the stock market, he noted. However he noted that the fee to obtain a credit rating from an agency depends on the asset base of the company and it will not be a massive amount. Director/CEO of Asia asset Finance Ltd Rajiv Gunawardena pointed out that several licenced finance companies have already resorted to the practice of publishing credit ratings and it is not a financial burden for any of the companies. He said that stakeholders including depositors and employees as well as prospective clients would be able to judge the credit worthiness and financial position of the company through its single digit rating without going through the complicated balance sheets. Credit rating agencies estimate the ability of an organisation to fulfill its financial commitments when they fall due (basically the ability to repay debt) and its important for the finance company sector, he emphasised. A senior CB official said that that the rapid growth and broad outreach of the non bank finance sector necessitates proactive supervision and regulatory guidance. While several regulations have been introduced to strengthen these institutions, some licensed finance companies have shown signs of stress while the rapid expansion of certain others has been curtailed due to their lack of compliance with regulatory requirements. This reiterates the need for continued strengthening of the existing regulatory framework of NBFIs to ensure the soundness of the sector and contain its spillover effects on the whole system, he pointed out. (Bandula)http://www.sundaytimes.lk/180520/business-times/avurudu-the-great-shutdown-288937.html7 April 2018 @ 5:49 pmOr call it ‘The Great Escape” or like last year when we termed it “That lonely feeling … again!” I am referring to that time of the year when the delightful Koha’s (cuckoo’s) singing is our morning wake-up call, the days get hotter and, most of all, when Kussi Amma Sera and Co. prepare for their sojourn to the village for the traditional Avurudu or Sinhala and Tamil New Year. I was reminded of this, rather noisily, by the racket KAS was making in her room on Thursday morning after a sweaty night’s sleep, filling her old ‘tung-ka-pettiya’ (an old suitcase) while humming ‘Avilla Avilla Sinhala Avurudda Avilla (It’s here…it’s here, Avurudu is here)’ song, made famous decades ago by singer Mohideen Baig. “Mama yanawa Mahattaya (I’m going),” she says happily, with a jig in her stride as she brings the morning tea. And, as if to remind me that she would be away for a “loooo..ng” time, comes the noisy packing in the room! It’s that time of the year when the city of Colombo shuts down, virtually, as Colombites flee – in droves – to the cool climes of Nuwara Eliya with children on holiday and probably most people taking ‘off’ on April 12 and returning on April 15th or 16th. The bakeries are closed for a few days along with most restaurants; the supermarkets close for a day. Want to meet politicians, businessperson or the movers and shakers in the country, then walk the streets of Nuwara Eliya town and you’ll probably bump into one of these ‘famous or infamous persons’. Many decades ago, it was not so obvious, but today with their bodyguards and catchers-on in tow, you can spot them a mile away. Nothing has changed over the years, not even the politics or the troubled atmosphere during Avurudu ‘kalaya (period)’. Read my lips or what I said in the Avurudu column on April 16, 2017: “The economy is in the doldrums. We are not saying it; the Government is saying it and warning about the borrowing cost per citizen owing to the enormous borrowing by the previous regime. So we borrow again and again to pay off earlier debts. In today’s economy borrowing seems to be the right thing to do. I wait for the usual verbal barrage from KAS but there is silence from the kitchen.” Here is another para from last year: “A couple of months ago, the talk of the town was that a Cabinet reshuffle was on the cards and was to take place after the President or the Prime Minister would be returning after an overseas trip. That didn’t happen because when the President is back, the PM flies away and vice versa. Now attention has been drawn to a post-Avurudu reshuffle.” Planned post-Avurudu reshuffle in 2017, planned pre-Avurudu reshuffle in 2018! Some things never change; that’s Sri Lanka for you. Old wine in a new bottle with the United National Party and Maithripala promising change for the better after the disastrous showing at the local government elections and successfully fending off an effort to oust Ranil at this week’s no confidence motion. The rambunctiousness nature of our politicians, proving that position and power [read Nimal Siripala de Silva’s and Dilan Perera’s lips “I want to hang on (come what may)”] is far more important than ‘country first’, is predictable. An entrapped President is also on the same wave length. Amidst all this uncertainty (mark my words, you don’t need an astrologer to predict that Avurudu 2019 will be a worst scenario for Sri Lanka with presidential elections due at the end of that year); comes some rational thoughts from Central Bank Governor Indrajit Coomaraswamy. Mind you, Indrajit has been flagging warning signals for the past few months in every public speech he makes. His concerns about ‘political instability’ in measured tones have prefaced a lot of the positives in the economy. The general gist of his argument is that political instability is not good for growth; not an incentive at all for foreign investment. Fellow columnist, Sirimal in his ‘Down to Earth Economics’ recently referred to the story of the unsuccessful entry of Motorola into Sri Lanka in 1980, as explained in a book by two other eminent economists, where the US multinational invested in a new production facility in Malaysia instead of Sri Lanka. Why? Because of political instability. This can take many forms including indecisive decision-making and frequent tax changes. A lot of water has flown under the bridge since then and Sri Lanka is not the only country in the world with political risks for investors. However, some of these countries have succeeded in attracting foreign investments while Sri Lanka has not met with the same measure of success. Perhaps resigning to the fact that Sri Lanka is unlikely to come to grips with its warring political factions – and at a time when huge foreign debt payments are piling up -- Indrajit spoke of a more realistic scenario; that is if the politicians are listening. While stating that the need of the hour is “to overcome the current political instability quickly as prolonged instability will bring disaster to the country’s economic consolidation”, the Central Bank Governor is pinning hopes on a mechanism or framework for some serious work being done in service delivery, policy formulation and development. “Let the politicians fight; but let the work continue,” seems to be his message, suggesting a framework for this structure in a fiery political climate that is not getting any better. “Whatever political configuration in the coalition government, the policy, basic services and development programmes should not be hindered,” he told reporters this week, alluding to some positive-decision-making in recent times amidst the hoo-ha. He referred to the enactment of new tax laws, the Hambantota Port project deal and several other foreign-funded development programmes as initiatives despite the differences of opinion among the government’s coalition partners. Opinions might differ on whether these were the right decisions or not. But the point is that decisions are taken and implemented. While this is easier said than done, given the political infighting in the coalition government, in a gloomy economic environment, small things matter. So if the government can get its decision-making apparatus on track and implementation mechanism fast-tracked, then there is some hope particularly for foreign investors waiting on the fringes of Sri Lanka’s shores to wade in. Another positive is the speedier business registration process which has been reduced to just one day from the earlier six days with the new online registration process. Silver linings, however small, in a disruptive environment, are welcome. The singing has stopped, the noise has quietened down and Kussi Amma Sera is ready to leave. “Mahattaya, mama yanawa … ta,taaa (Sir I am going, byeee),” she says, carrying her oversized ‘tung-ka pettiya’ with clothes jutting out from the sides, and making her way to the gate where, she is joined by her comrade-in-arms Serapina on their joyful return to the village. I can only say ‘bye’ in return, watch them as they walk out of the gate and wishfully think of that perennial classic ‘Oh what a beautiful morning, Oh what a beautiful day’. No way. My mind is warped with the political shenanigans or reflecting on how to pay the bills (a common grouse by everyone, even the government). Anyway - Happy Avurudu!http://www.sundaytimes.lk/180520/business-times/taxing-or-robbing-whats-the-difference-288910.html7 April 2018 @ 5:43 pmOnce I came across a case study that had been circulated among the economics students in a foreign university. The students were supposed to read the case and review it for their tutorial. I thought of repeating this tutorial for your benefit, reporting the case study as follows: “A robber stopped a man walking on the road at night and pointed a gun at his head, demanding his money. The frightened man gave his money to save his life, but after that went to the police to report the incident. The criminal was caught and the case was brought to the court for justice. In another incidence, politicians got a new tax bill passed in the parliament and deployed the tax officials to get money from people; some people paid, but some others evaded the tax. In both cases, apparently the innocent people had to give away their hard-earned money. Nevertheless, there is a difference in the judgement: In the first case, the one who lost money could go to the courts against the one who got his money. In the second case, it was the opposite; those who asked for money could go to the courts against those who did not give money.” At a time that the new Inland Revenue Act (No. 24 of 2017) is being the subject of public discussions and debates in Sri Lanka, I thought of undertaking the above as a timely issue. It is not my intention, however, to review the Act and the pros and cons of its proposals. Rather my focus is on the difference between taxing and robbing, because the line between the two is absolutely very thin. Spending others’ money Governments are spending others’ money and so are the thieves who rob others’ money. This is why Milton Friedman - a great American economist from a Jewish lineage, distinguished four modes of spending. I am going to elaborate on these four modes in my own style as follows: 1. If I spend my own money on myself, my spending is absolutely very efficient and effective; I don’t spend on useless things and unproductive things. I keep watching on how my spending gives me a worthwhile return. I am so careful in spending so that I will not borrow and fall into debt. 2. If I spend my own money on someone else, I will be still cautious on how I spend. Unless my decisions are from my heart, my rational thinking does not allow me to cross the boundaries. I can buy a gift for someone, but I really consider its cost and, perhaps the value for money. 3. If I spend someone else’s money on myself, I can have a really good time - especially when that “someone else” is not anyone I know personally. Government money that comes from tax collection is absolutely like that; I don’t know who pays taxes but I know money comes from the Treasury for which I don’t have to worry about. I can get the best for me without thinking of how much it costs and even borrow on the account of the Treasury. 4. If I spend someone else’s money on someone else, I will have no sense of the quality and the cost; I don’t have to care about its return either. If there is any return for myself at least indirectly, I will choose to spend without boundaries and even decide to borrow. The point that I want to get across is very clear: Government spending is closer to the 3rd and 4th scenarios where the government authorities spend others’ money for themselves than to the 1st and 2nd scenarios. This is where the line between taxing and robbing becomes blurred. That is why there should be institutions and mechanisms to improve the responsibility and accountability of public spending. Taxes: Price of civilisation According to a famous dictum, people who want to live in a civilised society pay taxes as the “price for civilization”. Given this fact, if you long to live in a “civilised Sri Lankan society”, you better pay taxes. What do we mean by a civilised society? It is the kind of society that we like to live and work comfortably and safely with security and certainty about our future. In such a society, our tax money is spent to keep us free from crimes, rapes, robberies, harassments and other social disorders. Our neighbourhood and our streets are clean and orderly because they are kept free from scattered garbage, stray dogs, mosquitos and, unbroken payments and open manholes. Our children get education at their choice without being denied using various attributes and receive the best health care without delay and harassment. Our taxes are being used to keep us from fires, floods, cyclones, earth slips, and wars and insurgencies. Law and order is maintained and, road discipline is established so that people can sleep at home without fear and commute on roads confidently and safely. In a civilised society, we also have a social responsibility to look after the needy; the poor who cannot work, disabled and permanently sick, helpless widows and orphans, and the beggars on the streets. Finally, politicians and public sector employees - they all work efficiently, effectively, and tirelessly in order to ensure all above requirements of a civilised society. Therefore taxes should also be used to pay their salaries and wages, and other allowances and perks to compensate for what they do for civilisation. You might be thinking if it is a joke: It is easy to say that taxes are the price we pay for civilisation, but is that the reality we see? The closer the authorities get to the 3rd and 4th types of spending modes, the thinner the dividing line between taxing and robbing. Sri Lanka’s tax profile Sri Lanka’s tax revenue of about 12 per cent of GDP can be comfortably increased further. One of the major problems is its overwhelming bias towards indirect taxes leaving out potential revenue from direct taxes on incomes, profits and capital gains. The Government here generates only about 15 per cent of its revenue from direct taxes. Japan, Malaysia and the US generate about half of the revenue from direct taxes while in Singapore, Thailand and UK it’s about one-third of the revenue from direct taxes. Why is Sri Lanka generating such low direct tax revenue? This is primarily because many Sri Lankans who generate income, profits and capital gains do not pay taxes, while the government does not have a record of such income sources of the people. In addition, there are tax exemptions and tax evasions. The flip side is that the Sri Lankan government depends largely on indirect taxes, which contribute about 85 per cent of the tax revenue. Indirect taxes are those taxes on sales of goods and services so that they are added to the price. As a result, our VAT and other indirect taxes on sales are exceptionally high so that as consumers we pay higher prices. Among the indirect taxes, another area of distortion is the taxes on international trade, and particularly on imports. Tax revenue from international trade is about 17 per cent of revenue which is greater than the direct tax revenue. Compared to the Sri Lankan case, share of tax revenue from international trade is zero in some countries such as Singapore and the UK, and only 2 - 3 per cent in many other countries such as Malaysia, Thailand, Japan and US. Reforms on both sides Apparently, there is a strong case for tax reforms in Sri Lanka. Direct tax revenue has to be raised to about 40 per cent of the government revenue. At the same time, Sri Lanka’s indirect tax rates should be lowered and simplified to a great extent. Secondly, it is difficult to ignore the reforms needed in spending the tax revenue. It is primarily about spending the tax money which makes a difference between taxing people and robbing people. The overwhelming public discontent about taxation actually echoes the years of public distrust about spending tax money. (The writer is Professor of Economics at Colombo University)http://www.sundaytimes.lk/180520/business-times/boc-2017-profits-soar-to-highest-in-the-industry-288665.html6 April 2018 @ 9:20 pmBank of Ceylon (BoC), with 78 years of successful banking, saw another record year in 2017 with pre-tax profit reaching Rs.30.3 billion, up 8 per cent from 2016, the highest in the industry This is after adjusting the one off gain recorded in 2016 (disposal of Mireka Capital Lanka Pvt Ltd). Profit after tax for the year stood at Rs.21.3 billion, BoC General Manager Senarath Bandara said in a media release issued by the bank. Total operating income grew by 3 per cent to Rs. 74.3 billion mark with net interest income contributing 78 per cent of the total operating income. The statement said that the increase in policy rates last year saw market interest rates move further upward and the high interest rate regime prevailed throughout the year except for the latter part of the year in which interest rates recorded a slight slowdown. “Whilst, the increasing trend in market interest rates has resulted in an increase in both interest income and expenses, the net interest margin of the bank has only eased by 10 bsp (basis points) over the previous year due to its effective management of cost of funding.” In the midst of a subdued performance reported from the trade sector, the bank reported a growth of its net fee and commission income due to the timely and meticulous strategies it has adopted to diversify their avenues of revenue. The statement noted that during the year the economy was performing below the expected level and the bank also had to absorb the impact of prolonged drought which prevailed in the northern part of the island. Income tax, VAT, NBT and dividend which constitute the bank’s value to the Government coffers amounted to Rs. 28.6 billion during the period under review, which is 76 per cent of the profit before financial VAT, NBT and taxation. Loans and advances reached Rs. 1.2 trillion and in doing so has pushed the assets base to Rs. 1.95 trillion bringing BoC closer to another significant milestone- the Rs 2 trillion mark, the statement said. BoC Chairman Ronald C. Perera, PC, in his comments in the annual report said that the greatest strength behind ending 2017 with high note was the well experienced and knowledgeable staff strength of 7,500 “dedicatedly working towards implementing the meticulous and timely strategies executed by the management”. He also stressed the importance the bank has placed on enhancing the customer centricity in all avenues of the bank for a better customer experience. “Although we are moving fast towards digitally enabled banking culture, the weightage we have placed on improving the quality of human touch has never been compromised. We believe the human factor, yet has much more to do with customer care and tangibility,” he further stressed.http://www.sundaytimes.lk/180520/business-times/cb-eases-tight-monetary-policy-worries-over-political-stability-288663.html6 April 2018 @ 9:19 pmThe Central Bank (CB) has eased the tightening of monetary policy by reducing the Standing Lending Facility Rate (SLFR), by 25 basis points but raised concerns about political stability. "The Monetary Board (the CB’s governing board) felt it is timely at this juncture to give a signal that the tightening phase of monetary policy should end now," CB Governor Dr. Indrajit Coomaraswamy told a media conference in Colombo Wednesday. However he pointed out that Sri Lanka’s need of the hour is to overcome the current political instability quickly as prolonged instability will bring disaster to the country’s economic consolidation. The government should initiate a framework for service delivery, effective policy formulation and continuation of development activities, he added. “Whatever political configuration in the coalition government, the policy, basic services and development programmes should not be hindered,” he said adding that the stability of the governing coalition will be essential to limiting the damage. The present administration has taken several tough decisions towards economic reforms it has brought successful results while resurrecting the economy, he added. The enactment of the Inland Revenue Act, Hambantota Port project deal and several other foreign funded development programmes were among the different initiatives taken by the government for the betterment of the country despite differences of opinion among its coalition partners, he added. It remains an open question, whether the political will is present to ensure faithful implementation of the economic reforms, he noted pointing out that the economic growth will be around 5 per cent this year from an unexpected 3.1 per cent in 2017 with an anticipated increase in foreign direct investment. On the easing monetary policy, he said the reduction in the upper level of the CB’s policy interest rate corridor to 8.5 per cent was an indication that the monetary policy tightening cycle was easing with inflation falling and growth also slowing. This decision is also expected to dampen the volatility observed in interest rates in the domestic market during the recent past. While the CB monetary policy easing measure is expected to address the near term tepid growth prospects, it is essential that the planned structural reforms are carried out without delay for the economy to move towards a sustained high growth path in the medium term, he said. According to the provisional estimates of the Department of Census and Statistics (DCS), the economic growth slowed to 3.1 per cent (year-on-year) compared to the growth of 4.5 per cent (year-on-year) in 2016. The strategy to ease interest rates is expected to address the near term tepid growth prospects, But it is essential that the planned structural reforms are carried out without delay for the economy to move towards a sustained high growth path in the medium term, a CB media release revealed. On the external front, in January 2018, export performance improved both in terms of price and volume, which however was outpaced by the increase in imports, thus causing a widening of the trade deficit. Nevertheless, improved foreign exchange inflows in the form of earnings from tourism as well as workers’ remittances helped cushion the impact on the current account to some extent.http://www.sundaytimes.lk/180520/business-times/sri-lanka-wants-to-bridge-trade-deficit-with-nz-288660.html6 April 2018 @ 9:18 pmRecognising New Zealand’s importance as a friendly nation that Sri Lanka supported at the UN Security Council, Tourism Minister John Amaratunga on Monday highlighted the need to bridge the trade gap between the two nations. [caption id="attachment_288661" align="alignright" width="400" caption="Tourism Minister John Amaratunga with the NZ delegation. Pic by M.A. Pushpa Kumara."][/caption] New Zealand’s exports to Sri Lanka was US$254 million in 2016 compared with US$55 million in exports from Sri Lanka, the minister explained and pointed out that this trade gap needs to be bridged. He was addressing the trade delegation that arrived in the country for a 3-day visit in a bid to venture into business relationships with Sri Lankan companies. Key exports to Sri Lanka are milk powder, butter and dairy spreads, apples, pears and quinces; while New Zealand imports tea, retreaded or used pneumatic rubber tyres, rubber and clothing. He pointed out that Sri Lanka has the potential to be to India what Hong Kong is to China adding that the bilateral ties between the neighbouring states is expected to open a gateway to some Asian nations. The minister explained that it was possible to use Sri Lanka as a manufacturing and trading base to access the vast Indian market adding that the country had also signed a FTA with Singapore as well. Sri Lanka's attempts to expand its export market is clearly supported by the visit of trade missions of this nature, the minister said. He noted that tourism would be able to provide an “equitable pathway to balance the trade deficit” between the two countries. Sri Lanka had seen 10,332 arrivals from New Zealand in 2017, a growth of 14.2 per cent from 2o16. Trade Delegation Head Ralph Hayes said that Tourism New Zealand was the number one earner and noted that adventure tourism was a specialty in this sector. He pointed out that New Zealand had expertise in food service and production, environment, education and training. This is the fourth visit of a New Zealand trade delegation to Sri Lanka. A number of companies participating in this delegation comprise those having interests in South Asia already. (SD)http://www.sundaytimes.lk/180520/business-times/peoples-bank-says-record-income-in-2017-288658.html6 April 2018 @ 9:16 pmPeople’s Bank has announced the consolidated results of its year ended December 31, 2017 with gross income increasing by 31.4 per cent to Rs. 190.2 billion. “Total operating income grew by 15.2 per cent to reach an industry high of Rs. 78.8 billion. Operating expenses increased by a controlled 4.9 per cent to Rs. 37.2 billion,” the bank said in a statement to the media this week. Profit before tax increased by 17.4 per cent to reach a group all time high of Rs. 29.9 billion. On a bank standalone basis, this was Rs. 25.9 billion, up by 24.5 per cent. Group profit for the year increased by 14.2 per cent to Rs. 20.5 billion and its return on equity was 21.4 per cent. The group’s contribution to the government in the form of taxes, special levy and dividends amounted to Rs. 23.3 billion against Rs. 22.9 billion in 2016. Commenting on the results, Bank Chairman Hemasiri Fernando said: “Our all-round successes are owed to our customers and our valued employees. It reflects the bank’s capacity and willingness to consistently push the limits of performance even amidst challenging circumstances. In terms of near term goals, expediting the Cabinet of Ministers approved amendments to the People’s Bank’s Act is our foremost priority.” CEO/General Manager Vasantha Kumar added: “2017 was an exceptional year for the bank. Record top and bottom line numbers attest to the collective effort of our entire team on a day in day out basis. Successes stemmed from every aspect of operations - be from a retail and corporate banking perspective, to an improved product service delivery capability, enhanced collection and recovery due processes, treasury successes and those which stemmed from process refinements and improved regulatory capital and risk control. Amongst all, our 2017 highlight is our digital roll out. Our leadership on this front remains best described in a significant number of conventional to digital branch conversions since first rolled out and over 100 Self Banking Units now established island-wide”.http://www.sundaytimes.lk/180520/business-times/lolc-retains-o-in-lolc-288656.html6 April 2018 @ 9:15 pmLanka ORIX Leasing Company PLC will retain the 'LOLC' logo, and possibly incorporate another suitable word to replace the word 'Orix', pursuant to the divestment by ORIX Corporation Japan of its shareholding in LOLC, officials say. As mutually agreed, the LOLC board has decided to change its name, by removing the word ORIX, the company announced to the Colombo Stock Exchange (CSE) recently. They said an EGM will be convened shortly with due notice, to obtain shareholder approval for the said name change. Officials told the Business Times that as LOLC is a strong brand name and since LOLC logo is registered with the Registrar of Companies, this decision was taken to retain the company’s trademark logo and incorporate another word instead of Orix. Incorporating a new word is also subject to shareholder nod. The Ishara Nanayakkara family-led LOLC Group last month increased its stake in the company, buying over the 30 per cent stake held by Japan's Orix Corporation, the one-time owners of the company. In a transaction done on the CSE, the deal was worth nearly Rs. 13 billion or US$ million dollars. The Nanayakkara family has increased its stake to 85 per cent from 55 per cent earlier with this transaction while the balance 15 per cent is held by the public. The group is involved in various business sectors with focus on financial markets and micro finance.http://www.sundaytimes.lk/180520/business-times/new-german-industry-office-opens-in-colombo-288653.html6 April 2018 @ 9:13 pmAn office titled the “Delegation of German Industry and Commerce in Sri Lanka” was opened in Colombo on Tuesday with Malik Samarawickrama, Minister of International Trade; Dr. Martin Wansleben, CEO, Association of German Chambers of Commerce and Industry and Jorn Rohde, German Ambassador in Sri Lanka, in attendance. Dr. Wansleben said that there is a huge growth potential for German companies in Asia and the Sri Lankan market will open up even more opportunities for German industry and commerce. With the opening of this office, their network of German Chambers of Commerce around the world will grow to 140 offices in 92 countries. He indicated that the annual growth of Sri Lanka German economic relations is 5 per cent and with Sri Lanka becoming a maritime hub across Asia, Africa and Europe, Sri Lanka’s exports to Germany grew by 13 per cent in 2017. German exports grew by 81 per cent to over 570 million Euros in 2017 reaching a total bilateral trade volume of more than 1.26 billion Euros. Sri Lanka raises more interests, he said, for German sourcing in the sectors of food and textiles. He said that German foreign direct investment in Sri Lanka amounts to around 170 million Euros, listing Sri Lanka in a global approach among countries number 86 and ranking 3rd as a target location in South Asia after India and Pakistan. The establishment of the Delegation office in Colombo is supported by the German Ministry for Economic Affairs and Energy and coordinated by the Association of German Chambers of Commerce and Industry (DIHK) and the Network of German Chambers of Commerce Abroad (AHKs). The head of the New Delegation of German Industry and Commerce in Sri Lanka is Andreas Hergenroether. He has been working for the organization for 20 years and headed the offices in Algeria, Saudi Arabia, Taiwan and Egypt before coming to Colombo. Malik Samarawickrama, Minister of International Trade, expressed confidence that the setting of this office in Colombo would result in productive business in both countries. He said Germany is a country which maintains high standards, quality and punctuality, where the standards of German industry are very high and Sri Lanka could learn many lessons. He pointed out that Germany is more resilient than other European areas of economy where the importance was on the business climate and labour laws with a strong economic foundation. He said that Sri Lanka is focusing on economic reforms and making steady progress and the German companies would see the results of those reforms. The newly passed income tax laws, he said provide a progressive modern and transparent tax policy and the rates are now lower than many countries in the region. As policy the Central Bank is moving towards a market economy based on exchange rate to check inflation. The reform initiatives are focused to catalyze growth and create better jobs to the people. German Ambassador Jorn Rohde said that the new industry office is equipped with professionals and requested the corporates in Sri Lanka to make use of that expertise. This leads to enter the German and European markets and stressed that European market has 500 million consumers.http://www.sundaytimes.lk/180520/business-times/trusts-ordinance-companies-act-to-be-amended-soon-288650.html6 April 2018 @ 9:12 pmSri Lanka’s banking regulator, due to global issues such as money laundering, drug trafficking and financing terrorism, was compelled to bring in new legislation during 2005-2006 to deal with such criminal acts. Additionally, Head of Compliance, Cargills Bank, Summaiya Macan Marker, speaking at a discussion held at the Ceylon Chamber of Commerce in Colombo last week on the topic of “Public -Private Policy Dialogue” on overcoming regulatory and compliance challenges in the banking sector said, that new laws were promulgated during this period for the prevention of money laundering and other financial crimes. Meanwhile new legislation such as the FIU which is the apex body for prevention of financial crimes was introduced under the purview of the Central Bank (CB). During 2007 to 2015 numerous other regulations were also introduced for stock brokers, insurance companies and for securities, casinos, gambling houses and to other professionals as well. In 2018 new laws were introduced under the FIU for non-finance and real estate agents, lawyers and notaries. Numerous laws have become part and parcel of the banking sector. "We need to know the customer and the customer’s customer who is behind the wheel .We need to know the sources of wealth and anticipated flows to the account. Therefore we need to have data." She said there are going to be amendments to the Trusts Ordinance and the Companies Act in the future. Senior Director, Non-Executive Director of Sampath Bank Plc Sanjiva Senanayake said the CB had informed all bankers to take a fresh look at risks in an unorthodox way that affects everybody. "We have to look at new trends that are constantly changing and where we are heading." Referring to the practical side of banking, he said an awareness with regard to risks has to be created in banks. “My view was that we should take a broader look at risks than relying on data and statistics as things are changing constantly." He said credibility is the main factor in a bank or in a financial institution because when credibility is lost business too is lost. CB Director Finance - D.M. Rupasinghe said that they are subject to international financial bodies that led to the creation of the FIU in 2007 to monitor money laundering and financing terrorism. "We are planning to cover financial, non-financial institutions, and other professions under the provisions of the FIU." CB Assistant Governor - Yvette Fernando referring to the new Foreign Exchange Act said that under the previous Exchange Control Act it was not possible to do anything without the prior approval of the CB. But over the years from 1950-2017 there had been relaxations to the old Act where certain capital transactions were relaxed. From 2016 it became possible to use foreign exchange currency outside Sri Lanka through authorised dealers like commercial banks or financial institutions.

Trusts amendment laws to prevent money laundering, illegal funds

Tough new laws have been included in Sri Lanka’s Trusts (Amendment) Act, no. 6 of 2018 which was recently approved by Parliament to prevent money laundering and illegal funds slipping in. The Act, gazetted on March 28, provides for stringent penalties on a trustee who acts in contravention of the “provisions of sections 6A, 19, 19A and 19B” and on being guilty of the offence shall, on conviction be liable to a fine not exceeding Rs.200,000 or to imprisonment for a term not exceeding two years or to both such fine and imprisonment.” The amended provisions is the Act says that in 6A (1), the Registrar-General shall prepare and maintain a register containing information in respect of every express trust. “The trustee of any immovable or movable property in respect of an express trust, shall forward to the Registrar-General all such information relating to the trust and the Registrar-General shall, on a request made by the Financial Intelligence Unit, or by any other authority with the written sanction of the Financial Intelligence Unit, provide to the Financial Intelligence Unit (FIU – which operates in the Central Bank) or such other authority any information relating to any express trust, kept in the register. According to 19A (1), a trustee shall keep records of all such information as may be prescribed, on the identity of the following persons at the time of creation of an express trust under section 6: the trustee himself; co-trustees, if any; author of the trust; the beneficiary, to the greatest extent possible; and any other person engaged in the execution of the trust in the capacity of an agent, a legal representative, a manager, an investment advisor or a tax advisor, an accountant or otherwise. The information must be updated every three months, according to the amendments. “Where an express trust has been created for the benefit of a class of persons, all such information as may be prescribed, on the identity of every person belonging to such class of persons, to the greatest extent possible, shall be kept in record.” And, where an express trust has been created for the benefit of a person other than a natural person, the information on the identity of the natural person who is the beneficial owner of the trust, shall “be kept in record”. A trustee is required to maintain records of information of any person at least for a period of six years from the date on which such person’s involvement with the trust ceases to exist. According to 19B (1) (a), a trustee and a co-trustee, if any, of an express trust shall provide to any relevant authority, any information in the record maintained in respect of any person referred to in that section whenever such trustee is required to provide such information by such authority. The amendments said that “relevant authority” means – (i) any public authority assigned with the responsibility of preventing money laundering and suppression of terrorist financing; or (ii) any authority that performs the function of investigating and prosecuting money laundering and terrorist financing associated offences and seizing or freezing and confiscating assets relating to such offences. It said that under 115A (1), the Minister may make regulations in respect of all matters required by this Act to be prescribed or in respect of which regulations are authorized by this Act to be made. Every regulation made by the Minister shall be gazetted and as soon as possible be presented to Parliament for approval. “Every regulation which is not so approved shall be deemed to be rescinded from the date of disapproval but without prejudice to anything previously done thereunder,” according to the amendments.

http://www.sundaytimes.lk/180520/business-times/business-delegation-from-slovak-288643.html6 April 2018 @ 9:09 pmA business delegation from the Slovak Republic led by Peter Kazimir, Deputy Prime Minister and Minister of Finance recently visited Sri Lanka. It comprised 20 Slovak companies seeking investment and trade opportunities in Sri Lanka. During their visit a MoU was signed with the Ceylon Chamber of Commerce. [caption id="attachment_288645" align="aligncenter" width="400" caption="Among those in the picture are - Radko Kuruc – Deputy Minister of Finance; Peter Kazimir -Deputy Prime Minister and Minister of Financ; Ms.Dhara Wijethilake, CEO Ceylon Chamber of Commerce; Zigmund Bertok – Ambassador of Slovakia and Maahen Kariyawasan -Honorary Consul of Slovakia in Sri Lanka."][/caption]http://www.sundaytimes.lk/180520/business-times/e-passport-row-heads-for-ags-review-on-a-supreme-court-directive-288639.html6 April 2018 @ 9:08 pmThe legal tussle over the government’s planned procurement of the e-passport from De La Rue Lanka Currency and Security Print Ltd takes a new turn with the Supreme Court’s recent directive to the Attorney General (AG) to examine the whole deal. When the fundamental rights case was taken up for hearing recently the court directed the AG to look into an attempt to accept an unsolicited proposal for Rs. 1.2 billion from this UK-based firm for the supply of e-passports. In a fundamental rights case filed before the court, Epic Lanka Pvt Ltd. challenged the decision of the Cabinet to award a contract worth Rs. 1.2 billion to De La Rue Lanka Currency and Security Print Ltd, based on an unsolicited proposal submitted for supply of e passports and an end-to-end system to data capture, personalise and issue ePassports. This decision was taken at the time when the Petitioner was offering the same service at a fraction of the cost. De La Rue is a firm owned by De La Rue, UK with a minority stake owned by Government of Sri Lanka. Counsel for the petitioner, Harsha Fernando submitted that although an earlier decision has been taken to use the Swiss Challenge method of procurement, the Cabinet has by a subsequent decision allowed the award of the contract to De La Rue without considering any other proposal, including that of the petitioner’s for approximately Rs.180 million which amounts to only 15 per cent of the cost of the De La Rue’s proposal. He informed the court that the country stands to lose more than Rs.1 billion because procurement guidelines have not been followed. He further submitted that the justification given in the Cabinet memo, that Government of Sri Lanka owns 40 per cent shares of De La Rue, is not acceptable as the Procurement Guidelines require the Government to own 50 per cent shares to consider a Public-Private Partnership arrangement. He further pointed out that the Cabinet Paper recommends commencement of the work with the Department of Immigration and Immigration based on an alleged MoU existing between the department, Information Communication Technology Agency (ICTA) and De La Rue. However, a request for information submitted by Epic Lanka CEO under the Right to Information Act to both ICTA and the Immigration Department, has confirmed that there is no such MoU in existence at the time the Cabinet Memo was submitted. It has been further revealed that even the Government Printing Department has been assured that they too can submit their proposal as the Swiss Challenge method would be used, but was deprived of doing so. In responding to a request by Senior Deputy Solicitor General Viraj Dayaratna, appearing for the Attorney General, to re-fix the case in May so that AG can obtain instructions, Counsel Fernando expressed concern that re-fixing the matter would delay the court from considering what appears to be an instance of a gross violation of procurement guidelines at huge financial costs. He said that the main relief that the petitioner is pursuing is that open competitive tenders be called. Supreme Court allowed the Petitioner’s Counsel to make a brief submission and in view of the application of the AG, re-fixed the case for support in the first week of May. However, the AG was directed by the Supreme Court to look into the matter.http://www.sundaytimes.lk/180520/business-times/beredina-micro-finance-bmic-launched-for-micro-finance-288633.html6 April 2018 @ 9:06 pmThe newest, not-for-profit microfinance organisation of Sri Lanka, Berendina Micro Investments Company (BMIC), essentially poverty-focused and development-oriented, was ceremonially launched on March 22 under the patronage of State Minister of Finance, Eran Wickramaratne. Also present were C.J.P. Siriwardane, Deputy Governor of the Central Bank and Charitha Ratwatte, Senior Advisor to the Prime Minister. The event was also graced by Ms. Joanne Doornewaard, Netherlands Ambassador to Sri Lanka; Jos Van Aggelen - Chairman of Berendina Stichting and the Board of Directors and Advisors of Berendina Stichting in the Netherlands. Berendina Stichting is the founder of BMIC in Sri Lanka. A media release from the organisation said that since 2007, Berendina’s microfinance services were provided by the Berendina Microfinance Institute (Gte) Limited. In keeping with the Central Bank’s new licensing requirements, the microfinance services are now operated by the new company BMIC. BMIC is owned by Berendina Development Services (BDS), an NGO providing numerous services to the under-privileged of the country. “Berendina has come a long way and done lot of work to reduce poverty in the country, over the years. But we have not spoken about or publicised what we have been doing, which must change. We must now take our message out to the people, so we can do much more, getting closer to our ultimate goal of completely eradicating poverty in Sri Lanka,” said Jagath Godakanda, Chairman of BMIC, in his welcome address. BMIC is providing loans at the lowest interest rate among the NGO and private sector micro-finance institutions (MFIs) in Sri Lanka. (The effective interest rate is 26 per cent per year) as opposed to over 40 per cent as in the case in most other MFIs in the industry. The loan amount disbursed in 2017 was over Rs. 3.5 billion. The statement said BMIC works mainly in high poverty divisions in high-poverty districts in the country and also provides training, business counselling, product marketing and business information, required by low-income individuals and provided by a dedicated and well-trained, full-time staff (over 46,000 people trained in 2017). BMIC has also embarked on a few initiatives which goes beyond monetary assistance, one of which is to provide scholarships for the bright children of BMIC clients after their OL examinations, until they complete their higher education or vocational training (3,000 scholarships were given by Berendina in 2017 out of which 445 scholarships were funded by BMIC). Berendina is currently working in the districts of Kegalle, Nuwara-Eliya, Kandy, Anuradhapura, Trincomalee, Batticaloa, Ampara, Vavuniya Kilinochchi and MuIllaitivu whilst Puttalam is also in the list.http://www.sundaytimes.lk/180520/business-times/over-40-hospitality-brands-at-maldives-gms-forum-288630.html6 April 2018 @ 9:04 pmOver a 100 delegates representing 40 hospitality brands have confirmed attendance at the upcoming Hotelier Maldives GM Forum on April 18 at Kurumba Maldives, the organisers said in a media release. The day-long event will see the largest gathering of hoteliers and hospitality professionals congregate for a day of keynote speeches, presentations and panel discussions on pertinent topics in the industry. Some of the brands that have confirmed participation include Sri Lanka’s Cinnamon and Adaaran chains, and Coco Collection, Shangri-La Hotels, Soneva, One and Only, IHG Hotels, Baglioni Hotels, Lily Hotels, Constance Hotels and Resorts, Fairmont, Diamonds Resorts, Jumeirah, Universal Resorts and Crown and Champa Resorts. Confirmed keynote speakers at this year’s forum include Daniel Welk, Vice President, Luxury and Lifestyle, Asia Pacific, Hilton. The release said that expert presentations and panel discussions will cover topics such as tourism related taxation, guest transfers, wellness related revenue opportunities and destination marketing trends.http://www.sundaytimes.lk/180520/business-times/cse-indias-national-stock-exchange-sign-mou-on-collaboration-288627.html6 April 2018 @ 9:03 pmThe Colombo Stock Exchange (CSE) and the National Stock Exchange of India Ltd (NSE) have signed a memorandum of understanding (MoU) focused on exploring opportunities to work together and co-operate with each other to foster a deeper and more strategic relationship. The MoU was signed at the CSE on Tuesday by CSE Chairman Ray Abeywardena and Vikram Limaye, Managing Director and Chief Executive Officer, NSE. The MoU enables cooperation on the exchange of information and expertise and also paves the way for NSE to play a consultative role in a number of strategic initiatives implemented by the CSE, including in the area of new product development and exchange operations, the CSE said in a media release. Commenting on the MoU, CSE Chairman Mr. Abeywardena said: “The move formalizes and paves the way to strengthen what is already a strong relationship of collaboration between the CSE and NSE. The new avenues for cooperation created as a result of this MoU will add value to the Sri Lankan capital market. NSE is a leading stock exchange in the region and is in prime position to offer valuable perspective and guidance to the CSE, as we pursue growth initiatives to further develop the exchange and build on our strengths.” NSE’s Mr. Limaye said: “The NSE has built world class market infrastructure solutions across asset classes that could service requirements of the entire spectrum of investors from retail to institutional to traders. India is one of the fastest growing markets in terms of investor participation and volumes. Market eco-systems in South Asia have significant commonalities and collaboration between NSE and CSE could leverage NSE’s experience in building robust markets to provide further impetus to the growth of Sri Lankan capital markets. NSE and CSE have collaborated over the years and I am confident that this MoU will take the relationship to the next level and would benefit capital markets in both the countries.” NSE is the leading stock exchange in India and the third largest in the world by the number of trades in equity shares in 2017, the CSE said quoting international data.http://www.sundaytimes.lk/180520/business-times/srilankan-on-crash-course-to-profitability-in-3-years-288619.html6 April 2018 @ 9:02 pmThe new board of directors at the struggling national carrier has assured that plans are underway to turnaround the organisation in three years. [caption id="attachment_288622" align="alignright" width="400" caption="Directors from left: Mano Tittawela, Ranjit Fernando and Air Force Commander Air Marshal Kapila Jayampathi at the briefing. Pic by Amila Gamage."][/caption] SriLankan Airlines new Chairman Ranjit Fernando said that according to the Consultant Nyras they were assured of bringing profits to the carrier. He made this announcement at the media briefing held at the airline's office in Colombo on Thursday. The new Chairman is a former banker, a former Secretary to the Ministry of Industries and former Chairman of the Urban Development Authority. The carrier is currently faced with losses amounting to US $100 million for the FY ending March 31, 2018 he said noting that they were faced with a “crisis situation.” He added that the debts were running to $750 million and pointed out that the carrier had purchased aircraft not suited for the routes it was plying on. Budgeted loss estimated for next year is $160 million. Restructuring Plans Nyras have given the new board three options: Do nothing and close down the airline in a few years; adopt procedures to take up the matter in court where an officer would be appointed to look at what to do with the airline; or restructure the carrier. The airline which believes that they are “already late in implementing the restructuring plans” said that they would be getting things off the ground within two months. At present the board is studying the restructuring proposal. “We are keen to make changes,” he said adding that they would also look at about 2000 staff cuts as this was the excess that the airline was carrying from the total of 7000 employees. These staff reductions would be carried out according to the contracts the employees have with the company, he noted. Nyras has recommended staff cuts as this was imperative to cutting down on excessive costs. “We will take the airline from being a burden to the government to a profitable venture,” he said adding that they hope to find an improved image of the carrier in the media in this respect as well. Management changes were also in line, Mr. Fernando said as part of the restructuring plans that is currently being studied. Identifying the new board, as part of the reinventing of the airline, Mr. Fernando said that they hope to “resurrect the airline and bring it to a profitable business”. With little knowledge about airline business, Mr. Fernando noted they were a big management team and were faced with a big challenge and insisted they would not obtain any salary or remuneration until the carrier becomes a profitable venture. The new Chairman also said that they would be looking at the possibility of joining hands with an international partner but that in order to do so they must ensure the carrier becomes profitable as otherwise it would not be picked up. Previous bids were noted to have not concluded successfully as a result of which the new board would be taking a fresh look at the restructuring plans. Accounting for the losses Commenting on the losses incurred by the carrier, it was blamed on the huge interest charged on borrowings made on the carrier; using unsuitable wide bodied aircraft without narrow bodied aircraft; commitment on lease agreements that are over the market prices; and over payments made. Currently four wide bodied A350 aircraft delivered in 2015 were considered not affordable and in this regard, the carrier is currently having direct negotiations with Airbus and re-negotiating. SriLankan Airlines Director and also a senior advisor to the Finance Ministry, Mano Tittawella pointed out that while the new team was supportive of restructuring the airline they would ensure that the main shareholder, the Treasury should be able to obtain a long term return on the investment made. In this respect, the time for doles and hand-outs were over, he said adding that within a period of 3-4 years the airline would gain profitability. The airline said that they would not be implementing the Weliamuna report and that it would be left to the Presidential Commission of Inquiry that was established to look into these matters. Director Susantha Katugampola, a Sri Lankan-origin immigration lawyer based in Melbourne and Air Force Commander Air Marshal Kapila Jayampathi are on the board. Board member Dr. Roshan Perera, the only female on the board and from the Central Bank, has been involved with matters pertaining to the SriLankan Airlines’ restructuring plans. Head of the Public Private Partnership unit Thilan Wijesinghe who is currently also involved in the restructuring process and heads that committee as well, was also present at the briefing.http://www.sundaytimes.lk/180520/business-times/sri-lanka-makes-business-registration-easy-via-internet-288615.html6 April 2018 @ 8:59 pmSri Lanka’s newly launched online business registration system cuts down the registration process from six to one day, reducing unnecessary time consuming paper work and eliminating red tape. The Department of the Registration of Companies (DRC) launched its online registration portal on Monday making business registration much easier and less cumbersome with effective and efficient service. After 80 years of manual company registration process in Sri Lanka, the DRC has installed the new web based system with an investment of Rs.57 million borne by the department, Registrar General of Companies D.N.R. Siriwardena said. KPMG Sri Lanka was the supplier of the automated solution for this e-Registration of Companies Project (e-ROC), while Informatics Co has developed the software and web based platform. Under the first phase of the project, it will provide business name approval service and in the second phase the online facility will be extended to the procedure of company closures offering access to the public to obtain local company information, and issuance of certified information. Entrepreneurs can now view the company name approval and company registration status online Foreigners can register their companies in Sri Lanka from their country via this web portal by paying a fee through the nominated credit card. The online process will be fully completed by August this year, he disclosed adding that entrepreneurs based in the outstations especially in rural areas will be able to register their companies and make payments online without coming to Colombo. This will reduce the paper work and expedite the company registration process, he said, adding that entrepreneurs will have to simply fill the details of their companies online or via SMS and make payment using their credit or debit cards, he pointed out. Addressing the launching ceremony, Industry and Commerce Ministry Secretary Ranjith Asoka said that 9,782 new company registrations had been made by the department in 2017 and it was an increase of 18 per cent compared to 2016. The department has recorded a revenue of Rs. 792 million, he disclosed. Telecommunication and Digital Infrastructure Ministry Secretary Wasantha Deshapriya, also at the meeting, emphasised the need to make drastic changes in the organisation structure of the department to streamline business registration with the launch of the online platform. He said that it is also essential to use e-signatures to ensure security as well as the digital identity of the key members of the organisation to eliminate the time lag and red tape.http://www.sundaytimes.lk/180520/business-times/some-unions-to-go-ahead-with-may-1-rallies-288612.html6 April 2018 @ 8:58 pmSeveral trade unions have opposed the state postponement, because it clashes with Wesak, of May Day rallies on May 1 saying they will go ahead with their rallies. One such group, the Free Trade Zones and General Services Union (FTZGSEU) said it will go ahead with its May Day rally on May 1 in Vavuniya, as originally planned. The Government said earlier that it has postponed May Day rallies to May 7 since May 1 falls during Wesak. In a statement the group said that it didn’t agree with the change, pointing out that May Day comes after Wesak which is on April 29 and the extra holiday on April 30. “Therefore May Day has absolutely no interference with Wesak. Also if May Day interferes with any religious event or festivity, we will firmly say that, this should be discussed with trade unions that represents workers.” The union points out that there have been instances in the past too where Wesak fell close to May 1 but no change was made by the then governments to postpone May 1 rallies. The rally being organised in Vavuniya is meant to “garner support from other organisations, attended by our membership in an effort to create unity among workers from North to South”, the union said.http://www.sundaytimes.lk/180520/business-times/public-sector-and-politicians-lack-accountability-288603.html6 April 2018 @ 8:56 pmManaging the private sector, the public sector and politics is totally different to each other where considerations differ in managing politics as opposed to the private sector, said Eran Wickramaratne State Minister of Finance. [caption id="attachment_288606" align="alignleft" width="240" caption="Eran Wickramaratne"][/caption] Speaking as the Chief Guest at the Great Manager Awards 2017 held at the Kingsbury Hotel in Colombo this week, he said there is a huge paradigm shift in politics unlike in the private sector where ‘you destroy your successor”. In the private sector, however ‘you build your successor’ and comparisons doesn’t make any sense. He said a great opportunity exists in recognising great managers for their high performance. However promotions and rewards are not necessarily based on performances in the public sector and there aren't any provisions either for penalising bad performance. As a result recruitment to the state sector becomes politicised and fails to attract the best educated professionals. Those who work in bureaucracies know that their rewards and punishments are not based on performances but on alignment to power structures. "I said all this not to look down on politics or on the public sector but to distinguish the differences that exist in them.” The State Minister further said that accountability in the public sector was lacking and had to be improved. Referring to the collapse of the garbage mountain at Meethotamulla where 32 people perished, he said no politician or an official took responsibility for that disaster. So far no one had taken responsibility for the incidents that happened in Digana - Kandy where several properties and people were affected. "The attitude of the public sector is why risk but to play safe," he said. Meanwhile, the following were the winners of the Great Manager Awards: Jaykay Marketing Services (Pvt) Ltd, Allianz Insurance Lanka Ltd, Brown & Co Plc and Bharti Airtel Lankan Ltd. Great Managers for Driving Results & Execution: Mangala Bandara - Allianz Insurance Lanka Ltd, Carmen Ranwalage -Bharti Airtel Lanka PLC, Sanjaya Nissankage -Brown & Co PLC, Ajith De Silva -Brown & Co PLC, Jayalath Kumarasinghe - Jaykay Marketing Services (Pvt) Ltd, Thusara Perera - Jaykay Marketing Services (Pvt) Ltd and Riaz Saban -Pure Life Solutions (Pvt) Ltd. Great Manager for Aligning Organization Vision: Udaka Kappagoda- Bharti Airtel Lanka Ltd, Hamamali Senarathna - Siam City Cement Lanka Ltd. Great Manager for Enhancing People Performance: Mahalingam Yohendrakumar – A. Baur & Co (Pvt) Ltd, Buddhi Dharmasena - Jaykay Marketing Services (Pvt) Ltd, Sanjeeva Chlakumara - Siam City Cement Lanka Ltd. Great Manager for Building Team Effectiveness: Saman Lalith Samaratunge - Akbar Brothers Ltd, Indika S. Perera - Hameedia Group. Great Manager for Sustaining Individual Credibility: Channa Munasinghe - Bharti Airtel Lanka Ltd, Nilantha Premakeerthi - JayKay Marketing Services (Pvt) Ltd, Gayan Bogahawatte - Jaykay Marketing Services (Pvt) Ltd, Dammika Bandara - Markss HLC (Pvt) Ltd. Great Millennial Manager: Thuwan Surajdeen - Barista Coffee Lanka (Pvt) Ltd. CEO of Colombo Leadership Academy Riaz Hassen said the award is for Great Managers who are results oriented.http://www.sundaytimes.lk/180520/business-times/sl-makes-double-digit-growth-in-digital-payments-288598.html6 April 2018 @ 8:54 pmSri Lanka has made double digit growth in digital payments which is a substantial increase since the arrival of Visa to the country 30 years back. Announcing this at a media briefing in Colombo at the Galle Face Hotel on Thursday, Visa International Sri Lanka and Maldives Country Manager Anthony Watson said that the growth in digital payments had increased substantially over the years and achieved double digit growth in the country. Asia Pacific Regional President Chris Clark said that since the Colombo office opened in 2016 they were able to build leadership and retain partners built up over the years. Through the Visa chip cards and contactless payment system, he said "We are going to drive digital payments on the island." India and South Asia Group Country Manager T. R. Ramachandran said that with card payments accepted in only specific locations, today the Visa International wants to ensure that these transactions would become a possibility even in small rural areas. It has been found that following a recent study by Visa on cashless cities, Colombo with a population of about 700,000 and a GDP of US$6.5 billion could alone gain $200 million annual net benefits by transitioning into a digital economy. He pointed out that it was innovation that was the reason for Visa’s success with its market defining products like chip based card and the contactless card. As part of a promotional drive, 30 three wheelers will travel the length and breadth of the island creating awareness of digital payments and the use of the Visa cards. Visa has also partnered with Sarvodaya Fusion, the community based development organization network, in a three-phased programme to inform, engage and educate consumers and businesses around the country of the benefits of transitioning to a digital platform. In this respect, the three wheeler initiative on digital payments would witness Visa’s clients including banks, merchants and technology partners joining hands in a coordinated effort to inform and influence audiences across 30 towns and cities across the country. When Visa commenced its operations in Sri Lanka back in 1988, Bank of Ceylon was the first bank to adopt Visa for its cards; and today it is associated with 29 banks and nine finance companies offering debit, credit, commercial and prepaid services. (SD)http://www.sundaytimes.lk/180520/business-times/hubpoints-new-grade-a-office-spaces-288596.html6 April 2018 @ 8:52 pmHubpoint, a company that provides co-working spaces in the heart of Colombo, has launched Grade A office spaces. The Hubpoint workplaces, situated in Colombo 1, offers a dynamic corporate environment with state of the art modern amenities, the company said in a media release. Also being in close proximity to the WTC and many hotels like Hilton in Colombo, Hubpoint is at a strategic location. “Hubpoint members enjoy features such as free high speed Internet services through CAT 6 cables, 24/7 air conditioning, 24/7 security, smart card enabled printing and coffee machines. It will also feature a corporate conference room and a 1,100 sq ft balcony for events. Innovative concepts, modern interior design and furniture create aesthetic and functional spaces you want to work in,” it said. Hubpoint was founded by Thusith Muthumala, Talal Rafi and Thasim Rafi. The 3 co-founders with their experience from the UK want to change the work culture in Sri Lanka. Hubpoint plans to add four new locations in Colombo by the end of 2018.http://www.sundaytimes.lk/180520/business-times/staid-postal-money-orders-now-thro-speedier-digital-transfers-288589.html6 April 2018 @ 8:50 pmThe Department of Post – Sri Lanka has joined up with Sampath Bank to unveil e-Pay Mobile Cash, a revolutionary service using the network of post offices, sub-post offices and Sampath Bank ATMs around the island to enable real time money transfers in a secure and convenient manner. “We are delighted to unveil the e-Pay Mobile Cash money transfer service together with Sampath Bank,” said Postmaster General D. L. P. Rohana Abeyaratne, at the launch event recently. “With 4,610 post offices and sub-post offices around the island, we have one of the widest network of physical touch points in the country. And Sampath Bank continues to invest in expanding its network of ATMs. Leveraging our combined pan-island presence, this service is set to transform the way we Sri Lankans send and receive money to and from one another.” In line with the Government’s efforts to transform conventional services using technology for the benefit of the public, the Department of Posts had entered into a strategic alliance with Sampath Bank to give a digital makeover to its traditional money transfer services. And e-Pay Mobile Cash was developed jointly by the two entities under this partnership, Sampath said in a media release. Nanda Fernando, Managing Director, Sampath Bank PLC said that the new facility is a convenient and secure means of sending and receiving money instantly. It combines the strength of the network of post offices, sub-post offices and Sampath Bank ATMs to deliver an unparalleled real time money transfer service, islandwide”. Consumers can send and receive anything between Rs.1,000 and Rs.25,000 per transaction, through e-Pay Mobile Cash which will be available 24 hours of the day, 365 days of the year. To send money, one simply needs to visit the nearest post office or sub-post office and provide the beneficiary’s name, address, National Identity Card (NIC) number and mobile number along with the amount to be sent. The beneficiary will instantaneously receive a text message with the amount and an approval code (PIN). He / she can immediately withdraw the money from one of Sampath Bank’s 388 ATMs around the island, without an ATM card, by selecting the mobile cash option and entering the approval code and his / her NIC number. “Offering consumers around the island a convenient and secure means of sending and receiving money around the clock, without any delays, e-Pay Mobile Cash is set to change the face of peer-to-peer money transfers in Sri Lanka in the days to come,” the release added.http://www.sundaytimes.lk/180520/business-times/uncertainty-over-2018-budget-tower-tax-on-telcos-fitch-288585.html6 April 2018 @ 8:49 pmUncertainty surrounds the implementation of the tower tax on telcos announced in the 2018 Budget, according to a rating report. The Government had then announced that it proposes to tax mobile operators Rs. 200,000 per tower each month. “However, we believe there is a high level of uncertainty about the implementation of the taxes and we have not therefore factored these into our base case. Nevertheless, we would expect Dialog's ratings to remain unaffected, even if the taxes were implemented, given the high ratings headroom,” Fitch Ratings said in a report this week. The agency Dialog Axiata PLC's National Long Term Rating at 'AAA (lka)' and said the “Outlook is Stable”. The report pointed out that Dialog's standalone credit profile of 'AAA (lka)' is underpinned by its market leadership in the growing mobile and pay-TV industry segments. “We believe the company is in a position to gain revenue market share from smaller telcos, with its superior 3G/4G networks capability.” It said that barring the proposed tower taxes, Dialog's operating EBITDAR margin is forecast to remain stable around 35-37 per cent as larger economies of scale in the data segment will support falling profitability on the voice and text segments. Strong data growth is supported by the proliferation of smartphones, with over half of new smartphones activated on Dialog's network being 4G-enabled. Referring to debt-funded mergers and acquisitions, Fitch said some industry consolidation is likely, with ongoing intense competition in the mobile segment where smaller telcos are unprofitable and face high investment requirements. “We believe Dialog and Sri Lanka Telecom could acquire smaller telcos to strengthen their market position and consolidate spectrum assets. Dialog's ratings have sufficient headroom for a debt-funded acquisition of a smaller telco for around Rs. 10 billion-12 billion,” it said.http://www.sundaytimes.lk/180520/business-times/just-imagine-that-neela-marikkar-wants-to-turn-politicians-into-statesmen-288575.html6 April 2018 @ 8:47 pmAT THE BARRICADES IN BAMBA: There is a latent revolution percolating in the mind of Neela Marikkar. Advertiser par excellence, she now wants to start a campaign aimed at the government and policymakers where she can sell the idea that diversity brings peace and prosperity. John Lennon imagined a world without boundaries – no countries and no religion too, imagine all the people living life in peace – and Neela has most probably taken inspiration from the songwriter for she too believes a strong nation can only be founded on diversity. “Imagine a country where we are all one, where we respect diversity, where we see the strengths of each of us coming together to make us a very strong nation,” Neela visualises. It is easy for her, for after all her day job is to dream up ideas which can sell a product to customers. Now the chairperson and managing director of Dentsu Grant wants to put all her years of experience – since 1986 she has been involved in the company her dad Reggie Candappa started in 1958 - to good use by starting a Sri Lankan spring, an uprising that will transform this beautiful island into a real paradise, and not one just touted as a tourist destination. Before authorities get alarmed, let’s clarify that her ‘revolution’ is not aimed at overthrowing governments, but rather educating them about the ways to create an environment that will set the foundation for a true reconciliation process among all communities in this country. This is her passion and ambition. Where to start, is the question posed as we meet in her offices at Bambalapitiya. The answer is right at the top; target our politicians who sadly hold the fate of the country in their grubby hands. These are my words, not hers. As an advertiser she is more diplomatic. But you get the drift? “I would love to sell this idea of a reconciliation campaign to the government. My heart is in it and I know a lot of people think like me. Unfortunately, even though the corporate sector has a voice we tend to leave these things to politicians which is perhaps not the best idea,” Neela sums up. Majority is silent “What gets portrayed in the media is that people who have the loudest voice get mileage. The majority is usually silent. We are at fault; it is because we are silent that others get away with what they do. Now more than ever we need a movement where we can voice our concerns. And, there are a lot of people who are concerned,” she adds. Multiplicity is at the core of her own life and as such the idea of diversity is nothing strange and comes naturally for Neela. Her parents came from different communities – her mother was a Sinhalese and her father a Colombo Chetty. She is married to a Muslim but retains her Christian faith. “I respect my husband’s (Zarook) faith so I have grown and live in an environment where I have a sense of everything, a bit of everything so I don’t see it as one community. Thank God I have this multi-dimensional feel, for it helps me to see things much more neutrally. I wish more people could see it in this same way.” [caption id="attachment_288579" align="alignleft" width="400" caption="Neela Marikkar seated at her office with a picture of her illustrious father above. Pix by M.A. Pushpa Kumara"][/caption] The recent ethnic upheaval in the hills of Kandy has reminded Neela of the urgency for action. She points out that while the war was won in 2009, the hearts and minds of estranged communities have still to be won over. This has seen divisions erupt from time to time, like last month. “When we are divided we will never be able to be competitive. Everything negative that happens in this country impacts us. The tourism industry is hurt and there is a ripple effect on all other industries. There must be true reconciliation. It is a pity that the corporate sector is not more vocal for we have a real vested self-interest in the stability of the country. “We always say we want to be like Singapore, but what is Singapore’s strength? They respect diversity, they work together,” Neela pointed out. This is not the first time Neela has played the role of activist. A few years ago, she was involved in an environmental movement which led to the cancellation of the controversial Sampur coal power plant being built in Trincomalee. The environmentalists successfully argued their case in court that building the India-funded US$600 million power plant would severely impact the health of the people in the area and was a long-term environmental disaster. They based their argument on the repercussions being felt by communities living in and around Norochcholai. For once sanity prevailed and the Fundamental Rights application filed prevented the Sampur project going ahead. “When we heard another coal plant was going to be set up in Sampur, a pristine area with beautiful marine diversity we knew it would end in a disaster,” Neela revealed. “When the whole world is going for renewable energy why are we going with a coal plant. I can understand if coal was a natural resource of Sri Lanka but we are importing it also, and to make matters worse bringing the cheap variety. Another coal plant “Thankfully we were able to stop the Sampur coal plant from going ahead but now we hear that they are trying to put up another coal plant in a place further down the (Trincomalee) coast in a place called Foul Point. The Government gave it’s assurance that they would not build but now this is happening.” Environmentalists in this country cannot afford to let their guard down. Hanky-panky deals are a dime-a-dozen, with the citizenry paying the ultimate sacrifice. According to Neela, this is because politicians and decision-makers have a blinkered view and look at things in the short-term. At the end of the day, vested interests are what matters. Everyone is a Ranil, a Mahinda and a Sirisena. Statesmen are rare. “Our politicians divide and rule. We learned this from our British masters. Recently, I watched the March for Life in the US. I cried watching that because of the passion of these young people, half-a-million of them out on the streets of Washington and making a stand. I felt there was hope for the youth. But I don’t know how the Sri Lankan youth feel today,” Neela contemplated. She believes the education system today has got a lot to answer for the problems facing the country. “How much of our children know each other, other communities. In my generation it was different for we didn’t know or care what race or religion people came from. Today youngsters are propagating hate material (on social media). “Today schoolchildren are segregated and not interacting with other communities. Then you have these religious issues further polarising people. There is no interaction between communities. This is the sad thing. We have to build a nation that respects diversity and see the strength of diversity. It is not a negative but a positive. We are all Sri Lankans, and we must get our children to understand that.” Imagine there is no heaven, and no hell below us, and the world will be as one sang Lennon. Neela dreams of that day, here in Sri Lanka.http://www.sundaytimes.lk/180520/business-times/apl-reaffirms-commitment-to-sri-lanka-288572.html6 April 2018 @ 8:44 pmAPL, a global giant in shipping, has reaffirmed its commitment to contribute to Sri Lanka’s regional hub ambitions just as the company opened its new office premises recently in Colombo. [caption id="attachment_288573" align="alignright" width="400" caption="From left - Ikram Ghazali, Director - APL and CMA CGM for Sri Lanka and the Maldives; Thomas Casutto - Chief Commercial Officer, APL; Nicolas Sartini, Chief Executive Officer – APL; Michel Azrak, Regional Commercial Director – APL; and Eranga Wijesinghe, Head of Commercial - APL for Sri Lanka and Maldives."][/caption] APL, which celebrates 170 years of global shipping in 2018, said that Sri Lanka’s neighbouring economies such as Bangladesh and India that trans-ship significant cargo volumes via Colombo have continued to grow robustly, auguring well for Sri Lanka’s prospects as an Indian Ocean hub. In a media release, APL said Colombo began container operations with APL when vessel SS President Tyler first berthed in Queen Elizabeth Quay (QEQ) in December 1973. Having served Sri Lanka for the last 45 years, APL has expressed its commitment to keep sailing this voyage with Sri Lanka which is pursuing Vision 2025; and builds her new port city to promote the country as a trading hub. “Going the extra mile for shippers, the carrier also pledges to elevate customer service experience through active engagements. In fact, APL was recently lauded as the 'Best Carrier for Customer Service in the Trans-Pacific Trade Lane' at the Institute of Chartered Shipbrokers' 24th Award Ceremony in Sri Lanka. This award marks a vote of recognition for APL’s service excellence by customers and peers in the industry,” the release said. Sri Lanka sits strategically in the middle of the Indian Ocean and the Maritime Silk Road, making her a critical gateway for an efficient cargo flow within and beyond the Indian Subcontinent. Sri Lanka remains an important market for APL’s development in the Indian Subcontinent where APL has also started commercial operations in Maldives in March this year.http://www.sundaytimes.lk/180520/business-times/propertyguru-asia-property-awards-in-colombo-288570.html6 April 2018 @ 8:42 pmThe PropertyGuru Asia Property Awards (Sri Lanka), the premier industry awards ceremony that will be held for the first time in Colombo in July 2018 at the Shangri-La Hotel, Colombo, is slated to showcase Sri Lanka’s brightest real estate talent and most outstanding property developments, across all asset classes, to a global audience, officials at a recent media conference said. They said that these awards will be highlighting the tremendous growth prospects and potential that the sector offers and confirming Sri Lanka’s evolving status as an established destination for institutional capital and private investment. “Sri Lanka’s real estate sector is rapidly developing and this underlines JLL’s investment and commitment to the rapidly-growing real estate sector in one of South Asia’s most dynamic markets,” PropertyGuru Asia Property Awards Founder and Managing Director Terry Blackburn told media. The PropertyGuru Asia Property Awards (Sri Lanka) is part of the regional Asia Property Awards programme established in 2005. With a professionally run awards system supervised by BDO, the world’s fifth largest auditing and accountancy firm, the PropertyGuru Asia Property Awards (Sri Lanka) is the most prestigious real estate event in the country, with top and emerging names in property and related industries celebrating the best developers, projects and design, a media release on the same awards said. “A double event, the much-awaited gala dinner will also honour the finest real estate developers from the Maldives. The awards is a milestone event in the real estate industry calendar and is attended by key decision makers as well as esteemed trade and consumer media.” From 13 competition categories in 2017, the new edition of the Awards will present more than 20 residential, commercial, design and developer awards, including outstanding development in Colombo, southern Sri Lanka (Galle, Matara, Hambantota), central Sri Lanka (Kandy, Nuwara Eliya, Matale) and north east Sri Lanka (Jaffna, Kilinochchi, Mannar, Mullaitivu, Vavuniya). “We have expanded our reach this time. We are hopeful that we will have more entries and most of the developers that participated last year are willing to put in entries in terms of the suburban markets and the province. Our expectation is it to be truly Sri Lankan in nature cross geography wise,” Judging Panel Chairman and Paramount Realty Co-Founder and CEO Dr. Nirmala de Silva noted at the media conference. Nominations are now open for eligible entries and will be accepted until May 11. Site inspections will be conducted from May 22 to June 1, while the official shortlist is to be revealed on June 6.http://www.sundaytimes.lk/180520/business-times/cb-puts-in-mechanism-for-real-estate-sector-compliance-288566.html6 April 2018 @ 8:40 pmThe Financial Intelligence Unit (FIU) of the Central Bank (CB) has included stringent Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT) criteria into the real estate sector in a bid to prevent black money or undeclared currency creeping in, officials confirmed. Since about a month ago, the condo builders are required to submit a 'compliance document' or the blue form as it is commonly called, each month. A FIU official told the Business Times that each builder was requested by the FIU to register as a 'property developer' at the FIU. "This is a new criterion," he said noting that this is an additional requirement apart from being incorporated as a company. The FIU has also requested builders to appoint as a 'compliance officer’, a senior employee of the company who will be responsible for all compliance related transactions. "The compliance officer will function as the contact point for the FIU," the official said. He added that this officer will monitor all suspicious transactions and 'high value' transactions. The limit for a high value transaction is yet to be set by the FIU, a builder told the Business Times adding that within this month the FIU will be sending the prescribed limits. Under Section 33 of the Financial Transaction Reporting Act (FTRA), No. 6 of 2006, real estate businesses are categorised as one of the designated non-financial businesses (DNFBs). "Accordingly, customer identification is essential when buying and selling immovable properties by business entities or persons engaged in real estate sector," the official added. DNFBs are subject to compliance, legal and reputation risk owing to non-detection of their bank accounts, other banking products and delivery channels being misused by the criminals to launder money. [caption id="attachment_288568" align="alignright" width="400" caption="Artist's impression of the upcoming Cinnamon Life development in Colombo."][/caption] The real estate sector in Sri Lanka has been categorised at medium level risk for Money Laundering/Tourist Financing (ML/TF) under a National Risk Assessment conducted in 2014 by the Financial Action Task Force (FATF), a unit of the CB, but officials say that now this may be higher. He said that as a money laundering vehicle, a mass of mechanisms frequently used with real estate transactions can irritate efforts to expose the criminal source of funds, such as nominees, fake mortgages, solicitor–client privilege, and legal trust accounts. Reporting of Suspicious Transactions (STRs) of the FIU and recordkeeping is required to mitigate the ML/TF risk in real estate businesses, he said. A suspicious transaction prescribed by Section 8 (1) of FTRA is one where an institution has reasonable grounds to suspect that any transaction or attempted transaction may be related to the commission of any unlawful activities or any other criminal offence, and in such a case the institutions must inform such transactions to FIU.http://www.sundaytimes.lk/180520/business-times/no-vat-on-apartments-decision-deferred-to-april-2019-288563.html6 April 2018 @ 8:37 pmThe 15 per cent value added tax (VAT) on sales of apartments from projects after April 1 won’t be effected from April 1, as planned earlier, officials said. “The Treasury differed this tax for a year and it will be effected from April 2019," Finance Minister Mangala Samaraweera confirmed at a media conference on Monday. This VAT was in effect a few years earlier and was removed in the 2015 budget. This is mainly since the amending legislation to enable this process hasn’t been presented to parliament as yet, the Business Times learns. Earlier the Treasury promised Condominium Developers Association of Sri Lanka (CDASL), in response to a letter in January by the CDASL, to price the condominium housing VAT on apartment projects after April. They opposed the proposal to impose a 15 per cent VAT on the sale of condominium housing units from April 2018, which was presented in the budget. CDASL members said that whilst they are aware of the need for bigger revenue to the Government and the intent to abolish selective exemptions, they are of the view that the re-imposition of VAT on the sale of condominium housing projects which have already started construction and sales will be counterproductive and cause a serious negative impact on the industry. Before the start of this month the buyers were scrambling to make the most of it. A major developer told the Business Times that March was the month they expected the highest sales. Another builder agreed saying his sales increased at a considerable rate. “Many are buying at an increasing rate.” He said that most were bought by doctors and engineers, also entrepreneurs and those working abroad earning a good income. A third builder added that their apartment sales are mostly generated from the diaspora. “We see that 30 per cent sales are from the diaspora and less than 10 per cent are foreign buyers."

Surge in sales

While the tax debate was on, certain apartment buyers told the Business Times that builders were trying to ‘make hay while the sun shines’ last month when some had hiked their condo prices in anticipation of the sharp rise in sales owing to the anticipated value added tax. “There was an ad that was posted on March 3 for an apartment for Rs. 22.8 million on the Internet but by March 30 for the same property they were quoting Rs. 25 million," an interested buyer told the Business Times. She added, "It looks like they have increased the rates over the last few days because of the VAT increase, as they know customers are purchasing before 1st April.” She also added that after April 1 these builders will advertise or sell saying they are absorbing the VAT cost.

http://www.sundaytimes.lk/180520/business-times/kollupitiya-resident-complains-against-high-rise-builder-288561.html6 April 2018 @ 8:35 pmCondo developers, the Blue Ocean Group has denied claims of wrongdoing on complaints made by some residents of their apartments that Blue Ocean hasn't transferred their deeds. In one example, a resident of Kollupitiya, A. Priyantha owning four condominium apartments built by Blue Ocean Residencies has complained about the company’s poor construction, among other issues. “I have paid upfront for all four apartments – three at Blue Ocean Residencies Kollupitiya and one at Blue Ocean Residencies, Siripala Road, Mt. Lavinia. It has been almost three years since they have finished the constructions but they are very poorly constructed. My main worry is that still they haven’t handed over the deeds to us and they are not even replying to our email or returning our phone calls,” he said in a letter to the Business Times. The apartments, he alleged, are not consistent with the sales contracts and they don’t include the promised square feet. He said the products used are not as per the standard that was promised. “When we inquired about it we have been told by their sales manager that Blue Ocean Residencies doesn’t want to waste time with us.” Blue Ocean Group Chairman S. Thumilan rejected the claim saying this resident hadn't submitted the proof of funds which is the reason that they hadn't transferred the said deeds. The resident countered this by sending documents to the Business Times where his monies were transferred. "All our money is legitimate and came from bank to bank. We transferred the cash through Seylan Bank - a Share Investment Account. All proof can be submitted." He added that he has proved to the banks here and Australia his source of income. “Australian banks are more strict than local banks and all our money came from an Australian bank to a Sri Lankan bank via our SIA Account because one day if we need to take the money back we can take it back via the same channel." He said that he has been in Australia for 25 years and that he and his wife invested in this country all their hard earned money as foreign investors. “Sri Lanka is begging for foreign investors to come and invest but once they do there is no government body or organisation that can help us. Most organisations that are here are all corrupt and being bribed.”http://www.sundaytimes.lk/180520/business-times/property-development-projects-grave-danger-to-city-dwellers-288559.html6 April 2018 @ 8:34 pmThe rapid growth of multi story apartments and high rise offices around the city in a haphazard and unplanned manner, has caused untold hardships to countless citizens in the recent past. You only have to drive down a road and witness the strange sight of a multi-storey construction rising menacingly over the adjoining one storey residence, most often constructed without leaving any space between the two boundary walls. There have been two incidents in the recent past, the collapse of buildings in Wellawatta and Grandpass which have resulted in the death of eight people which reflects the sad state of affairs at the Colombo Municipal Council (CMC) and the UDA. The negligence displayed by these authorities with regard to certificates of conformity and lack of proper monitoring has lead to the death of eight people. I have personally experienced this gross negligence, or could it be willful laxity due to large sums of money exchanging hands by both the CMC/UDA. Our home is located down a road where majority of the buildings are residential houses in the heart of Colombo. However on the sale of the neighbouring residence to a large company; the nightmare started. The deep excavation process during the “wall to wall” construction of a multi-storeyed apartment without the required metal shoring lead caused a soil shift lead to large cracks appearing in several parts of the house. In addition the terrazzo tiles on the floor developed massive cracks. Several calls to the police and complaints to the municipal authorities proved fruitless. Several visits to the municipality and meetings with the Director City Planning also proved fruitless. In desperation a meeting with the UDA Chairman and UDA officials was arranged. The Chairman requested the attending officer to call for the file from the municipality and arrange an inspection, whether the new construction was in conformance with the plan. Several weeks of calling revealed that the requested file had not been received. It was evident that orders were deliberately disobeyed despite the UDA being vested with powers over the CMC. It was shocking to witness the number of residents who were present at the UDA premises to complain at the destruction being done to their homes. All had the same story to tell. Many complaints had been made but no results were seen. One lady bemoaned that her house had been newly constructed and was now damaged beyond repair. Further the developers had not even paid insurance. It was sad to see that several retired and aged folk also being forced to undergo the hassle of visiting the UDA premises to make a complaint. When an ancestral home, lovingly built with several years of hardship and sacrifice is damaged by callous property developers, without the slightest regard or even compensation; the situation has sunk to a new low. If residents who have lived for years in their home are now faced with damaged and cracked home due to the willful negligence of authorities responsible, the citizenry is now faced with a frightening prospect. It is the primary responsibility of the municipality and Government to protect city dwellers from the scourge of unscrupulous property developers who will stop at nothing to earn extra profits. Deep excavations in and around residential areas have further weakened the foundations of homes in the area. Currently elected Mayor Ms. Rosy Senanayake, please take note of this alarming new trend and also take strong measures to prevent wrongful plan approvals by corrupt authorities at the CMC. It is also the responsibility of engineering institutions in the country to implement safety regulations so that constructions will not pose a risk to houses in the vicinity. In developed countries due to zoning restrictions, high rise buildings cannot be constructed next to residential homes. Further there are rigorous safety regulations which cannot be breached. It is high time that those in authority take action to protect homes and lives of innocent citizens from this menace. P. Rubini Colombohttp://www.sundaytimes.lk/180520/business-times/investments-on-apartments-and-condos-288557.html6 April 2018 @ 8:33 pmWhile going through the Hit Ads section of the Sunday Times, I observed that the amount of advertisements for sale and rent of apartments and condos has sharply increased during the past 10 years. These apartments are being built by investing large amounts of funds in billions of rupees and due to the high price of these apartments the sales have been declined, since there are many repeat advertisements in papers. In 2008 till 2012 the US mortgage credit bubble burst unexpectedly due to granting of excessive credit for home loans, which finally ended up creating a serious financial crisis in the US economy. This trend continued till about 2012 which later affected the global economies due to the global financial crises. During this period many banks and lending institutions crashed while some were bailed out by the central banks. The recovery from this mortgage loan crisis was not that easy for many countries. In Sri Lanka in 1989, HPT crashed and subsequently many financial institutions failed and crashed in our country due to mismanagement and credit crises. This situation is yet to be resolved by the Central Bank. The main objective of this letter is to caution that we too may face a similar property investment crisis considering the rate of construction of such apartments investing billions of rupees, some borrowed from banks, others by way of customer advances. In this connection I feel it is high time that the state must intervene and bring about regulations limiting such investments while encouraging such investors to invest in other productive assets based projects like factories, etc for export purposes offering tax concessions etc. Mahinda Wimalasena Kiribathgodahttp://www.sundaytimes.lk/180520/business-times/democracy-working-in-sri-lanka-eu-delegation-288553.html6 April 2018 @ 8:30 pmThe No-Confidence motion that was debated in parliament on Wednesday proved that democracy is working in Sri Lanka, observed the European Parliamentary Delegation visiting Sri Lanka at the media briefing held at the Office of the Delegation of the European Union to Sri Lanka and the Maldives in Colombo on Thursday. [caption id="attachment_288554" align="alignright" width="400" caption="Anton Marcus, Joint Secretary, Free Trade Zones & General Services Employees Union (second left) addressing the media briefing on GSP +. Others in the picture are from left: Sylvester Jayakody - Gen Secretary, Ceylon Mercantile Union, Palitha Atukorale, Secretary - Industiall Sri Lanka Council and Padmasiri Ranawakaaarachchi, Secretary General, National Trade Union Federation. Pic by Quintus Perera."][/caption] A delegation of six members of the European Parliament Committee on International Trade (INTA) were in Sri Lanka from April 4 to 6 to follow up on the country’s commitments made in exchange for access to the European Union (EU). Jan Zahradil, European Conservatives and Reformists at the media briefing, said that that they have been able to see democracy at work in Sri Lanka referring to the recent No-Confidence vote in parliament and indicated that this is a very good example of a real democracy. He said “for us it was a very good example of a vibrant democracy.” Meanwhile on the same day morning, trade union leaders in the IndustriALL Sri Lanka Council meeting the media at Renuka Hotel, Colombo indicated that while the EU has granted GSP+ which accrues benefits to Sri Lanka these benefits are reaped by the employers of the Free Trade Zones. They are getting increased orders for garments, trade union leaders said, adding that 50 per cent of these benefits should trickle down to the workers and the public. At the EU briefing, Mr. Zahradil said that they came here to share some of their findings and observations made by INTA and said that they had several meetings with officials, Ministers of Law and Order, Labour and the Speaker of the House as well as the Leader of the Opposition and had met the Prime Minister too. They have also met TU leaders, NGOs, and missions of ILO and UN in Colombo. They were discussing issues related to GSP + which they believed is beneficial to both Sri Lanka and the EU countries and were keen to cooperate with Sri Lankan partners. It was persistently stressed by Mr. Zahradil that they were not here to master, teach nor scrutinise but as friends in a united journey to work for a better Sri Lanka and its people. He said that they are interested in the security of the country as it is important for the overseas investors to see a stable country. Also speaking about GSP +, he said: “If necessary we like to speak little bit about labour market and most of these things are domestic. And we are interested in particular about some labour conventions of international standards. But everything is in a positive, active way. So again, happy to be here.” Sajjad H. Karim, Standing Rapportuer, European Conservatives and Reformists said that while Sri Lanka needs to raise its standards, he felt that the people themselves wanted their living standards to improve and was keen to strengthen the relations between them and Sri Lanka. [caption id="attachment_288555" align="alignleft" width="400" caption="From left: Zahradil - European Conservatives and Reformists, Tung-Laï Margue - EU Ambassador in Sri Lanka and Sajjad H Karim, Standing Rapportuer, European Conservatives and Reformists. Pic by M.D. Nissaka."][/caption] They were discussing about the Prevention of Terrorism Act and Counter Terrorism Act and inquired whether Sri Lanka would adhere to international standards for good and equitable law enforcement. He pointed out: “We demand nothing, but merely a journey undertaken as partners in order to ultimately arrive at a place of a strong, open, vibrant, tolerant Sri Lanka that provides opportunity for its citizens and raising their living standards”. Referring to the recent communal disturbances in Kandy, he said they were not satisfied about the protection afforded to those attacked and there was nervousness among the minority groups while pointing to a need for the government to improve policing and good community relations. At the Renuka Hotel media briefing by trade unionists, Anton Marcus, Joint Secretary, Free Trade Zones & General Services Employees Union said that even before granting GSP + last year they were campaigning and canvassing and have played a major role to obtain this facility. He said that they are joining the EU delegates in their task of assessing the working of GSP +. They also have discussed other labour issues affecting the workers. He pointed out that the employers refuse to accept that GSP + afforded financial benefits but Mr. Marcus insisted that all involved should work out to at least 50 per cent of these benefits being shared among the workers and the public. Unions oppose changing May Day Another matter of concern raised by unions at the briefing was the government decision to change the date of holding the May Day which has become a major issue among the trade unions. Sylvester Jayakody, General Secretary, Ceylon Mercantile Union (CMU) said that changing the date of May Day is like changing one’s birthday and they have with all other trade unions decided to hold the May Day on May 1. Mr. Marcus said that they are holding their May Day on May 1 in Vavuniya in a bid to bridge North and South through workers. Another plague that erodes the working class is the ‘manpower’ employment system, pointed out Palitha Athukorale, Secretary, Industriall Sri Lanka Council, adding that 40 per cent of the 8 million workforce in the country consist of manpower employees and their future is destroyed as they would not receive any benefit like the permanent workers. He said that every day in the morning at Awariwatte, Katunayake there would be more than 1,000 girls herded, worse than cattle, into lorries and transported to factories. The contractors are said to be hooligans in the area with political connections. He pointed out that many unpleasant incidents appear to be happening during this transportation.http://www.sundaytimes.lk/180520/business-times/ceylon-dollar-bond-fund-now-open-to-local-investors-288551.html6 April 2018 @ 8:27 pmLocal investors are now eligible to invest in the Ceylon Dollar Bond Fund (CDBF) which invests in Sri Lanka Development Bonds (SLDBs), Dollar Sovereign and Bank Bonds. All Personal Foreign Currency Account (PFCA) holders (formerly NRFC, RFC, RNNFC, SFIDA, etc) or Business Foreign Currency Account (BFCA) holders (formerly FEEA, Exporter's Foreign Currency Accounts, etc) can now invest in the Fund, the company said in a media release. CDBF, the only dollar denominated unit trust in Sri Lanka, is approved by the Central Bank (CB) and is licensed and regulated by the Securities and Exchange Commission of Sri Lanka (SEC). Deutsche Bank AG is the Trustee and Custodian of the fund, which is managed by Ceylon Asset Management. The fund reported a net return of 6.95 per cent in 2016 and 5.25 per cent in 2017, while the annualised return as at February 28, 2018 was 4.34 per cent. However, due to the recent political instability, the dollar SLDBs rates now yield over 6 per cent per annum, the release said. Previously limited to Sri Lankans living or working overseas, BOI companies and foreign investors, the fund is now open to any investor from US$1,000 upwards. The open-ended fund structure enables an easy exit whenever investors require, without being locked-in for a fixed period. Chairman of Ceylon Asset Management, Nilu Wijedasa, commended the CB and the SEC for paving the path for Sri Lankan investors to access competitive returns available through CDBF. He added that the replacement of the country’s previous Exchange Control Act, which was succeeded with the new Foreign Exchange Act, legislation has advanced Sri Lanka’s foreign currency management systems to be on par with international standards.http://www.sundaytimes.lk/180520/business-times/global-fitch-ratings-raises-stake-in-sri-lanka-unit-288547.html6 April 2018 @ 8:25 pmFitch Ratings, a global rating agency, has increased its ownership of Fitch Ratings Lanka Ltd to approximately 89 per cent from 45 per cent through its acquisition of the equity interest of several shareholders, the company said in a public announcement on Thursday. "We are excited about Fitch's commitment to Sri Lanka, one of Asia's fastest-growing fixed-income markets," said Maninda Wickramasinghe, Head of Fitch Ratings Lanka Ltd. "As a global brand recognised for independent opinions and a transparent methodology, coupled with on-the-ground insight and expertise, we look forward to helping to develop Sri Lanka's capital markets as demand for funding infrastructure projects and corporate investments increases." Since its inception in Sri Lanka in 1999, Fitch Ratings has rated more than 60 issuers, including almost all the banks in Sri Lanka and over half of the financial institutions, as well as the leading conglomerates. The agency has also rated landmark transactions, including the country's first Basel III-compliant subordinated bond issued in October 2017. Fitch Ratings was also the first international rating agency to issue Sri Lanka's maiden rating of 'BB-' in December 2005.http://www.sundaytimes.lk/180520/business-times/lkis-wignaraja-speaks-on-china-in-south-asia-at-uk-institutes-288545.html6 April 2018 @ 8:24 pmDr. Ganeshan Wignaraja, Chair of the Global Economy Programme at Colombo’s Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKI) recently made two presentations in London on the topic of China in South Asia; one at the South Asia Centre of the London School of Economics (LSE), and the other at Chatham House. At the LSE South Asia Centre, Dr. Wignaraja spoke at the South Asia Summit 2018 on March 10, a conference that debated topics of pan-South Asian significance, according to a LKI media release. The LSE South Asia Centre aims to work with individuals, organisations, think tanks, the media, governments and parastatal institutions to debate South Asia among its constituent countries and with the world at large, through multi-faceted dialogue and debate, and to position South Asia as a dynamic global region influencing wider challenges and powers. During the session titled “Is China South Asia's Principal Ally?,” Dr. Wignaraja explored China’s increasing geopolitical influence in South Asia over the past few years including via and trade agreements and systematic investments in infrastructure like the China-Pakistan Economic Corridor, the proposed project of a Bangladesh-China-India-Myanmar Economic Corridor, and the 99-year lease of Sri Lanka's port of Hambantota. On March 14, he spoke at the think tank, Chatham House, on “China’s Outlook and Changing Role in South Asia.” Chatham House, the Royal Institute of International Affairs, is an independent policy institute based in London. Dr. Wignaraja discussed the opportunities for closer economic cooperation between China and South Asia, in light of China’s slowdown and India’s economic reforms. He also outlined China and India’s economic outlook for 2018-2020 and beyond, and examined the political challenges to rising Chinese influence in South Asia, as well as how powers in Europe and the US can prepare for a multipolar world economy. He said that China would see a soft growth landing amid an uncertain global upturn and that its economic ties in South Asia would increase. He argued for increased regional cooperation in Asia to maximize the benefits of these developments. The seminar was attended by over 50 academics, diplomats, and government officials.http://www.sundaytimes.lk/180520/business-times/virtusa-acquires-etouch-288543.html6 April 2018 @ 8:23 pmSouthborough, MA – Virtusa Corporation, a global provider of digital engineering and IT outsourcing services that accelerate business outcomes for its clients, has entered into an equity purchase agreement to acquire all of the outstanding shares of eTouch Systems Corp (eTouch US) and eTouch Systems Pvt. Ltd (eTouch India, together with eTouch US, eTouch). The company, in a media release, said it completed the acquisition recently and expects to complete the acquisition of eTouch India in the next several days, pending the final settlement of eTouch India shares. Headquartered in Fremont, CA, eTouch provides cutting edge digital engineering, digital marketing, cloud, analytics, and data security solutions, primarily to tech companies. The acquisition of eTouch expands Virtusa’s digital engineering expertise and broadens its digital service offerings. It also establishes a strong innovation hub in the heart of Silicon Valley and allows Virtusa to better address the needs of both fast-growing tech companies and global enterprises. Further, the acquisition expands Virtusa’s team of highly-skilled digital engineers, deepens its tech domain expertise, and adds marquee names to its client portfolio, including a leading Silicon Valley-based multinational technology and Internet company to its top-10 list of clients, the release said. Kris Canekeratne, Chairman and CEO of Virtusa, said, “Digital Transformation is increasingly a cost of doing business, and digital engineering is the critical competency to realize the full business value of digital-first investments. The eTouch acquisition solidifies our growing leadership in the digital space, and will have a positive impact on both Virtusa and eTouch clients. There is strong alignment between the two firms, from our shared approach to digital engineering and innovation to how we address client engagement, talent development and a strong engineering-first culture. The addition of eTouch’s Fremont, CA Digital Innovation Center to Virtusa’s already global footprint significantly strengthens our capacity to guide and serve Valley, national and multi-national clients around the world. We are thrilled to have e-Touch’s team members and clients join us on our journey to becoming the leading digital engineering firm in the world.” Ani Gadre, Founder and CEO of eTouch, stated, “We are pleased to join the Virtusa team and believe this is a tremendous opportunity to deliver on eTouch’s vision of offering digital engineering services on a global scale”.http://www.sundaytimes.lk/180520/business-times/combank-takas-lk-link-results-in-largest-day-of-sales-in-ecommerce-in-sl-288541.html6 April 2018 @ 8:21 pmCommercial Bank partnered with leading e-Commerce platform, Takas.lk, to give incredible savings to its credit card and debit card base for the months of March and April, a partnership that hit record levels. During this period customers were given discounts to up to 12 per cent on a range of more than 13,000 products. The massive single day sale occurred with discounts of 25 per cent offered for all the products at Takas.lk. In a single day (March 29) Takas.lk recorded sales of Rs. 51 million or more than Rs.33,000 in sales revenue per minute. Commenting on the partnership, Thusitha Suraweera Head of Cards stated: “We believe that digital and credit card payments is the way to the future. Commercial Bank is also the provider of the Internet Payment Gateway (IPG) to Takas.lk” Lahiru Pathamalal, CEO/co-founder of Takas.lk said, “This clearly shows that e-Commerce is here to stay. It also shows that Takas.lk have fully scalable model that we have built. Takas.lk being a managed market place mode (only a virtual stocks) we work with reputed suppliers in the country such as Singer to deliver products to the end consumer.” Commenting on the technology that enabled this massive turnover, Kalinga Athulathmudali, takas CTO said: “We have internally developed systems that were able to handle a large amount of traffic coming on to our site, we do our hosting as well. The site was able to handle multiple orders coming though our payment gateway every minute (empowered by Commercial Bank) which meant that we did not lose any orders, there was no down time”.http://www.sundaytimes.lk/180520/business-times/central-bank-closely-monitors-eap-group-deal-288539.html6 April 2018 @ 8:20 pmSri Lanka’s Central Bank (CB) is closely monitoring the deal between the EAP Group and a Singapore investment fund company to sell its subsidiaries of the group and rescue a struggling finance company, CB Governor Indrajit Coomaraswamy said in Colombo on Wednesday. The Singapore investment is meant to resuscitate the ailing Edirisinghe Trust Investment Finance Ltd (ETIFL). But he noted that potential capital infusion would not completely resurrect the ailing company. The cash infusion will be extremely helpful in stabilising the situation but it is essential to seek further capital to fully revive ETIFL, he added. The Monetary Board has already granted approval to the valuation, and it was done in terms of the law. He told reporters that the full financial commitment in the deal would be made in several tranches and the CB is watching as to whether the money being remitted to the company as capital is sufficient to meet this finance company’s commitments. He noted that the investment will come in, in tranches and the CB is monitoring the credentials of the investor. Disgruntled depositors will get their money after the completion of the whole process, he disclosed. Apart from this, investigations are being carried out as to how the ETIFL had fallen into an abyss and persons responsible for its financial crisis, he said adding that “we will have to complete the deal and then understand what caused the problem.” ETIFL a licensed non-bank finance institution, is to be revived with a capital infusion of US$17 million by a Singapore based Investment Fund Company aimed at protecting over 35,000 depositors, informed official sources revealed. EAP Group entered an agreement with this company to sell some of its major subsidiaries at a price of $75 million with the sole aim reviving ETIFL and Swarnamahal Financial Services PLC, a high official closely connected to the deal said. The Central Bank in January placed troubled ETI Finance and Swarnamahal Financial Services PLC of ETI Group under a three-member expert panel to bring the two troubled finance companies into normalcy in six months, mainly through the sale of assets within ETI Group. The panel consists of former Central Bank Assistant Governor Sepala Ratnayake, former Bank of Ceylon Senior Deputy General Manager P. A. Lionel and former Bank of Ceylon Assistant General Manager H. M. Thilakarathnehttp://www.sundaytimes.lk/180520/business-times/insee-cement-honours-business-partners-288537.html6 April 2018 @ 8:19 pmINSEE Cement recently honoured its top performing Business Partners and their families at the Annual INSEE Business Partner Awards, recognising and rewarded the channel partners of its three leading retail products, INSEE Sanstha, INSEE Mahaweli Marine and INSEE Mahaweli Marine Plus, from across the island. Ranjith Weragala of Lahiru Enterprises won the Business Partner of the Year 2018, the most coveted award of the evening, while Deepthi Kumara of W. P. Seemon Singho & Sons was declared the Winner of the National Award - Platinum Category for Mahaweli Marine Cement, the company said in a media release. The INSEE Cement Executive Committee presented a total of 46 awards at the event with the business partners applauded for their performance and commitment to the INSEE brand in 2017. Congratulating the winners, Executive Vice President and Sales and Marketing Director of INSEE Cement, Jan Kunigk, commented, “We ventured into unexplored markets last year and gained impressive traction thanks to the commitment and support of our business partner network. We have introduced a strong partnership approach aligned to our strategy for 2018; Bigger investment in production plants and assets to serve our growing market, stronger construction solutions with superior expertise and technology to complement our strong brand name, and finally, faster strategy execution and rapid market reach”. INSEE Cement is a member of the Siam City Cement Public Company Ltd, the leading cement manufacturer in Southeast Asia founded in 1969 in Thailand.http://www.sundaytimes.lk/180520/business-times/mas-begins-biodiversity-battle-with-25000-acre-habitat-restoration-drive-288534.html6 April 2018 @ 8:18 pmMAS Holdings this year will expand its biodiversity initative to 1,000 acres in the quest to grow and protect eco systems across 25,000 acres by 2025. This is in line with sustainability goals mapped out in 2016 where the group made three clear commitments in its quest to drive sustainable manufacturing in Sri Lanka. As one of the world’s most recognised design to delivery solution providers in the realm of apparel and textile manufacturing and also the largest apparel and textile manufacturer in South AsiaMAS has pledged to take radical climate action in the renewable energy space, to continuously manage the footprint of its business and to directly support biodiversity by creating habitats in 100 times the area it operates, the company said in a media release. “It’s critical that business intervene to turn the tide of deforestation. The time for action is not even now – it was the day before yesterday. We are losing our forests faster than we can replant them. Conservative estimates say Sri Lanka is losing 8,000 hectares of forest cover each year and more critically we are losing our precious endemic species of flora and fauna at alarming rates.” said SarindaUnamboowe, Board Member overseeing environmental sustainability. “This idea began when we asked ourselves ‘How can we help restore the biodiversity we may have either displaced or destroyed by our physical presence?’ This simple question grew into a larger more ambitious vision– to attempt to restore and replace 100 times the physical space we occupy. We didn’t want to just grow trees but to impact biodiversity.” said Sharika Senanayake the group’s Director of Environmental Sustainability. In 2017 MAS set out to cover 250 acres, equal to the space it occupies in Sri Lanka but thanks to the incredible passion and dedication by its own teams and the continuing support from the Forest Department, Wildlife Department and other stakeholders the group achieved double the impact. Throughout 2017 sustainability teams from all divisions of MAS collectively made an impact on over 500 acres with a 5 to 7 year commitment to maintain and ensure the projects keep growing. Knowing that growing trees alone would not help the problem of biodiversity loss MAS picked 6 models to engage and deploy habitat creation from all fronts. Ms. Senanayake noted: “We hit our learning curves on the way, the method, the research, the science, the partners all fell into place once we started. We didn’t outsource this effort - our own teams went out there, scoped out locations, did their research, engaged communities and got their hands dirty for weeks in a row,” The result has been the spirit of collaboration that has not just restored forests but also restored some belief that fighting deforestation can be done well inside ‘our lifetimes’ if there is a will to innovate solutions, the company added.http://www.sundaytimes.lk/180520/business-times/japan-sri-lanka-expo-2018-on-april-21-23-288532.html6 April 2018 @ 8:16 pmSri Lankans will witness an “exceptional country exhibition” when the Japan Sri Lanka Expo 2018 is held on April 21-23 at the BMICH, according to Ruwan Perera, Chairman, Kizuma International Sri Lanka Association, organisers of the event. Speaking at a media briefing last week to launch the event, he said 80 to 90 per cent of the exhibition would cover the entire BMICH exhibition display space showing Japanese culture and tradition. He said while last year there were more than 300 Japanese tourists visiting the exhibition, this year they expect 500 Japanese visitors. There would be Japanese award-winning film shows, dances, music and also famous Japanese heavyweight Sumo wrestling demonstration matches. Explaining the purpose of the exhibition, Michiyo Furusowa, Chairman, Japan Sri Lanka Kizuma Association said that there are several similarities between Japan and Sri Lanka –both countries are islands, both nationals eat rice, both are concerned about cleanliness and both are passionately kind hearted. She said that ‘Kizuma’ is a meeting place of cultures and traditions of Japan and Sri Lanka. They expect to further strengthen the solid historical ties between Sri Lanka and Japan, she said, and indicated that Sri Lanka has been special to Japan as it was former President J R Jayawardene who stood by Japan at the legendary San Francisco Conference. The conference was where world leaders decided to punish Japan for the crimes committed at the World War II. Ms. Furusowa said that JRJ quoting Lord Buddha’s “Na hi verena” stanza from the Dhammapada had urged that Japan should be pardoned. Saman Athaudahetti, Chairman, Independent Television Network (ITN) and Additional Secretary to the Prime Minister spoke of Japan and asserted that Sri Lanka could learn much from Japan. Japanese are inclined to adapt all good things into their culture and would consequently become a part of their traditions. Jun Mizuteni, Event Producer, explained the itinerary of the exhibition. (QP)http://www.sundaytimes.lk/180520/business-times/visionary-lankan-engineer-trailblazer-in-low-cost-machinery-288528.html6 April 2018 @ 8:14 pmWhen the British withdrew after Sri Lanka gained independence, they left a legacy of mechanisation in industrial agriculture like with tea factories, coconut mills, and also rubber factories. [caption id="attachment_288529" align="alignright" width="400" caption="Wet coconut coir dust is fed to the dryer"][/caption] Most of the other industries like soap making, cosmetics and the like too were mechanised. This mechanisation began more than 100 years ago but around 50 years ago these machines were worn-out, becoming obsolete, drastically slowing down production and compelling industrialists to replace them, in the absence of any other option. New imported ones would have been prohibitive while the alternative was to modify them or replace them locally, to continue the same production rate. By 1965, Sekarage David - who runs a machine manufacturing plant bordering the Ekala Industrial Estate in Jaela - had completed his studies then worked in the Ceylon Railway for 10 years. From 1980 he worked at Ceylon Tobacco Co, Sugar Corporation, Rhino Asbestos, and then as Chief Engineer at Baurs Ltd. He also acquired an MBA from Rajarata University and a Master’s degree in Economics from Colombo University. A product of Katubedde University with a master’s degree in Mechanical Engineering he continued his further studies in Poona University, Chennai. In 1980, then Baurs Managing Director Thilo Hoffman helped him to set up his own workshop to manufacture machinery. A techo-mechanical genius, he became a ‘God sent’ to those large scale manufacturers with heavy machines that needed replacements. Mr. David helped them to modify or replace the obsolete and worn-out machines. The man who single-handedly conducted a 5-day industrial exhibition in 1993, covering the entire exhibition area of the BMICH when others pulled out, now produces all types of plant and machinery for many of Sri Lanka's biggest firms. He began to prove his craftsmanship in the latter part of 1970s. He has manufactured conveyors, agitators, mixers, sieving machines, chemical pumps, blenders, furnaces, deck ovens, rack ovens, rotary ovens, service carts, rice degraders, ball mills - match mixers, stainless steel structures, automated dryers for noodles and papadam manufacturing machines. The uniqueness of his work is that he could turn out any ageing, imported machinery by modifying or by innovating to suit the requirements of various industrialists, with automation. He now supplies machines for industries like food, soap, cement, textiles, coconut, rubber, packaging, agro based industry, paint, etc. His newest venture is a ‘coco peat’ Drying Machine (coconut coir dust) which is in great demand as, according to him, in Sri Lanka there are around 60 such dryers but they all involve sun drying which takes a long time. [caption id="attachment_288530" align="alignleft" width="400" caption="Mr. S. David speaks to the Business Times with- part of the coconut coir dust drying machine in the back ground"][/caption] It could be supplied with various capacities at varying prices from around Rs. 3 million. He says there are several coconut producing countries and coir dust is in great demand in the world market, but no other country in the world has tried to make coco peat drying machine. The lowest cost would be Rs. 4 million. The plant and machinery thus required are designed to suit local conditions, considering the smooth function, high rate of production, maintenance and the supply of spare parts with high quality. He also had a revolutionary streak since prior to the infamous 1981 JVP insurrection, he met JVP leader Rohana Wijeweera when Dr. Ray Wijewardene, another technological genius, dismantled and demonstrated his helicopter at the Katubedde University for the benefit of the undergraduates. Lever Bros (now Unilever) which was using his engineering services then gave him the contract of turning out machinery. Another big David client is Ceat Kelani Tyre manufacturers. When Sri Lanka was plagued with various exchange restrictions and the exorbitant cost of importing new machinery, many industrialists backed down closing down their industries - unable to afford new machinery to replace the obsolete ones. In that difficult time his services became invaluable for those struggling to keep their industries afloat for want of new machinery or replacements. When imported machinery cost Rs, 10 million, his replacements would cost around Rs, 1 to 2 million, saving millions of rupees in foreign exchange. The largest machine he has manufactured is for the then state-owned Ceylon Gas Company for their main gas filling plant somewhere in 1979. It was a machine worth Rs. 100 million but manufactured by him for just Rs. 3.5 million. Now, Litro Gas has asked him to manufacture a similar type of machine and he has quoted Rs. 130 million for a machine that would cost more than Rs. 300 million in the international market. A true visionary, he planned to set up a Technical Training and Education Campus in 1994-95, and bought a 40 acre land in Alawwa to train around 100 diploma holders as technically skilled to feed the job market. But that was a bad time due to unrest in the country and there were also fears of forcible encroachment of the land, so he had to abandon his plans. He concedes that his machines would not reach the standards that of UK, Germany or USA but assured that the quality and precision of his machines would be amongst the best in South Asia. He also has exported several machines from soap manufacturing machines to washing plants and bottle filling plants to the Maldives and Vietnam. Not resting on his industrial brilliance, Mr. David plans to author several books on engineering and economics to be distributed in the international market.http://www.sundaytimes.lk/180520/business-times/no-joke-new-tax-regime-from-april-1-288013.html31 March 2018 @ 8:37 amRajendra Theagarajah, MD/CEO - Cargills Bank, stresses a point watched by Suresh Perera, Principal, Tax and Regulatory –KPMG (extreme left) and Roy Joseph -MD of Hemas Manufacturing (Pvt) Ltd) (second from right) during a panel discussion on the new taxes at the Sunday Times Business Club meeting on Tuesday. Club President Chaturanga Perera is also in the picture taken by Indika Handuwala. http://www.sundaytimes.lk/180520/business-times/eap-group-exits-from-subsidiaries-to-save-two-finance-companies-288011.html31 March 2018 @ 8:35 amCrisis-ridden, Edirisinghe Trust Investment Finance Ltd (ETIFL) a licensed non-bank finance institution, will be resurrected with a capital infusion of US$17 million by a Singapore-based investment fund, official sources revealed.The EAP Group has entered into a deal with Blue Summit Capital Management Pvt Ltd to sell some of its major subsidiaries to this Singaporean firm at a price of US $75 million in a bid to protect the deposits of over 35,000 depositors of ETIFL and Swarnamahal Financial Services PLC (SFS), a top official source closely connected to the deal told the Business Times. The Singapore fund has already remitted US$17 million to deal with ETIFL’s liquidity issue and eroding capital, a senior Central Bank (CB) official confirmed. According to a due diligence conducted by relevant parties, the gap indicated in ETI’s balance sheet was Rs. 17.5 billion at end-March 2017. This company has a 90 percent stake in SFS which has a negative book value of Rs. 1 billion. EAP is expected to receive $43 million by the end of April and the balance $15 million by mid May this year to finalise the deal of exiting the ownership of their subsidiaries namely SFS, EAP Films and Theatres Pvt Ltd, EAP Broadcasting and Swarnamahal Jewellers, the official source said. Only a 40 per cent stake in EAP Broadcasting, which owns the Swarnavahini TV station and several Sinhala and English radio channels, can be sold due to state restrictions imposed on foreigners to hold shares in media companies. The balance 60 per cent will be retained by the EAP Group. The CB restricted the withdrawal of maturing deposits and renewal of such deposits of ETIFL and SFS for six months with effect from January this year, and placed the companies under a 3-member expert panel comprising former CBAssistant Governor Sepala Ratnayake, former Bank of Ceylon (BoC) Senior Deputy General Manager P.A. Lionel and former BoC Assistant General Manager H.M. Thilakarathne. From that day onwards, EAP Group has tried to find an investor to infuse fresh capital into two finance companies, the official said. Earlier EAP’s negotiations with a controversial Malaysian-based broker, who was once stopped at the Colombo airport with a large amount of undeclared foreign currency, and also linking a Singapore firm Straits Grid Pte Ltd, didn’t work. It was after this that the EAP group was approached by another Singapore firm through another broker. The earlier negotiations also included a stake to be taken by UK based Lyca Group, owned by Sri Lankan-origin Allirajah Subaskaran, a high profile player in the mobile network space operating in 21 countries worldwide. The Lyca founder is a powerful financial backer of Britain’s Conservative Party.http://www.sundaytimes.lk/180520/business-times/fm-official-tipped-to-head-promotions-in-travel-industry-288009.html31 March 2018 @ 8:34 amThe government is likely to consider a diplomat with sound knowledge of state bureaucracy to head the promotions arm of the state run tourism body. It is learnt that the criteria for the selection process is to find someone with the ability to engage in the proper procurement processes of the government and in this respect a former diplomat now back in the island from India is being mooted for the job. However, Tourism Minister John Amaratunga told the Business Times that they were yet to find a suitable candidate and noted that this particular lady official from the Foreign Ministry had expressed interest in taking up the job. The industry too has indicated to the minister at a meeting on Tuesday their eagerness to appoint a new Chairman at the helm of the promotions operations and had noted that they required a “dynamic” person to take up the posting. Since the removal of the former Chairman Udaya Nanayakkara, Tourism Ministry Secretary Esala Weerakoon has been in the job as acting Chairman. At the same Tuesday meeting, expediting the promotions campaigns was discussed and it was pointed out that there should be clear timelines for the global promotion campaign. The minister noted that they had received a lot of interest from overseas agencies to carry out the promotions campaign under the digital marketing programme that is scheduled to kick off by the end of April. He noted that while they would have to work within the stipulated costs as allocated by the Treasury however, they would have to negotiate with the bidders on this aspect as well. Meanwhile, the CNN advertising campaign is set to kick off in April, Minister Amaratunga said adding that following the digital campaign getting underway the global promotion campaign would also fall in line accordingly. (SD)http://www.sundaytimes.lk/180520/business-times/phone-components-and-airplane-landing-gear-built-in-sri-lanka-288007.html31 March 2018 @ 8:33 amEuropean based telecommunication companies embed transformers and inductors manufactured in factories in Ratmalana, Sri Lanka? Absolutely … the next flight you take could ensure a safe landing because the gear is manufactured here by a company named Etal that has been carrying out operations for the past 10 years. Etal Group Pvt Ltd General Manager Scott Robinson told the Business Times in an interview last week that the BOI company believed that Colombo was an ideal location in terms of logistics and shipping and they also have a good quality workforce from the factory floor to the design department where engineers from local universities are hired to join in. He pointed out that 50 per cent of the total demand of Etal’s sales are manufactured out of Sri Lanka mainly for the European market and now India has also opened up to buying from Colombo since the company started its own operations here. Colombo is the base that manufactures about five million units of production per year. The factory floor comprises mainly of a female workforce who are operators and are generally considered flexible and committed in carrying out some of the tedious operations even by hand as well, Mr. Robinson said. However, Sri Lanka has to import its raw materials in order to manufacture the inductors and transformers, it was pointed out and these mostly are brought down from China. Etal has a presence in China as well and in this respect Colombo is faced with a clear challenge in terms of increased costs to import the raw materials and manufacture them in order to compete in terms of cost which is approximately seven per cent of the total production cost, Mr. Robinson said. Some of the manufactured components are used in aeroplane landing gear, deep sea fishing radar systems as well, he said. Colombo is the largest unit in the Etal Group with 360 employees with a larger amount of the production volume is mainly for the telecommunication companies in Europe. The operations in Estonia has about 60 employees where they manufacture for the military and defense sector. Etal initially started its operations in Colombo more than 10 years back with a sub contractor but had subsequently set up their own operations in the country due to the viability of having operations here. “It has been a slow and steady build and now we are looking at transferring the design work which was previously based in Sweden to the Research and Design Centre in the UK,” Mr. Robinson explained. He noted that Colombo based engineers would offer their input to the centre from the Asian capita and moreover the shifting of the R&D centre to the UK was also due to the fact that the company’s President is based there. Since the Colombo operations began 10 years back, the company had set up a second manufacturing plant. “We had a steady increase in demand for our products,” he said adding that the company is always on the lookout for new acquisitions to expand their client portfolio. China and India are the company’s customers as well and the sales workforce operates out of Sweden, the UK, and India with an office in China to check on quality and logistics. The Colombo based manufacturing facilities located in Ratmalana commenced operations in 2008 and has capabilities that include manual and automatic fine wire winding and among other the it fully cover the manufacturing requirements of a wide range of standard and custom designed inductive components and assemblies.?http://www.sundaytimes.lk/180520/business-times/deals-in-abundance-at-the-cse-288005.html31 March 2018 @ 8:32 amSo far this year the CSE has seen so many deals – crossings, buybacks and private equity.  This trend was started by On’ally Holdings PLC, engaged in property development and real estate business when its 12 per cent crossed on January 3. The buyer was Renuka Capital PLC which has been collecting this share since last year when it bought a 23 per cent stake in September. Ceylon Tea Brokers PLC (CTBL) saw its controlling stake trade on January 8. On the same day, Ceylon Investment PLC (CIP) - part of the Ceylon Guardian Group - shed its holding in cable manufacturer, ACL Cables PLC. Hemas Holdings’ fully-owned subsidiary Hemas Manufacturing Ltd bought Nimex from Atlas, owned by Ceylon Pencil Co. (Pvt) Ltd on January 19. January 26 saw Softlogic Holdings PLC enter into a private placement deal with Samena Ceylon Holdings Ltd, a fully-owned subsidiary of Samena Capital, a principal investment group focusing on the subcontinent, Middle East, Asia and North Africa, to raise Rs.3.11 billion for the company, to settle short-term debt. The month of February began with Janashakthi Insurance PLC selling its entire stake in the general insurance segment to multinational insurer, Allianz. March 21 saw Navara Capital selling its controlling stake in Serendib Engineering Group PLC, which provides engineering solutions to major state infrastructure outfits, to a Singaporean entity. On March 27, Dialog Axiata entered into an agreement to acquire 35 per cent of the share capital of Digital Reality Pte Ltd (DRPL) through a primary issuance, at a cash consideration of Rs.262.5 million to establish, operate and manage Sri Lanka’s first ever high-density data centre. Dialog Axiata’s wholly owned subsidiary, Dialog Broadband Networks Pte Ltd (DBN), also entered into a shareholder agreement with Orion City’s main developer St Anthony’s Property Developers Pte Ltd (SAPD) for the acquisition. On March 24, Serendib Hotels paid Rs.108.1 million for the balance 425,627 shares representing 48.85 per cent stake in Frontier Capital Lanka Private Ltd, the owners and operators of the villa chain, Lantern Beach Collection. United Motors Lanka PLC (UML) announced that it sold its entire stake in TVS Lanka (Pvt) Ltd to the TVS parent company in India for Rs. 1 billion. The Ishara Nanayakkara family-led LOLC Group on March 28 increased its stake in the company, buying over the 30 per cent stake held by Japan’s Orix Corporation, the one-time owners of the company. In a transaction done on the Colombo Stock Exchange, the deal is worth nearly Rs 13 billion or US$ 85 million dollars. The Nanayakkara family has increased its stake to 85 per cent from 55 per cent earlier with this transaction while the balance 15 per cent is held by the public.http://www.sundaytimes.lk/180520/business-times/new-vat-on-apartment-sales-suspended-288003.html31 March 2018 @ 8:31 amThe 15 per cent value added tax (VAT) on sales of apartments from projects after April 1 won’t be effective from today, as planned earlier, since the amending legislation to enable this process hasn’t been presented to parliament as yet, officials sources said. Many people had rushed to buy apartments to beat this deadline with one developer saying he sold 25 units in February and expected to sell another 30 in March. The Business Times also reliably understands that there is rethinking on this budget proposal which is likely to be differed for the time being. Meanwhile the new Inland Revenue Act valid from today has also raised doubts about the legality of the 44 double tax treaties as the new law doesn’t have the required transitional provisions to ensure the old treaties are valid.http://www.sundaytimes.lk/180520/business-times/killing-the-spirit-of-entrepreneurship-287998.html31 March 2018 @ 8:29 amSri Lanka has become dysfunctional. Over the past few months, including the period of the recent local government elections, some key state institutions have ground to a halt like the Securities and Exchange Commission (SEC) where the terms of office of the commissioners including the chairman ended (and no replacements have been made so far). Then there is a tussle between the Prime Minister and the President over the scrapping of the PM-led Cabinet Committee on Economic Management (CCEM). What about the no-confidence motion against the PM and its fall-out, whichever way the wind blows? Pump-and-dump wheeler dealers in the stock market are on the prowl again amidst accusing fingers at the SEC for its lackadaisical approach towards bring the crooks to book. There are many other areas where matters run by the state are not smooth and have become big issues given the dysfunctional state of the public institutions. These thoughts crossed my mind when listening to what Kussi Amma Sera had to say on this Thursday morning.“Balanna Mahattaya, apey lamai-ta vechcha-de (see what has happened to our children),” she says while reading the newspaper in the verandah. “Aei?” I ask. She then goes on to read about the closure of universities due to an ongoing strike by non-academic staff, adding “apey gamwala, vishva vidyalawalata yana lamaita hemadama gatelu” (university students from our villages are always having issues). Interestingly, searching the Internet, I came across an ongoing strike at more than 60 universities in the UK over a pensions’ dispute. So while one may argue that problems at universities are not only in Sri Lanka, unrest at local universities have continued for a while disrupting lectures and delaying examinations. In most cases, students are compelled to spend an extra year in completing their university courses. Adding fuel to this troubled university environment is a passage in the new Inland Revenue Act (IRD) on imposing taxes on companies that are collaborating with universities on innovation and creativity in transforming ideas to commercial products for the benefit of society.“Taxing companies who are helping students to think and breed ideas that transform into products for society is killing the spirit of entrepreneurship which the government has professed to encourage,” said one company executive. Many universities including Moratuwa, Colombo and Uva-Wellassa have been involved in private sector-funded research on various initiatives. Not only have some of these projects yielded products that would cost five to 10 times more to import but allow students to dabble in creative thought and ideas with some financial reward rather than be distracted by university problems. It also keeps them occupied productively. For the companies there is risk involved, research works both ways. It can be successful; it can fail. The crux of the problem is that under the new tax laws there is no incentive for innovation. The generous (up to 300 per cent) tax exemption from profits of companies that are collaborating with universities on research and development has been removed in the April 1 tax regime. From today, no exemptions would be granted to companies involved in R&D, which is not only a disincentive but goes against the grain of government thinking and promises in the past two budgets. For example, budget 2018 spoke of “… building an innovation driven social market economy, accelerating economic growth in a fair and equitable manner”. It also said a National Science Technology & Innovation Coordinating Authority will be set up to convert research into commercial ventures; the Centre for Robotics will be further strengthened and a Hi-Tech Innovation Park is to be established in Homagama. Budget 2017 spoke of an “Innovation Based Economy” through progressive reforms, an Innovation Accelerator Fund, aimed at supporting commercialisation and particularly last stage financing and of converting “Research into Rupees”. “The speed with which new ideas could proliferate with digitalisation will facilitate innovations and productivity improvement thereby creating a competitive environment,” it was stated, adding: “Job creation, investment in fixed assets in designated zones, clean energy and the innovation will be the sole grounds for incentives.” Almost every other week, the Business Times has been profiling young Sri Lankans and their creations – with a little funding help for instance from the National Science Foundation – like the recent remote-controlled underwater camera developed by two university students which cost them Rs. 100,000 compared to Rs. 10 million to buy one from overseas. Sri Lanka’s start-up community is a reservoir of ideas with most of their products based on a personal experience, a problem encountered and a solution found. They don’t go running behind banks like in the traditional growth of small and medium scale enterprises but carve out a niche for themselves and attract funding from (what are called) angel investors. There are privately-funded competitions to select the best start-ups that would receive funding. There are former Sri Lankan executives in Silicon Valley, home of the world’s biggest start-ups and tech firm, who are running their own start-ups in Sri Lanka. There are others who are helping universities to thrive in transforming a fountain of great ideas into products. Robotics development at the Moratuwa University is pushing the boundaries of creation and raising the bar to international standards and levels of achievement. It was only last week the Sri Lanka Association of Software and Service Companies in partnership with Virtusa and Virtusa xLabs organised a competition designed to encourage innovation and entrepreneurship among Sri Lankans and “help start-ups in the country embrace the 4th Industrial Revolution”, according to the organisers. And, the 500,000-rupee-prize winner -- Faculty of Computer Science and Engineering at Moratuwa University -- had invented a wearable which uses IoT (Internet of Things) and machine learning technology to track and compile foot pressure data to predict symptoms related to diabetes. Ten years ago this would not only have been unthinkable but an unbelievable creation by Sri Lankans. These innovations are just the tip of the iceberg; new ones are either being created as we speak or discussed on the drawing board. The ecosystem of ideas and platforms to take them forward is growing. Unfortunately, only a few ministers in the government understand these developments which form a crucial part of the 4th Industrial Revolution which is building digital space and technology that will drive industry in the future. Traditional jobs will be lost to technology and if Sri Lanka doesn’t keep pace with these changes, even our politicians won’t have jobs (how can they dole out jobs to others when technology and machines would do many of the jobs handled by humans?). Taxing ideas is not the way to go and is contrary to stated government policy as clearly illustrated in the recent 2017/2018 budget proposals. Often there are complaints that not enough budgetary allocation is given to R&D compared to other countries. Thus where the state is unable to, the private sector has filled this void. While companies are likely to pull out of their collaborations due to the risks involved and on top of that taxes, others are hoping to continue even at a loss, as a social enterprise to help students and committed academics, driving these programmes. Within the chaos in Sri Lanka, there are many positive developments like these private sector-university collaborations. These must be encouraged, not discouraged.http://www.sundaytimes.lk/180520/business-times/2017-an-economy-on-crutches-287994.html31 March 2018 @ 8:27 amThe residence of my one-time teacher, named as “wana leheba” (shrubbery) is located in a beautiful piece of forest-like garden, hidden within the Kurunegala city - a sanctuary with shades of big trees and beautiful natural landscaping for art-lovers as well as bird-lovers. It was after many years that I recently had an opportunity to visit my teacher whom I called “Munasinghe Ayya” - not a teacher of economics, but of arts and design. I happened to train my mind and hands in arts, graphics and designs under him before I became a university student. [caption id="attachment_287995" align="alignright" width="660" caption="File picture of Katunayake airport runway under reconstruction last year, one of the bright sparks in the economy. However the SriLankan Airlines plane was a negative with the Government struggling to find a foreign partner."][/caption] There were numerous creations of art work scattered throughout his shrubbery, and they were quite unusual to a normal eye; anything that you throw away had been the raw materials for my teacher’s art works. I realised that he had moved into a new direction of creativity from the previous form of arts and designs. I walked through this new types of creative pieces, listening to his explanations and interpretations of each one. Among them I noticed something that looks like a “pair of crutches” hanging on a tree - another piece of art work. You really need his help to understand most of them; so that I asked him what it was. He replied, “It is the way I see our economy; you know it, don’t you?” Economy on crutches Last week the Department of Census and Statistics released provisional estimates of growth performance of the Sri Lankan economy in 2017. When I glanced at the indicators of the growth performance last year, I could picture the paralytic economy standing with the support of crutches! The rate of real GDP growth has declined further to 3.1 per cent in 2017 for the third consecutive year. It was like a further deterioration of the condition of a paralytic! Real GDP growth rate was 4.5 per cent in 2016 and 5 per cent in 2015. Per capita GDP in nominal terms has only slightly improved to US$4,065 from $3,857 in the previous year. Had the exchange rate depreciated little more (which was not at all an unlikely event), even that slight improvement would have been wiped away. The nation’s hope of achieving and sustaining 8 - 10 per cent growth after the end of the war in 2009 and of becoming a rich nation is gradually fading away. Those who sense the paralytic nature of the economy have been staring sorrowfully and compassionately at the numbers of growth performance. They are like those numbers on a medical report that indicate the severity of the paralytic condition. Let us look at the issue of economic growth and, the implications of its slowing down. Fundamental issues The issue of economic growth looks alien to many, because they don’t feel its ups and downs with their five senses. What people feel in their day-to-day life is a different set of issues: Poor meals of the day, unbearable commodity prices, monthly utility bills, insufficient salaries and incomes, paucity of money in hand, dearth of suitable jobs, lack of basic needs, challenges of children’s education, health hazards, helplessness, insecurity and, so on. Slower economic growth is the most fundamental factor underlying all these issues, because it is the rapid economic growth that would provide sustainable solutions to them. These issues are only symptoms of the problem or the manifestation modes of the problem - just like those symptoms of a paralytic patient. We like to provide external support to a paralytic patient with crutches or other modes of support; but crutches do not present a sustainable solution to the sickness. Nevertheless, donating a pair of crutches to a paralytic patient is politically correct; it is more acceptable from a political point of view than treating the patient to get well from the sickness. Without setting the parameters of rapid economic growth, a nation cannot increase people’s income or expand job opportunities or eliminate poverty. Post-conflict economic recovery Sri Lanka was an economy that had sustained on average 5 per cent rate of growth throughout its difficult times from 1983-2009. In fact, many have taken it with a surprise! Then, how much more we should be able to achieve after ending the war and restoring peace? Sri Lanka would have easily reached 8 per cent average annual rate of growth. The economy, in fact, achieved higher growth rates during the period of consecutive three years from 2010-2012, but failed to sustain it. It was because that sudden growth spurt was based on: The improvement in capacity utilisation that was previously “under-utilised” and,the expansion of output in the area what economists call “non-tradable” sector. In particular, the productive capacity of the Northern and Eastern regions had been under-utilised due to conflict. As a result of the end of the war, this regional capacity utilisation improved with people gradually returning to agriculture, fishing and other economic activities. Once the capacity utilisation comes to normalcy, there is no reason to accelerate growth unless there is capacity expansion. Secondly, the post-conflict sudden growth spurt was driven by construction and reconstruction activities on the one hand, and public sector expansion on the other hand - both come under the category of “non-tradable” sector. Public sector expansion can be identified with an unusual increase in government expenditure, government activities, and government employment. The growth momentum based on these factors naturally comes to their limits of expansion; hence, the growth starts to slow down, thereafter. Sustainable growth momentum Sustainable growth comes from expansion in private investment and productivity growth. Even if a nation does not have its own savings for investment, today there is no shortage of investment funds in the world. Didn’t we expect that once the war ended Sri Lanka would be flooded with foreign investment? But soon we realised that it was not so; they didn’t jump out so soon and, wanted more time to “wait and see”. It is clear now; so far we have failed to win the investor confidence; how could we, without doing anything about that? Growth momentum cannot be sustained, if its output cannot be sold in international markets through export expansion. That is why the sustainable growth needs to be based on the expansion of what economists called “tradable” production - products that can be exported globally. This is because the local market is too small to allow industry expansion and, hence to reap the benefits of improved cost advantage. Besides, industries have to be efficient and productive, because in the international market there is competition. Sri Lanka’s persistent trade deficit widened in 2017 as well, reaching $10 billion, since total exports accounted for about $11 billion and imports $21 billion. Sri Lanka’s services exports which was about $7 billion, shows signs of slight improvements. This sector is currently dominated by tourism-related activities, but it has a long way to go to reach its potential growth. Since the engine of growth has been slowing down for the past three consecutive years, someone might ask a sensible question: Didn’t our economy perform far better during conflict times than during peace times? The answer is yes, it did. Rest of the matters Expansion of wealth and opportunities of a nation is associated with economic growth. The faster the growth of the economy, the greater the expansion of wealth and opportunities for that nation. There is no country in the world that has eliminated poverty from its nation, without creating job opportunities and expanding incomes. Growth will stabilise the exchange rate, since it is connected to export growth. It would stabilise the inflation since there would be supplies to meet rising demand. It would reduce the budget deficits, since the government’s tax revenue expands. It would reduce the nation’s debt burden, since the ability to repay the loans improves for the nation. Because growth is fundamental to everything else, our priority number one needs to be the establishment of a policy and political atmosphere for accelerating growth; it should originate mainly from private investment and, it should be destined mainly to global markets. (The writer is Professor of Economics at the Colombo University)http://www.sundaytimes.lk/180520/business-times/government-to-dispose-unproductive-non-financial-assets-287990.html31 March 2018 @ 8:21 amThe cash-strapped Sri Lankan government is embarking on an ambitious plan of making maximum use of its non financial assets through the newly established Comptroller General’s office at the Finance Ministry, a senior Treasury official told the Business Times. This office was set up recently, with a view to monitoring the management of the assets and expenditure of the Government and its main function is to maintain a list of central assets prepared covering all non financial assets of the government. Non-financial assets play a crucial role in economic developments as these assets are the most important determinants of net worth, or net wealth, of an economy, he said adding that making use of them provides the fundamentals for the future growth potential of an economy. The Comptroller General’s office is now making preliminary arrangements to create a central database to record all non-financial assets belonging to the government evaluating its correct value in state accounts. It will adhere to a systematic process of developing, operating, maintaining, upgrading and disposing of assets in a cost effective manner and collect due revenue from non-financial assets of the government and assist expenditure management, he disclosed. Another objective of this initiative is to make maximum utilisation of state land for investment and development activities. The Comptroller General has been entrusted with the task of supervising the management of government non-financial assets by formulating regulations, collecting data and creating a centralised information system. This office has issued a circular recently requesting all ministry secretaries, chief secretaries of provincial councils, heads of departments and public corporations and statutory boards to provide details of unutilised or idle buildings, incomplete constructions owned by state agencies. The aim is to make use of such assets for productive activities he pointed out noting that providing necessary guidance for the acquisition, maintenance and disposal of government assets was among the objectives of the setting up of the Comptroller General’s office. The deadline for the submission of these details ended on March 29. The Finance Ministry will be introducing an unallocated asset account for unidentified assets, which will be periodically debited and credited to a non-financial asset account or by admitting the existence of negative net assets. The current administration has identified about Rs. 1.6 trillion in assets. According to the Auditor General’s report released recently, “even though the burden of debts of the country was rapidly on the increase, the non financial assets had not increased relatively.” The process of non financial asset management has been launched to tackle this situation, he disclosed. The Finance Ministry has also issued instructions to ministries and state agencies to immediately dispose of 7,723 state-owned vehicles not in running condition. In an asset management circular, Treasury Secretary, Dr. R.H.S. Samaratunga has directed all ministry secretaries, chief secretaries of provincial councils, heads of departments, public corporations and statutory boards, chairmen of state banks and government owned companies to dispose all vehicles not in running condition before June 30. All proceeds from the sale of these vehicles will be credited to the Consolidated Fund, he said, adding that updated information on this matter should be provided to the Comptroller General’s office on or before July 30.http://www.sundaytimes.lk/180520/business-times/will-sri-lankan-family-firms-be-around-in-3-years-287986.html31 March 2018 @ 8:20 amThere are three corporate decision makers in Sri Lanka right now, says a HR solutions firm. “First, the founder of a company, hesitant to hand over the reins of a company that took him or her years to build. His or her children are uninterested in taking over the family firm or intent on pursuing dreams elsewhere. Next, the one who inherited their parents’ company and must navigate their family dynamic. Lastly, the new boss who took over the business and is faced with a change resistant mould,” according to HR Consortium (Pvt) Ltd, a total HR solutions provider. Like many Asian countries, Sri Lanka too is confronted with family firms realising that change needs to come fast and this is where HR Consortium (Pvt) Ltd is raising the question, “Are Business Chairpersons managing their organisation’s Human Asset with the same rigour as they do their Financial Assets?” Or is it too late now?” It says the recruitment landscape has shifted rapidly from a buyer’s market to a seller’s market. The biggest challenge today is to attract and retain people. Gone are the days that the recruiter could specify the salary and job objective to filter out the ideal candidates for the job vacancy. Now candidates broadcast their personal brand and set their conditions. They chase a clear idea of what they want; unless they find it at work, they will not commit. Who are these elusive individuals? Millennials. Millennials find their job interesting and worthwhile if their voice is heard and their ideas implemented. On the side of the management, there is no thought about how employees add value to the business. The HR Consortium sees the employees’ need to be involved in the decision making as their value proposition. “The last ‘employee satisfaction’ survey report lies untouched on the HR Head’s table. Has the company’s research partner done a good job gathering data that could possibly be included into the business plan for the next quarter? Probably. But it is insight, not data that can be translated into action,” the company says. The business research unit of The HR Consortium, Second Curve (Pvt) Ltd, has gained insights by recording the ‘employee displayed emotions’, enabling them to measure their ‘emotional stamina’. The significant patterns are used to build action plans and initiatives. It doesn’t stop there. Unfortunately, most companies have trouble putting suggestions to practice. Second Curve offers an Employer Brand Tracker that is more than a document picking which employee is an asset and who needs to be kicked out. It is an expansive study blending the different visions of the boss, the board of directors, the senior managers and each employee. Second Curve collects insights, strategies and solutions and passes them on to The HR Consortium. Then a holistic answer is developed to solve the multitude of issues.http://www.sundaytimes.lk/180520/business-times/lanka-hospitals-launches-male-wellness-centre-287984.html31 March 2018 @ 8:20 amLanka Hospitals PLC has announced its latest addition to the Centres of Excellence- the Male Wellness Centre (MWC) – in a bid to offer services to improve health and wellbeing of men. It’s also significant that a fully-fledged wellness centre dedicated solely for men has been established for the first time in Sri Lanka, the company said in a media release. Often men who play the role of breadwinner in a family, tends to neglect their own health by prioritising the needs of the family. Further, hospitals and medical institutions pertaining to both public and private sector facilitate dedicated centres to address health issues of women, children as well as senior citizens, and have not considered establishing a centre solely for addressing health issues of men. Likewise, medical awareness programmes covered by the main stream media too focus on popular ailments such as diabetes, cardiac related issues as well as cancers, and rarely bring health issues of men to notice. As a medical institution in the forefront of the private health sector, Lanka Hospitals took these factors into consideration and established a fully-fledged dedicated centre to uplift the health and wellbeing of men, the release said. The MWC caters to a host of services including Personnel fitness scheduling and programming, Sport health and injury management, Dietary and Nutritional advices, Pre-marital counselling and health screening, Management of premature ejaculation, Management of Erectile dysfunction, Cosmetic surgeries (Bariatric / Ocular / Dental). In addition to the general health screening, patients can obtain screening for Liver, Kidney, Respiratory, Cardiac, Diabetic, Endocrine-Hormonal, Cancer and Sexually Transmitted Diseases in addition to Substances and Alcohol abuses. Furthermore, apart from leading physicians MWC offers the services of competent consultant specialists such as Cardiologist, Endocrinologist, Diabetologist, Venerologist, Urologist, Nephrologist, Oncologist, Surgeon, Vascular Surgeon, Psychiatrist as well as Counsellor.http://www.sundaytimes.lk/180520/business-times/wide-powers-to-tax-chief-in-new-tax-laws-effective-today-287978.html31 March 2018 @ 8:18 amThe new Inland Revenue Act effective from today (April 1) gives wide and far reaching powers to the Commissioner General of the Inland Revenue Department (IRD) where, in one instance, he alone can decide whether a taxpayer can be accompanied by a lawyer or another representative to the IRD, or not. [caption id="attachment_287979" align="alignleft" width="200" caption="Suresh Perera"][/caption] Also under certain circumstances the Commissioner General has the power to decide taxes that one should pay in terms of future profits, said Principal -Tax and Regulatory, KPMG - Suresh Perera. He was speaking at a panel discussion titled ‘New regime in tax laws’ on the changes in taxation from April 1 organised by the Sunday Times Business Club at the Movenpick Hotel, Kollupitiya on Tuesday. Movenpick is the host hotel of the club while the NDB is a sponsor of the club. Referring to real estate apartments, he said a final policy decision has not been taken so far on the enforcement of VAT. However selling a house and land will not be taxed if one owned it for three years and lived there for more than two years. He said under the new Act one has to evaluate his future profits in paying taxes. [caption id="attachment_287980" align="alignright" width="200" caption="Roy Joseph"][/caption] As far as the new Inland Revenue Act is concerned there will be no change for listed shares and will continue to be exempted from sales proceeds.However for unlisted shares there will be a change from April 1 if one sells it when it become taxable. Where listed debentures are concerned there will be a change in relation to its sales proceeds. Where foreign shares and foreign dividends are in the hands of Sri Lankans, they will not be liable for tax if one owns more than 10 per cent of the shareholding. Where Treasury bills and bonds are concerned there is a 10 per cent withholding tax at present but after April 1 there won’t be any withholding tax. However interest on fixed deposits will be increased to 5 per cent. One salient feature of the new Island Revenue Act is that there won’t be any tax holidays or exemptions. Meanwhile there will a change to employment income where the tax rate will go up to 24 per cent while the tax rate for professionals in practice will also go up to 24 per cent. He said although there are no tax holidays it does not mean that there are no incentives for investments especially by foreigners. Referring to migrants, he said if they acquire any foreign assets prior to migration they will be liable for taxation. "The best will be to migrate first and then to acquire foreign assets," he added . [caption id="attachment_287981" align="alignleft" width="200" caption="Rajendra Theagarajah. Pix by Indika Handuwala"][/caption] Managing Director/ CEO Cargills Bank and the Chairman – Ceylon Chamber of Commerce Rajendra Theagarajah said from a national point of view the focus was to mobilise all sectors and not a few companies to build an export driven economy. It was defined that companies have to show that 80 per cent of its export revenue to qualify for concessions. "The Ceylon Chamber of Commerce of Commerce has been lobbying from day one not to implement that proposal." He said the total combined profits of all banks for last year was less than Rs. 100 billion and within the next 18 months every bank is expected to double the amount of capital as a buffer. Referring to inward remittances and the NRFC scheme, he said people are in a quandary at present whether to bring money to the country or keep it outside owing to the withholding tax on interest accruing all deposits including remittances. Managing Director of Hemas Manufacturing (Pvt) Ltd, Roy Joseph said that his company was engaged in building brands overseas that brings foreign exchange to the country but under the new Act they will not be entitled for any tax concession. He said even domestically the tax rate is moving up where cash flows are impacted. The three panellists spoke at length on the new tax laws, its impact on banking and the corporate community and on manufacturing and sales. [caption id="attachment_287982" align="aligncenter" width="400" caption="Section of the audience"][/caption]http://www.sundaytimes.lk/180520/business-times/grant-reggie-candappas-business-of-ideas-celebrates-60-years-287973.html31 March 2018 @ 8:15 amIt wasn’t Madison Avenue by any stretch of the imagination, but when Reggie Candappa returned home from the US, one day in 1958 with a thousand American dollars in his pocket, his dining table at home – 91, Galle Road, Bambalapitiya – was where “the business of ideas” took off in Sri Lanka, or Ceylon as it was called then.  Reggie, at 39, was no spring chicken but if ever the catch-phrase ‘Life begins at 40’ held true, it was typified by his story, one which will make you believe that everyone has a calling in life, and that he was truly destiny’s child. [caption id="attachment_287974" align="alignright" width="400" caption="First Grant team in 1958. Founder Reggie Candappa is seen kneeling (front row extreme left) and behind him is Anandatissa de Alwis."][/caption] For how else, could one explain the genesis and success of Sri Lanka’s pioneering advertising agency, the first to have an international tie-up going back six decades. As the company he founded celebrates its 60th birthday today (April 1), his daughter Neela Marikkar, chairperson and managing director, Dentsu Grant and Dentsu Aegis Network, narrates a fairytale story. It all began inside the bowels of Lake House where Reggie was plying his trade as a multi-tasking journalist being a writer, photographer, political cartoonist and graphic artist all rolled into one. “My father was a very gifted man but most of all he was a people’s person,” describes Neela. “He had all the right attributes to take on something like this.” What Reggie took on his shoulders was the responsibility to start a new advertising agency with links to Madison Avenue in the US. Grant, which had a branch in India, had approached the managing director of ANCL, George Gomes, and asked him if he could be their front-man in Ceylon. Remember this was in 1957, a year after SWRD Bandaranaike had become Prime Minister and had introduced the Sinhala Only Bill in parliament. It was also the year British bases were closed in the country and the island became ‘non-aligned’. It was a different time, and people had a different set of values. Today, most people would have grabbed the chance to head an international advertising agency, not George Gomes. He knew he had a person working for him who was far more suited to the task – Reggie Candappa. “My father was placed in a dilemma for he had just been awarded a scholarship by the newspaper to study journalism at North Western University in Chicago. When he was told by George that a US-based advertising company called Grant wanted to start an agency in Ceylon, my dad asked ‘what about the scholarship’,” relates Neela. Challenges The Lake House managing director said he would tell Grant to wait one year until the scholarship was over. Reggie left to hone his journalism and at the end of one year, visited Grant which also had offices in Chicago. The advertising company gave Reggie US$1,000 and told him to return home and open a company and represent them. [caption id="attachment_287975" align="alignleft" width="500" caption="The visit of Will C, Grant (Second from left) the founder of the worldwide advertising agency Grant Advertising Inc to Sri Lanka with his wife Mary Grant in 1969. They are seen admiring the gift of jewellery given to them by Mr & Mrs Reggie Candappa on behalf of the staff of Grant Advertising Ceylon Ltd."][/caption] “It was a very big thing of George Gomes to have done. He knew Reggie would leave after his scholarship yet he recommended him. And Grant’s was willing to wait one year. It was a life-changing episode for my father, actually for all of us, my mother Therese and elder sister Sriyani, too,” Neela acknowledges. Reggie began with a couple of big accounts handed to him by Grant – TWA and Shell – and within a couple of years had won a few big accounts, Singer, Reckitt and Coleman, and Browns. The first two local accounts are still with the company proving that Reggie, who died of a heart attack in 2004 aged 84, did a good job. “It is admirable that my father was able to build a business that has remained at the top of advertising industry for decades. We were the university of advertising in this country. It is great legacy, a brand that he built, and it has a very special culture as well,” says Neela proudly. “Many people have passed through our doors, learning the business and gone on to open their own advertising companies and businesses. It has been the Home of Advertising, and to have remained for 60 years at the top of our league has been quite a challenge and also a great and fantastic journey,” adds Neela who joined her father in 1986 having returned from London. She worked seven years as an art director, before being appointed chief executive in 1993. It’s a virtual Who’s Who of the people who learned the trade under Reggie. Anandatissa de Alwis, Lilamani Dias Benson, Chris Greet, Laddie Hettiarachchi, Ranjit Jayasuriya, Michelle Leembruggen are a few to mention. But the person closest to Reggie was his second daughter Neela who would listen to him at the dining table where it all began. “Advertising was always the topic of conversation at our dinner table I remember as a child. I grew up with advertising around me and I was very close to my father and even as a child he used to take me everywhere. I used to spend hours at Lake House, used to go to the block printers where I sat while they made the pages using blocks, linotyping, metal filling. I was completely saturated with the whole business from a very young age, the whole idea of creativity. Culture at Grant “The whole culture at Grant was one of family. It reflected my father’s personality. He was a wonderful human being, very generous, kind man, always helping people. It was part of his DNA and that culture was there in the agency because of him, his leadership. Even today people remember that part of it and I have tried very hard to retain that quality,” Neela discloses. The company has played a massive role in shaping major corporate strategies locally, an example being paving SriLankan’s smooth transition from AirLanka. It just wasn’t only about corporates, however, with Grant Advertising playing a huge part in eradicating polio in this country by taking the message of immunization to young mothers. Today, 130 people work for Neela, as she busily juggles all her clients. And the biggest challenge still awaits with Dentsu Grant recently winning the biggest advertising account in Sri Lanka, a Rs.4.5 billion spend on a media and digital campaign by Sri Lanka Tea Board to create awareness of the Ceylon Tea brand and the association of the Lion logo. Last year, Grant – the Americans pulled out entirely in 1983 with Reggie buying over the entire stake of shares but the name was retained as it had itself become a brand – tied up with Japanese advertising giant Dentsu Aegis which has controlling shares. The wheel has turned full circle. Reggie stopped over in Tokyo and visited the offices of Dentsu on his way back from the US in 1958. He was energized by the visionary ideas he saw. Today his daughter is making them become a reality.http://www.sundaytimes.lk/180520/business-times/cse-gets-tough-with-more-errant-firms-287971.html31 March 2018 @ 8:13 amSome 16 quoted companies are on the chopping block for flouting the Colombo Stock Exchange (CSE) regulations, officials say. Of this, trading of shares in seven firms currently on the Watch List will be suspended with effect from tomorrow April 2, the CSE announced recently, unless they comply by March 29 (last Thursday). It wasn’t clear whether they had done so by Friday. They need to abide by Rule 7.4 (c) (vii) and/or Rule 7.5 (d) (7) of the CSE Listing Rules. Some nine firms are in line to face the same treatment, officials told the Business Times. Lanka Cement PLC, PC House PLC, PC Pharma PLC, Ceylon & Foreign Trades PLC, Standard Capital PLC, Adam Investments PLC and Adam Capital PLC are the firms which flouted sending interim financial statements for certain quarters. Once companies are on the Watch List, they now issue market disclosures on what they intend doing about becoming compliant. These firms were saying they'll comply, but they hadn't, which prompted CSE's action. This came about after the Watch List provided them with real powers compared to weak rules earlier to which listed companies had a 'don't care' attitude. Lanka Cement PLC is a state owned entity which has been especially bad since September 2014 without submitting any financial reports. Two others – PC House PLC and PC Pharma PLC haven't sent interim financial statements for the quarters ended 31st December 2015 to 31st December 2017 and the annual reports for the year ended 31st March 2014 to 31st March 2017. The balance firms that were named by the CSE hadn't sent their interim finance statements for the quarters ended 30th September 2017 and 31st December 2017 and the annual reports for the year ended 31st March 2017.http://www.sundaytimes.lk/180520/business-times/union-banks-breakfast-forum-for-elite-circle-clients-287969.html31 March 2018 @ 8:12 amUnion Bank recently hosted its Elite Circle clients to an exclusive breakfast forum at the Jetwing Colombo Seven with the participation of over 75 bank clients. The breakfast forum was held under the theme 'Personal Taxation and highlights of the Exchange Control Act of Sri Lanka'. An informative presentation and discussion on Personal Taxation was conducted by Suresh Perera, Principal - Tax and Regulatory at KPMG Sri Lanka while Udeani Alawattage, Director - Department of Foreign Exchange of the Central Bank of Sri Lanka spoke on the recently updated Exchange Control Act of Sri Lanka, the bank said in a media release. Union Bank Elite Circle signifies the pinnacle of relationship banking and is designed with the clients' need for exclusivity in mind. "Having understood the unique needs of this clientele, the bank provides its Elite Circle clients with opportunities to gain first-hand knowledge on the latest developments in the financial services sector that would impact their wealth management decisions. The bank also offers exclusive lifestyle privileges and experiences to its Elite Circle clientele, delivering an enhanced banking experience in recognition of their exclusive banking relationships," the release added.http://www.sundaytimes.lk/180520/business-times/too-many-farmers-in-sri-lanka-287965.html31 March 2018 @ 8:09 amThe gist of Prof. Sirimal Abeyratne’s piece titled “Netherlands farmers and Sri Lankan doctors” in the Business Times last week is that (i) the productivity of Sri Lankan farmers is low compared to those in the Netherlands, (ii) that we have too many farmers and (iii) the scale of production of Sri Lankan farmers is comparatively low. [caption id="attachment_287966" align="alignright" width="400" caption="File picture of a water lily in a pond. A persistent drought in the dry zone has badly affected farmers."][/caption] The low productivity of most of our farmers is due to a number of factors. Most farmers have to face droughts which seriously affect production. There are nearly 12,000 tanks in the dry zone which collect rainwater to be used for crop and animal production and various domestic activities. These tanks play a dominant role in the socio-economic and cultural aspects of villages. Most of the 12,000 tanks are not distributed randomly, but in the form of distinct cascades each made up of 4-10 small tanks situated within a single small catchment of 100-1000 hectares. Water shortage which the farmers in the dry zone face can be partly attributed to the inability of the governments from 1977 to rehabilitate most of these tanks. Due to this, it is estimated that around 60 per cent out of the 100 billion cubic metres of rain water received annually escape to the sea, although we often speak of the famous dictum of King Parakramabahu I - "let not even one drop of water that falls on the earth in the form of rain be allowed to reach the sea without being used”. Seeds and planting material Most of the seeds (eg. onion, potato, vegetable) used by the farmers are imported, often of poor quality and are susceptible to many bacterial and fungal diseases and also to insect attacks. Soil degradation Soil degradation is also a factor which causes low productivity in most of our farms. Land degradation is a common occurrence in many parts of the country and is due to many factors such as soil erosion, soil compaction, nutrition depletion, development of salinity or acidity, loss of bio-diversity, etc. Soil erosion which is evident in many parts of the country is the main factor responsible for land degradation. During the last few decades attempts have been made by successive governments to control land degradation. There are many ministries, departments and other institutions which are expected to look into land degradation and take appropriate control measures. There are ministers at provincial level who are expected to take relevant action to control land degradation. During the last few decades Parliament has passed many laws to control land degradation. A large number of seminars and workshops have been held on this topic. In spite of all this, land degradation continues to take place evident by the common occurrence of landslides, depleted top soil, siltation of tanks, and reservoirs, decline in crop yields, etc. Elephant attacks Almost daily we hear about deaths to many people and destruction to crops/property caused by wild elephants. Most of the people affected are farmers in a number of districts of the country. As a result the productivity of most farms tends to be negatively affected. Chronic Kidney Disease Around 50,000 people, mostly farmers, in a number of districts are affected by the kidney disease called CKDu, and on an average three or four people die daily because of this disease. The families of those affected by CKDu are desperate. In some families both parents have died and their children are helpless. Inability of the farmers to attend to farming activities due to CKDu tend to have a negative effect on the productivity of farms. Thus, low productivity of most of our farms is due to inability of the authorities to take appropriate action which will address the issues related to low-productivity. Marketing Prof. Abeyratne has also highlighted the issues related to marketing the farm produce. A few decades ago there were a few state organisations such as the Marketing Department which made it possible for the farmers to sell their produce at a reasonable price. These organisations are no more and at present farmers have to depend on middle-men who buy the produce at very low pieces. There are no proper marketing facilities discouraging most farmers and have a negative effect on their productivity Too many farmers In Sri Lanka there are 2 million farmers and Prof. Abeyratne appears to be of the opinion that we have too many of them. If a substantial number of farmers moves away from the agriculture sector what are they going to do? Become security officers or three wheel drivers? If the 2 million farmers can be engaged in more productive farming and agro-industries it will enable us to reduce our annual foreign exchange expenditure on food imports which at present is around Rs. 200 billion. Scale of production Prof. Abeyratne appears to be of the view that when the scale of production is too small each farmer produces too little. This does not necessarily have to be so. Even if the farm size is small there can be intensive production and family labour can be made use reducing COP. A good example is seen in the tea sector. The average area of a tea smallholding is about 0.43 ha and the average tea yield of the smallholder sector is around 1600 kg/ha. In the large tea estates which are more than 20 ha, the average tea yield is around 1400 kg/ha. (The writer is former Professor at Ruhuna and Rajarata Universities. He can be reached at csweera@sltnet.lk)http://www.sundaytimes.lk/180520/business-times/25-years-on-bates-strategic-alliance-looks-at-the-future-287956.html31 March 2018 @ 8:00 amBates Strategic Alliance reputed as a pioneer in Integrated Marketing Communications and Public Relations now driving strongly in Digital, has announced that it will celebrate its 25th anniversary with a ‘Festival of Our Future’ where it will explore vital issues and future trends in four critical areas – brands, communications, environment and society. [caption id="attachment_287961" align="alignright" width="660" caption="The Bates Strategic Alliance Team celebrating their 25th anniversary"][/caption] The Thought Leadership Sessions will feature all 32 local and overseas speakers and two national leaders in a single day, the company said in a media release. The morning sessions on ‘The Future of Brands’ and ‘The Future of Communications’ will explore the changes in technology, society and the operating environment and what it means for brands and communications of the future. Among the brand topics covered are “The Higher Purpose of Brands, Brands that are Good for People and the Planet, Social Entrepreneurship, Corporate Sustainability, Destination Marketing to New Age Travellers, Customer Experience, and the Importance of Good Design.” Among the communications topics are: Digital Transformation, The Future of Brand Communications, How Social Media is changing News and Views, Branding through Digital Platforms, Reputation Management in the Digital Era, trending from Traditional to Digital Media and Music in Sensory Branding. The social topics will include: “An Alternative to Governance by Politicians, Politics and Social Media, the Office for National Unity and Reconciliation (ONUR)’s experience in forging National Unity and Reconciliation, Empowering Women, Gender Equality and Societal Inclusion, Teaching the Young for a Better Society, Change-making through Youth and Revitalising our Heritage Industries through Community Entrepreneurship.” The day will end with a cameo chat featuring former President and ONUR Chair Chandrika Bandaranaike Kumaratunga and Minister of Finance and Media Mangala Samaraweera sharing their “Vision for Sri Lanka amidst the current challenges and lessons from the past.”http://www.sundaytimes.lk/180520/business-times/no-flying-by-night-to-batticaloa-287954.html31 March 2018 @ 8:00 amSri Lanka’s civilian flights to the East coast opened with the Batticaloa airport being fully commissioned at the weekend however air services are restricted to only day-time operations. There won’t be any night operations for civilian aircraft unless special permission has been granted by the Sri Lanka Air Force, that continues to operate the airport, alongside the Airport and Aviation Authority (AASL), the authority’s Executive Director Johanne Jayaratne said this week. He noted that while military flights could operate at any time the civilian aircraft would be restricted to day-time operations as the control tower at the airport would be operated by civilian air traffic controllers from dawn to dusk and by Air Force air traffic controllers from dusk to dawn. Ratmalana Airport also operates civilian flights only during the day with special permission required for night operations. In a bid to promote the facility, the authorities have ensured that no landing or parking charges would be made from aircraft operating to the airport. Officer in Charge of the Batticaloa Airport - Chinthaka Fonseka said that Minister Nimal Siripala De Silva had announced waiving off all charges for landing and parking in a bid to promote the airport for a period of six months. At present Cinnamon Air operates its daily scheduled flights and Fly Southern has joined in with three scheduled flights on Tuesdays, Fridays and Sundays. Amidst much wrangling by the Civil Aviation Authority and the AASL with the Sri Lanka Air Force (SLAF), the latter had finally agreed to allow civil operations to be carried out at the Batticaloa airport. Earlier despite cabinet approval and a gazette issued declaring the facility to be handed over to the AASL, the SLAF had continued to man the airport leading to a tense situation with the Aviation Ministry that had allocated over Rs.1 billion for its construction and renovation. This domestic airport could accommodate corporate jets and 50-seater planes or less that would be operating as a category 2B airfield on the 1200 metre length runway.http://www.sundaytimes.lk/180520/business-times/coyle-programme-with-harvard-business-school-professor-287949.html31 March 2018 @ 7:49 amThe Chamber of Young Lankan Entrepreneurs (COYLE) will hold a full day programme titled "Best of Harvard for Sri Lankan CEO’s and their Executive Teams” on April 24 from 8.30 am to 4 pm at the ‘Oak Room’, Cinnamon Grand, Colombo. The featured keynote speaker at this forum will be renowned Harvard Business School Prof. Boris Groysberg, who will reveal the secrets of success of world class business leaders and the skills required for great leadership, the chamber said in a media release. It is designed to teach leadership and management practices that impact organisational effectiveness in a dynamic industry, to understand how leadership and management systems can support strategy and how best to use tools and techniques to improve organizational execution and performance. Prof. Groysberg will explore areas that will develop your ability to innovate, think strategically and gain a competitive advantage for your organisation through this intensive business strategy and leadership management programme. Participants will be able to explore the latest business theories and strategic tools through hands-on exercises, interactive lectures and dynamic discussions — and master the fundamental thinking that will set them apart as strategic leaders. The programme will be attended by some key corporates in the Colombo business circle. COYLE Chairman Dinuk Hettiarachchi said, “The role of the Chamber is to be the advocate and voice of the business sector at every level of participation; to the benefit of the local business community. At this programme participants will learn why improving organisational execution is so vital and will receive valuable insights that will help increase their business acumen.”http://www.sundaytimes.lk/180520/business-times/sri-lanka-launches-ambitious-blueprint-for-global-printing-hub-287946.html31 March 2018 @ 7:43 amSri Lanka’s printing community may be small, but they are now being brought under one umbrella with an ambitious blueprint to transform the country as the global printing hub especially for the Asia Pacific region. The Sri Lanka Association of Printers (SLAP), the authoritative body representing the interests of the printing community, has stepped into its 61st year by unveiling the printing hub plan at its “Sri Lanka Print 2018”, a biennial event which concluded recently. A White Paper has been prepared with the aim of achieving this objective through the strong partnership from the industry while taking advantage of Sri Lanka’s strategic location in the Indian Ocean, architect of the strategic plan and Managing Director of DESIGNLOGICS (Pvt) Ltd Dhammikka Siriwardhana told the Business Times. The island nation’s appeal lies in its prime geographical position at the crossroads of vast Asian markets like China, India, West Asia and the Asia Pacific, he said adding that his out of the box plan is aimed at leveraging this advantage to make the country an ideal destination for value added printing. He noted that the local printing industry currently provides a wide range of products to the export market ranging from commercial printing to quality packaging materials such as tea cartons, garment tags and labels and it is a supporting service for major export sectors. The Sri Lankan label and package printing companies should move rapidly towards more automation of both their administration and production process workflows, using sophisticated management information systems (MIS) to be competitive in the world market, he added. Many local printers are currently using high-tech state-of –the-art offset/digital facilities and 38 to 40 per cent of their capacity is still unutilised, he claimed. The capability of the industry has been further strengthened with 276 four colour offset machines with a capacity of printing 4 million sheets per hour being maintained by local printers, he revealed. It has been proposed to open avenues for them to make use of their full capacity to cater to the increasing consumer demand both locally and internationally, he said. The Print 2018 exhibition stallholders had been able to secure printing machinery and product orders to the value of Rs.748 million; he revealed stressing that this showed the potential of the local industry. Printing is a catalyst for all sectors in value addition and is an essential need of any type of business involving packaging or advertising, publishing, etc. The White Paper presented by this young energetic entrepreneur who entered the printing arena at the age of 16 years, has suggested to follow standards of other hub economies, like Singapore, China Hong Kong or Taiwan which have low corruption indicators, efficient fiscal and legal infrastructure and competitive tax systems. These are precisely some of the benchmarks that Sri Lanka can achieve, Mr. Siriwardhana emphasised noting that the local printing industry has a room-full of printers processing knowledge, expertise and fantastic facilities. Sri Lanka should be an international meeting point between suppliers and companies from all over the world interested in initiating modern high tech printing ventures, he suggested. To overcome the challenge of market saturation, one of the options was to look towards the global aspects so as to attract a bigger market share, he said pointing out that some of the countries in the world, particularly in the Asian and African regions are still to acquire skills in printing. The ‘going global’ initiative proposed in the White Paper highlighted that Sri Lanka should explore the possibility of expanding and growing printing operations in those countries through contacts. In the face of all the technological developments, the globalisation of end-user brand markets, and the capabilities of online business, Sri Lankan printing firms will be provided with necessary assistance to join with regional companies to form multinational suppliers, he disclosed. The White Paper has stressed the importance of arranging local delegations of printers to visit countries like Cambodia, Nepal and Bhutan as well as West Asia and some African countries to showcase Sri Lanka’s printing industry development to achieve this objective, he disclosed. Despite the overall printing volume declining in recent years, higher-value consumer packaging and labels in emerging markets have provided stronger revenue growth. Sri Lanka should take advantage of this situation without delay; he said emphasising that local printers are being made aware through these proposals and not to miss the bus this time. Sri Lanka Print 2018, the three day event of local printers, has been able to support the Sri Lankan printing industry to form the required connections as well as provide training to enable them to excel in their operations outside of Sri Lanka, he added.http://www.sundaytimes.lk/180520/business-times/anti-competitor-games-state-red-tape-stops-fdi-287943.html31 March 2018 @ 7:41 amSuspected anti-competitor tactics in Sri Lanka’s lubricant industry and bureaucratic red tape are attempting to stop a large foreign investment, the Business Times learns. Malaysian based local subsidiary, Hyrax Oil's brand new blending plant hasn't been granted the necessary approvals to start operations owing to certain vested interests by other industry leaders working together with state officials, informed industry sources told the Business Times. Hyrax Oil which has been in business since 2007 had signed up to start a blending plant worth US$15 million on a 5-acre land leased from the Ceylon Petroleum Corporation (CPC) at Muthurajawela. In 2016, the Cabinet Committee on Economic Management (CCEM) granted approval for this plant along with the Attorney’s General’s nod. This facility has an annual 44,000 Metric Tonnes (MT) capacity catering to Hyrax's African, Maldives, Bangladesh and Pakistan markets. The estimated price reduction in lubricants for the state with this plant is 30 per cent, industry sources say. With this plant competitors’ pricing will get hit, they opine. And they say that now after building the plant and doing all things according to the book, Hyrax hasn’t been issued a 'blending licence' to start their operations. This is called ‘Blending, Import and Export Licence' and is issued by the Ministry of Petroleum. It hasn’t been issued for some four months after the plant was built. Sources say this state-of-the-art plant is idling with Hyrax paying Rs. 5.6 million rental for the land to the CPC. Attempts at contacting Hyrax officials and the Ministry of Petroleum Resources Development on this issue weren't fruitful .http://www.sundaytimes.lk/180520/business-times/technology-will-replace-over-40-per-cent-of-jobs-in-10-years-287941.html31 March 2018 @ 7:41 amTechnology that is driving the world today will take over 40 per cent of the existing jobs in another 10 years, an industry expert has said. Queensland University of Technology, Head of School of Management Prof. Rowena Barrett, speaking at the CEO’s Forum organised by the Chartered Accountants (CA) of Sri Lanka in Colombo on Tuesday on ‘Innovation and Entrepreneurship’, said that: “Innovation can go from radical to incremental. It’s about scientific advancement and can roll out in government policies.” Innovation is not just technical but goes deep into the subject. Sensing, seizing and transforming are stages of innovation, she added. She also mentioned that entrepreneurship is transforming innovation into economic activities and organisations come into existence. Digital disruption is continuing to grow through various devices while disruptive technologies reduce transaction cost, generate data, underpin the automation of tasks and enable new business world. Data becomes a big source for businesses to survive, stressed Prof. Barrett. She stated that Sri Lanka shows strong signs of competitiveness and widespread usage of the technology while access to internet is limited to certain areas in the country. “It doesn’t have to be technology to drive a business,” she noted. Pointing out the ‘Cultural Dimensions of Hofstede’ and their impact on organisational performance in Sri Lanka, Prof. Barrett explained that power distance is high so that all individuals in societies are not considered equal. With a high score of 80, Sri Lanka is a relatively hierarchical society. Sri Lanka stands low in individualism with a score of 35 which means it’s a collectivistic society. In terms of masculinity the country has a very low score of 10, and thus considered a feminine society. The country scores an intermediate of 45 for uncertainty avoidance and long term orientation directs that Sri Lanka does not indicate a strong preference. Sri Lanka has no score on indulgence according to the Hofstede report. She also noted that Sri Lanka’s entrepreneurship is culturally constructed and it’s a motivation based on social power. “For entrepreneurship you not only need technical skills but also creativity and management skills,” she added. CA Sri Lanka President, Jagath Perera in his opening remarks, stated that innovation is a specific instrument for entrepreneurship. “Sri Lanka’s economy survives because of the private sector while all small businesses are an integral part of it. Entrepreneurship produces financial gain and entrepreneurs are the innovators of economy. Businesses and entrepreneurship begins with a need and all entrepreneurs look for the current needs and demand.” Innovators look for not just one solution but keep innovating till they obtain multiple solutions, he added.http://www.sundaytimes.lk/180520/business-times/rs-2-bn-investment-at-serenia-residences-in-talpe-287939.html31 March 2018 @ 7:40 amWith an investment of Rs. 2 billion, Serenia Residences has set up its footprint in Talpe Galle. The construction of the 47 unit residential property will commence in June 2018 on a 180-perch land. Prices of the beachfront apartments starts from US$ 278,000. Serenia Residences Ltd Executive Director, Dilshan Kodituwakku during the launch of the property at the Shangri-La Hotel in Colombo recently, told the Business Times, “We are targeting at the premium residential property investors at Serenia Residences in Talpe.” Out of the 47 units on the two towers, 10 will be hotel rooms, he added while stressing that the high net-worth people who attended the launch have already shown interest in purchasing the apartments. The architecture of the property is done by a designstudio, sales and marketing by Acquest (Pvt) Ltd while the construction will be handled by Access Projects (Pvt) Ltd. The property is expected to be completed by the end of December 2019. According to a media release, Serenia Residences offers its residents a host of privileges that includes allocated car park, plunge pools in selected residences, smart key and home systems, luxury designer European kitchens with built-in appliances, floor-to-ceiling double glazed windows, oversized glass enclosed rain showers, an outdoor cinema, outdoor yoga studio, kid's play area with day care, carwash facilities, a library, an oceanfront deck and spacious private cabanas, beach concierge services, 24-hour attended lobby and valet parking services, Italian tile or wood flooring and many other facilities. Freehold title for locals and foreigners alike, and up to 70 per cent financing from NTB are some of the advantages offered to prospective owners. The two-bedroom suites has a floor area of around 1,300-1,600 sq. ft, three-bedroom sky villas around 1,800 sq. ft, three-bedroom garden villas around 2,700 sq. ft. where you step out into your landscaped garden, as well as custom penthouses styled across two floors with a floor area ranging from 4,400-12,700 sq. ft. provides residents an unparalleled beachfront living experience.http://www.sundaytimes.lk/180520/business-times/central-bank-launches-revamped-website-287937.html31 March 2018 @ 7:39 amThe revamped website of the Central Bank of Sri Lanka (CB) was launched by Governor Dr. Indrajit Coomaraswamy on Wednesday. It is a much more advanced and user-friendly website. The main features of the new site https://www.cbsl.gov.lk include additional content, more dynamic and interactive features with improved functionality, mobile compatibility and active social media integration, the CB said in a media announcement. It said this will provide a better browsing experience for web users such as professionals, the public, media, and students to ensure efficient and speedy accessibility to information with user- friendly interfaces.http://www.sundaytimes.lk/180520/business-times/no-rush-to-invest-abroad-despite-forex-relaxation-287935.html31 March 2018 @ 7:38 amDespite the new Foreign Exchange Act being passed by Parliament last November making the transaction of foreign exchange more relaxed than before, banks haven't seen any expected increase in ‘intended’ forex transactions, industry experts say. Amongst these regulations which were cited in the Foreign Exchange (Capital Transactions in Foreign Exchange Carried on by Authorised Dealers) Regulations No. 2 of 2017, firms listed in the Colombo Stock Exchange can now invest up to US$2 million or the equivalent in any Central Bank designated foreign currency in shares, units, debt securities or sovereign bonds overseas. Earlier they could only invest $100,000 in those instruments. The same investment for unlisted companies which was $100,000 is now increased to $500,000 annually, a partnership to $300,000 per annum and individuals can to go up $200,000 ((lifetime) from the earlier $100,000. A company or partnership is entitled to utilise up to $300,000 (per annum) in opening overseas offices which they couldn't earlier. Bankers told the Business Times that all these alterations have not seen many opening Overseas Investment Accounts (OIA) to carry out transactions. "If at all only a few firms are doing it," a senior banker told the Business Times. He added that some firms are purchasing foreign export oriented companies while others are starting offices in places such as Myanmar. Another banker noted that there are many administrative checks and balances discouraging many from opening OIAs. Amongst these, obtaining clearance from a qualified chartered accountant on shares that will be invested in, tax clearances, letters from the Controller of Exchange, etc stand prominent. Some analysts opined that returns guaranteed by local firms are better than putting cash abroad which is another reason many are ignoring this relaxation. They said that India has done similar relaxations in exchange controls since 2015, quite successfully. Encouraged by foreign exchange reserves touching record levels, the Reserve Bank in February 2015 doubled the annual overseas investment ceiling for individuals to $250,000.http://www.sundaytimes.lk/180520/business-times/celebrate-avurudu-at-the-movenpick-287933.html31 March 2018 @ 7:37 amMövenpick Hotel Colombo has come up with a ‘sweet’ offer for Sri Lankans this April. From April 1 to 30, a special resident offer awaits you, the hotel said in a media release. The stunning rooms offer panoramic views of the city or Indian ocean. With floor-to-ceiling windows, the hotel’s stylish guest rooms and suites are bathed in natural light and mesmerizing views. Even the bathtub sits in front of giant windows, overlooking the city’s futuristic skyline, it said. “During your stay, experience the signature Mövenpick breakfast with a healthy shot to boost the morning. With lavish buffets, AYU, the all-day dining offers amazing action stations and a spectacular daily spread. Guests will be required to present their identification or resident permit upon check-in. Book your stay this April and enjoy the season,” it said.http://www.sundaytimes.lk/180520/business-times/green-tea-expert-gets-honorary-doctorate-287931.html31 March 2018 @ 7:37 amTiran Peiris, the founder of three Green tea plants in Sri Lanka, has been awarded an honorary doctorate for his work. The pioneer of inventing specialty Green tea products and promoting Green tea, he has been honoured by the Hebron Eco University with a honorary doctorate “Doctor of Humanities” for his contribution to the Green tea industry. This university which has a campus in Norton Bridge, Central Province is accredited with the Confederation of International Accreditation Commission.http://www.sundaytimes.lk/180520/business-times/york-presents-most-energy-efficient-vrf-air-conditioning-technology-287928.html31 March 2018 @ 7:36 amThe most energy efficient and cost effective VRF technology York air conditioner by Johnsons Controls was recently presented in Colombo to an audience of engineers and consultants. The versatile and comprehensive smart climate control York YES series variable refrigeration flow (VRF) air conditioners have come a long way since their introduction and today the technology has been developed to ensure customisation and intelligent air cooling, said Metropolitan Air-conditioning and Refrigeration, the sole distributor of York acs in Sri Lanka, in a media release. The VRF system works by identifying the heat and cool conditions in each area and varying the release of cool air into the various heating conditions ensuring that each area is cooled based on the varying requirements of that particular space. In multiple spaces in the same building the VRF technology is capable of customizing the cool air to cater to the heat in each space using smart controls. Manufactured by renowned Johnsons Controls Hitachi Ltd, and distributed in Sri Lanka by Metropolitan Air-conditioning and Refrigeration Pvt Ltd, this newest series of VRF A/Cs offers a range of innovative technologies to customers including unparalleled energy efficiency making advanced climate control technology even more accessible. This industry-leading solution provides excellent operational savings and greater comfort to both corporate and residential customers, the release added. "York and Metropolitan have no doubt the new technology will increase productivity and enhance efficiency of the local customer by keeping him cool and comfortable. The customer also need not worry about the systems failing as Metropolitan has a 24 hour on call service engineering team attending to all inquiries and maintenance island-wide," said Ivor Maharoof, Managing Director of Metropolitan Engineering (Pvt) Ltd.http://www.sundaytimes.lk/180520/business-times/softwave-printing-group-wins-prestigious-awards-287925.html31 March 2018 @ 7:35 amChaminda Kariyawasam Managing Director of Softwave Printing & Packaging (Pvt) Ltd, receiving a Gold Award from SLAP Past President of SLAP Sanjeev Mohan. Others seen are Zakeer Kamrudeen (Exco member), Sashi Hettiwatta (Director Marketing, AGXA Global), Anton Godfrey - Group CEO AGXA Global and Krishantha Rajapaksha, General Manager Softwave Group. Softwave Printing & Packaging (Pvt) Ltd, the pioneer Print Hub in the island, won four Gold medals, four Silver medals and three bronze medals at the recent awards night of the “Sri Lanka Print 2018 – Going Global” by Sri Lanka Association of Printers. Softwave’s group of companies comprises Softwave Printing & Packaging (Pvt) Ltd, Softwave Reprographers (Pvt) Ltd and Softwave Holdings (Pvt) Ltd. http://www.sundaytimes.lk/180520/business-times/sri-lankas-manufacturing-future-in-a-digital-era-287923.html31 March 2018 @ 7:34 amMicrosoft recently revealed how rapid advances in emerging technologies have created new ways to turn data into iterative insights at a C-level conference in Colombo titled "Manufacturing in the Digital Era". The event, which took place at Cinnamon Grand Colombo, revealed how data and the advent of connected devices and platforms are driving the persistent digitisation of manufacturing. "The pace of digital transformation is accelerating, and we expect by 2021, at least 60 per cent of Asia Pacific's GDP will be derived from digital products or services. This will have a positive and measurable impact on Sri Lanka's manufacturing sector," said Hasitha Abeywardene, Country Manager for Microsoft Sri Lanka and Maldives. From quantitative to qualitative data, the concept of 'data' plays a critical role in today's current trend of automation. And no one knows this better than manufacturers. Not only do they use data to make thoughtful business decisions, but they also use it to streamline their processes, according to a Microsoft media release on the event. Dean Shaw, Industry Solutions Director for the Asia Pacific Region, spoke on manufacturing in the digital era or how manufacturers were leveraging cloud computing, augmented reality, artificial intelligence and Internet of Things ( IoT).  According to Mr. Shaw, integrating such technologies has helped manufacturers like Rolls-Royce and Deschutes Brewery identify new revenue streams and extract deep insights from data to optimize business outcomes and best practices. With emerging technologies starting to enter the manufacturing mainstream, organisations must establish new metrics and realign organisation structures to utilise the sheer volume and velocity of data. Last year, Hirdaramani Group deployed an internal QMS system built by Microsoft partner H One, to digitise data collection and improve the end-to-end quality of apparel using Microsoft Azure and Power BI. Microsoft partners at the event then showcased their own industry solutions to help manufacturing organisations in their transformation journeys. A representative from nCinga presented an industrial IoT based solution developed on Microsoft Azure called nFactory to assist decisions makers with actionable insights by capturing events in real time and contextually streaming it via Power BI. Similarly, JustAnalytics showcased its ability to integrate unstructured and structured data for agile data discovery using customisable Power BI dashboards, while Microimage showcased how HCM Cloud is helping manufacturing organisations manage their largest asset-people, the release added. The event concluded with a panel discussion featuring CIO of Hirdaramani, Samath Fernando and Ceylon Biscuits Ltd Head of IT Chandrima Rodrigo, initiating a conversation over the benefits-predictive-analytics, machine learning, and a view related content feature-Microsoft Azure and Power BI have across multiple manufacturing segments and how manufacturing leaders can prepare themselves given the importance of data in the digital era.http://www.sundaytimes.lk/180520/business-times/first-sri-lankan-company-to-manufacture-transformers-locally-287921.html31 March 2018 @ 7:33 amLTL Holding that began first by exporting locally manufactured transformers to Iraq in 1980, now exports transformers to 25 countries. Sixty per cent of its locally manufactured transformers are exported while only 40 per cent of them are used locally, said the Chief Operations Officer of the LTL Holdings Dammika Nanayakkara at a media briefing held at the Kingsbury Hotel in Colombo recently to commemorate LTL Holdings’ 35 years in operation. He said LTL-made transformers were of a high quality that had been tested in the Netherlands, the US and at British standard institutes. "We were able to bring in around Rs. 5 billion to the country as foreign exchange by exporting transformers." The core business of LTL Holdings has been to manufacture and design high voltage transformers and power grid sub stations at their plants located at Angulana - Ratmalana and at Sapugaskanda. Way back in 1980s there were no transformers made in Sri Lanka which resulted in the importation of 70 types of transformers by various parties through tender procedures at various times causing a maintenance problem during breakdowns. "At this stage as an independent company we began to manufacture transformers in Sri Lanka for the first time to cater to the local needs," he added. He said the work on the galvanising plant began in 1990. The company's other business include galvanising and steel fabrication of transmission towers at the Sapugaskanda plant and to maintain thermal power plants they manufacture. Mr. Nanayakkara said the company had also set up thermal power plants in other countries and the maintenance works was done by them. Another feat of LTL Holdings was by transporting a massive 260 ton power generating plant to Puttalam by sea in a barge and then by road to the site. During the 1990s Sri Lanka became the sole country in the South Asia which was capable of producing transformers that didn't require maintenance. The Kerawalapitiya Power Station which is capable of producing 300 Megawatts of power is the largest power station established by the LTL. Two power stations at Bangladesh have been built in addition to one project being built in India. (Jayampathy)http://www.sundaytimes.lk/180520/business-times/trade-fair-held-to-promote-treated-water-solutions-for-dry-zone-communities-287919.html31 March 2018 @ 7:32 amA trade fair on ‘Advanced and Appropriate Water Treatment Systems’ to treat water in locations with serious water quality issues was held at the BMICH Colombo recently in commemoration of World Water Day 2018, where nine companies showcased nature-based solutions, in parallel with alternative approaches, in water treatment technologies and practices. This was initiated by the Green Climate Fund (GCF) supported Climate Resilient Integrated Water Management Project (CRIWMP) together with the World Bank assisted Water Supply and Sanitation Improvement Project, the UNDP office in Colombo said in a media release. The agency pointed out that globally, 2.1 billion people lack access to safely managed drinking water services while over 80 per cent of the wastewater generated by society flows back into the environment without being treated or reused. This year’s theme for World Water Day marked last week was “Nature for Water”, with a focus on finding nature-based solutions to the water challenges faced by people. The release said the UNDP supported ‘Climate Resilient Integrated Water Management Project (CRIWMP)’ is one such example of using nature based solutions to improve irrigation of water tanks in the Northern, Eastern, North Western and North Central Provinces by investing in improving the community irrigation water infrastructure, scaling-up decentralized drinking water systems, and strengthening early weather warnings, flood-response, and water management. This seven-year project (2017-2024) is aimed at strengthening the resilience of Smallholder Farmers in Sri Lanka’s Dry Zone to climate variability and extreme events. These projects aim to improve access to potable water by enhancing community-managed rural water supply infrastructure including advanced filtration and treatment systems with appropriate disinfection processes. Speaking about UNDP’s support, Ms. Lovita Ramguttee, Deputy Country Director, UNDP Sri Lanka stated, “Nature-based solutions have the potential to solve many of our water challenges. UNDP remains committed to exploring these solutions together with our partners, to support smallholder farmers in the dry zone of Sri Lanka to ensure we can protect and manage our water resources in a sustainable manner.” The Ministry of Mahaweli Development and Environment, the Ministry of City Planning and Water Supply, National Water Supply and Drainage Board, Department of National Community Water Supply, Presidential Task Force on Prevention of CKDu Ministry of Science and Technology, University representatives, private sector contractors are a few of the stakeholders who participated at this trade fair. D.U. Sumanasekara, General Manager of the National Water Supply and Drainage Board, said, "The rural communities in Sri Lanka need potable water for which new and advanced treatment technologies have to be showcased and promoted. I appreciate the combined effort of these two projects to promote these nature-based technologies to improve the quality of life of the rural people." With the advancement of Nano technology and other innovative water treatment technologies; many new water treatment options have been developed both locally and internationally. This trade fair explored the best solutions to address drinking water concerns at a community level in the dry zone of Sri Lanka.http://www.sundaytimes.lk/180520/business-times/fitch-affirms-hemas-holdings-at-aa-lka-outlook-stable-287917.html31 March 2018 @ 7:32 amFitch Ratings has affirmed Hemas Holdings PLC's National Long-Term Rating at 'AA-(lka)' with a stable outlook, saying that the group's business risk profile has improved from the recent acquisition of Atlas Axillia (Pvt) Ltd (Atlas), the largest domestic manufacturer and distributor of exercise books, pens, colour products and other school stationery. However, the benefits are offset to an extent by the operational pressures in its fast moving consumer goods (FMCG) segment that accounted for 40 per cent of EBITDA in the financial year ended March 2017 and its leisure business (12 per cent), which Fitch expects to persist in the next 12-18 months. The Fitch media release said that it expects Hemas' Atlas acquisition to improve cash flow stability as the latter's business is defensive across economic cycles. Fitch expects demand for school stationery to grow over the medium term, supported by government and private-sector investments in the education sector and rising per capita income in the country. "Atlas's stationery business fits into Hemas FMCG segment and Atlas will be able to leverage on Hemas established distribution network once the integration is completed. We expect Atlas to contribute around 15 per cent and 25 per cent to group revenue and EBIT, respectively, in FY19, its first year of full consolidation," it said. Fitch said: "We do not expect Hemas to engage in any other large scale Mergers and Acquisitions(M&A) that is similar to Atlas in the medium term, but the company will continue to spend Rs. 3-4 billion on organic expansion in its core segments in the next few years. We estimate Hemas will generate around Rs. 4 billion per annum in cash flow from operations in the next few years but this may be insufficient to fully cover the planned capex and shareholder returns. We do not expect an improvement in company leverage in the medium term amid higher borrowings and a moderating operating performance." A slowdown in the FMCG segment is expected to continue in the next 12-18 months due to pressures in Bangladesh (around 15 per cent of FMCG revenue in FY17) arising from the restructuring of Hemas distribution network and increased competition. Hemas may have to keep investing in its Bangladesh distribution network and marketing efforts to support its bigger operational scale and counter competition, which would keep margins below historical levels in the medium term, Fitch said. "We don't expect a recovery in domestic Fast Moving Consumer Goods (FMCG) volumes in the near term as weak personal income and inflationary pressures may force consumers to continue to cut down on personal and home care spending. Domestic margins may also remain pressured due to a pickup in input costs and currency depreciation, which the company may find difficult to fully pass on to customers amid weak demand. However, steps taken by the company to streamline its supply chain operations are likely to generate cost savings to offset margin pressure to an extent," Fitch said. On leisure, Fitch said it expects Hemas hotels (around 50 per cent of leisure sector EBIT) performance to continue to weaken in the medium term on declining occupancy and room revenue due to a slowdown in tourist arrivals, oversupply of graded accommodation and competition from the informal sector. On healthcare, Fitch said it believes the healthcare segment can offset most of the other segments' earnings volatility. "We expect the drug distribution arm to continue winning market share from distributors exiting the market on price regulations, primarily on branded drugs. We expect the pharma segment and its hospital chain to continue growing in the medium term, supported by a rapidly ageing population, rising incidence of non-communicable diseases and undersupply in public healthcare services. However, the hospital sector may face regulatory pressure on pricing of certain services," the release added.http://www.sundaytimes.lk/180520/business-times/tea-industry-export-earnings-losses-at-rs-15-bn-in-2017-287914.html31 March 2018 @ 7:29 amThe Sri Lankan tea industry has accrued losses amounting to approximately Rs. 15 billion in export earnings last year, a top government official said on Thursday. Plantations Ministry Secretary J.A. Ranjith told the Business Times that the glyphosate ban had impacted on export earnings resulting in a loss of Rs.15 billion in 2017. As a result the ministry forwarded a cabinet paper seeking a lifting of the ban on the application of glyphosate to the tea estate sector.However, the cabinet last week decided to appoint a committee to study the consequences of using glyphosate. In this respect, Mr. Ranjith said that they had been asked by the President to send in their nominations to the committee. Similarly, nominees from the Ministries of Agriculture and Health would also be made that would comprise the committee.Asked what alternative the government has come up with, Mr. Ranjith said that the Tea Research Institute (TRI) is currently carrying out studies to ascertain what other substance could be used. The tea industry has been requesting the government to lift the ban on glyphosate and to find an alternative substance that could replace glyphosate should the ban continue.Some plantations have been involved in the use of a number of other weedicides that have caused Ceylon Tea to run into issues having been detected with high residue levels. As a result the teas have been rejected by countries like Japan and certain European states. Meanwhile, Planters Association Chairman Suni Poholiyadde told the Business Times on Friday that with the monsoon rains setting in the losses could worsen on the estates as the requirement for a weedicide would increase during this time of the year. He pointed out, “We will not be able to get the potential yield,” this year due to the absence of the use of glyphosate on the estates. Mr. Poholiyadde explained that following the drastic drop in workers available to cultivate the lands the use of chemicals for commercial agriculture remains a necessity. While the industry was able to find workers to harvest the teas, manual weeding however, could not be carried out on the estates and pointed out that the industry had precautions to ensure that they do not use other substances not recommended by the authorities.http://www.sundaytimes.lk/180520/business-times/port-of-colombo-13th-best-connectivity-port-in-the-world-287912.html31 March 2018 @ 7:29 amThe Port of Colombo has gone up by five places and is now ranked the 13th best Connectivity Port in the world in the 4th quarter 2017. The port that had been ranked as the 18th Best Connectivity Port by the Drewry Port Connectivity Index is up by five places and is now ranked the 13th best Connectivity Port in the world. According to the rankings, the Port of Colombo is also the top best connectivity port in South Asia. The Drewry Global Container Port Connectivity Index recently announced the top 20 ports with new entries of Jebel Ali and Algeciras to the listing for the 4th quarter of 2017, a media release issued by the Ports Ministry stated. Shipping consultancy Drewry that has launched a regular, bespoke index of port connectivity in this latest edition of its Ports & Terminals Insight report aims to show how well connected the world’s container ports are. The index divides the world into seven major zones, and measures each port’s breadth of connectivity by the number of regions served and how many mainline services call per week. Routes that involve transshipment are not counted, nor are intra-regional services within a region. “The Drewry Global Container Port Connectivity Index that signifies the importance of port connectivity as important as size or scale, consists of two variables, the number of mainline services calling at each port per week and the regions in the world to which each port is directly linked. Having the widest possible range of direct service is a significant competitive advantage for all ports,” it says. At a meeting with stakeholders Minister of Ports and Shipping Mahinda Samarasinghe said that the port exceeded the 6.1 million TEU target in collaboration with all terminals at the Port of Colombo and the port expects to reach the 7 million TEU target by the end this year. “We will take the new initiative forward to promote the Port of Colombo internationally, together with all stakeholders and to attract more new shipping lines that work in alliances to the port,” he said. The Sri Lanka Ports Authority (SLPA) recently signed a Memorandum of Understanding (MOU) with the terminals of the Port of Colombo to operate collectively to promote the Port of Colombo.http://www.sundaytimes.lk/180520/business-times/new-sri-lankan-factory-to-reuse-and-recycle-electric-vehicle-batteries-2-287910.html31 March 2018 @ 7:28 amThe Electric Vehicle Club of Sri Lanka (EvClub) has pointed out an error in the story with the above headline appearing in the Business Times on March 4. In that interview, what the EvClub said was that the factory will be set up in Japan (not in Sri Lanka as reported).http://www.sundaytimes.lk/180520/business-times/hutch-to-go-4g-in-2018-287907.html31 March 2018 @ 7:26 amHutchison Telecommunications Lanka (Pvt) Ltd (Hutch) says it would be launching 4G services in the second half of 2018. In a media release, the company said it has received all approvals from the Telecommunications Regulatory Commission of Sri Lanka. The deployment of 4G services will allow Hutch to continue its work towards providing their customers with the best mobile broadband experience at the most affordable prices. The Business Times exclusively reported the inordinate delay faced by Hutch in the release of its 4G equipment from the Colombo Port.http://www.sundaytimes.lk/180520/business-times/new-board-for-srilankan-airlines-287905.html31 March 2018 @ 7:25 amWith reference to the story in last week’s Business Times on the appointment of a new board of directors to SriLankan Airlines, my view is that appointing a new board will not resolve the existing problems of the airline. Spending time and funds on restructuring will be a waste if we are looking for foreign investors with a 49 per cent stake. The Indian Government recently decided to sell Indian Airlines to investors by transferring 76 per cent of its shares. This is a good move to attract foreign and local investors. After all who will want to invest 49 per cent and leave control in the hands of local politicians? The government too should arrange to sell at least 70 per cent to private sector investors so that they would be happy to take control and run it efficiently, managing by themselves than our political appointees, mostly failed politicians. The management of state enterprises by politically-appointed persons has failed totally and taking that lesson we must now reform by handing them over to professionals whose talents are wasted now without being used for the country's development. In respect of the balance 30 per cent of SriLankan Airlines owned by the state, only ex-officio members of the Treasury, Finance Ministry and the Ministry of Public enterprises should be appointed with clear responsibilities and no politicians to be appointed under any circumstances. Secondly, as done by the Indian government we too should retain all existing unsettled liabilities of SriLankan Airlines with the national carrier itself so that the new company will be able to plan their operations more efficiently without worrying about the old debts. Mahinda Wimalasena, Kiribathgodahttp://www.sundaytimes.lk/180520/business-times/world-bank-in-talks-to-accelerate-start-up-community-acceptance-in-sri-lanka-287901.html31 March 2018 @ 7:23 amWhile Sri Lanka’s start-up ecosystem is booming and various angel investments are coming into the country, the government has three major roles to play in terms of recognising the potential for start-ups. A team from the World Bank is in discussion with the government to accelerate the start-up community acceptance. The three main roles of the government are to create a capital structure, a limited liability partnership and an exchange control regulation. BOV Capital Co-founder, Prajeeth Balasubramaniam elaborated on this at the Dialog Axiata’s first phase of Digital Innovation Fund (DIF) release held at Dialogs’ head office in Colombo on Thursday. Mr. Balasubramaniam said, “The Government has a massive role to play to accelerate the growth of startups in Sri Lanka. We have made many requests to recognise the potential for startups in Sri Lanka. There are three major roles the government can assist the start-up eco-system.” Dialog together with BOV Capital has chosen three startups; roar.lk, insureme.lk and mydoctor.lk as its first phase of investment. The US$ 15 million DIF was debuted by the Malaysian Prime Minister in December 2017. Some 30 per cent of the investment, US$ 250,000 each will be invested during the seed stage of eight startups while US$ 1 million each will be given to 10 early stage, start-ups. The investment will be made on any digital start-up that has a scope of innovation, Mr. Balasubramaniam explained while noting that small and medium enterprises are non-innovative whereas start-ups are innovative. He also mentioned there was a gap in the funding cycle for start-ups. BOV Capital acts as an investor, fund manager and mentor. The initial screening by BOV Capital considers several factors including revenues, user traction and scalability and includes a comprehensive study of the business model. Subsequently the start-ups are approved by the investment committee of the DIF for further evaluation prior to awarding the funding. “Worldwide, out of 10 start-ups only one will succeed. We want to make it to at least six or seven start-ups to succeed. It’s always a high risk for the funding agency but it will remain an experience for the entrepreneur,” Mr. Balasubramaniam reiterated. Dialog Axiata Group CEO, Supun Weerasinghe at the event mentioned that the purpose of the DIF is to empower Sri Lanka. “Connectivity alone will not help Sri Lanka go forward. During this funding process it’s a combination of companies that will work together,” he added.http://www.sundaytimes.lk/180520/business-times/beware-of-new-year-bank-loan-on-card-schemes-287898.html31 March 2018 @ 7:22 amIn anticipation of the forthcoming Sinhala and Tamil New Year, many commercial banks are offering tempting loan schemes to unsuspecting customers. As an example, a bank is offering customers a pre- approved loan of Rs. 1 million with a convenient monthly repayment plan based on a ‘loan on card’ programme. Options for repayment are in 12 or six equal monthly installments at a one off processing fee of 8 per cent or 5 per cent respectively and valid only until April 20. The benefits are described as convenient cash bundled with installments options, easy to apply, quick delivery, preferential rates and fixed equal monthly installments. [caption id="attachment_287899" align="alignright" width="400" caption="File picture of one of many stores in Colombo that would attract Avuruddu buying.."][/caption] The hidden negative feature is that the effective interest rate is not stated in the offer. The effective interest rate is defined as the interest rate on a loan restated as a rate with annual compound interest payable in arrears. Take for example, a loan of Rs. 1 million payable in 12 equal monthly installments of Rs. 84,000 at a nominal interest rate of 8 per cent. The effective interest rate as calculated on the midpoint of outstanding balance would be approximately 14.8 per cent. Assuming net of service charge, the actual cash received is 920,000 (net of first installment) only, the effective rate of interest would be higher at 15.9 per cent. Upon checking with the bank, they confirmed by phone that the effective interest rate on the loan is between 13 per cent and 15 per cent. Hence, it is obvious that the bank’s stated ‘reduced one off fee’ is incorrect. In addition, the banks’ promotion of the convenience of installment payments by credit card is a mirage that puts customers at high risk in case of default. They become liable to a stiff penalty charge for late payment plus a high interest charge on defaulted payments. Currently, the credit card maximum cap on interest rates stands at a high of 24 per cent as authorised by the Central Bank. Although the high rate was imposed to discourage unproductive personal loans, it has not happened as banks do not explicitly state the real costs. The Government also charges stamp duty on credit card payments and it too adds a significant cost on card users. The Central Bank instructs banks to publish the interest rates when promoting credit products in any media including the penal interest rate, the method of computation and changes in interest rates. Unfortunately, it does not happen due to its negative impact on marketing credit products. As a result, ill-informed bank customers’ may be duped into a serious financial crisis by the very bank that offers them financial support to enjoy the festive season. In this regard, Sri Lankan Chartered Financial Analysts who serve in banks are bound by The Code of Ethics and Standards of Professional Conduct of the Chartered Financial Analysts (CFA) Association, US. The relevant sections are quoted below: Duties to clients A. Loyalty, Prudence, and Care. Members and Candidates have a duty of loyalty to their clients and must act with reasonable care and exercise prudent judgment. Members and Candidates must act for the benefit of their clients and place their clients’ interests before their employer’s or their own interests. B. Fair Dealing: Members and Candidates must deal fairly and objectively with all clients when providing investment analysis, making investment recommendations, taking investment action, or engaging in other professional activities.. Misrepresentation: Members and Candidates must not knowingly make any misrepresentations relating to investment analysis, recommendations, actions, or other professional activities In addition, the Central Bank Credit Card Operational Guidelines clearly states the following: Section 2.2 Benefits, incentives, rewards or reduction of any charges / fees which are offered by the Card Issuers in any promotional campaign or any event with regard to Credit Card operations shall be clearly communicated to the Customers in legible writing (electronically or document form). 2.3. The terms and conditions relating to the Credit Card shall be clearly communicated to the Customers and the same shall be provided in writing in the preferred language of communication, on request. The terms and conditions shall be displayed in the Card Issuers‟ web sites. 2.6. Misleading and unethical information/advertisements shall not be conveyed/ published by Card Issuers. Due to the rapidly rising convenience of credit card usage among the middle income population, the Central Bank must strictly enforce commercial banks to abide by codes of ethical conduct in order to protect unsuspecting credit card holders of over 1.3 million countrywide who are at the mercy of being exploited by unethical practices of most commercial banks. It can be concluded that most commercial banks try to make quick profits by expanding their customer loan portfolios through enticement and covert marketing techniques which hide the true cost of capital which is unsustainable as most customers fall into financial traps due to unaffordable personal consumption. It would be in the mutual interest of banks and customers if banks made a proper assessment of potential customer credit needs, repayment capacity and savings potential. The absence of such evaluation has resulted in many customers being lured into un-affordable consumption which results in personal financial crisis. From a macro perspective, Sri Lanka needs to set an economic growth trajectory by promoting local savings in order to bridge the savings investment gap. For this, commercial banks need to play their role in promoting personal savings rather over consumption. In the medium term, banks must promote value added new productive investments that generates economic growth. Promoting local investments that produce value addition via sale of goods and services, especially with export earning potential will stabilise the external sector. Resultant growth and macro stability will eventually attract much needed foreign investment particularly, for the lucrative export sector. This will, in turn, not only enhance the long term profitability and sustainability of commercial bank operations but also discourage current unsustainable and usurious practices by banks in exploiting personal banking customers with unaffordable credit products and thereby killing the proverbial goose that lays the golden eggs. R. Jayaratne Colombohttp://www.sundaytimes.lk/180520/business-times/cb-suspends-march-31-deadline-for-defaced-currency-287896.html31 March 2018 @ 7:19 amSri Lanka’s Central Bank (CB) on Thursday suspended a March 31 deadline for the acceptance of willfully defaced currency notes saying these would be accepted until “further notice”. In a public statement, the CB said: “Considering the immense requests made and the difficulties faced by the general public in exchanging willfully defaced currency notes after 31.03.2018, the Central Bank of Sri Lanka (CB) has decided to continue the service of exchange of willfully mutilated, altered and defaced currency notes from CB until further notice”. It said accordingly, the general public is hereby informed to submit such currency notes to the CB Head Office or Regional Offices located at Anuradhapura, Matale, Matara, Trincomalee, Nuwara Eliya, Kilinochchi or send the same by registered post to the following address together with the duly completed application form. The relevant application form can be obtained from the CB website (www.cbsl.gov.lk), Regional Offices and any branch of Licensed Commercial Banks (LCBs). The statement said the public is informed that the currency notes that have been mistakenly marked in the form of a small dot or a line are not considered as willfully mutilated currency notes and such currency notes can be used for transactions. Service of accepting damage currency notes by the LCBs due to normal wear and tear or due to natural disasters will continue without any change, it said. In addition, all LCBs have been instructed to calibrate currency processing machines to detect willfully mutilated, altered and/or defaced currency notes. However, in case of general public receiving a defaced currency note from an ATM or other currency handling machine, such currency notes can be exchanged from the nearest bank branch.http://www.sundaytimes.lk/180520/business-times/kiwi-companies-to-explore-business-opportunities-in-sri-lanka-287894.html31 March 2018 @ 7:18 amA New Zealand business delegation representing 13 innovative companies arrives in Colombo tomorrow on a 3-day visit aimed at forging business and trade links with Sri Lanka. Sri Lanka is an increasingly important partner for New Zealand in South Asia, evidenced by the recent visits from New Zealand businesses and a new Zealand High Commission office scheduled to open in Colombo next year, according to a media release issued by the Dubai-based New Zealand Trade and Enterprise Office for Sri Lanka and India. “With one of the highest per capita incomes in South Asia and a growing urban population, Sri Lanka’s demand for quality manufactured goods and access to healthcare and technology services is rising. New Zealand companies are well positioned to meet this demand due to our strong trade links throughout South Asia and our focus on delivering premium but cost-effective solutions,” said Ralph Hays, who leads New Zealand Trade & Enterprise’s (NZTE) activity in Sri Lanka and South India. The companies in the delegation are AD Instruments, DGL International Powder Coatings, Fisher and Paykel Healthcare, FRAMEDCAD Holdings, Medtech, New Zealand International Commercial Pilot Academy, Powershield, Redesign, Reese Group, Sealegs, Staah Limited, Tait Communications and Vista / Book My Show. “I’m pleased to be leading such an innovative and diverse group of business leaders and it’s encouraging to see more New Zealand companies exploring the opportunities Sri Lanka has to offer. We see potential to combine the skills and resources of both countries to take value-added goods and services to the world,” said Mr Hays. The programme includes a traditional cultural welcome from Kandyan and Māori culture groups; an infrastructure seminar involving FRAMECAD, Redesign and DGL International Powder Coatings, which will also explore emerging trends in the construction sector, as well as business meetings and site visits. To register for the infrastructure seminar please email cherryl@chamber.lk New Zealand and Sri Lanka’s two-way trade is NZ$367 million (Rs. 41.3 billion), with tea ($21 million), rubber tyres and other rubber products ($5.5 million) and food preparations ($1.8 million) leading Sri Lanka’s exports to New Zealand. While New Zealand’s top exports to Sri Lanka are milk powder ($279 million), butter ($3.6 million) and fruit ($3.1 million).http://www.sundaytimes.lk/180520/business-times/national-payment-platform-ball-now-in-the-cb-court-287892.html31 March 2018 @ 7:17 amThe much-debated National Payment Platform (NPP) project suspended in August 2017 will be further reviewed before it gets off the ground under the watchful eye of the Central Bank (CB), official sources said. The CB, now coming under the Finance Ministry on a directive of the President, will supervise and monitor the entire process of developing and implementing of the NPP to facilitate digital payments with the working of the core platform, the payment gateways of banks, and digital payment applications, a top official involved in this NPP task told the Business Times. In 2015, the then Finance Minister Ravi Karunanayake allocated a sum of Rs.25 bullion from the national budget for the NPP. This NPP is to be devised by integrating traditional and nontraditional payment and settlement systems while separating business messaging from financial messaging. The NPP will be within the regulations of the Payment and Settlement Systems Act No 28 of 2005 and in line with the requirements of the Central Bank (CB), State Minister of National Policies and Economic Affairs, Dr. Harsha de Silva told the Business Times adding that the ball is now in the CB court. Financial messaging will be the scope of the CB while business messaging will be the scope of various other innovative entrepreneurs’ ventures, he said adding that marrying traditional and non-traditional systems will not be an easy task, but progress has been made in identifying a couple of alternatives. He noted that he took the initiative to bring the NPP within the regulations of the Payment and Settlement Systems Act No 28 of 2005 and in line with the requirements of the Central Bank (CB), The validity of the approval given by the Cabinet Committee on Economic Management (CCEM) and the subsequent endorsement of the cabinet to set up a hybrid company as a separate entity of the NPP to facilitate ‘single button transactions’ is now in doubt due to the President’s directive to abolish the CCEM. Meanwhile issuing media release, the CB rejected claims Minister de Silva had "summoned the Monetary Board to his Ministry and asked the Board to implement ICTA's shoddy payment gateway". The CB said the State Minister convened a meeting of stakeholders to resolve a longstanding issue regarding the way forward on a NPP and two independent members of the Monetary Board had expressed an interest in participating in the meeting to assist in finding a solution to a long outstanding issue.http://www.sundaytimes.lk/180520/business-times/coca-cola-president-meets-pm-to-invest-50-mn-by-2023-287890.html31 March 2018 @ 7:16 amPresident/CEO of The Coca-Cola Company, James Quincey, met Prime Minister Ranil Wickremesinghe during his, recent maiden visit to the country. Affirming the company’s commitment to Sri Lanka, The Coca-Cola Company and its bottling partner, have committed to contribute US$50 million+ into the ecosystem of the country over the next five years. Mr. Quincey’s visit to Sri Lanka, within his very first year of taking office, reflects the company’s continued commitment to the country, the company’s local office said in a media release. It also follows the FIFA World Cup Trophy Tour by Coca-Cola in January 2018 that caught the imagination of the youth and footballing community here. “Coca-Cola is one of the leading consumer brands in the world, serving almost all possible beverages ranging from the Classic Coke to Fruit Beverages to Dairy to Tea and Coffee. Coca-Cola has been operating in Sri Lanka since 1961, contributing significantly to Sri Lankan economy,” the release said. Mr. Quincey was appointed as President and Chief Executive Officer of The Coca-Cola Company on May 1, 2017. Prior to this, he served as the company’s President and Chief Operating Officer, leading all of the company’s operating units worldwide.http://www.sundaytimes.lk/180520/business-times/bank-of-china-boc-enters-sri-lanka-strengthening-strategic-cooperation-287888.html31 March 2018 @ 7:15 amBank of China (BoC), one of the largest state-owned commercial banks in that vast People’s Republi,c began its operations in Sri Lanka on Wednesday by opening of its first branch in Colombo with the aim of boasting active entrepreneurial activities and promoting investments. The bank has made an initial capital investment of US$ 80 million to set up its first Colombo branch at the Cargills building in Fort to support Sri Lanka’s aim of becoming a financial hub, officials said. Delivering the address of welcome at a glittering ceremony organised to mark the occasion at the Shangri-La Hotel, Colombo, Wang Xiquan, Chairman of the Board of Supervisor of Bank of China, told the gathering that the launching of his bank branch operations in Colombo marks the beginning of China’s financial industry in the island. He said that it was a new milestone in Sino -Lanka friendly relations and corporations. This will be an opportunity for the progress of overall strategic cooperation between the two countries, he said emphasising that this initiative paves the way for economic development and prosperity of the island nation. The BoC will assist Chinese companies and investors to enter into the Sri Lankan market for the benefit of the two countries, he opined. He revealed that the 100 year-old bank now has 600 branches overseas and links with 1,600 financial institutions worldwide. In his keynote address, Prime Minister Ranil Wickremesinghe expressed his optimism that the use of Chinese currency in Sri Lanka would be facilitated through the new bank branch with several Chinese funded projects now underway in the country. He pointed out that the opening of the Colombo branch was an important step in strengthening the island's economy and it opened a new chapter in the modern history of bilateral relations with China. "The bank branch opening in Sri Lanka happens at a time when Colombo city is transforming into a megapolis,” he said noting that the Bank of China has a crucial role to play in helping this island by strengthening to local businesses while also being able to attract more Chinese investments into the country. Sri Lanka has already entered into several new project agreements with China and the economic relations between the two countries were growing rapidly. He disclosed that there will be better infrastructure facilities including express highways between Colombo and Kandy and Colombo and Hambantota by the end of the decade opening new investment avenues. Sri Lanka is on its way to become the financial hub of Asia and the Bank of China could play a vital role in attracting Chinese investments facilitating the ongoing devilment process. The Premier noted that Sri Lanka is now working to enter into a Free Trade Agreement with China as the island embarks on a programme to become the financial hub of Asia at a time when China was gaining the status of economic power house of Asia. The future of trade in Asia could depend heavily on what becomes of China's expansive One Belt, One Road initiative, which calls for massive investment in and development of trade routes in the region, he pointed out. Sri Lanka is also negotiating a Comprehensive Economic Partnership Agreement in addition to its Free Trade Agreement with that country; he said adding that it makes economic trade deals with the two leading economies in Asia. Governor of the Sri Lankan Central Bank Dr. Indrajit Coomaraswamy lauded the entry of the Bank of China into Colombo as a "major landmark" in the history of the Sri Lankan economy. He said “the bank, with its large network of branches in China and other parts of the world, will not only help expand trade in Sri Lanka but help small and medium enterprises grow and tie up with manufacturers overseas as part of international supply chains”. Bank of China Country Manager Wang Chuan, Finance Minister Mangala Samaraweera, Chinese Ambassador Cheng Xueyuan State Ministers Dr .Harsha de Silva and Eran Wickremaratne, leading businessmen in the country and ministry officials were among the large gathering who graced the occasion.http://www.sundaytimes.lk/180520/business-times/changing-of-the-guard-at-bernards-287314.html24 March 2018 @ 5:50 pm Bernard and Gayani (left), children of Janaka Botejue, Managing Director Bernard Botejue Industries, have infused new life into the company which marks 70 years next month. Please turn to page 8 for complete story. Pic by Indika Handuwalahttp://www.sundaytimes.lk/180520/business-times/ibsls-ms-sugathadasa-steps-down-287309.html24 March 2018 @ 5:48 pmInsurance regulator, the Insurance Board of Sri Lanka (IBSL) is headless after its Chairperson, Indranee Sugathadasa stepped down last month. Two names – Mano Tittawella, Senior Adviser to Finance and Media Ministry, and Manjula de Silva, Chairman of the National Insurance Trust Fund Board - are still being debated as the replacement, industry officials said. Ms. Sugathadasa's term ended on February 9 after eight years in which she served two terms as IBSL head. When contacted Ms. Sugathadasa told the Business Times that after more than 40 years in the public service, she decided to step down as she wanted to spend more time with her family. (DEC)  http://www.sundaytimes.lk/180520/business-times/jpura-university-trio-picked-for-unilevers-future-leaders-league-in-london-291719.html27 April 2018 @ 8:28 pmMadusha De Silva, Nayomi Fernando and Umendra Abeynayake of team Innovints from the University of Sri Jayewardenepura were adjudged winners of Unilever Challenge 2017 held recently in Colombo. Emerging on top of three teams from 10 universities after three intense rounds, they will be representing Sri Lanka at the Unilever’s Future Leaders’ League to be held in London in April. [caption id="attachment_291721" align="alignright" width="400" caption="From left: Umendra Abeynayake, Nayomi Fernando and Madusha De Silva of Team Innovints."][/caption] The event, which is powered by Rin Brightness Academy, saw team Innovints winning the judges over with their ingenious approach to solving the cases posed to them and developing a marketing strategy for Rin with a focus on universities, Unilever said in a media release. Helping them prepare themselves to face competitors from around the world, the team will be mentored by senior representatives from Unilever Sri Lanka. The winners of last year’s Unilever Challenge, Haritha Jayasinghe from the University of Moratuwa and Pulasthi Ekanayake from Achievers Business Academy, who had gone on to become the runners up of the Future Leaders’ League 2017 in London, too will be helping them gear up for this prestigious global competition. “Year after year undergraduate students from some of Sri Lanka’s most esteemed higher education institutions demonstrate their ingenuity and passion at the Unilever Challenge and secure a place for themselves in the Unilever Future Leaders’ League. The calibre of the contestants continues to serve as a reflection of the exceptional pool of talent available in the country, something we at Unilever Sri Lanka have always believed in,” said Sumeet Verma, Director – Human Resources and Corporate Relations, Unilever Sri Lanka. The Future Leaders’ League is a dynamic marketing competition, where aspiring young brand managers get the opportunity to compete against likeminded future leaders from over 30 countries. The Unilever Challenge is the local leg of Unilever’s Future Leaders’ League. It is a unique competition that tests the ability of undergraduate students to conceive and implement a brand strategy for world renowned brands, the release added.http://www.sundaytimes.lk/180520/business-times/enemy-of-the-state-290398.html21 April 2018 @ 5:42 pmAny faithful reader of Kussi Amma Sera’s exploits in the kitchen – lunu miris, kochci miris and katta sambol included and her fiery explanation of economies – would be perturbed about this headline. ‘Enemy of the state? What! Who! Why! Hold your horses; it’s a definition that arose during a tele-conversation with my jolly-mood economist friend, Sammiya (short for Samson). Both our households are still reeling with the Avurudu absence of the domestic aides and the kitchen fires waiting to be lit again; so the tele-talks these days take longer. “No one to disturb us, no!” says Sammiya, referring to his domestic aide, Ammandi, also being away. The silence of the household continues (waiting for the return of Kussi Amma Sera from her long Avurudu sojourn) with even the trees in the garden going silent – probably missing KAS’s loud and juicy gossip with her comrade-in-arms Serapina. No early morning tea for me too! Back to Sammiya and his wake-up-call (the telephone rang at 7.30 a.m.), and the conversation is about the ability or inability of a state to effectively communicate with its people. “Machan, communication or the lack of it seems to be the biggest enemy of the state,” says Sammiya. “What do you mean,” I ask. “There are these big newspaper ads by the Finance Ministry these days, for example, the one on Friday allaying fears that senior citizens would be taxed. The notice says only those earning over Rs. 125,000 per month in interest income would be taxed.” “So isn’t this a reasonable explanation and won’t affect the bulk of senior citizens who earn far less on their deposits? I think this is a fair decision by the state. Furthermore, everyone has to pay some taxes as long as it’s reasonable and just,” I respond, bracing for an argument. “Ha … ha …ho… ho.” (I can hear him laughing his guts out … as usual in a jolly mood). “Got you there! What I meant was that the newspaper ads are a good thing. But the fact remains that this kind of effective, simple communication has eluded the Government in the past three years and given out negative signals. It is clear the Government lacks an effective communication policy and communication (or the lack of it) has become the biggest enemy of the state.” The last part was stated in a more serious note, before Sammiya returns to his usual humorous self with a parting shot: “Machan, a typical case in Sri Lanka -- it’s the Koheda Yanne Malle Pol scenario that we face every day.” Consider a recent example of communication. The Prime Minister asks UNP parliamentarians to withdraw a no confidence motion against SLFP Ministers and deputies who voted for the unsuccessful no confidence vote against the PM. Nothing wrong with that except the messenger to the media was the Department of Information. Should a state institution be the communication agency for political party issues? Certainly not. The public is not paying state institutions to work for political parties. This is just the tip of the iceberg. The reality is that while the Government complains about unfairness in media criticism of its policies, the inadequacies are showing, be it in tourism, economic policy formulation, infrastructure development, foreign investment, etc. The preparations for the new Inland Revenue Act were shrouded in secrecy until alarm bells were rung by unions and some tax professionals as to whether the IMF was forcing laws it produced for Ghana, on Sri Lanka. Changes were, to some extent, made in line with the local environment. Then, consider repeatedly talking about the gigantic debt burden, left behind by the former government - according to the ruling coalition - and often mouthing a figure that each citizen has to pay for the sins of the former regime. Citizen Perera’s response or Kussi Amma Sera’s, for that matter, would be: “Who cares. That’s the reason the politicians were changed for the better, not for worse times, Ah?” Then, what has happened to the so-called Harvard input into making Sri Lanka a better economy? Hidden from the public and the glare of media attention, this costly exercise goes on and what is the return. It began with a grand conference in a blitz of state-managed publicity in January 2016 with the involvement of controversial billionaire George Sores and Harvard University academics. That event triggered 2-3 visits to US-based Harvard by Sri Lankan ruling coalition ministers and deputies, government officials and advisors on “learning” expeditions. They are still going to Harvard! This exercise will turn out to be another waste of time and costly experience at public expense. Months later after opposition scrutiny, the Government says it didn’t invite Sores and that he came on his own! Furthermore, it was stated that the Government didn’t organise this meeting but it was done by Sores and his team and that “the PM and government officials were invited!” Interestingly, the key local organiser who worked with government agencies on the conference is a controversial businessman with strong connections to the former regime. Sometime last year when this column raised this issue as to what has happened to the Harvard discourse, an embarrassed advisor said, “No, no, there are many things happening”. Asked why the administration has been silent on this process, the advisor was dumbstruck but agreed that channels of communication could have been better. Ad-hoc decision making is also not making it better. For instance, the labour portfolio has been assigned to Minister Malik Samarawickrama, a businessman by profession and who is having a running battle with professionals on the entry of services in free trade agreements. While this is said to be a temporary position ahead of a wider cabinet reshuffle, this is the first time a businessman has been appointed to this post at a time when trade unions are flexing their muscles over a number of labour-related issues. In the past it has been either politicians, lawyers or trade unionists like M.C.M. Kaleel, T.B. Illangaratne, M.P. de Z. Siriwardene, Ranjit Atapattu, C.P.J. Seneviratne, D.B. Wijetunga, Mahinda Rajapaksa, Alavi Moulana, John Seneviratne, etc who worked as labour ministers. These ministers are expected to be supportive of the labour force and their needs and strike a balance with business and economic needs. There are many other examples that have confirmed the failure of a proper communication strategy by the Government and one of the reasons why even its good deeds hasn’t got any ‘positive’ play in the media or other public channels. At a tourism conference that I attended in the Maldives on Wednesday, there was a presentation by a tourism advisor on an annual survey where tourists are interviewed on issues and needs, etc. The advisor, who undertook the survey on behalf of the state tourism agency, pointed out weaknesses in the system in a ‘breath of fresh air’ presentation. “Instead of praising our tourism services, let’s look at what is going wrong and how we can correct these flaws,” he said and showed pictures of bad toilets in the airport, dirty areas and poor guest experiences. Now, that’s an innovative and bold way to move forward, admitting your mistakes, rather than hiding them. The enemy of the state in Sri Lanka is a simple case of looking in the mirror than finding fault in others. And, given the speed in which governing political parties say they would be moving to “make things right in the country (before the next presidential election)”, a poor communication strategy can potentially reverse the process and undo all the good.http://www.sundaytimes.lk/180520/business-times/political-bourgeoisie-kill-ceylon-tea-287307.html24 March 2018 @ 5:47 pmThreats, intimidation and political pressure are mounting against the tea industry, the minister and Tea Board officials by factory owners opposing detections that revealed 53 factories had adulterated the 150 year old Ceylon Tea. Out of the 740 tea factories in the country the Sri Lanka Tea Board (SLTB) found 53 to have added sugar into the teas to increase the weight and dark colour as a result of which the Tea Factory Owners Association (TFOA) President Harith Ranasinghe has received anonymous telephone calls from overseas numbers insulting him in obscene language; the former SLTB Chairman Dr. Rohan Pethiyagoda and Tea Commissioner being yelled at a recent meeting held on March 20 in the presence of other factory owners as well. The former had also being berated at a recent gathering of these factory owners in Ratnapura; and Plantation Industries Minister Navin Dissanayake has come under intense political pressure to go soft on these offenders some of whom have been warned previously as well and not cancel their licences. The process involved is first a fine of Rs.50,000 and a warning followed by a suspension of licences for three months and next a cancellation of the licences. Factories owned by at least two politicians from the ruling parties and another relative of an MP from the opposition were found to have adulterated the teas as a result of which the SLTB has sent a notice of show cause to provide an explanation why action should not be initiated against them. Another factory owner is learnt to have abused SLTB officials stating that he had got away previously as well and noted that he was a donor to the Mahaweliseya as a result of which the government should give cover to him. However, Minister Dissanayake during this week’s media briefing held to announce the new chairman of the SLTB Lucille Wijewardena said that he would not be lenient with any factory owners but would have a meeting with them next week on the next course of action. But he pointed out that cancelling their licences would only impact the workers and with the New Year around the corner it would hurt them. Of the 53 factories that have been asked to show cause some of them have agreed to the allegations leveled against them while others have said they would seek legal action against the authorities for carrying out the detections and questioned the basis of the methodology adopted in testing the teas. TFOA President Ranasinghe told the Business Times that they had been complaining to the authorities and government officials to ensure that detections were carried out against these factories that were adulterating the teas. As a result, Mr. Ranasinghe said that they were scheduled to have a meeting with the SLTB authorities who would clarify to them the methodology adopted. For the past six years the association has vehemently opposed the adulteration of tea and asked the industry to stop it and authorities to find the culprits and bring them to book. Compared to previous detections carried out in this instance the scale has been higher with a large number being netted in. Last year there were 12 factories that were detected. As an association they would call for explanation from their members once they receive the list of factories that are under inquiry, he said adding that in the past some members had quit their membership when such detections were carried out. It is learnt that the SLTB had carried out the detections by obtaining samples from the factories and sent it to the laboratories for testing as anonymous. As a result it was only after the final result was received that the samples could be checked to find out who had actually adulterated the teas. The detections was carried out to look for the sugar in tea by obtaining samples of teas before and after rolling as it has been found out that the sugar is added at the point of rolling the tea leaves. The detections found that the teas were adulterated with glucose, sucrose and fructose and the factories were found to be mainly from Ratnapura, Galle and Matara. In addition to testing by the SLTB, the Tea Research Institute (TRI) had also carried out the testing using the sophisticated method – high performance liquid chromatography that detects the high performance of sugar and glucose. Samples had also been sent to an external laboratory as well all of which had fully corroborated with the TRI and SLTB results. Moreover, in obtaining samples from the factories, one sample was given to the factory manager and another sample stored in the laboratories for future reference while another was sent for testing. Industry persons opine there needs to be a process of punishment, and the cancellation of the licenses of these offenders is required to ensure no such activity would be carried out in the future as well.http://www.sundaytimes.lk/180520/business-times/sri-lanka-set-to-benefit-greatly-from-mahindras-success-291717.html27 April 2018 @ 8:26 pmSri Lanka’s automotive industry is to benefit greatly in the wake of Mahindra & Mahindra Ltd’s achievement of high market capitalisation in the Bombay Stock Exchange, Ideal Group, the Indian company’s local partner in a vehicle assembly joint venture(JV) said on Monday. “With the shares of the Mahindra & Mahindra Ltd (M&M)surging more than 2 per cent to hit an all-time high, thus steering the automaker to join the club of Rs 1 lakh crore market capitalisation on the Bombay Stock Exchange, Sri Lanka can only but benefit as M & M will soon be setting up their automotive assembly plant, here in Sri Lanka,” said founder Chairman of the Ideal Group, Nalin Welgama. The Indian company entered into a joint venture recently with Ideal Motors Ltd, a fully owned subsidiary of the Ideal Group, to assemble automotive vehicles in Sri Lanka. Mahindra will hold a 35 per cent stake in the JV, while Ideal Motors will have a 65 per cent stake, he said adding that with this joint venture Mahindra will strengthen its presence in the country. The plant will be built over the next one year under the expertise of the Mahindra team, and will incorporate global technology. Mahindra & Mahindra Ltd is now bigger than the Tata group’s carmaker Tata Motors, in terms of market capitalisation, he added. This was the first time that a genuine automobile manufacturer has entered the vehicle assembly arena, he told the Business Times noting that the Indian company will begin Mahindra ‘people’s car’ assembly in Sri Lanka with an initial investment of around US$15 to 20 million. Ideal Motors will initially manufacture the Mahindra KUV 100 sports utility vehicle, the ideal ‘people’s car’ for Sri Lanka, he revealed. Almost all the ground work has been finalised to set up the vehicle assembly plant in a two acre block of land in the Colombo suburbs probably in Horana, Mr. Welgama said. Sri Lanka is one of Mahindra's top three export markets, and the new facility will not only contribute to human capital development, but will also enable collective development of local automotive components manufacturers to international standards under the global expertise of Mahindra. “This is a leap forward for the industry, adding value to the meaning of ‘Made in Sri Lanka’ and opening broader opportunities for national growth,” he said.http://www.sundaytimes.lk/180520/business-times/dysfunctional-economy-and-elitism-290393.html21 April 2018 @ 5:38 pmMuch of the economic news I heard during the past few weeks was about the Sri Lankan state being dysfunctional. I am not referring to the standstill of normal activities due to the Sinhala and Tamil New Year vacation. But it is a similar thing extended for a much longer period, resulting in a state of being dysfunctional in terms of the economy or its parts and components. It is a worrying situation because a dysfunctional state will have far reaching economic and political consequences. [caption id="attachment_290394" align="alignright" width="400" caption="File picture of the Registrar of Companies office where an online registration service was introduced to fast-track registrations. Amidst the uncertainty, some state institutions are working at satisfactory levels."][/caption] At the Kotelawala Defence University On March 22, a meeting of the Sri Lanka Forum of University Economists (SLFUE) - Professors and Lecturers, was held at the General Sir John Kotelawala Defence University (KDU). Initially it wasn’t planned to be held there, but at the Sabaragamuwa University. Trade unions of the university employees suddenly launched a strike. As a result, all the government universities in the country, except one or two such as KDU, became dysfunctional. The KDU did not have such issues so that the organizers were able to shift the meeting venue from Sabaragamuwa to KDU. There might be differences in opinion (about this university), but I think many must have appreciated the state of discipline and order at KDU which is managed differently from the traditional universities in Sri Lanka. KDU selects the students it wants to admit from among the Sri Lankan and foreign applicants. Within a few weeks after the release of the GCE Advanced Level results, KDU has the ability to finalize its admission process and admit the students. A student who enters KDU knows his or her academic calendar in advance so that he or she can plan everything for the next 12 months. They enter the university on time, continue with studies without any interruption, sit the examinations as planned, and graduate on the day as mentioned in the academic calendar. It was about 10 years ago a group of Sri Lankan university students who attended a regional conference reported that they were 3 - 4 years older than their counterparts from Bangladesh, India, and Pakistan. By international standards, students enter the universities at the age of 18 years and graduate at 21 years. This is the age that a Sri Lankan student prepares to enter a university; they are usually about 25 years old or even more, when they become graduates! Visit of a Japanese Professor Prof. Hitoshi Osaka - one of our academic friends from a Japanese University, had planned to visit the Colombo University last month. Although we kept him informed about the dysfunctional state of the universities, he was unable to change his months of planning. Anyway, he came and saw that there was nothing happening within our universities. After having the discussions, we sat with him for lunch. He said: “Under whatever the circumstances public sector employees in Japan never go for strike; it is prohibited there as public sector employees are considered to perform a service to the nation than doing a job.” He continued: “For the same reason, a public sector official hardly loses the job, as it is that much respectable.” I quickly replied: “Oh, we also have that part; at least we share 50 per cent with Japan!” I hope Prof. Osaka’s work in Sri Lanka was not interrupted by the dysfunctional state of the universities here. Even if it was, does anyone care? Economic standstill During the same week I met a senior public sector official who with frustration told me about the dysfunctional state of the public sector that has become worse in the recent past. As a result the activities are not moving and the economy is in a state of limbo while the business sector is in the state of “wait and see.” I asked him: “Usually the ministries should have a vision and a plan for the respective sectors for the next couple of years; do they have anything as such?” He only laughed! At KDU too, the keynote speech delivered by Dr. W.A. Wijewardena, former Deputy Governor of the Central Bank of Sri Lanka, exposed the current political imperatives that have made the economy dysfunctional. The political imperatives that are moving in two opposite directions effectively left the economy not moving in any direction. In a political economy environment as such, slowing down growth prospects of Sri Lanka is not surprising. If it continues for the next few years too reporting less than 5 per cent annual rate of growth it won’t be surprising. It is sad to see what should have become the strength of the nation - coalition of major opponents -, turning out to be its weakness now. In the first week of April, there was an email circulated with an interesting question inviting for answers: Why are political leaders not seeing and acting on issues and challenges we in society see? The question was also accompanied by a coherent answer given by a reputed scholar. Whichever the way you may think of answering that question, its underlying truth is that the political authority of the country is dysfunctional! Elite class of development I was also there at KDU attending the SLFUE meeting. Apart from being a member of the SLFUE, I had to review the new issue of the Sri Lanka Journal of Economic Research (SLJER) that was launched at the same occasion. As relevant for our topic today, I like to quote from one of the research papers published in this Journal. It was on “Rethinking the Development of Post-Conflict Sri Lanka Based on the Singapore Model” authored by Sanika Ramanayake and Chandana Wijetunga. Whenever you hear a title as such you might have the impression about the inappropriateness of such a model for Sri Lanka due to two different political systems. But this was a paper that has deviated significantly from such traditional line of thinking. One element of the analysis that caught my attention was the building up of an “elite class” that became the catalyst for economic development in Singapore. In every political system, the leadership supports a formation of an elite class on the basis of different attributes. In Singapore it was more on “merit-based” than on any other attributes. The leadership intentionally built this elite class by selecting the “right” persons on merit-basis to be the Parliamentarians, Cabinet Ministers, key public sector officials, heads of departments and, managers of state-owned enterprises; they formed the “elite class” and carried out the jobs, which converge at the end enabling Singapore to be a rich country. Accountable for output There were other strategies adopted in forming this elite class for development; they were paid well so that they did not have to look for commissions, bribes and other forms of corrupt practices and areas with conflict of interests. Anyway, the rule of law was efficient and effective so that there was no room for such things either. They were also given the autonomy of powers and responsibilities within their purview. On the top of all above, they had to show outcome-based performance so that the accountability was utmost important. This was the formation of an “elite class” purposively for development in Singapore that was known as “development elitism.” As a result, there was no sector underperforming or malfunctioning on the one hand and, being subject to corrupt practices or external influences on the other hand. Quality and character of the elite Formation of an “elite class” by the political leadership is something that you can observe in every country. It has nothing to do with authoritarianism or democracy or any other system. Intentionally or effectively, it is there everywhere and, as the political leadership select the people to be around them and to follow their vision and mission. What matters is the quality and character of the emerging elite to drive the economy forward; the difference depends on what basis the elite class is chosen, and how much they are equipped with and guided by the necessary regulatory instruments. By looking at the layers of the elite from national to local levels, you can infer where the nation is set forth to move in the future. (The writer is Professor of Economics at Colombo University. He could be reached at sirimal@econ.cmb.ac.lk)http://www.sundaytimes.lk/180520/business-times/seeing-red-in-blue-green-lanka-287304.html24 March 2018 @ 5:38 pmAn agitated Kussi Amma Sera was red in the face (anger, not embarrassment) after something she appeared to have read in Thursday morning’s newspaper. A vociferous reader, peering occasionally to see the big print with an old set of spectacles, she spends at least 30 minutes in the morning while preparing tea scanning the headlines of the paper like any smart reader and then selects what she should read and what should be passed on. This morning, she is involved in an over-the-fence, chit-chat with Serapina (often amusing to passers-by due to their loud conversation interspersed with high-pitched laughter or high-pitched anger, depending on the content). This time it sounded serious. Again, without giving any indication that I was listening to their conversation from my work-room from where I could clearly see them through the window, I heard snatches of the conversation which went like this: “They are taxing hard-earned money sent by our people in the Middle East” “Are you sure? Eke hari wedak neda (this is a fine state of affairs)? “Meka hari asadaranai (this is unfair).” “Apey sallee ekka manthri-la sel-lung karanawa (parliamentarians are playing with our money).” While pondering on their conversation and looking at a blank wall wondering what today’s topic should be, the phone rings. It’s my banker ‘amba yahaluwa' (mango friend) Seeni Bola on the line. He earned this sobriquet after once boasting that other banks were handling ‘seeni bola’ (peanut) deposits compared to his bank! “I say, there is a hue and cry over the new taxes on deposits,” he says in a baritone voice over the phone (ideally suited to be in a choir). “Say what?” I ask. “My banker friends say there is some misunderstanding over new taxes on these accounts. People are calling the banks and complaining,” he said. “What’s the issue?” “That there is a tax on all deposits and money sent by our migrant workers will be taxed. This is a misunderstanding of this budget tax,” he added. Realising that this is an issue that needs to be addressed and politely ending the conversation after promising to call later, I find that this was the problem that Kussi Amma Sera and Serapina were discussing over the fence and as usual, bashing the politicians without a clear understanding of who and what is being taxed. However, this misunderstanding and treading into the unknown by many people is a reflection of the Government’s poor communication mechanism showing time and time again its inability to explain to the people with clarity, taxes that directly affect them. For the record, even at the Business Times there were people calling and complaining about the unfair taxes on deposits and that this would further reduce remittances from abroad. Separately, banks are still waiting for clarity on the tax on transactions called the Debt Repayment Levy which is also enforceable on April 1. The bone of contention is Circular No. SEC/2018/01 to banks and financial institutions titled ‘Withholding tax (WHT) on interest paid by banks or other financial institutions’ issued by the Department of Inland Revenue (DIR). Dated March 16, the circular sets out the taxes on interest effective from April 1 which customers have learnt, triggering concern and in some cases hysteria by depositors that a new tax is being enforced. A WHT of 5 per cent is being imposed on the interest income of a deposit account, increasing from 2.5 per cent earlier. In the case of senior citizens, the 5 per cent WHT is being applied on aggregated interest income (from all deposits) above an annual income of Rs. 1.5 million (or Rs. 125,000). This 5 per cent WHT on interest income is being enforced for the first time on foreign remittances which applies to export earnings and money sent home by Sri Lankan migrant workers, the last named being the subject of conversation by Kussi Amma Sera and Serapina. Bankers believe the tax on interest income on foreign earnings could be a disincentive to exporters to bring back their money. On the other hand, it is unlikely to make a major dent in remittances by Sri Lankan workers abroad, many of whom send money to keep the home-fires burning and hardly have any cash left in accounts to earn interest. Nevertheless, the Government is sending the wrong signal by taxing foreign remittances which serves as a disincentive rather than an encouragement to bring your money home. Having said that, taxes are an integral part of the functioning of a state in providing public services like free health and free education (for all, irrespective of whether you are rich or poor), subsidised transport (railways and buses, again without discrimination) and other services. While taxes need to be collected, the issue is whether the authorities over the years have got the tax structure right and there lies the problem. There aren’t enough people paying income tax in Sri Lanka (particularly those who should be taxed!) reflecting the inefficiency of the DIR and compelling the government to resort to indirect taxes which are easier to collect. This problem was also alluded to recently by Senior Minister Sarath Amunugama (a former, distinguished civil servant) at a public forum, where he said that one of the major problems in the economy is that revenue from traditional sources of taxation (income tax) hasn’t worked. He said people have to be taxed, particularly those who have the ability to pay and because this is not happening there are distortions in the economy where indirect taxes are higher than direct taxes. Indirect taxes now bring in 80 per cent of the tax revenue, whereas the ideal ratio should be 60 per cent in direct taxes and 40 per cent indirect. But, he noted, because of the inability of the DIR to bring more people under the income tax net, administrations are forced to resort to indirect taxes to meet the government’s spending needs. Eventually, everyone ends up paying consumption taxes where there is no discrimination on the ability to pay. The poor pays the same tax as the rich on consumption goods, which is unequal, unfair and unjust with the worst affected being the middle class who are sandwiched between the upper class and the working class. The WHT on interest income was announced in the 2017 budget but as usual in technical jargon that no one except tax advisors understand. It is meant to confuse the public, at least that’s the people’s perception. One of the reasons why accountants and audit firms immediately issue a statement the day after the budget explaining to clients the changes in taxes is because corporates are also unable to understand clearly the changes, particularly the exemptions. If that is the case, how does one expect the public to understand taxes that affect them? In fact, the November-presented budget said that regulations would be announced later in the case of bank interest paid to senior citizens. If the banks don’t inform customers of these changes (and in this case, with the circular being issued just two weeks before its enforcement), how are people expected to know? Furthermore the tax on interest income on migrant workers’ remittances, the biggest foreign exchange earner for the Government, should have been explained clearly to the public, instead of worried customers calling banks a few days before the April 1 rule to express their concerns. The March 16 circular should have been issued in January or early February and banks directed (this should have been stated in the budget, if it’s not a common practice) to inform their customers of these changes. Taxing the people is inevitable but failure in proper communication of those decisions has been the bane of this Government compelling Kussi Amma Sera and her ilk to see red in the Government’s supposedly acclaimed “blue-green” budget exercise.http://www.sundaytimes.lk/180520/business-times/bajaj-qute-quadricycle-entry-into-local-market-291714.html27 April 2018 @ 8:25 pmAfter an over 2-year struggle, the ‘Qute’ quadricycle manufactured by India’s Bajaj Auto Ltd is now on sale in Sri Lanka, following its inclusion in a separate category of under section 203 in the Motor Traffic Act. [caption id="attachment_291715" align="alignright" width="400" caption="File picture of the Qute."][/caption] The Ministry of Transport and Civil Aviation has promulgated regulations in a gazette extraordinary recently approving quadricycle as a road-going vehicle under a separate category, a senior official of the ministry said. These quadricycle regulations have classified this vehicle category as four-wheeled microcars defined by limitations in terms of weight, power and speed, he revealed. Previously the Motor Traffic Department (DMT) had refused approval to the Bajaj RE60 Quadricycle which has been seeking permission to enter the local market since 2015, due to concerns over its safety aspects .and road worthiness, he added. The local agent for the RE60 vehicle requested the DMT to register it under a different category, but no decision was taken towards this end until recently as it needed to create a new category for this vehicle and make regulations accordingly. The vehicle distinguishes itself from a car on the basis of weight (under 500 kg), speed (70 kmph) and power (less than 15 kilowatts). However India is yet to launch the quadricycle due to delays in completing administrative procedures of the road transport authorities in that country including the Automotive Research Association for its roadworthiness as is the norm for all vehicles. Even under these circumstances, Bajaj Auto has exported these vehicles to 16 countries including Latin America, Africa, Europe and Asia at a price of around $2000, before its launch in India, Indian media reported. It is not a car or a three-wheeler and therefore not a replacement for either. It is an alternate vehicle that combines some features of both to provide smart, affordable, environmentally friendly mobility, the ministry official said. According to new regulations gazetted by the ministry, this vehicle is permitted to run at a speed of 50 kmph although it could accelerate up to a maximum speed up to 70kmph. Sri Lanka’s David Pieris Motor Company Ltd (DPMC), the sole distributors for India’s Bajaj-brand of vehicles, has already sold 20 units of quadricycles and its demand is gradually increasing, a top official of the company revealed. This vehicle is ideal for first time vehicle buyers and families who cannot afford to buy a car and who do not want a three wheeler either because of its social status, he said adding that even owners of three wheelers could go for quadricycles which have fuel efficiency and low running costs due to lower fuel consumption and its light weight. This category of vehicle could transform Sri Lanka's transport landscape and could bring vehicle ownership and affordable mobility to a previously untapped market segment both in urban and rural areas, he said. According to company officials, Bajaj Auto’s Qute will be launched in India soon following the approval recently there by the Ministry of Road Transport and Highways. With the dismissal of all court cases filed in India against this vehicle citing safety, the 216cc Qute could hit the roads by the end of this year, Indian media reports revealed. However in India there are still questions about the clearance given to quadricycles by government, and those are fully justified as far as load carrying or passenger transportation is concerned, several local motor traders said. Sri Lanka is facing dire consequences as a result of permitting the entry of three wheelers in to the country and it cannot allow Bajaj Auto RE60 to ply on roads as an alternative to small cars, they emphasised. The National Movement for Consumer Rights Protection recently handed over a petition to the Indian High Commission against the attempt to import “Quadricycle”-micro car into the country Chairman of the movement Ranjith Withanage pointed out that on the directions of Transport Minister Nimal Siripala de Silva, the government has given clearance to import this Indian made vehicle which is yet to be launched in India.http://www.sundaytimes.lk/180520/business-times/insurance-takeovers-the-next-big-thing-2-290169.html20 April 2018 @ 8:36 pmReference to the Business Times story last week headlined “Insurance takeovers: The next big thing”, two companies named in the story – Janashakthi Insurance Plc and HNB Assurance Plc - have denied its contents. In letters to the newspaper, HNB Assurance said the news item is inaccurate while Janashakthi also said that the story was inaccurate. Janashakthi went on further to state that, “In fact, post the divestment of our General Insurance business, Janashakthi Insurance PLC has commenced its journey of investing behind the Janashakthi Life business. As a result, we have taken the initiative to rebuild the Life brand, strengthen our IT capabilities to bring innovative life solutions to our customers, increase the capacity and skills of our valued customers and the field sales staff and spread our presence throughout the island through a new branch network. YTB 2018 the Janashakthi Life business is experiencing health double digit growth.” Business Editor’s note: The story was based on industry sources who said there had been ‘talks’ on these matters. In the Janashakthi case, at a recent briefing directors said that they were looking for an international partner for technical collaboration along with a small equity partnership.http://www.sundaytimes.lk/180520/business-times/netherlands-farmers-and-sri-lankan-doctors-287298.html24 March 2018 @ 5:35 pmSandra was born to a Sri Lankan mother, and adopted by a Dutch mother. She was a 12-year old child, when I met her and her foster parents, some time ago in the Netherlands. Sandra’s foster parents wanted me to help her. I was there on a scholarship, studying for my doctorate at the Free University of Amsterdam and living in a quiet and beautiful city by the North Sea - The Hague. Sandra and her parents had come to Sri Lanka, searching for Sandra’s biological mother. And they had found her; what a moment it would have been for the Sri Lankan mother who saw her daughter after 12 years! But there was no direct communication between the mother and the daughter, as they didn’t understand each other’s language. After they returned from Sri Lanka, Sandra’s biological mother started sending letters to her daughter, of course written in Sinhala. Sandra’s foster mother also wanted to read them and reply. The help that was asked from me was to provide translations of the letters to both sides and, I started doing that. There was something in this correspondence, which struck my mind and heart: The Sri Lankan mother did not forget to emphasize in her letters to the daughter, “Whenever you come again to see me, it is my desire to see you as a lady doctor!” As this request, or rather the advice appeared quite often in her letters, Sandra’s foster mother once replied to it: “Sandra doesn’t like to be a medical doctor; rather she wants to be a farmer!” I didn’t think they understood what each other was saying. But I was quite certain that the heart of the Sri Lankan mother would have been blown to pieces if I had done the literal translation of that reply. Farmers here Recently, I was disturbed by seeing the pictures of disappointed, hopeless and helpless farmers who were sitting on their vegetable loads, trucks and tractors parked at Sri Lanka’s major vegetable markets. Only after they brought their vegetable produce to the wholesale markets, they found that there were no buyers! Being unable to sell their harvest of months of labour and sweat, they had to spend a sleepless night in the market awaiting the buyers. They were exhausted by morning to the point that they were more than happy just to get rid of the load, as there was no hope of selling the produce. Even if they never sold it, they still had to pay the transportation costs to the vehicle owners. The middle stretch of the vegetable value chain is a peculiar area where much of the transaction costs, rent-seeking costs, and wastage costs are added to the price. As a result of weak market mechanisms controlled by external forces, neither the producer nor the consumer has any bargaining power. Farmers there Farmers in the Netherlands are agri-business owners and, belong to the upper-income class. Their social, political and economic status is much higher than that of the doctors who are engaged in an average profession. Agriculture in the Netherlands is modernised and mechanised, while farmers work with all types of land vehicles, machines, and computers, all owned by themselves. In most of the cases they also run their own post-harvest packaging, processing, storing, and transporting facilities. They also focus heavily on technological upgrading. They are not subject to the impact of seasonal variations in climate conditions: they control artificial temperature and artificial light within greenhouses so that even in the freezing winter they can bring out a better agriculture harvest. According to 2016 World Bank data, real agriculture value added per worker in the Netherlands is US$84,142 a year or $7,011 a month; this is not different from the agriculture value added even in the US as a large country. Compared to that, real agriculture value added per worker in Sri Lanka is only $1,415 a year or $118 per month. It is noteworthy that the real value added is calculated in constant prices, and is only part of the total output sales value. Nevertheless, this simple illustration is sufficient to understand that farmers in the Netherlands are rich and the farmers in Sri Lanka are poor. This difference can also explain why the farmers in the Netherlands enjoy much higher economic, social and political status, compared to farmers in Sri Lanka. [caption id="attachment_287301" align="alignright" width="400" caption="Tulip flower farm in the Netherlands."][/caption] What makes the difference? Now we have a fundamental question to answer; what makes the difference between a farmer here and a farmer there? I have no dispute against the fact that the Netherlands is a developed country in the Western hemisphere which has over $45,000 per capita income, compared to $4,000 in Sri Lanka. Nevertheless, even for achieving the developed country status in the Netherlands, the contribution made by its agriculture sector was important. Why the agriculture value added per farmer in the Netherlands is so high and can be comfortably compared to that in the US is because the number of farmers there is small: there are less than 200,000 farmers in the Netherlands, which is only 2.2 per cent of the country’s total employment in 2016. The Netherlands is a small country with 33 thousand square kilometres of land area and, 17 million population. In Sri Lanka there are 2 million farmers which is 28 per cent of the country’s total employment. Sri Lanka, which is bigger than the Netherlands has a population over 21 million and, land area over 62 thousand square kilometres. Thus it is clear that the Sri Lankan agriculture sector has too many people, producing too small output and, consequently earning too little average income. They are vulnerable to shocks and, dependent too much on government’s handouts. Average farm size In fact, in the Netherlands agricultural land is scarce and population density is high; it has only 18,370 square kilometres of agricultural land. Compared to that, Sri Lanka has 27,400 square kilometres of agricultural land. But the difference is that the average farm size in the Netherlands is 26 hectares, compared to half a hectare in Sri Lanka (excluding the plantation sector). Even after being a smaller country and still constrained by high population density, the Netherlands managed to have a reasonably large average farm size because just a few farmers are left in the entire agriculture sector. When the scale of production is too small, each farmer produces too little and the average income is too low - the main problem of being too small. In addition, that smallness determines not only the economic status, but also the social and political status of the farmers who are left helpless and hopeless in the market which is not a level playing field for them. When the scale of production is reasonably big enough, the farmers are also capable of modernization and mechanisation of their production activity and of undertaking the application of research and development for technological upgrading. Thus, even though the country is small, the agriculture sector in the Netherlands competes well with large countries in the international markets, producing specific horticulture, dairy products, meat, vegetable, and fruits. Raising the farmer standards Can we improve the status of Sri Lankan farmers? Well, you can’t really do that with “Samurdhi”, fertiliser subsidy, and other types of handouts from the government or even with agriculture protection. If we can, we would have already done it for long ago, because there has been no shortage of such policy measures in Sri Lanka. Farmer status will improve when non-agriculture sectors (industry and services) grow fast enough in order to accommodate labour from the agriculture sector, leaving a few thousands of farmers in reasonably large farm lands. This will then result in agriculture transforming into modern agri-businesses and, farmers into agri-entrepreneurs with higher bargaining power in the market. If anyone decides to be a farmer in such an environment it is a rational choice rather than not having any other choice. (The writer is Professor of Economics at the University of Colombo).http://www.sundaytimes.lk/180520/business-times/porsche-car-owners-club-launched-in-colombo-291711.html27 April 2018 @ 8:23 pmPorsche Club Sri Lanka (PCSL), an exclusive club for Porsche car owners in the country, has been launched in Colombo recently at the Porsche Breakfast Drive with Chopard and Mobil. Chopard is a watch brand while Mobil is a supplier of lubricants. The club aims to hold events, trainings and gatherings exclusively for the members of the club while promoting a positive car culture, Porsche Sri Lanka - General Manager, Ravi Opatha said. The Porsche Breakfast Drive concluded on a successful note with the participation of a large number of sports car enthusiasts. The drive began from Independence Square to Waters Edge, Battaramulla with the participation of Porsche cars owners and enthusiasts and was followed by a breakfast hosted for Porsche, Chopard and Mobil customers who had the opportunity to indulge in a memorable experience. The Porsche Breakfast Drive was a joint initiative by Eurocars, official agent of Porsche cars in Sri Lanka, Chopard and Mobil.http://www.sundaytimes.lk/180520/business-times/multiple-listing-service-for-property-sales-being-developed-in-sri-lanka-290165.html20 April 2018 @ 8:35 pmWhile investments (both local and foreign) on properties seem to increase drastically in Sri Lanka, there’re weaknesses among property developers in terms of transparency and professionalism in disclosing certain information about the property, some real estate agents state. RE/MAX Sri Lanka Chairman and CEO, Sujan Shan in an interview with the Business Times stressed that Sri Lanka does not have a Multiple Listing Service (MLS) that could ease property sales where all details are transparent and visible for potential investors. “RE/MAX Sri Lanka is currently in the development stage of building the MLS platform. Once it’s set up we control the platform for anyone who wants to buy, sell or rent a house, apartment or a land. MLS will be the source of information,” said Mr. Shan. MLS is a suite of services that real estate brokers use to establish contractual offers of compensation and accumulate and disseminate information to enable appraisals. A MLS's database and software is used by brokers in real estate, representing sellers under a listing contract to widely share information about properties with other brokers who may represent potential buyers or wish to work with a seller's broker in finding a buyer for the property. The listing data stored in a MLS's database is the proprietary information of the broker who has obtained a listing agreement with a property's seller. Mr. Shan added, “There has to be authenticity of a property before it’s listed in the MLS. We do proper checks of the deed and an evaluation of the property. In terms of transparency all details of the properties must be disclosed to the clients.” Last week RE/MAX Sri Lanka held its annual convention and awards to top brokers and agents at the Shangri-La Hotel in Colombo. During the event Mr. Shan mentioned, “Being ethical, transparent and professional is the key to the success of any business.” RE/MAX World Headquarters USA Vice President of Global Development, Shawna Gilbert who was the Chief Guest at the annual convention stated, “With Sri Lanka standing on the cusp of a new era, RE/MAX will undeniably add immense value to the burgeoning real estate industry. “We have had immense success in Asia Pacific countries because we identified this region as one of the most promising, expanding our footprint aggressively to make sure that our range of unparalleled services become available to this part of the world. This is why we are here in Sri Lanka, as we observe the strategic path of development being mapped out by the country and the role Sri Lanka will play in the future progress of this entire region,” she noted.http://www.sundaytimes.lk/180520/business-times/swadeshi-awarded-iso-90012015-certification-287162.html23 March 2018 @ 8:16 pmThe Swadeshi Industrial Works PLC, Sri Lanka’s leading herbal-based personal care products company, has received the prestigious ISO 9001:2015 International Quality Management Certificate from the Sri Lanka Standard Institute (SLSI). The company, which manufactures and markets an extensive range of personal care, baby care and laundry care products led by its flagship brands ‘Khomba’ and ‘Rani Sandalwood’ said in a media release that this certification covers the quality management systems pertaining to the production of all personal care products, baby care products and laundry care products in the company’s portfolio. Commenting on this important milestone in Swadeshi’s 77 year history, the company’s spokesperson said: “The trust and confidence enjoyed by Swadeshi products over seven decades will be reinforced by the ISO 9001:2015 certification. This acknowledges an unwavering commitment to quality that has made Swadeshi a household name in Sri Lanka”. The ISO 9001:2015 system certification was awarded to Swadeshi based on important key elements known as the “quality management principles”, which include leadership in achieving quality objectives, involvement of people in the quality management system, the process approach and continual improvements in manufacturing, fact-based decision making, mutually beneficial supplier relationships and most importantly customer satisfaction and focusing on customer needs. These principles ensure the path to a final quality product, a company spokesperson said. She said the quality of all raw materials, packaging materials and all processing steps are closely monitored by the Quality Assurance Department of the company, to ensure that quality is maintained throughout the production process to attain the final objective of delivering a quality product to the customer. Established in 1941, The Swadeshi Industrials Works Ltd, was the first company to manufacture soap in the country. A strong focus on innovation, research and development has endowed the company with many firsts the first herbal beauty soap, first sandalwood based soap, first herbal baby care range, first herbal shower gel range, first kids personal care range and first mosquito repellent with a best herbal mix.http://www.sundaytimes.lk/180520/business-times/vehicle-importers-motor-show-to-offer-big-deals-291709.html27 April 2018 @ 8:22 pmThe LB Big Wheels Motor Show, is set to take place on May 18 to 20 from 10 am to 10 pm at the Nelum Pokuna-Colombo 7. The inaugural LB Big Wheels Motor Show is organised by the Vehicle Importers Association of Sri Lanka (VIASL), the leading voice representing the brand-new and reconditioned automobile importers in Sri Lanka and powered by LB Finance, VIASL said issuing a media release. It will showcase a diverse range of small cars, luxury sedans, all sizes of SUVs, powerful jeeps and even super cars, it added. The show will include over 35 stalls and a total of over 200 brand new and reconditioned vehicles including hybrid and electric models, a spokesman of the association said adding that all the leading makes and models from Europe, Japan, Thailand and Australia will be displayed at the event. A broad selection of some of the finest classic cars in the island that are always a hit with automobile enthusiasts will also be made available. Ranjan Peiris - President of VIASL stated, “The association was formed almost 35 years ago with the objective of becoming the leading voice representing the brand-new and reconditioned automobile importers in Sri Lanka”. LB Finance will assist prospective buyers to purchase their vehicle by taking advantage of the special offers and deals available at the show, he revealed. The association comprises a wide-reaching membership of 132 vehicle importers of the country.http://www.sundaytimes.lk/180520/business-times/lakdanavi-wins-kerawalapitiya-300mw-lng-power-plant-tender-290161.html20 April 2018 @ 8:34 pmAfter a string of bureaucratic hullabaloo in tender procedure, the much delayed Kerawalapitiya 300MW Liquified Natural Gas (LNG) power plant bid was recently awarded to Lakdanavi Ltd, the largest independent power producer in the country, a top bureaucrat divulged. The 18 month impasse in selecting a suitable bidder to build the 300MW Kerewalapitiya LNG Power Plant has ended marking a significant step forward for a new era of LNG power in Sri Lanka, Secretary to the Ministry of Power and Renewable Energy Dr. Suren Batagoda said. Lakdanavi Ltd, a power plant construction and operation subsidiary of LTL Holdings (Pvt) Ltd, which is a subsidiary of the state-owned Ceylon Electricity Board (CEB), placed the lowest bid, he told the Business Times. Proposals for this 20 year Build, Own, Operate and Transfer (BOOT) project were opened in April 2017 and it took almost one year to fast track the project due to tender irregularities and political pressure, a senior member of the CEB engineers union said. The delay has caused a loss of over Rs. 18 billion, he said adding that plans to build the power plant were suspended after detecting certain irregularities in the tender procedure to select the company to construct the plant. The awarding of the tender had dragged on further owing to certain disagreements in opening the financial bid of Samsung JV Korea Group without considering bids of seven other firms. The Standing Cabinet Approved Procurement Committee (SCAPC) had opened tenders that pass the technical evaluation of the Tender Evaluation Committee(TEC), in order to ensure transparency in procurement. In another development, Petronet LNG Ltd, India's biggest importer of gas, and its Japanese partners have completed a feasibility study for the proposed Liquefied Natural Gas (LNG) Terminal and the Floating Storage Regasification Unit (FSRU), Dr. Batagoda said. Sri Lanka has signed a tripartite MoU with India and Japan to conduct this feasibility study with the approval of the cabinet. The Cabinet of Ministers has also authorised Sri Lanka Gas Terminal Ltd to enter into agreements with the Indian and Japanese partners to establish the proposed pubic private partnership. Sri Lanka Gas Terminal Ltd will hold a 15 per cent stake in this joint venture while 47.5 per cent of the stake will be with the India’s Petronet LNG Ltd. Some 37.5 per cent shareholding of this venture will be jointly vested in Japan’s Sojitz Corporation and Mitsubishi. The LNG terminal is to be located within the Colombo Port and pipelines from the port will transport the gas to two dual-fuel power plants in Kerawalapitiya expected to be completed around 2021. Petronet LNG Ltd. will finalise negotiations with Sri Lankan authorities to build the country’s first liquified natural gas terminal project in Colombo and expects to receive commercial clearance by August this year. The project capacity of the floating LNG receipt facility off the island's western coast, is 2.6-2.7 million tonnes per year and would cost around US $350 million.http://www.sundaytimes.lk/180520/business-times/idea-groups-i-roof-product-secures-export-markets-287160.html23 March 2018 @ 8:15 pmIdea Group of Companies, that offered local consumers the revolutionary roofing product i-Roof, has ventured into the export market by exporting its first i-Roof consignment to India. Goods shipped in February this year were ordered by a leading construction company in Bangalore, Idea Group said in a media release. i-Roof will be exported to many other countries within the next few months. Orders have been already secured from Ghana, Malawi, Madagascar and Egypt. i-Roof produced with the payoff-line “Roof with best benefits” is the only ASA polymer roofing tile produced in Sri Lanka with the ISO 9001:2015 international standard certification, the company added. “The green product i-Roof doesn’t contain Lead (Pb) or asbestos in its composition and is considered the best solution for Sri Lankan roofing requirements. In estimates made by building constructers on fixing the roof, i-Roof contributes to the lowest cost per square foot that include; fixing the frame, using heat resisters and fixture of thatching sheets. When estimates are made on roofing tiles, Aluminum sheets (regular shape) and Aluminum sheets (tile shape) for roofing requirements, the cost is much higher,” the release added. Sampath Mayakaduwa, CEO/Managing Director, Idea Group Ltd said that while securing the export market was a positive development, i-Roof is also a ground breaking product. “We used the latest technology in the world and the best raw materials to produce i-Roof product. After securing the largest market share in the country we aimed at entering the export market and participated in few trade exhibitions in the world including ‘Big 5’ a leading trade exhibition in Dubai. At those exhibitions, leading construction companies in the world got attracted to the i-Roof product. The supremacy of our product resulted in exporting the first i-Roof consignment to India. We will soon export our roofing products to many more countries,” he said. Since i-Roof has four layers, it gives coolness to homes. The outer layer is made with ASA (Acrylonitrile Styrene Acrylate) that offers heavy resistance to sunlight. Hence i-Roof rids houses of heat and saves the cost for heat resistant gear needed by other thatching sheets. i-Roof maintains its colour too. Idea is a leading diversified company in Sri Lanka, active in construction, hotels and IT.http://www.sundaytimes.lk/180520/business-times/micro-promotes-small-mg-utility-cars-in-sri-lanka-291706.html27 April 2018 @ 8:21 pmMG, the famous British car brand now owned by the Chinese, is all set to popularise its new compact semi luxury car with modern specifications in partnership with Micro Cars Pvt Ltd through its subsidiary, Euro Sports Auto Lanka Ltd as the island wide distributor, Micro officials said. [caption id="attachment_291707" align="alignright" width="400" caption="File picture of an old MG racing car."][/caption] Previously Unimo Enterprises Ltd., a fully owned subsidiary of United Motors Lanka PLC, took Sri Lankans down memory lane with the launch of MG6, designed and engineered in Britain but made in China. This was the first all-new MG to be launched in Sri Lanka in 16 years in 2014 and also the 21st century incarnation of a 90 year old brand that was once a byword for open topped and carefree speed about British sports cars. The history of MG has been colourful enough to merit attention since its inception in 1924. Their cars had the speed and power for racing and until now, haven’t lost any of their appeal, a top official of United Motors said. But the company had to stop the importation of MG6 a couple of years ago due to heavy taxes and the chapter of the return of MG ended abruptly, he added. Micro has stepped in to re-introduce MG semi luxury cars in the island in partnership with SAIC - Shanghai Automotive Industry Corporation, the Chinese owner of the MG brand. The first model to debut in Sri Lanka was not the familiar sports or racing car models but as the new MG ZS Compact SUV with modern specs ideal to suit the needs of local consumers, Micro officials said adding that the first batch of MG SUVs was delivered to the respective customers. The ZS, directly imported to Sri Lanka is manufactured in China for UK, European and Australian markets and is the “Exclusive” version, which offers the highest spec of its range, one official said. The new MG compact SUV is powered by a hgh-powered turbocharged engine, with six-speed automatic gearbox, he added. MG was the latest brand to come under the line-up of brands catered by Micro Cars, having already secured luxury car brands such as Lamborghini, Alfa Romeo and Maserati as well as the mid-market brands such as SsangYong, BAIC and Geely, he disclosed.http://www.sundaytimes.lk/180520/business-times/unions-go-ahead-with-may-1-rallies-ignoring-official-may-7-change-in-date-290158.html20 April 2018 @ 8:33 pmLankan trade unions are to ignore a Government decision to change May Day, saying they will go ahead with May 1 rallies and processions – bracing for a possible confrontation on the streets with the authorities. The Government has declared May 7 as the May Day holiday instead of May 1 Tuesday, which is the traditional International Workers Day, since the normal date clashes with the Vesak celebrations. However an umbrella group of trade unions on Thursday said in a public statement: “… we as trade unions will proceed to hold our joint May Day rally as usual on May 1 whatever hurdles there could be. We therefore call upon all organisations, groups and individuals who stand for human, democratic and worker rights to join hands with us, this May Day.” The group comprised 14 unions - Ceylon Bank Employees Union, Ceylon Mercantile Industrial & General Workers Union, Free Trade Zones & General Services Employees Union, Ceylon Estate Staff Union, Union of Postal and Telecommunication Officers, United Federation of Labour, Ceylon Teachers Union, Insurance Employees Union, Women Workers Solidarity Union, Commercial & Industrial Workers Union, All Employees Union of Information Telecommunication, Telecommunication Engineering Diplomat's Association, Federation of Media Employees Trade Union and Government United Federation of Labour. "We strongly protest the decision of this “good governance” unity government that has not only postponed the international workers’ day on May 01st that in Sri Lanka is a workers’ right to celebrate, but also its attempts at disrupting any workers’ celebrations on May Day." The statement said that it was in 1956 that May Day was declared a holiday in Sri Lanka for public, bank and the mercantile sectors. “After 62 years this government has declared May Day a working day by issuing a gazette notification that has created confusion even among the top bureaucracy. Government has on a unilateral decision, declared May 7 as the alternate day for May Day celebrations. The government did not even consider it worth discussing the issue of postponing May Day in the National Labour Advisory Council (NLAC) before it decided on the postponement,” it said. Following the change in the date for May Day celebrations, the major partner of this government, the United National Party which now controls the Colombo Municipal Council has refused permission for May Day rallies to be held in public parks on May 1, the statement said, adding: “The government has thus achieved an indirect ban on all May Day celebrations in Colombo”. “It is our experience now, this government that gives into wheeler dealer interests is openly and seriously into curbing worker and democratic rights. All these including the postponement of the May Day and refusing permission to hold May Day rallies in public parks, fall in line with the appointment of a businessman who was brought into parliament on the UNP national list, being appointed as acting minister of Labour and Labour Relations. We therefore forewarn, these developments would leave all promises and guarantees given by this government to the EU in regaining GSP + as benefits and advantages to the businessmen and not to the people and the workers of Sri Lanka,” it said.http://www.sundaytimes.lk/180520/business-times/bankers-in-limbo-on-debt-repayment-levy-287158.html23 March 2018 @ 8:14 pmCommercial banks haven't still received clear directions on the tax on transactions proposed in the last budget, despite their official communication to the Treasury through the Sri Lanka Bankers' Association (SLBA) more than five months ago, officials say. The budget proposed a 0.02 per cent tax (this is down from 0.05 per cent 2016 when it was first proposed) on banking transactions. This tax has to be borne by the banks, not customers. In 2016, Rs. 106 trillion was recorded as transactions and the Treasury slapped this on banking transactions expecting to earn a large amount through this tax called the "Debt Repayment Levy". It's a temporary tax that was enacted for the three years to generate cash for government's debt repayment and will yield Rs. 20 billion. Some analysts said high networth investors are starting to sell banking sector shares during the past month on account of expectations that the sector will be temporarily hit with taxes. Apart from the debt repayment, a withholding tax of 2 per cent on savings account is also to be applied. "We want clarity on this as well,” a banker told the Business Times noting it's not clear if this tax is charged on senior citizens’ savings accounts as well. An analyst told the Business Times that compared to this year, in 2017 many were 'clearer' on where the economy was heading. With the loose monetary policy of last year, many got into banking shares, but this trend has been waning since the start of this year. Others say this trend won’t hold as this sector is slated to perform well. They also said that mostly HNB shares were sold by three Harry Jayawardena controlled companies in January and February this year. They disposed 11.343 million (2.89 per cent) of the 18.35 million unregistered shares (4.6 per cent) of HNB during the past two months.http://www.sundaytimes.lk/180520/business-times/united-motors-lanka-plc-launches-after-sales-mobile-app-291703.html27 April 2018 @ 8:20 pmUnited Motors Lanka PLC, in another pioneering venture, recently launched the first after sales mobile application for the vehicle industry in Sri Lanka. In an attempt to further engage with its customers this mobile app will enable customers to reserve appointments for servicing and mechanical repairs, call in for 24/7 breakdown assistance, order spare parts and reach the United Motors network at their convenience, a spokesperson for the company disclosed. The app was developed keeping in mind the needs of different vehicle owners and with maximum accessibility and convenience, he added. The mobile app which is available currently for all Android and iOS users has a secure login designated for each user. Once users have created a new account, basic details and vehicle specifications need to be added. Thereafter using any of the features is as simple as it gets. Connected to Google maps, the app immediately identifies the user’s location and links it with nearest service station. In the event of a collision, the app takes customer convenience a step further with a one-touch dial to any insurance company. It also has the ability to upload images of the damage and send it directly to the insurance company. The spare parts module of the app allows users to purchase a range of genuine parts or check stock availability and place orders. A comprehensive branch network directory will allow users to access the nearest branch with ease. The app also keeps a detailed history of bookings, services and purchases for easy reference. Making the app truly versatile, an inbuilt search engine also allows users to locate the nearest ATM, hospital, gas station or police station. Users can also get technical advice from motor experts and share their views and concerns on the app’s user forum. The app also provides up-to-date information on all the latest promotions and offers. To download the app, visit the App Store or Google Play Store and type “United Motors PLC”.http://www.sundaytimes.lk/180520/business-times/cb-cautions-against-the-use-of-virtual-currencies-in-sri-lanka-290155.html20 April 2018 @ 8:32 pmSri Lanka’s Central Bank (CB) this week alerted the public to the dangers of dabbling in cryptocurrencies which it said “may pose significant risks in terms of financial, operational, legal, customer protection and security related risks to their users as well as to the economy”. In a public announcement on Monday, the CB – wading into these ‘new currencies’ long after it has been in ‘circulation’ – said that it has not given a licence or authorisation to any entity or company to operate schemes involving virtual currencies, including cryptocurrencies, and has not authorised any Initial Coin Offerings (ICOs). The statement, which opens saying “the CB is aware of the growing interest in virtual currencies (VCs), both domestically and internationally”, noted that the term “virtual currencies” is commonly used to refer to digitally created representations of value that are issued by private developers and denominated in their own unit of account. The statement added: “Common examples of virtual currencies are cryptocurrencies such as Bitcoin, Litecoin and Ethereum. Virtual currencies are not central bank issued currency. Virtual currencies such as cryptocurrencies use decentralised peer-to-peer digital networks to authorise transactions. Due to the absence of a centralized authority such as a Central Bank to guarantee the value of the currency and regulate transactions, there is no recourse in the event of any user or transaction related issues or disputes. The value of virtual currencies is dependent on speculation and is not backed by an underlying asset or a regulatory framework. Due to this, virtual currencies may demonstrate major volatility. Similarly, there appears to be a high probability of virtual currencies being used in illegal activities. Further, though unintentional, their usage could amount to breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws.”http://www.sundaytimes.lk/180520/business-times/economic-elephant-now-in-sri-lankas-room-cb-governor-287156.html23 March 2018 @ 8:12 pm“The economic elephant in the room is the situation of the country and it should not deviate from the present consolidation process despite any political challenges for progress and growth,” Central Bank (CB) Governor Dr. Indrajit Coomaraswamy said in Colombo on Tuesday. Inaugurating the development process for Sri Lanka’s National Financial Inclusion Strategy (NFIS), he noted that no country has achieved economic development without political stability. The restoration of political stability is of paramount importance and it is particularly important at this juncture, he emphasised. Dr. Coomaraswamy revealed that “the country was beginning to see some progress in the economy in a positive direction towards improving macroeconomic fundamentals and putting in place a framework that could give the country sustained growth”. He pointed out that the inflation has come down to 4 to 5 per cent and the external stability of the economy is on the verge of strengthening with foreign reserves increasing to US$8 billion at the end of last year from $6 billion in 2016. Macroeconomic stability is in the right direction and the framework for sustainable growth is now in place, he disclosed. Financial inclusion refers to access to an appropriate range of financial services at a reasonable cost provided by a number of responsible and sustainable financial institutions. According to the CB, the NFIS is scheduled to come into effect in the mid part of next year and main focus will be on digital finance including the National Payment Platform (NPP). Sri Lanka is joining more than 60 countries in the world that have launched or are in the process of developing national financial inclusion strategies. Dr. Coomaraswamy said that Sri Lanka has already made considerable progress in financial inclusion as there is high level of physical access to financial institutions in the country with bank branch density currently standing at 18.6 branches for every 100,000 adults. Further, around 83 per cent of the adult population in the country has accounts with formal financial institutions and more importantly the same percentage of women also has accounts at formal financial institutions. He pointed out that despite the relatively better financial inclusion compared to its regional countries Sri Lanka faces several blockages in achieving greater financial inclusion. “For successful implementation of this process high level political commitment is essential,” he said. IFC Country Manager for Sri Lanka and the Maldives Amena Arif disclosed that Sri Lanka has performed better in financial inclusion compared to the other countries in the South Asian region. She pointed out that Sri Lanka needs a financial inclusion strategy that is both accessible and responsive to the need of the population to achieve growth. “A strong and inclusive financial sector is crucial simply because without such sector no sustainable economic development is possible,” she said.http://www.sundaytimes.lk/180520/business-times/cpn-meeting-in-colombo-291698.html27 April 2018 @ 8:18 pm Prime Minister Ranil Wickremesinghe was the chief guest at the final session of the 22nd annual global conference of Cargo Partners Network (CPN) held at the Shangri La Colombo on Thursday. Seen here the PM being greeted on arrival..http://www.sundaytimes.lk/180520/business-times/public-unhappy-over-performance-of-state-enterprises-290153.html20 April 2018 @ 8:31 pmA survey conducted by the World Bank and other counterparts have found that many Sri Lankans are not happy about the performance of state enterprises due to issues of political interference and has stressed the need for better governance. Revealing this data, Idah Pswarayi-Riddihough, World Bank's Country Director for Sri Lanka and Maldives, said that many state-owned enterprises had reported significant and persistent losses over the years which had caused social problems. She was speaking at the recent launch of the "Handbook on Good Governance for Chairmen and Board of Directors of Public Enterprises" held at the Institute of Chartered Accountants of Sri Lanka in Colombo. From 2012- 2015, the net transfers from the state to public enterprises amounted to Rs.460 billion more than what was estimated in the budget. Referring to a study done on 70 countries in 2007, she said it indicated that countries with higher quality institutions experienced a higher growth and low corruption. It further estimated that countries moving towards high quality institutions had a growth rate of 26 per cent in the short term and 40 per cent in the long term. “Those are not small numbers,” she added. Referring to a World Bank report, she said it was intangible capital that makes the difference. Intangible capital is composed of human capital, natural capital, institutional capital and social capital that is very relevant to Sri Lanka in strengthening the governance framework. The recently approved Right to Information and Audit Acts create a conducive environment to improve transparency and accountability and good governance in the public sector and state enterprises. She said public sector enterprises in Sri Lanka represent a major part of the state institutions and their governance matters greatly. Around 400 small and medium enterprises (SME) that operate in Sri Lanka play a major key role in the country’s economy by providing infrastructure and service facilities. She said that good governance requires credible institutions that are built on principles of transparency and accountability to end poverty and to share prosperity. “While many of us are not government specialists we can relate to the impact of good and bad governance where the recommendation of this hand book should be implemented. It is the citizen’s right and duty to demand good governance,” she said. Parliamentary Speaker Karu Jayasuriya, Chief Guest at the event, said that enormous losses of public corporations can be stopped or minimised to a certain degree as expressed by the World Bank Country Director. These loss-making institutions are making the country’s economy to bleed and that had gone on for a long time. The present government had taken measures to uphold the rule of law, accountability and good governance and transparency in managing the public sector. He said the creations of independent commissions under the 19th amendment such as the Right to Information Act and the proposed Audit Act and the Public Finance Act will soon become a reality. Since 2015 several far reaching steps have been taken to strengthen the supervision of the public boards. The opposition political parties have been given a chance to participate in the COPE committee. The Auditor General too had been vested with powers to eradicate corruption in the public sector. President of the Institute of Chartered Accountants of Sri Lanka Jagath Perera also spoke. Chairman National Human Resources Development Dinesh Weerakkody participated in the panel discussions.http://www.sundaytimes.lk/180520/business-times/unimos-bezza-most-affordable-sedan-in-sri-lanka-287153.html23 March 2018 @ 8:10 pmMalaysia's first Energy Efficient Vehicle (EEV) 'Perodua Bezza' has become one of the best-selling brand new sedans in Sri Lanka in a short period of time, a media release issued by United Enterprises Ltd (UEL), a fully-owned subsidiary of United Motors Lanka PLC, revealed. This was due to its all options and most importantly the price factor of an all-inclusive price of Rs. 3.6 million, it said. Bezza is equipped with a 1000cc VVTI engine coupled to a four-speed automatic electronically controlled transmission providing ample power for quick acceleration and effortless pulling. Its safety features including the dual airbags, Anti-Lock Braking System (ABS) and Electronic Brake Force Distribution (EBD) system have won it New Car Assessment Programme (NCAP)'s four star safety rating, media release highlighted. The NCAP is an independent body which assesses driver, passenger and pedestrian safety standards of vehicles in the event of an accident.http://www.sundaytimes.lk/180520/business-times/cnn-media-blitz-to-get-3-increase-in-footfalls-2-291694.html27 April 2018 @ 8:17 pmMy attention was drawn to a newspaper article published in the Business Times last week under the above headline where the current managing director of Sri Lanka Tourism Promotion Bureau has said that “No campaign had been carried out during the last four years”. I would like to draw your attention further that, as claimed in the newspaper article the period should have been stated by the managing director as three years, starting from 2015 not 2014 as the current year (2018) could not be counted as we are in the early part of the year. There were many international destination promotional campaigns in progress till January 2015, when I relinquished office as Managing Director. Some of the mega global marketing campaigns in 2014 were: 1) UK - 300 taxis’ branding campaigns in London, Manchester and Birmingham cities and outdoor advertising (OOH) 25 numbers in underground tube stations in London. 2) CHINA - 200 buses branding campaign in four cities namely Beijing, Shanghai, Guangzhou and Chengdu; Beijing - mega outdoor events such as Sri Lanka Tourism forum, Sri Lanka Trade Forum, Shopping mall activation and Sri Lanka night with gala dinner; Shanghai - mega outdoor events such as Sri Lanka Tourism forum, Sri Lanka Trade Forum; and Shopping mall activation and Sri Lanka night with gala dinner – Shanghai. 3) German – 300 taxis’ branding campaign in Berlin, Hamburg, Munich and Frankfurt; 100 buses branding campaign in Berlin and Frankfurt. 4) France - 100 Taxis branding campaign in Paris; 100 buses branding campaigns in Paris. Global television advertising campaigns: Sri Lanka Tourism Promotion Bureau carried out TV advertising campaigns on CNN, Bloomberg, Al – Jazeera (Arabic and English) channels, Sky News (UK) and Sky Sports. The former Minister of Economic Development Basil Rajapaksa presented a cabinet memorandum, bearing number 14/0174/519/002 dated 2014-02-03 to the Cabinet of ministers titled ‘Simulation of Tourism Development through a comprehensive Global Mega Promotional Campaign’. The Cabinet of ministers approved the same of US $ 15 million for year 2014/2015 for the promotion of Sri Lanka as a tourist destination. Apart from the few above stated international destination promotional campaigns such as many road shows, consumer awareness campaigns, print media advertising, digital advertising on many digital platforms such as CNN, Al- Jazeera, BBC, Sky news and Bloomberg were carried out. Rumy Jauffer Former MD, Sri Lanka Tourism Promotion Bureauhttp://www.sundaytimes.lk/180520/business-times/cse-struggles-amidst-low-turnover-net-foreign-outflow-290151.html20 April 2018 @ 8:30 pmThe Colombo Stock Exchange (CSE) on Monday recorded its lowest turnover in over four years amidst a three week foreign outflow with investor sentiment at its lowest ebb. "It's the lowest turnover at Rs. 101 million since the last crash in December 2012,” an analyst noted to the Business Times. On Tuesday the turnover recovered to Rs. 315 million – still not as high. The low turnover is mainly owing to many reasons - mostly policy decisions, analysts say. There's acute political uncertainty in the country that has hampered sentiment all around. Then Parliament being prorogued (which is not an unusual protocol but post the no confidence motion the media had highlighted it in a negative light, according to some analysts) was the last of many blows to investor sentiment. Also the IMF reform agenda that was to be approved by the Cabinet by March 31 hadn't happened and their implementation by June 30 won’t see the light of day. Another analyst added that the fuel pricing formula needs to come as the market has already factored in and forecasted fuel to increase in price. "It has to increase by at least Rs. 10,” he added. The only silver lining seems to be the Rs. 2.5 billion sovereign bond which is already boosting a bit of sentiment at the CSE. "Already we're seeing some positivity and it's a good sign," the first analyst said. The Central Bank’s (CB) estimate that Gross Domestic Product (GDP) growth is likely to increase over the next few quarters to reach 5 per cent - 5.75 per cent for 2018. Analysts say that CB also expects inflation to decelerate in the year ahead, to 4 per cent - 6 per cent as food supplies stabilise. Another spell of adverse climatic conditions in 2018 and a sharper than expected depreciation of the Rupee could however, reverse this trend and exert pressure on inflation again, they say. The second analyst said by Tuesday there was net foreign buying for April so far at Rs. 1.2 billion.http://www.sundaytimes.lk/180520/business-times/new-national-transport-policy-aims-to-improve-public-transport-287150.html23 March 2018 @ 8:08 pmSri Lanka will give high priority to improve quality and reliability of public transport services through the introduction of the newly, revised National Transport Policy. The new policy devised by the National Transport Commission is aimed at promoting public transport systems that are safe, comfortable and can provide reliable service, Transport Ministry sources said. It will also give priority to services that will increase the public transport mode share by users shifting from private vehicles. A directive will be issued to expand the public transport network and increase frequency of services with possible integration of different public transport systems. The new policy will be presented to the cabinet for its approval soon, a high ranking official of the Ministry disclosed. Recognising the role of a para-transit service and providing last mile connectivity, the new policy facilitates para-transit service providers to deliver services to less demand areas and last mile connectivity with the help of ICT tools. Measures will be taken to incorporate ICT technologies for transport operations, communication and information gathering and dissemination wherever possible, he said revealing that transport related database will be developed and maintained with the participation of all stakeholders. According to the national transport policy, a directive will be issued to promote the use of energy efficient and less polluting vehicles with higher operation life and consider energy efficiency for the entire public transport service. It has been suggested to reduce transportation cost and travel time through better traffic and demand management mechanisms with the coordination of all stakeholders. A comprehensive up-to-date accident database with possible details on accident black spots, injury types and costs of damages will be established in accordance with the directives of the new policy. It has suggested to maximise the private sector investments and public-private partnerships in transport systems development and service delivery. Monitor emission levels from individual vehicles, promote renewable energy for transport, evaluate contribution to emission levels and fuel efficiencies in all transport interventions, ensure adequate and effective enforcement of traffic rules for better compliance to laws and regulations were among the directives included in the new policy. Vehicles should be easily accessible to all users irrespective of age, gender or ability and fares should be attractive and affordable, the new policy document revealed.http://www.sundaytimes.lk/180520/business-times/gem-export-industry-in-the-doldrums-falling-apart-291692.html27 April 2018 @ 8:15 pmSri Lanka’s Gem and Jewellery industry is falling apart, accusing the government of neglect, not properly fostering the sector and removing a key tax concession in recent tax developments. Industry officials, referring to these issues at a media briefing last week, said exports were in jeopardy due to the current practices and policies of the National Gem and Jewellery Authority (NGJA). Since 1979 the industry had a tax exemption on direct exports and foreign currency sales, but this tax exemption facility has been withdrawn in the new Inland Revenue Act. To explain the impending crisis to the industry which could likely result in a halt in gem mining in Sri Lanka, the media briefing was called jointly by the Sri Lanka Gem and Jewellery Association, the Lanka Gem Dealers and Miners Association and China Fort Gem and Jewellery Traders Association, Beruwela, Ratnapura in Colombo. This was after the associations held a hurried emergency meeting. Associated at the briefing were A.H. M Imtizam, Chairman, Sri Lanka Gem and Jewellery Association; Punsiri Tennakoon, Chairman, Lanka Gem Dealers and Miners Association, Ratnapura and Akbar Cassim, Chairman, The China Fort Gem and Jewellery Traders Association, Beruwela. They said that it is estimated that about 70 per cent of the gemstones exported out of Sri Lanka are in fact imported gemstones and due to the negative tax effect these supplies from overseas are falling significantly and the country’s exporters find it difficult to secure necessary supplies to do their businesses. They noted that though the NGJA was established to facilitate the development of exports, the current practices and policies of the NGJA are in fact one of the biggest impediments to the development of exports. Due to these reasons the country’s export targets have significantly dropped to US$300 million whereas the annual export of a country like Hong Kong stands at $27 billion which does not mine a single gem stone and Thailand’s export was $13 billion. The NGJA levies a percentage charge on the value of exports with the original intention being to utilise these funds to promote the industry. However the Authority is increasingly withdrawing the funds for promotional activities and using them to fund their expenses, the officials said. They said the NGJA has sharply increased export charges. Earlier the tax was 0.5 per cent of export value and yet they stressed that the Authority always put exporters into lot undue difficulties and pressure, when the industry is trying to establish the value of gem stones. As of today the authorities have made the situation much more worse by increasing the gem licensing fee which used to be Rs. 35,000 and now increased to Rs. 500,000. Officials categorically stated that today the biggest bottle neck for the development of exports revenue from this industry is the NGJA and urged that the export process of this industry be fully liberalised in line with other industries of the country, through customs and urged to done away export- negative procedures. They said this industry has the potential to export $1 billion compared to $ 250 million if the right policies are in place.http://www.sundaytimes.lk/180520/business-times/bates-strategic-alliances-festival-of-our-future-draws-high-praise-290148.html20 April 2018 @ 8:29 pmBates Strategic Alliance, the pioneer in Integrated Marketing Communications and Public Relations, celebrated its 25th anniversary recently in Colombo with a well-curated ‘Festival of Our Future’ which explored vital issues and future trends in four critical areas – brands, communications, environment and society. [caption id="attachment_290149" align="alignleft" width="400" caption="At one of the panel discussions"][/caption] The Thought Leadership Sessions which featured all of 32 eminent local and overseas speakers and two national leaders in a single day drew high praise from the invitee audience and the participating speakers, the company said in a media release. The morning sessions on ‘The Future of Brands’ and ‘The Future of Communications’ explored the changes in technology, society and the operating environment and the implications for brands and communications of the future. Bates Chairman & CEO Nimal Gunewardena inducted the festival and introduced the first session on Future Brands. Dr. Ravi Fernando and Yasangi Randeni highlighted the criticality and experiences in embedding sustainability in the company. Researcher Roshani Fernando spoke on the “Higher Purpose” that brands should embrace beyond its commercial goals. Good Market Co-Founder Dr. Amanda Kiessel spoke on building an economy of brands that are good for people and good to the planet. Selyna Peiris spoke of driving social entrepreneurship to the level of a social movement. Designer Lee Bazalgette spoke of the essential elements of good product design. Virtusa’s Madu Ratnayake spoke of enhancing “Customer Experience” using the tools of the digital technology. Dr. Rohantha Athukorala spoke on how Sri Lanka could appeal to the “New Age Traveller”, the release said. In the Communications session, Stax MD Kumudu Gunsekara laid the foundation with the “Digital Transformation” context of today’s businesses and communications. India’s top voice on LinkedIn Prabhakar Mundkur outlined the trends in future brand communications and was followed by Google’s Prashanthan Balakrishnan who showed the way to communicating through today’s “Digital” ad platforms. PR expert Nimal Gunewardena spoke on the challenges and route to ‘Managing Reputation in the Digital Era’. Kantar Head Himalee Madurasinghe shared lots of statistics on how media is trending into the future. In the final act for the morning, Brandmusiq India’s Rajeev Raja used his flute to enthrall the audience by demonstrating how music could be used for auditory branding with the creation of mogos and soundcapes. The afternoon sessions explored the environmental and social challenges to our collective future. Environmentalist Vidhura Ralapanawe led the charge outlining the challenges of climate change and environmental sustainability. Environmental Architect Sunela Jayawardene followed with ‘Redefining Development’ in this context while a core member of the Rainforest Protectors Damith Sudantha spoke passionately on his hands-on Reforestation experiences and Anoka Abeyratne spoke of hers in motivating today’s youth in this cause. The subject of Waste Management was tackled by Chinthaka Abyesekara while Uchita de Zoysa spoke of driving the SDGs through inclusive transformation. A look at rectifying socio-political challenges kicked-off with Tilak Dissnayake proposing ‘An Alternative to Governance by Politicians’ while Prof. Rohan Samarajiva scoured the emerging battleground of social media in the context of politics and the nation’s democracy. ONUR’s Mohamed Hisham spoke on their work in forging national unity and reconciliation through communications and grassroots activities. Grassrooted Trust’s Sharanya Sekaram spoke on how men and women could combine in driving gender equality, social inclusivity and respect, while Women Empowered’s Senela Jayasuriya explored empowerment and feminism.http://www.sundaytimes.lk/180520/business-times/sri-lankas-multibillionaires-drive-super-luxury-vehicle-market-287145.html23 March 2018 @ 8:06 pmSri Lanka’s super luxury and luxury vehicle market is growing at present continuing the upsurge recorded a few years ago with high spending multibillionaires throwing money to import Lamborghinis, Ferraris, Porches, BMWs and Mercs. These super luxury cars have been bought by leading local billionaires, young businessmen and sons of politicians or sons of businessmen with high political connections outright or using leasing facilities obtained from major state-owned leasing companies, an independent survey conducted by motor traders revealed. Some of those Lamborghinis, Ferraris and Porches have been airlifted to Sri Lanka similar to Dubai style, a leading motor trader who wished to remain anonymous told the Business Times. The newly emerged high spending, young business class is wielding immense political clout and no one knows the exact nature of their business, a senior Treasury official told the Business Times. A few of them are big time business brokers and wheeler dealers; he said adding that these youth are playing with other people's money. The vehicle taxation formula introduced in the 2018 budget paves the way for super luxury vehicles to flow in with the removal of the ad-valorem rate, motor traders claim. The government has failed to understand the modern day automobile world and new trends in the trade worldwide and the present unexpected situation in the motor trade has arisen due to this reason, a frontline member of the Ceylon Motor Traders Association (CMTA) told the Business Times. Citing an example he noted that the comparison of a vehicle (apart from its options) is made taking into consideration the power factor (output) and the cost of production and not the cubic capacity of an engine. There is no basis in a taxation formula based on engine capacity, he added. At least five super cars including McLaren 570GT, Bentley Mulsanne, Ferrari 488 and two Lamborghinis, worth millions of rupees have been airlifted to Sri Lanka from Dubai airport, he disclosed adding that he received this information, on Wednesday. In December last year, multibillionaire Dhammika Perera brought down a Bentley Mulsanne Hallmark, worth around Rs. 160 million, inclusive of import duty. This super luxury car is the single, most expensive sedan in the world. [caption id="attachment_287148" align="alignright" width="400" caption="Porche Boxster 718"][/caption] A Lamborghini worth Rs. 110 million was imported by a businesswoman from Havelock Town in December last year. The custom duty was nearly Rs. 60 million. A yellow coloured Ferrari 488 Spider which is equipped with a full convertible Spider architecture was brought down by a leading businessman who is the owner of a chain of hotels in Negombo recently. According to local media reports, those were some of the recent imports of super luxury vehicles to Sri Lanka by leading business leaders. Such premium cars surged to 206 units in January this year a significant increase from December when volumes were a mere 53 units and 67 units 12 months ago, JB Securities said in their latest research report. Mercedes Benz accounted for 52 units in the new segment of which 37 are C Class mainly the C160 which has a 1.6L engine thus a duty of Rs. 6.4 million and 23 pre owned units of which 20 were C class. BMW posted a mere four units but in the pre owned segment there were 54 units registered – 3-series 24, 5-series 20 and 7-series 8 , the 7-series comes with a 2L hybrid engine thus the duty was Rs. 10 million significantly improving affordability. Audi recorded 54 units in the preowned segment, up by 31 A1 units and 18 A3 units which have 1L engines. Around 40 per cent of premium cars have a financing element to them, JB Securities revealed.http://www.sundaytimes.lk/180520/business-times/modern-update-to-david-ogilvys-advertising-bible-291689.html27 April 2018 @ 8:14 pmFor many people and for many years “Ogilvy on Advertising” was somewhat of a Bible on Advertising. It was, says author Miles Young former CEO and Chairman of Ogilvy Worldwide, a storming success and while it is still relevant “Ogilvy on Advertising in the digital age” launched readers in to 21st century. [caption id="attachment_291690" align="alignright" width="240" caption="Miles Young, currently Warden of New College Oxford University presenting his new book ‘Ogilvy on Advertising in the Digital Age’ to Irvin Weerackody Chairman of Ogilvy Group of Companies Sri Lanka, recently."][/caption] Ogilvy on Advertising is widely considered an industry classic. A must-read for anyone interested or pursuing a career in marketing and advertising. But for obvious reasons, not the least of which being the digital revolution, the emergence of social media, and the total fragmentation of media, plenty of the work discussed in the book feels outdated, according to Ogilvy’s Colombo office. Back then, you could make a TV commercial and reach 80 per cent of people an average of five times in three weeks, and that was it. No Amazon. No Facebook. No Google. Now 34 years later, former Ogilvy chairman and CEO Miles Young has written an updated version, aiming to apply the principles outlined in Ogilvy’s original to the modern era. He cautions those who think digital work and 2017 audiences require dismissing traditional advertising insights. “The world has changed dramatically, particularly in the last 15 years, and in a sense, some of the things David Ogilvy stood for came under slight attack,” says Young. “Not in a malicious way, but in a way that put his view of advertising on the defensive. That attack came from people who were strong partisans of digital, and some of it was justified and some wasn’t. The part that wasn’t was really to do with the view that digital replaces everything.”http://www.sundaytimes.lk/180520/business-times/four-shortlisted-to-handle-hilton-hyatt-sale-290146.html20 April 2018 @ 8:28 pmIn this story published last week, the first para should read as: “Four parties have been shortlisted by the Ministry of Public Enterprise and Kandy Development for the position of advisor to seek suitable investors for the sale of government stakes in the Hilton and Grand Hyatt hotels.” (Making clear that the four were shortlisted for the final selection, not selected as advisor)http://www.sundaytimes.lk/180520/business-times/vehicle-registrations-rebound-following-duty-cuts-287143.html23 March 2018 @ 8:02 pmSri Lanka’s vehicle registrations in January this year recorded a rebound compared to December 2017 specifically in the small car segment, motor cycles and heavy trucks following the duty cuts in the 2018 budget. In the car segment registrations in January there were 5,306 units significantly up from 3,394 units in December and 3,487 units, 12 months ago, JB Securities said in their latest research report. The brand-new segment recorded 840 units in the month up from 756 units the previous month but significantly down from 1,149 units, 12 months ago. The segment is dominated by small cars which account for 88 per cent of the total – Suzuki/Maruti accounted for 252 units of which 114 units were Wagon R imported by the agents. Toyota is showing steady growth with its Wigo model registering 55 units which is a 1L petrol engine small car that is manufactured in Indonesia and marketed locally for Rs. 3.4 million. Pre-owned cars accounted for 4,466 units in January which is a 24 month record up from 2,638 units in December and significantly up from 1,930 units, 12 months ago. Suzuki accounted for 2,777 units of which 1,883 were Wagon R followed by Toyota which accounted for 1,257 of which 760 units were 1L Vitz. Electric cars recorded 18 units in January up from 6 units in December but significantly down from 40 units 12 months ago. Nissan Leaf accounted for 16 units. SUVs accounted for 541 units in January up from 454 units in December and up from 434 units, 12 months ago. Toyota claimed market leadership recording 254 units lifted by 146 units of its CH-R model which is a 1.3L crossover followed by 64 2.7L Prado Jeeps. Hybrids accounted for 2,984 units in January up from 2,590 units in December and significantly up from 1,856, units 12 months ago. Motor cars accounted for 2,757 units in the month with Suzuki registering 2,250 units (Wagon R – 1,883) followed by Toyota with 230 units (Axio 108 units, Aquan 71 units). Vans recorded 829 units in January up from 673 units in December and 627 units, 12 months ago. Suzuki was the market leader accounting for 516. The 3-wheeler segment recorded 1,543 units in January up from 1,236 units in December but significantly down from 3,327 units, 12 months ago. Bajaj continued to enjoy dominance in the segment followed by TVS and Piaggio. Two-wheeler registrations recorded 31,596 units significantly up from 25,019 units in December and marginally up from 31,158 units, 12 months ago.http://www.sundaytimes.lk/180520/business-times/all-debt-payments-in-2018-will-be-honoured-cb-291687.html27 April 2018 @ 8:13 pmSri Lanka’s Central Bank (CB) has vigorously denied reports that it was short of cash to pay for huge debts this year. “The CB has observed media reports erroneously highlighting lack of funds to pay-off Treasury bonds before their date of maturity,” the banking regulator said in a media release on Wednesday. The reports were based on comments made by Opposition Parliamentarian Bandula Gunawardene at a media conference on Tuesday. The bank said that the coupon and maturity payments for Treasury bonds so far during 2018 amounted to Rs. 324,448 million as against Rs. 222,020 million raised by issuing Treasury bonds. It said the bank has an unblemished debt service payment record of the government in servicing both domestic and foreign debt. The payment of interest and principal at maturity on due dates (timely payment) and not before the due date is followed to the rule by CB in discharging its agency function of managing public debt on behalf of the government. The availability of funds to pay maturity (including the interest component) for Treasury bills and coupon and maturity for Treasury bonds in 2018 also highlights the substantial liquidity available with the government in servicing its debt liabilities, the release said. “The CB also clarifies that payments made to few beneficial owners with respect to interest and maturity payments of Treasury bills and Treasury bonds but held in an account of a primary dealer whose account is frozen due to legal proceedings would be released in due course with appropriate legal clearance,” it said, in a reference to the funds of controversial Perpetual Treasuries being frozen.http://www.sundaytimes.lk/180520/business-times/talented-moratuwa-university-students-need-support-for-international-competition-290144.html20 April 2018 @ 8:27 pmA group of engineering students at University of Moratuwa is on the verge of making Sri Lanka proud by being the first participants at a Formula Student Electric event and is seeking funds to make it a reality. Formula Student competitions are one of the most popular competitions among undergraduates all over the world. These competitions are held in countries all over the world while the major events taking place in the US, the UK, Germany, Japan, Austria and Brazil. The two major organisers of these events are Society of Automotive Engineers (SAE) and Institution of Mechanical Engineers (IMechE) and the participating universities are supposed to design and develop a single seat formula type race car to compete, according to a media release from Moratuwa University. The university team has been sponsored by several organisations so far. Brandix through financial assistance, MATLAB, a software company, through free license for design software and ITN as the official media sponsor. The team welcomes any industry or personal partners to help highlight Sri Lanka in an international arena and to bring out the engineering excellence of the country. Formula Student Germany is a prestigious international arena which began in 1981. For 2017 competition, more than 300 teams had registered with 102 teams for the Electric Vehicle category. The team from University of Moratuwa named FalconE Racing, named after the fastest animal, is building a car for the Electric Car category to compete at the Formula Student Germany in August 2018. Combustion engine event and Driverless cars are the other two categories to compete. So far in the competition, Team FalconE Racing has made a significant achievement by being placed second out of 102 teams in the Electric car category in the online quiz for selecting 40 teams to be participating at the event in Germany. The team became second only to Dresdone University, Germany. Team FalconE Racing consists of 20 students from 4th and 3rd year batches with 19 students from the Department of Mechanical Engineering and one from the Department of Electronics and Telecommunication Engineering. Team Leader of this project is Niranga Mayuran while Shehara Perera plays the role of the Chief Technical Officer. The guidance and advisory role of the academic staff members of the Mechanical Engineering Department is prominent in making this project a success. Prof. Ruwan Gopura as the Head of Department of Mechanical Engineering, Sasiranga De Silva as the Faculty Advisor of the project, Dr. Thilina Lalitharathna as the Electrical System Advisor and Dr. J.R. Gamage as the Project Coordinator supervise through all the successful achievements.http://www.sundaytimes.lk/180520/business-times/rising-vehicle-ownership-shatters-go-green-plan-287141.html23 March 2018 @ 8:01 pmSri Lanka’s plan to go green by removing petrol or diesel vehicles from the roads by 2040 will become a difficult task with the rising number of vehicle owners in the island, motor traffic experts warned. In terms of vehicle ownership, Sri Lanka has overtaken its neighbour - India with 76 cars per 1000 people whereas India has just 32 cars per 1000 people and China 32, they said quoting findings of the World Bank collection of development indicators, compiled from officially recognised sources. Fossil –fuel burning vehicle imports should be curtailed to achieve this target but the government’s action to provide duty slashed car permits to senior public officials with unprecedented concessions and tax reductions on small cars goes against the green strategy, they added. The Finance Ministry will find it difficult to implement the 2018 budget proposal of replacing all state-owned vehicles with electric or hybrid models by 2025, a move that will be extended to private vehicles by 2040 as it has to adjust the fiscal policy in accordance with the country’s political situation, a senior government official said. Sri Lanka has over 6.8 million vehicles, most imported from Japan and India, on its roads including nearly 720,000 cars. The government will have to phase out its fleet of diesel and petrol vehicles including buses over the next eight years, switching to electric or hybrid models, he said adding that private owners have until 2040 to replace their cars, tuk-tuks and motorcycles, when the country plans to no longer allow any fossil fuel-burning vehicles on its roads. To encourage citizens to replace their cars the government announced several measures including slashing taxes on electric cars and, introducing a new carbon tax on fossil fuel-burning vehicles. According to the 2018 budget the tax on electric cars will be reduced by over a million rupees (US$6,600) to encourage motorists to switch to clean energy and import tax on large cars will be hiked by nearly $17,000.http://www.sundaytimes.lk/180520/business-times/maldives-still-a-magnet-for-luxury-travellers-291684.html27 April 2018 @ 8:12 pmMALE – That the Maldives will continue to attract travellers as a luxury destination was restated at a recent conference which drew general managers from more than 50 luxury resorts. [caption id="attachment_291685" align="alignright" width="400" caption="Two of the pioneers of Maldivian tourism and the most powerful tourism personalities in the country (from left) M.U. Maniku, Chairman of Maldives Association of Tourism Industry and Chairman, Universal Resorts; Hussain Afeef, Chairman of Crown & Champa Resorts; with Daniel Welk, Hilton’s Vice President, Operations for Asia Pacific at the conference."][/caption] On the sidelines of the conference, hotel managers said that February and March were good months despite concerns raised over political unrest in the country’s capital. Held at the Kurumba resort on April 18, the Hotelier Maldives GM Forum was also an opportunity for Conrad Hilton to showcase the world’s first undersea villa to be opened for bookings next November (2018). Testing is underway while construction has been completed on the $15 million residence at the Maldives Conrad Rangali Island resort, also home to the world’s first undersea restaurant, Ithaa. “We are revolutionising travel. This product will further put Maldives on the map as a luxury brand,” said Daniel Welk, Hilton’s Vice President, Operations for Asia Pacific. He said the future of luxury is not only the price tag but many other things. “At Hilton we are moving to the golden age of luxury as (luxury) travellers are not only sophisticated; they want privacy, VIP levels of security, ease of entry and discretion,” he said. More than a dozen upscale resorts are opening in the next two years including the likes of the 120-villa Pullman Maldives Maamutaa Resort by Accor; the Movenpick Resort & Spa Kuredhivaru; the Waldorf Astoria Maldives with 138 beach and overwater villas; the LUX North Male Atoll resort with 67 double-storey residences; and the Hard Rock Hotel Maldives and Hard Rock Cafe Maldives. However M.U. Manikku, Chairman of Universal Resorts, one of the largest hotel chains in the Maldives and a tourism pioneer, said the market has broken into three segments – high end, middle range and guesthouses/budget travel and marketing of the destination required to touch all these points. Contrary to worries that the 45-day state of emergency in February/March in the Maldives had affected bookings, arrivals jumped by 18.5 per cent in March and 19 per cent in February. The surge was due to an increase in European travellers which offset the drop in Chinese travellers, the Maldives’ main source market. Andrew Ashmore, Group Head at Coco Collections, said while they witnessed a drop of 8 per cent from China that was compensated by an increase of over 10 per cent from the UK, Germany, Japan and Korea, and the Middle East. He said bookings in April and May were excellent and considerably better than last year. “June is down, which is normal (off peak season), but still well above last year,” he said. It was mostly guesthouses that reported cancelled bookings during February/March. Graeme D’Arcy, Hotels Area Manager at bookings.com, said that while 2/3rds of their supply in the Maldives comes from guest hosuses/home stays, the bulk of the revenue came from resorts and hotels. But he pointed out one of the challenges to resorts are that guesthouses are now offering the similar facilities like wifi or spa’s and charge less. (Feizal)

2nd Hotelier Summit in Maldives

The Maldives second Hotelier Summit, which is set to be the kickoff event for Travel Trade Maldives 2018, will be held on Monday April 30 at Bandos Island Resort and Spa. Founder and Director of Crown Company, Ahmed Nazeer who also serves Secretary General of Maldives Association of Tourism Industry (MATI) will give the keynote address. Followed by the keynote would be the platinum partner speech given by Maldives Transport and Construction Company PLC, CEO Ibrahim Ziyath, the organisers said in a media release. Over 150 tourism professionals are expected to attend the event including resort and hotel general managers, resident managers, key hotel owners, international travel trade stakeholders and travel industry professionals. Speaking about the event, its organiser Maldives Getaways CEO Dr Hussain Sunny Umar said that this is the largest gathering of tourism individuals in the Maldives of which stakeholders would discuss the future of tourism in the Maldives.

http://www.sundaytimes.lk/180520/business-times/srilankan-achieves-record-revenue-in-201718-290142.html20 April 2018 @ 8:27 pmSriLankan Airlines has achieved a record un-audited annual passenger revenue of Rs. 126.9 billion (US$830.7 million) for its just ended financial year of 2017/18 – the highest ever in the company’s 38-year history, the national carrier said in a media release this week. The revenue comes on the back of recent expansion of the airline to include services to several new destinations such as Gan Islands, Hyderabad and Melbourne and additional frequencies to popular cities in its network. The airline’s cargo division recorded a “spectacular performance” – achieving a revenue of Rs. 14.7 billion on its own, the release added. Both passenger and cargo divisions exceeded their annual target, enabling the SriLankan Airlines Group – bolstered by an even stronger performance at its best performing business unit SriLankan Ground Services – to comfortably exceed the overall annual revenue target, it said. Overall group turnover exceeded $1 billion, making SriLankan one of the handful of companies in Sri Lanka to reach this milestone. It also becomes the highest revenue generating company amongst all Sri Lankan businesses which publicly report their financials. Commenting on the achievement, SriLankan Airlines Chief Executive Officer, Captain Suren Ratwatte mentioned “This is the first instance of the airline achieving its annual revenue target since Emirates Airline left as the managing partner, 10 years ago. This comes at a turbulent time for the industry when most airlines are facing difficulty maintaining their yields due to intense competition. SriLankan has just completed a year of significant expansion with minimal erosion on yields and ended the year comfortably exceeding the revenue target. This achievement shows the capability and commitment of our workforce and demonstrates that the company is well on track with its restructuring targets. With a new Chairman and Board of Directors in place, I am certain that the airline will reach greater heights in the near future as we concentrate on curtailing our costs”. The airline’s Chief Commercial Officer, Siva Ramachandran, added “This is a proud moment for all of us at SriLankan and serves as a testament that a home-grown team is capable of turning around the airline from one that is deeply loss making to self-sufficient. The next generation at Commercial has come to the fore. The future of this company is in the good hands of young people who are capable of taking it forward”. The year has been one of transformation for SriLankan, in which it inducted four brand new fuel efficient narrow-bodied aircraft to the fleet – in the process becoming the first A321neo aircraft operator in Asia. It has also made significant improvements to on-board service, including offering flat-bed Business Class seats on all wide-bodied aircraft and Wi-Fi services on nearly half of its fleet. The airline is currently at the verge of implementing the second phase of its restructuring plan, which would see the airline become a profitable and self-sufficient entity within a short period. The restructuring initiatives would see the airline further fine tune its route network and implement a range of cost optimisation initiatives. It intends to report its audited financial results for FY2017/18, which are required to undergo the review of Auditor General of Sri Lanka, before the end of September 2018.http://www.sundaytimes.lk/180520/business-times/mtd-calls-bids-for-high-tech-vehicle-number-plates-287138.html23 March 2018 @ 7:59 pmSri Lanka's Motor Traffic Department (MTD) has called for local and international bids to procure vehicle number plates and stickers with Radio-frequency identification (RFID) with a view to introducing new high tech security number plates for vehicles within the next few months. [caption id="attachment_287139" align="alignright" width="400" caption="A current number plate which would soon have a chip embedded in the plates of new vehicles."][/caption] The tender issued by the Cabinet Procurement Committee on behalf of the MTD inviting bids from prospective bidders for the supply of at least 30,000 number plates and similar number of RFID stickers will be closed on April 18. This technology is primarily used for access control and to provide real-time vehicle location information. The system consists of hardware components in the form of the RFID tags themselves, roadside RFID readers/transmitters and a central computer system as well as software in the form of applications to interpret the RFID information. The new system will also help the MTD to digitise records and keep track of any vehicle on the road, a senior official of the Transport Ministry said .RFID uses electromagnetic fields to automatically identify and track tags attached to objects. The tags contain electronically stored information, he revealed. The RFID stickers have technology similar to smart cards and can be encoded with vehicle and/or driver information which is read by an RFID reader unit using radio waves, generally from several metres away. This will enable the reader to get basic information of the vehicle such as the registration number and the chassis number and further information could be obtained from the MTD, he said. The department will ensure that no privacy laws will be breached and it has the sole authority to release information to law enforcement authorities and other relevant institutions in accordance with the rule of law of the country, he said. A radio frequency identification system is to be introduced for new number plates which will help police to detect vehicular movements in traffic management, security and would be a more efficient way of gathering and disbursing information, real-time which will save money and the use of human resources.http://www.sundaytimes.lk/180520/business-times/undp-partners-with-nysc-cisco-and-citi-on-e-learning-programmes-291682.html27 April 2018 @ 8:10 pmThe United Nations Development Programme (UNDP) in Sri Lanka has partnered with the National Youth Services Council (NYSC), Cisco and Citi to conduct e-learning programmes in 20 locations across Sri Lanka to build on national priorities placed on strengthening the knowledge on ICT skills among youth. e-learning is a powerful tool that has the potential to connect the youth of Sri Lanka to up-to-date learning material to equip youth with the right tools to contribute to the sustainable development of the country. This innovative mode of learning will also support in developing the entrepreneurial skills of youth, thus providing them with the ability to positively contribute towards the economy, according to an UNDP media release. Speaking about the impact of this programme, Jorn Sorensen, UNDP Sri Lanka Country Director, stated: “As a crucial segment of society, we believe that engaging with young entrepreneurs to provide better access to market information and business skills, and a better enabling environment for youth-led enterprises is the best way forward to achieve inclusive and participatory sustainable development”. The programme will engage approximately 1000 youth through the National Youth Services Council network islandwide, who will have an opportunity to the Cisco e-learning course on entrepreneurship. The programme will run as a two-day workshop engaging 50 participants at each youth centre. Commenting on the e-learning module, Murugan Vasudevan, Regional Manager – South Asia for Cisco stated, “Entrepreneurship skills are critical to create the jobs of the future, many of which also require digital skills. Cisco is excited to be able to partner with the United Nations to offer the Entrepreneurship course with interactive, online case studies to show how one can apply digital skills to start a business.” An added feature of this programme will be the training on ‘Financial literacy for Young Entrepreneurs’, facilitated by Citi staff who will volunteer as resource persons. Speaking about this partnership Ravin Basnayake, Citi Country Officer Sri Lanka stated: "We strongly believe technology is a key enabler for inclusive development and recognises the crucial role of the youth in creating a prosperous Sri Lanka”. NYSE Chairman Eranda Weliange stated, “Young people are active drivers of change in local communities. I am confident that this programme will enable young people in this country to advocate for change both within their communities and beyond”.http://www.sundaytimes.lk/180520/business-times/government-intensifies-its-fight-for-economic-survival-amidst-political-instability-290136.html20 April 2018 @ 8:25 pmWith just over 600 days more to go in a tenure of governance marred by recent political instability, the debt-laden government is trying to find a short term way out of its economic woes, official sources revealed. The fight for economic survival will be crucial at this moment as the coalition government is being pressurised to take austerity measures to provide relief for the people amidst dissension among its major constituent parties. The increasing of frail state revenues while curtailing public expenditure was the challenge before the Treasury to bridge the gap in the fiscal account and tackle the heavy public debt this year, a top official of the Finance Ministry told the Business Times. The next tranche from the IMF of its US$ 1.5 billion three-year extended fund facility is crucial for the country at present as most of its monetary, fiscal and reserves targets are on track, he said. However the Sri Lankan government has delayed in the implementation of energy pricing formula and the reforms into loss-making state-owned enterprises (SOEs) due to opposition from political pressure and this could prompt the international lending agency to further delay or suspend the tranche, he pointed out. The Finance Ministry has been convening high-level meetings with public and private sector stakeholders while gathering innovative ideas from diverse partners in order to strengthen the policies suitable for a higher middle income, export-oriented economy amidst political instability. The Government will endeavour to undertake a comprehensive reforms agenda in the legal system and currently it is evaluating the Customs Ordinance of 1869, as well the Excise Ordinance of 1912. Also, extensive reforms are to be introduced in labour laws, housing and land laws, he said revealing that the government will make full use of its eligibility to funding from the International Bank for Reconstruction and Development. He noted that the World Bank’s transitional support to face the interim period without an adverse impact on the economy will also be helpful to face present challenges. The Government plans to grow revenue to 16.4 per cent of GDP to Rs. 2.3 trillion (Rs. 2,326 billion) for 2018 with 87 per cent of the revenue expected through taxes of which taxes on goods and services are projected to contribute 61 per cent of tax revenue, he disclosed . The new Inland Revenue Act will bring an additional Rs. 30 billion to state coffers this year, Deputy Treasury Secretary, S.R. Attygalle told a media conference recently adding that thereafter it will raise a sum of Rs. 60 billion per annum by way of removing various tax exemptions and introducing new taxes such as Capital Gains Tax. According to Finance Ministry estimates, non-tax revenue is forecasted to be 8 per cent of the total expected government revenue. The total planned expenditure for 2018 is Rs. 3 trillion (Rs. 3,001 billion) resulting in 21.1 per cent of GDP, growing from 20.6 per cent of GDP in 2017. The Treasury will not have to bear the large repayments of debts this year, a top official of the Finance Ministry who wished to remain anonymous told the Business Times revealing that interest payments of US$ 600 million and $2.5 billion of Sri Lanka Deavelopment Bonds (SLDB) mature this year. This will be met by the issuance of fresh Sri Lanka Development Bonds (SLDBs) of $3 billion, he disclosed adding that the total estimated foreign debt service payments, including interest and principal payments, amount to over $2.9 billion this year. The government aims to sell $5 billion-worth of debt securities this year, a mix of $3 billion of development bonds and $2 billion of sovereign bonds and a renminbi-denominated panda bond, equivalent to $500 million, is being “considered and which may take place late in the first half of the year, subject to conditions," he said. Foreign investments in the government securities market witnessed a net inflow for the eleventh consecutive month in January 2018 in comparison to the net outflow recorded in January 2017. Further, long term loan inflows to the government recorded a net outflow of $ 2.5 million during the month of January this year. In terms of foreign direct investments (FDIs) including foreign loans to BOI companies in 2017, Sri Lanka received $1,913 million, registering the highest ever FDI inflows in the history, the Central Bank said.

Sri Lanka tastes success in raising $2.5 bn in bonds

Sri Lanka’s Central Bank (CBSL) marked its return to the US dollar bond markets with a successful issuance of new US$ 1.25 billion 5-year and $ 1.25 billion 10-year Senior Unsecured Fixed Rate Notes. The notes are with maturity dates of April 18th, 2023 and April 18th, 2028 respectively, the CB said in a media release, adding that the notes were issued on behalf of the government. This marks Sri Lanka’s 12th US dollar benchmark offering in the international bond markets since 2007. “This also represents the largest offshore bond offering ever by Sri Lanka and is a strong reflection of the international investor community’s continued support for Sri Lanka through the years,” the CB said. Citigroup, Deutsche Bank, HSBC, J.P. Morgan and Standard Chartered Bank acted as the Joint Lead Managers and Bookrunners on this successful transaction. “Identifying a supportive issuance window in a challenging market environment, Sri Lanka announced the transaction during the Asia morning of April 11th 2018. The joint syndicates released terms and initial price guidance for new 5-year and 10-year tranches at 6 per cent and 7 per cent areas, respectively. The transaction saw strong interest from a wide range of high quality investors, which allowed the issuer to tighten price guidance by 25 bps each across both tranches. The notes eventually priced during New York hours, well inside the initial price guidance with a coupon of 5.75 per cent and 6.75 per cent for new 5-year and 10-year tranches, respectively,” the release said. The final order book stood at $3 billion across 235+ accounts for the 5-year tranche and $3.5 billion across 190+ accounts for the 10-year tranche. This clearly reflects investors' continued confidence in Sri Lanka and its economic outlook.

http://www.sundaytimes.lk/180520/business-times/softlogic-automobiles-steps-into-luxury-tourist-transportation-287136.html23 March 2018 @ 7:57 pmSri Lanka's tourist transportation service especially for travellers from the Asia Pacific region will be further streamlined and strengthened owing to tie-up between Softlogic Automobiles (Pvt) Ltd and May Flower Holidays (Pvt) Ltd, a destination management company. The luxury tourist bus fleet of May Flower Holidays has been enhanced by adding 10 King Long luxury tourist coaches provided to the company by Softlogic Automobiles recently. Xiamen King Long United Automotive Industry Co. Ltd with a production capacity of 20,000 units of annual production capacity for large and medium-sized luxury buses joined hands with its local dealer Softlogic Automobiles in making this initiative a reality. A ceremony to hand over these 10 luxury buses to May Flower Holidays (Pvt) Ltd was held in Colombo recently. Chamath Tennekoon - Chief Executive Officer of Softlogic Automobiles, told the gathering they linked up with May Flower Holidays as their preferred luxury coach partner. The company will offer full spare parts, service and collision repair capability and 24-hour roadside assistance, which is hugely beneficial to our customers in the tourism industry, he added. Gihan Vitharana - Director Sales of Softlogic Automobiles King Long, said they have become the preferred coach provider to the tourism industry and the National Transport Commission (NTC) in Sri Lanka. These buses also include a host of luxury features such as climate-controlled A/C, individual A/C vents, reclining seats, individual reading lamps, individual bottle holders and footrests, individual USB charging ports, 18.5" LED TVs with DVD player and large bottle chiller, among many others.http://www.sundaytimes.lk/180520/business-times/sri-lanka-is-softly-killing-its-tourism-industry-291676.html27 April 2018 @ 8:07 pmNEGOMBO - An attack similar to what transpired in Mirissa on tourists by a group of drunk Sri Lankans could happen anywhere else in the country – with the next hotspot likely to be Negombo where anti-tourism incidents are going on unabated. [caption id="attachment_291677" align="alignright" width="300" caption="Hotels amidst unauthorised constructions"][/caption] Even as I write this story on the situation in Negombo what is interesting to note is the lackadaisical approach of the authorities concerned in tackling these issues leaving not just the tourists defenseless but the country’s name to shame in the international arena. Duty Officer A.M.S. Premaratne of the Tourist Police in Negombo, when contacted, seemed unaware of the problems in the area noting that they were not informed of these issues of illegal restaurants operating on the beaches but were aware of tourists’ bags getting stolen with cash. But even in these instances the police have been unable to nab the offenders and it was surprising that this was not the first incident that had occurred in the area; in fact a trend has been observed of bag snatching. It would not be long before the beaches of Negombo could be overtaken by powerful local area politicians that attempt to control the once famous tourist attraction and thereby reducing the fame of this location to be feared by holidaymakers in future. Mirissa remains an unfortunate incident where tourists were physically and sexually attacked at a Surf Bar on April 8 that was subsequently closed on the orders of the Sri Lanka Tourism Development Authority (SLTDA). In this instance the Tourism Ministry and SLTDA officials have taken immediate measures in the aftermath of the Mirissa attack; to apologise to tourists at large and respond in a timely manner by closing down the restaurant in question and inform the public the gravity of the situation and initiating action to possibly overcome any future issues of a similar nature.A ride to Negombo and talking to a few hoteliers, we found that the area is inundated with political henchmen making a fast buck ignoring the rules whereas law-abiding citizens like the main hoteliers on the coastal belt were left to look after their own security as authorities seem to turn a blind eye to harassment to tourists and hotels. Negombo gets shock treatment We met a shocking sight when we found that the Paradise Beach Hotel had fenced access to the beach with just a small opening to allow their guests to use – the reason being that three-wheelers and bikes park on the beach right next to this fence obstructing the hotel view of the sea and sand beyond its boundaries. Young men walk right in front of the hotel from the beach with beer cans and bottles in their hands and sit around the coconut trees and are found boozing. They are visitors to the unauthorized or illegal construction of a restaurant that has laid open mattresses and tables on the beach clearly creating an unhealthy atmosphere where tourists would not like to venture into. Long-haired men turn up there for a round of drinks starting from around 11 am and some of the empty beer cans are thrown around the beach, creating an unfavourable environment to visitors to the area. “I’m only worried about the safety of my tourists to the hotel, which has been blocked by unwanted rowdies on the beach as tourists are worried to go to the beach when they are around,” Paradise Beach Hotel Managing Director E. Croos told the Business Times on Wednesday. Tourists staying in homes are the frequent visitors to these restaurants that started out as just one in 2014 but have now increased with two more opening up on state property. [caption id="attachment_291678" align="alignleft" width="175" caption="E. Croos"][/caption] Tourists are said to have been inconvenienced on New Year’s Eve when the said restaurant had music blaring from 6 pm on December 31 until 3 pm on January 1. In fact, some visitors had opined to the owner of the Paradise Beach Hotel that these people at the restaurant should be high on drugs to be able to continuously dance all this time. Mr. Croos explained that he had been subjected to death threats in the past by the owners of these restaurants and pointed out that despite making a number of complaints against them to the SLTDA, the Negombo Police, and the Coast Conservation Department no action had been initiated against these persons. He believes they are operating there with the concurrence or support of a powerful politician from the area. The beach remains littered and the guests do not have a comfortable stay as they are harassed if they venture out in beach wear with these locals said to call out names or simply stare at the female guests to the hotel. Previously there had been patrolling of the beach by the Tourist Police but today this is hardly evident and in fact, Hotel J Team Leader Vivian Vas speaking with the Business Times said that he had not seen them patrol the area in the past 10 days. In fact, he noted that once they had tried to set up a fence in front of their hotel to secure the place for their visitors, they had been obstructed by the Coast Conservation Department which had filed action in the High Court against the hotel. He noted that the transparent fence was set up to ensure there could be security for the holidaymakers staying at their hotel as guests were disturbed by locals who brought liquor bottles to have a drink right in front of the hotel and simply stand there and stare at the tourists and even cause harassment to the visitors. This caused problems to the guests who have repeatedly complained to the hotel authorities who have now made it a point to ensure their staffers are situated there when tourists are sunbathing in the pool area. Right of the coast Meanwhile, Coast Conservation Department Director General Prabath Chandrakeerthi told the Business Times on Thursday that they had already issued demolishing orders for unauthorized constructions on the Negombo beach. Moreover, he noted that in this respect they had informed the relevant police stations and the owners of the structures as well. However, it was pointed out that some of these owners had contacted the Coast Conservation Department and stated that theirs were only seasonal structures and were temporarily set up. But authorities noted that this could not be accepted as these owners initially would state that they would be there temporarily but later set up these structures on a permanent basis. The department had even in the past being subjected to a lot of pressures by local area politicians when they would implement the demolition of these unauthorized structures like in Tangalle in the past. Moreover, even after the Mirissa incident Minister Faizer Mustapha has been reportedly making calls to the relevant authorities asking them to refrain from demolishing the unauthorized constructions in line with government plans to assist small entrepreneurs. [caption id="attachment_291679" align="alignright" width="300" caption="People with bottles. Pix by Priyantha Wickramaarachchi"][/caption] Tourism Development Minister John Amaratunga said at a media briefing that the authorities should be allowed to carry out their work unhindered and though he was not aware of Minister Mustapha’s claims he believed such allegations could result in the Sri Lanka being branded as an unsafe destination. When asked about the situation in Negombo, he affirmed that there could be issues there as well similar to the situation in Mirissa. He noted that these issues could arise to the inaction of the police and law enforcement authorities and added that these persons could have been acting under pressure from local area politicians. The minister also pointed out that there were drug lords operating in the Negombo area and that this was a cause for concern as even recently there had been reports of tourists being subjected to harassment. The Coast Conservation Department is said to carry out demolitions and evictions of illegal structures in Mirissa on May 1 and in Negombo on May 8. Touts, Beach boys – the nuisance and the menace Touts, beach boys and the like have become part and parcel of the tourism business and since the 1970s the industry has been trying to engage them and contain the situation in order to make the country a tourist friendly state. But today the situation has gone out of hand, as the industry points out the politicians continue to influence these people and as a result no action is taken against them. Beach boys and touts are said to be connected to some politician or the other and since those in the different political parties do not want to lose their electoral base and voters they continue to assist such unscrupulous activities despite its negative impact on the Sri Lankan tourism industry. While the incidence of beach boys operating in Wadduwa and Kalutara is limited, the situation in tourist hotspots like Beruwala to Bentota and Hikkaduwa, Weligama and Mirissa has become rampant. In the cultural triangle one tour operator pointed out that despite repeated complaints made to the authorities they found touts inside the Sigiriya rock and they would attempt to try and help the tourists trying to go up and down the steps and later ask for about Rs.10,000. It was noted that even the tour guides were found to be helpless as they are unable to manage such situations when they had to take about 30-40 visitors on tour to these locations. The pristine beaches of the East coast were so far untouched as some operators point out the situation was in its infancy stages and that the area was unlikely to have thugs while most of the locals were law abiding people. In Jaffna too such incidents have not occurred since it was not yet a place frequented by holidaymakers but on the other hand Colombo has found a nuisance among three-wheeler taxis that continue to harass tourists by charging them exorbitant rates. Aitken Spence Travel Managing Director Nalin Jayasundere said, overall it has become a problem and this situation mainly occurs in countries like India and Sri Lanka but states like Dubai and Singapore did not have these issues since law and order is observed there and which is the reason why those destinations are growing. He pointed out that the cultural triangle too may have these problems but it was mainly connected to people trying to sell stuff to tourists visiting the attractions. But the situation on the beaches is different since tourists would be staying there for longer periods as a result of which they would be wanting to enjoy the night life as well, he said. However, he commended the government’s move to take corrective action in relation to the situation in Mirissa. Traveller’s talk Visitors to the island have expressed concerns in visiting the destination again. In fact a couple Keith and Maureen Nessling of Kent, England (repeat travellers for the past five years) who stayed at the Paradise Beach Hotel in Negombo had commented on the police inaction concerning the beach bar that was too loud. “The beach bar at the bottom of Paradise has always been very noisy but this year the noise has been unbearable. It has been ‘Boom Boom Boom’ all day and all through the night at times. The Police are called but no action taken. The people in the bar are very drunk and loud and have no regard for guests staying at Paradise,” the couple had complained in a letter to the hotel. Another tourist couple Robert and Jacqueline Trout who stayed at the hotel to herald in the New Year noted that “after the fiasco of this Christmas and New Year’s Day with the noise from the Port Bar and the drugs going on it puts our life in fear of ever returning. Perhaps if a solution to the situation could be resolved it may throw a different light on our next visit to your beautiful island.”http://www.sundaytimes.lk/180520/business-times/experience-the-benefits-of-aws-cloud-computing-with-efutures-290133.html20 April 2018 @ 8:22 pmA highly trained EFutures cloud services team is now offering round the clock AWS cloud computing support. Their capabilities are extended to providing assistance to any other AWS requirements as well, the company said this week. AWS offers a secure cloud service platform, with ample compute power, database storage and a myriad of other services that are vital to aiding a business scale and grow. AWS has many other benefits which could benefit a business . These include: Cost efficiency and Flexibility Pay only for the server requirements needed, with no long-term commitments or upfront expenses. It gives users the ability to adjust (scale up/down) their setup to meet their changing business requirements and even terminate the AWS account whenever required. This can result in allowing a business to chase revenue goals and reduce costs, by taking on new challenges and responding to beneficial business opportunities as and when they arise. Global leader in cloud computing The AWS Cloud is constantly extending its span, currently covering 54 availability zones within 18 geographic regions, with plans for growth (12 more availability zones) already in motion. What this also means is that AWS prices will continue to decrease due to economies of scale; as their client base and Cloud consumption grows they will have to expand their infrastructure to accommodate this increase. Multiple services that seamlessly integrate under one platform Allowing users to select the specific operating system, database system, web application system, and programming language, AWS also enables users to load all the software and services your application requires. This not only makes the migration process for existing applications swift and convenient but also reserves the options for building new ones. Whilst streamlining the entire process of development for teams, it also eliminates the requirement for any additional products or services. Heightened Security Security is a huge advantage when using the AWS server. Their clients work in different industries ranging from healthcare to retail and are very particular about data security. AWS proves to be an invaluable asset because of its security features such as; authentication protocols, authorisation, audit trials for users and data integrity. Faster Deployment Speed Deploying SaaS is much faster on AWS compared to other servers. Where standard deployment usually takes 2-3 days to acquire and test, AWS cuts the deployment phase down to just a few minutes.http://www.sundaytimes.lk/180520/business-times/kandy-hoteliers-plan-destination-push-287134.html23 March 2018 @ 7:55 pmHaving incurred a loss of approximately over Rs.1 million for 982 room cancellations during the week communal clashes hit the hill capital, Kandy hoteliers are drawing up plans to once again sell the dream destination. Of the cancellations, at least one hotel recorded over 250 cancellations as revealed at a March 17 meeting at the Mahaweli Reach with the participation of 18 members of the Kandy Hoteliers Association, its President Samantha Ratnayake told the Business Times. He explained that in line with these issues hoteliers came together for a meeting with the Chief Minister Sarath Ekanayake to discuss ways of overcoming the losses incurred and how to stop future cancellations. In this regard, the hoteliers have decided to brief the embassies in Colombo by inviting them for a tour of Kandy to ensure they have a clear understanding of the ground situation in a bid to ensure that the travel advisories would be removed. Mr. Ratnayake said that they would be hosting the embassy officials for a day in Kandy with a tour of the destination, a cultural show and providing accommodation at their hotels. Funding for the programme would be provided by the Chief Minister’s budget allocated under the Regional Economic Development Authority (REDA). In addition, he explained the hoteliers have discussed on how to counter attack the concerns aired through social media by hosting a site named kandy.com that would give the opinions of guests staying in and around Kandy. In this respect, they hope to speak to guests visiting the different tourist attractions and from these locations highlight to the world that Kandy is safe to travel, Mr. Ratnayake said. In a bid to carry out these plans, a meeting with the Foreign Minister Tilak Marapana and the Tourism Development Minister John Amaratunga would be held next week.http://www.sundaytimes.lk/180520/business-times/headline-inflation-eases-in-march-291674.html27 April 2018 @ 8:03 pmHeadline Inflation, as measured by the change in the National Consumer Price Index (NCPI, 2013=100), which is compiled by the Department of Census and Statistics (DCS), eased in March, continuing on its declining trend since November 2017. Year-on-year NCPI headline inflation decreased to 2.8 per cent in March, the lowest since April 2016, from 3.2 per cent in February. The monthly decline in food prices in March supported by the favourable supply conditions attributed to this sharp decline in year-on-year inflation in the same month March, the Central Bank said in a media release. The change in the NCPI measured on an annual average basis decreased from 7.2 per cent in February 2018 to 6.7 per cent in March. The latest easing trends is mainly due to the decline in prices of the items in the food category, particularly that of vegetables, big onions, rice and red onions. However marginal price increases were observed in Alcoholic Beverages and Tobacco, Transport and Miscellaneous Goods and Services sub-categories. The NCPI core inflation, which reflects the underlying inflation in the economy, continued its declining trend observed since September 2017 and decreased to 1.9 per cent last month from 2 per cent in February on a year-on-year basis.http://www.sundaytimes.lk/180520/business-times/ceylon-theatres-forms-landmark-partnership-with-bookmyshow-290127.html20 April 2018 @ 8:20 pmCeylon Theatres (Pvt) Ltd, the entertainment arm of CT Holdings PLC, recently signed a MoU with BookMyShow - India’s largest online entertainment ticketing platform, now present in Sri Lanka. [caption id="attachment_290130" align="alignright" width="400" caption="Participants posing for a photograph following the signing of the MoU between Ceylon Theatres (Pvt) Ltd., Sri Lanka and BookMyShow – India. From left - Ralph Hays - Trade Commissioner Sri Lanka and leader of the New Zealand business; Diptendu Sawn - Head of Service Delivery BookMyShow; Sanjay Niles - Managing Director Ceylon Theatres (Pvt.) Ltd and Pravin David - Chief Operating Officer CeylonTheatres (Pvt) Ltd."][/caption] The new synergy will help Ceylon Theatres to gain access to the globally acclaimed Vista ERP system – a fully customisable cinema enterprise solution by New Zealand based Vista Entertainment Solutions, the largest cinema software solutions provider in the world. With the use of Vista, Ceylon Theatreswill be able to bring in world-class cinematic experience to the local movie goers, the company said in a media release. With its roots spanning as far as 1928, CeylonTheatres has played a major role in the development of local cinema industry for 90 years, introducing innovative technologies while keeping abreast of global technological trends. The partnership with BookMyShow marks another milestone for the Company in its journey of technological evolution to bring the best for the local movie fans. Sharing his views on the special occasion, Pravin David (COO) of Ceylon Theatres (Pvt) Ltd, noted, “Major studios demand high end robust box office systems that are both transparent and efficient, in order to access vital statistics online real time. In order to meet global expectations, we need to incorporate the world’s best cinema enterprise solutions. Vista Entertainment Solution is acknowledged as the world’s best and largest cinema software provider. Access to Vista was made possible thanks to the new partnership drawn with BookMyShow.” Diptendu Sawn of BookMyShow, commenting on the new partnership, said, “After redefining access to entertainment in India, we are excited to offer our services in Sri Lanka and look forward to implementing the learnings from the Indian market, to the closely resembling Sri Lankan market. Taking from our incisive understanding of the entertainment needs of users, we are now committed to transform the Sri Lankan ticketing experience. In line with this, we are excited to partner with Ceylon Theatres and help them gain access to the best in class and highly diversified Vista - Cinema Enterprise Solutions.” Ralph Hays, Trade Commissioner Sri Lanka and leader of the New Zealand business delegation which visited Colombo recently, added: “The partnership between CeylonTheatres (Pvt) Ltd. and Bigtree Entertainment Lanka (Pvt) Ltd., is a great example of innovative New Zealand technology going global. Software from Kiwi tech companies, such as Vista Entertainment Solutions, is being used around the world and New Zealand is increasingly known not only for its beautiful scenery and premium food and beverage, but the clever companies tapping into niche areas to solve problems and deliver high-quality, cost-effective products and services.”http://www.sundaytimes.lk/180520/business-times/treasury-amendment-to-condo-builders-on-vat-sees-sharp-rise-in-apt-sales-287132.html23 March 2018 @ 7:54 pmThe recent budget proposal to impose Value Added Tax (VAT) to condo builders which will be applicable on the sale of new condominium housing units with effect from next month has seen a sharp rise in condo sales, developers say. The Treasury promised Condominium Developers Association of Sri Lanka (CDASL) in response to a letter by the CDASL that the VAT will be applied only on projects that began after April 1. Sales of apartments in projects started before April 1, 2018 will be exempt. They were unhappy with the proposal to impose a 15 per cent VAT on the sale of Condominium Housing Units from April 1 2018, which was presented in the budget. CDASL members said that whilst they are aware of the need for bigger revenue to the Government and the intent to abolish selective exemptions, they are strongly of the view that the re-imposition of VAT on the sale of condominium housing projects which have already started construction and sales will be counterproductive and cause a serious negative impact on the industry. Now the buyers are scrambling to make the most of it. "We sold 25 units in February which was the highest we sold in our history," a major developer told the Business times. He noted this month they expect the highest number to be sold at 35. Another builder agreed saying his sales are increasing at a considerable rate. “Many are buying at an increasing rate.” He said that most were bought by doctors and engineers, also entrepreneurs and those working abroad earning a good income. A third builder added that their apartment sales are mostly generated from the diaspora. “We see that 30 per cent of sales are from the diaspora and less than 10 per cent are foreign buyers." Real estate sector analysts say this buying spree will slow down by April.http://www.sundaytimes.lk/180520/business-times/government-streamlines-spending-on-capital-expenditure-projects-290125.html20 April 2018 @ 8:19 pmFaced with the constant threat of rising public sector expenditure, the cash strapped Sri Lankan government is set to rationalise spending on capital expenditure projects, Finance Ministry sources said. The aim is to facilitate the treasury cash management and improve productivity by maintaining fiscal discipline, revenue-based fiscal consolidation and rationalising government expenditure. Cash inflows from revenue and other receipts to the Treasury were very much less than the outflow for recurrent and capital payments last year and during the first quarter of this year, a senior Treasury official said. There was an increase in cash outflows to the capital expenditure which was more than the increase in cash inflows to the Treasury, he pointed out. Therefore the cabinet decision has been taken recently to implement capital expenditure projects on priority basis to facilitate the treasury cash management. Treasury Secretary Dr.R.H.S. Samaratunga has directed all secretaries and heads of departments to identify priority projects after ascertaining its necessity and the economic importance of the projects. In a circular issued to all secretaries, heads of departments, district secretaries and government agents, he called on them to inform the Treasury after prioritising of the projects and the necessary finances for such projects will be released accordingly. Any additional financial provisions for new project proposals or enhances the existing expenditure limits in 2018 will not be entertained by the Treasury, he warned. The 2018 budget has been prepared by considering all the proposals of the line ministries, provincial ministries and the heads of departments and those proposals clearly indicated the details of the output of such projects accompanied with the Key Performance Indicators (KPI), on a directive issued by the finance ministry, a senior Treasury official noted. Capital expenditure projects that have been earmarked for implementation by the National Planning Department for each ministry have been given priority by considering the plans of such projects with KPIs, he added. The medium term macro –fiscal framework for 2018-2020 approved by the Cabinet of Ministers for the performance-based budget preparation for the year 2018 include the rationalisation of recurrent expenditure and prioritisation of capital expenditure, he disclosed. The Treasury will take follow-up actions on reviewing the financial allocations for respective ministries and state institutions, he said adding that the time has come to critically analyse and evaluate the expenditure needs of the line ministries and departments to rationalise unnecessary expenditure and eliminate excessive administrative overheads. The public sector expenditure is being made at the expense of the limited direct taxpayers and also the revenue from indirect taxes, including from the poorest of the poor segment of the society, he opined.http://www.sundaytimes.lk/180520/business-times/government-mulls-replacing-vehicle-tax-formula-3-mths-after-its-introduction-287129.html23 March 2018 @ 7:52 pmAlmost three months after presenting the Blue-Green budget in Parliament, the government is mulling to replace the current engine capacity based taxation formula with vehicle engine power output based taxation (engine horse power) criterion, official sources revealed. The revenue loss incurred under the present taxation formula has prompted the government to change the present system, a senior government official said. The previous system of calculating the vehicle import duty on the cost, insurance, freight (CIF) value of the vehicle has brought sizable revenue despite minor leakages owing to under-invoicing by certain importers, he pointed out. Under the previous system the price invoiced or quoted by a seller includes insurance and all other charges up to the named port of destination, he explained. With a view to introducing a fair and justifiable system of duty calculations, the Finance Ministry is weighing the pros and cons of the new taxation system linked to the vehicle engine output (Brake Horse Power BHP). The proposed taxation system will compel the higher end super luxury vehicle buyers to pay a higher duty closing a tax revenue leakage of the government as well as creating a level playing field and ensuring the survival of all players in the market, the official claimed. Under the present taxation formula based on engine capacity, the same duty should be levied for different brands of vehicles with same engine capacity, he said adding that the value of those vehicles differ each other in quality standards. It is unfair to charge the same duty for a 2,000cc Korean-made vehicle purchased for US$20,000 and a European manufactured one with same engine capacity purchased at $35,000, he said. Citing an example, he noted that a European made model X with a CIF value of Rs. 5 million (taxed at 130 per cent under the previous system) will be charged with the same duty of a Japanese made model X with a CIF value of Rs. 2 million (taxed at 300 per cent) thus depriving the government of a duty income of around Rs.7-10 million per vehicle, he explained. The Ministry has focused attention on the additional outflow of foreign exchange on an expensive vehicle which does not bring in sufficient proportion of inflows to state revenue, he said adding that basically, the current tax formula which is aimed at tackling revenue leakage by closing the front door had opened the rear door for foreign currency outflows. However, he said that no final decision has been taken to introduce the engine horse power based taxation system and it is still under the process of evaluation and consultation. Meanwhile, the depreciation of the rupee against the Japanese Yen and the US $ has pushed the prices of imported vehicles by around 5 per cent making it difficult for motor traders to sell their vehicles. The prices of all vehicles will go up by 5-6 per cent due to the depreciation of the rupee pushing sales volume down, President of Vehicle Importers’ Association of Lanka (VIAL) Ranjan Peiris said adding that the price of fast selling Suzuki WagonR will go up to Rs.3.5 million from Rs.3.3 million. Franchise motor traders complained that their business is on the verge of collapse and most of them have decided to retrench their staff as a cost cutting measure. Around 1000 temporary and casual workers will lose their jobs under the present circumstances they claimed stressing the importance to maintain a constant policy on vehicle taxation in the country.http://www.sundaytimes.lk/180520/business-times/new-port-citys-hidden-truths-spells-dangers-for-future-generation-reply-of-chec-290122.html20 April 2018 @ 8:18 pmWe wish to clarify the statements made by academics, on the adverse aspects, of this mega Colombo Port City project since the response from CHEC Port City Colombo ( Pvt) Ltd is misleading as reported in your newspaper under the above heading. Prof. G.P Karunaratne Ph.D, EP, FASCE an international land reclamation expert with over 300 publications in scientific journals, conducted research in Sri Lanka in 2017. He states in response to your article: ' There have been many references to the Port City land reclamation project. The effect of this reclamation on the ground water table of the adjacent land, when coupled with intense rainfall in the same area has been discussed with respect to the effect on some of the old buildings, (historic buildings) in the said adjacent land. It was elucidated last December (05-12-2017) to an audience comprising of practicing engineers, that if proper drainage is not constructed and maintained certain despair would occur in these old buildings and infrastructure.' This public lecture given by Prof. Karunaratne and his team was illustrated with graphs of their research findings and made freely available at this public lecture. Hence we believe it is unethical to describe Prof. Karunaratne and his team's research findings as scaremongering and with no scientific basis. With respect to granite This project needs over 3.45 million cubic meters of Granite, quarried using explosives that are disturbing breeding sites of fauna and local residents. Granite is a limited resource in this densely populated small island (x100 smaller than Australia but with similar population of 21 million people). This limited resource is now being dumped in the sea opposite Galle Face Green to construct a Port City. As this resource would be needed by future generations too, we believe its use for this project needs careful moral and scientific evaluation. Dr. Gamini Jayatissa, Senior Research Scientist, NBRO, stated in the Sunday Times (November 2, 2014): “About 20 per cent of this island is mountainous or rocky and 1/3 of our population live in this area and warns of more landslides with climate change.” He publicly emphasised the need to take risk assessment seriously and stated that all projects in Sri Lanka need an Environmental Impact Assessment (EIA). Has a scientifically and legally accepted EIA been done for the Colombo Port City project? Attorney-at-Law, Ravindranath Dabare, Chairperson, The Centre of Environmental Justice, states: The EIA of 2011 fulfills less than 20 per cent of the legal requirements stipulated in section 42 of the Coast Conservation Act, No57 of 1981. He also states that the law does not identify compartmentalisation of the EIA for a single mega project. The word Supplementary EIA is not known in the Coast Conservation Act. It is thus of national importance that this mega Colombo Port City project has a valid EIA to continue its construction activities legally. If checks and balances are made with respect to EIA requirements stipulated why is not even one monitoring report been made public? We discovered that the much publicized Development Permit with its 72 conditions allegedly monitored by 26 Government agencies are a matter of private record, and are not available to the public. These reports are deemed by the participating public institutions (eg NARA) as the property of the CHEC company and as such confidential. How safe are our economically important and protective coral reefs with the massive sand dredging and dumping activities carried by CHEC P.C. Colombo (Pvt) Ltd? Are the essential light penetration levels for coral survival and smothering of delicate corals by sand particles carried by sea currents monitored to ensure their safety? Mr. Dabare says that the State Land Ordinance does not authorise the President to delegate his capacity under Section 60 (3) to reclaim any part of the foreshore or bed of the sea. The President has not authorised any lease as stipulated under Section 61 of the State Land Ordinance. We assume that this is because this section states that the President must be sure that such a lease will not substantially prejudice the rights of the public. Dr. Ranil Senanayake, Systems Ecologist clearly explained that clean air is an essential for healthy living. He stated the urban population of Colombo will lose their health for generations to come as they will suffer the consequences of high impact constructions that will block the through flow of fresh air from the sea the moment construction work begins on the Colombo Port City. It is a proven fact that construction activities contribute massively to air pollution, including land filling and vehicle emissions. All construction sites generate high levels of dust (typically from concrete, cement, stone, silica) which can carry for large distances over a long period of time. Currently toxic PM10 Fine Particles in the City of Colombo are at levels three times more than what is safe for humans. With the proposed high-rise building constructions in the Port City over an estimated period of 12 to 15 years the PM10 levels may increase 25-30 times more than what is considered safe for humans. Such an increase in PM10 toxic particles will definitely increase the risk of getting respiratory and cardio vascular diseases, including lung cancer as detailed in WHO reports. Clearly this project is an unacceptable health hazard to the citizens of Colombo, the capital city of Sri Lanka. - F. Mansoor (People’s Movement against the Port City and on behalf of the Creation Care Desk of the Methodist Church).http://www.sundaytimes.lk/180520/business-times/first-60-units-of-the-one-sold-to-overseas-sri-lankans-businessmen-here-287127.html23 March 2018 @ 7:49 pmWhile the demand for residential properties is on the rise despite the upcoming 10 per cent capital gains tax and 15 per cent VAT, Sri Lankan millionaires living overseas and some high end businessmen in the country have purchased the first 60 residential units of the luxury landmark development ‘The One’ in Fort. The three tower property which is believed to exceed US$ 500 million investment costs a minimum of US$ 765,000 per residential apartment unit. Top businessman Alex Lovell, key stakeholder of the project, at the launch of the development in Fort on Tuesday, said, “The landmark development ‘The One’ caters to the demand of foreigners looking for investments in Sri Lanka. Today the average spending of a tourist per day is around US$ 166 according to figures released by the government and it is expected to increase to US$ 225 in the coming years.” Phase one of the project was only open to locals to purchase whereas phase two will be open for foreigners to invest, he added. He also mentioned that lot of foreigners and Sri Lankans living overseas are eyeing to buy properties in Sri Lanka. The location of ‘The One’ in Fort is a demand driven centre of attraction for the high prices, he noted. On the sidelines of the launch, Mr. Lovell told the Business Times that the project commenced piling work in September last year and has now reached up to the sixth floor of the property. “One floor is built within five days,” he noted. The construction of the development is taking place on the previous controversial Krrish Square land. The land is on a 99-year lease taken by The One Transworks (Pvt) Ltd. On a land area of 4.3 acres, there will be 638 apartments while the project will also generate over 3000 direct employment opportunities. Phase one of the project will be completed by December 2021.The apartments range from 1700-4000 sq. ft at US$ 450 per sq. ft., comprising two to four bedrooms. China Construction Design International Group is the architects of the project while the construction, management and marketing is handled by the Zhongtian Construction Group. Two of the towers will be managed by The Ritz-Carlton Residences and JW Marriott Hotels.http://www.sundaytimes.lk/180520/business-times/womens-contribution-to-sls-tourism-development-290118.html20 April 2018 @ 8:17 pmTourism has demonstrated its potential for creating jobs and encouraging income-generating activities to benefit local communities in destination areas. However, less attention has been paid to the unequal ways in which the benefits of tourism are distributed between men and women, particularly in the developing world. Women form the majority of the population in Sri Lanka with around 10.9 million females as opposed to 10.1 million males. Out of the almost 11 million-strong female population, 67 per cent is in the productive or active category of between 15 to 65 years of age. [caption id="attachment_290120" align="alignright" width="400" caption="A tourist in a meditation posture at Jetwing Vil Uyana. Jetwing Hotels encourages its female employees to reach for the stars, with many holding senior management positions including general manager-level."][/caption] However, out of the 8.5 million economically-active Sri Lankans, only 30 per cent constitute women, which mean that the majority of females are economically inactive. This has directly resulted to build up a negative rate of growth of GDP over the last few years. The Department of Census and Statistics, in a report recently, identified that just over 5.3 million are the economically inactive female population in Sri Lanka. The total contribution of travel and tourism sector to the world GDP was recorded as 10.2 per cent and 9.6 per cent of jobs worldwide. This means that this sector generates approximately 1 in 10 of all jobs across the world. Globally, the tourism industry seems to be a particularly important sector for women in which 46 per cent of the workforce are women, as their percentages of employment in most countries are higher than in the workforce in general (nearly 40 per cent are women). The number of women and their percentage of the workforce in tourism vary between countries – from 2 per cent up to over 80 per cent. Although there were few obvious regional trends it would appear that in those countries, where tourism is a more mature industry, women generally account for around 50 per cent of the workforce. Of the data available, it appears that there has been a broad increase in the participation of women for tourism industry at a global level. This industry has also experienced a very low female participation. There are some significant reasons which affect to the less female participation in the tourism industry:

•  Social and cultural situation, limited range of skills acquired by females lead to low skilled occupations in tourism industry.
•  Lack of knowledge of handling of foreign languages, lack of professional knowledge required for the tourism industry, on occasion sees demand for low cost female labour. Multiple or dual work of the female, family responsibility and reproductive role, discrimination in the work environment specially in the tourism industry and no flexible hours allocated for female has resulted in less female participation in tourism.

In the tourism industry, the percentage of women who work in the industry is high, but their function is dominated by unskilled, low-paid jobs. Gender stereotyping and discrimination mean that women mainly tend to perform jobs such as cooking, cleaning and hospitality. In the world we have many examples and experiences for female employment in tourism industry. Countries like Malaysia, Singapore, Maldives or Turkey have more employment of females in the tourism field because those sectors are more developed there. In order to support the development of tourism industry it is clear that females can contribute more. The industry provides formal and informal opportunities for females. It can significantly impact on poverty reduction in rural community. There are many vacancies for females in this industry. Employment of more females in tourism can developed the industry as well as development of the economy. This can be done in many ways like increasing formal training, involving females at higher management level, scheduling flexible hours to perform their job at any time, allowing more autonomy in the integration of work and home obligation, establishing a pension scheme for tourism related occupations and increasing awareness of women’s important role in the economy.http://www.sundaytimes.lk/180520/business-times/siyapatha-finance-profits-surge-in-2017-287125.html23 March 2018 @ 7:47 pmSiyapatha Finance, the largest subsidiary of the Sampath Bank Group, has reported an after-tax profit of Rs. 498.86 million for 2017, an increase of 52 per cent from Rs. 327.28 million reported in 2016. Total interest income grew exponentially by 62 per cent year on year to Rs.4.6 billion in 2017, which was made possible by the improvement in business volumes, which enabled the company to achieve significant strides in its business segments of leases and loans whilst managing risk and return at both product and business levels, the company said in a media release. The growth in profitability was attributed to the significant increase in Net Interest Income (NII), Net Fee and Commission Income. The company reached a significant milestone last year with the asset base reaching Rs. 29.81 billion, recording an increase of 43 per cent over 2016. Siyapatha Finance introduced loans to its product portfolio in the second half of 2016, and in the year under review a net growth of Rs. 1.98 billion was achieved. Leasing/hire purchase expanded by Rs. 5.4 billion, reflecting a 37 per cent increase with a total portfolio of Rs. 20.12 billion. Gold financing stood at Rs. 2.56 billion, recording an increase of Rs. 794 million or 45 per cent. Deposits increased substantially to Rs. 5.97 billion, recording a growth of 178 per cent over the preceding year. “We at Siyapatha Finance are extremely proud of our financial results for 2017. We are especially happy with the 178 per cent growth of deposits and the noteworthy improvement of shareholder funds. These are testament of the customer’s growing confidence in Siyapatha Finance,” said Saman Herath, Managing Director of Siyapatha Finance.http://www.sundaytimes.lk/180520/business-times/over-700-money-laundering-complaints-in-2016-290116.html20 April 2018 @ 8:14 pmThe Central Bank (CB) this week reiterated strict rules pertaining to money laundering (ML) amidst a recent (2016) report that shows that 759 Suspicious Transaction Reports (STRs) were reported in 2016. Of this, 716 alone related to money laundering, according to the report from the Financial Intelligence Unit (FIU). Earlier this week the FIU in a public notice said that designated non-finance businesses (DNFBs) are now obligated to implement proper policies and procedures to stop money laundering and terrorist financing attempts using these businesses and professions under the customers due diligence rules. The notice referred to stringent Anti-Money Laundering / Combating Financing of Terrorism (AML/CFT) criteria in five sectors which also included professionals and accountants. Since the end of internal conflict of the country in 2009, STRs on Terrorist Financing (TF) have not been significant, at 43, while STRs relating to ML have showed a significant increase especially relating to drug dealing, frauds, cheating etc, an official told the Business Times. He added that statistics for 2017 are still being compiled. Money Laundering is the process by which proceeds from a criminal activity are disguised to conceal their illicit origin. The FIU notice, meanwhile, said the sectors include casinos, gambling houses and/or conducting of a lottery, including a person who carries on such a business through the Internet when their customers engage in financial transactions equal to or above the prescribed threshold real estate agents, when they are involved in transactions for their clients in relation to the buying and selling of real estate, dealers in precious metals and dealers in precious and semi-precious stones, including but not limited to, metals and stones covered by the National Gem and Jewellery Authority Act, No. 50 of 1993 when they engage in cash transactions with a customer, equal to or above the prescribed threshold, lawyers, notaries, other independent legal processionals and accountants as defined in Section 33 of the Financial Transaction Reporting Act (FTRA) and Trust or company service providers as defined in Section 33 of the FTRA. “Records of transactions and of correspondence relating to transactions and records of all reports furnish to the FIU, which is the authority to monitor AML/CFT compliance in Sri Lanka should be retained for a period of six years from the date of transaction, correspondence and the furnishing of the report. Records of identity obtained should be retained for six years from the date of closure of the business relationship. Where any record is subject to an on-going investigation, such records should be retained until such time where the institution is informed by the relevant authority,” the notice said.http://www.sundaytimes.lk/180520/business-times/sl-cigarette-prices-highest-in-asiareport-287123.html23 March 2018 @ 7:46 pmPrices of cigarettes in Sri Lanka are the highest in the Asia Pacific region and the second highest in the world with the island rapidly turning into a cigarette smugglers ‘paradise’. These comments were made by Roshan Madawala, Managing Director, Research Intelligence Unit (RIU) at Tuesday’s launch of the “Research Report on Taxation in Sri Lanka – a case study on the Tobacco Industry by the RIU” at the Galadari Hotel in Colombo. RIU has prepared the report in collaboration with the Big Issue Magazine. Quoting the report, he observed that the fiscal and taxation policy of a country is a major determinant of the economic policy of that country, particularly in areas such as revenue, public debt as well as resource allocation and economic stability. He said the policy on tobacco should focus on achieving two important objectives – reduce the negative health impact of tobacco consumption while securing government taxation revenue with the tobacco industry being one of the largest contributors. The World Bank has suggested that a 10 per cent rise in taxes would result in an 8 per cent fall in smoking in low and middle income countries. But, in Sri Lanka with the availability of much cheaper alternatives such as beedi, along with the choice of illicit cigarettes, the low price structure indicates that a ‘cut and paste’ approach to tobacco policy across international markets won’t work. In reality a 257 per cent increase in the price has resulted in a 25 per cent increase in overall smoking and in essence, taxation-driven price hikes alone have proved that they are insufficient policy measures for delivering the reductions in smoking prevalence that has been quoted by international agencies. With the findings of the research some observations and recommendations are: De-politicize the issue of tobacco taxation and base it on a rationalised, balanced and well researched policy framework; look at policy approach of Germany, Pakistan and others who have achieved their goals by monitoring and responding to their local environment and dynamics rather than blindly accept policy dictates from international agencies; consider the more important policy measures that are aligned with education and health awareness rather than only looking at taxation to achieve health goals; review policies on elated industries like beedi and review the policy towards smuggling. According to the report, other ancillary issues that are interwoven to this critical industry also impacted it such as the beedi manufacturing and tobacco growing. In the case of beedi manufacturing, the rural poor use it because of its price and also it has now become a cottage industry and also government earns revenue by way of taxation. The Chairman, All Island Tobacco Cultivators Association at the launch suggested to be an intervenient party to the discussion and said that there are about 20,000 farms and around 300,000 directly and indirectly dependent on the growing of tobacco. He pointed out that the total industry is adversely affected due to the smuggling of cigarettes as, according to information, only one in 10 of smuggled containers having undeclared cigarettes is detected while the other nine would invariably be merchandised in the country. This affects cigarette sales and due to this fact they are unable to sell their tobacco cultivation to the company. He pointed out that one smuggled container would fetch around Rs. 1 billion in income. The report indicated that the beedi industry and consumption in the country could also contribute to the increase in smoking. The beedi industry in Sri Lanka commenced in 1956 and since then it has come down from generation to generation enveloping the rural poor. In this industry, the supply chain commences with the purchase of tobacco leaves, including the refuse leaves rejected by the CTC. This tobacco is then wrapped in a ‘Thendu Leaf’ imported from Orissa, India. Over the years the beedi wrapping process has become almost exclusively a cottage industry that employs a large number of village level households. The research indicated that there are 700 registered/ licensed beedi producers and many more small players in Sri Lanka. Of those registered around 50 are well established and pay ETF and EPF to their workers. The beedi industry revenue contribution is Rs. 2.8 billion in 2016. The report noted that consistent tax hikes on cigarettes from 2009 to 2015 have since given way to a large and unprecedented hike in 2016 which hampered the objectives of both the Ministry of Health and the Ministry of Finance. It noted that over recent years, Sri Lanka has introduced unpredictable and seemingly ad-hoc increases in the rate of taxation on cigarettes which has partly caused current market distortions that have triggered a massive inflow of illicit products. This well researched report provides quality statistics and data on the tobacco industry in Sri Lanka.http://www.sundaytimes.lk/180520/business-times/cnn-media-blitz-to-get-3-increase-in-footfalls-290112.html20 April 2018 @ 8:13 pmSri Lanka hopes to increase its footfalls by about 3 per cent following the US$650, 000 CNN media blitz scheduled to kick off next month. Sri Lanka Tourism Promotion Bureau (SLTPB) Managing Director Sutheash Balasubramaniam told the Business Times on Monday that plans were underway to kick off the CNN campaign to promote the destination early next month. He said that this was taken as an interim measure since no campaign had been carried out during the last four years. The campaign is expected to create awareness about Sri Lanka in the global market and aims to attract the high spending traveller to the country, he explained. The CNN campaign would be targeting the Asia Pacific region, Europe, West Asia and would be displayed in all 42 airports in the US and is set to be viewed by at least 254 million viewers. The CNN blitz will be broadcast on the channel for a period of three months and is likely to increase the arrivals by about 3 per cent if all other factors stay good, Mr. Balasubramaniam said. The campaign would be aired across different timings daily during prime time slots and even lesser prime time slots, he said. In addition he pointed out that Sri Lanka would be featured on the “Great Big Story” documentary as well highlighting the top three attractions in the country as part of a CNN editorial pick. The CNN campaign ran into problems at the start due to issues pertaining to the method adopted to obtain approvals as a result of which the board and the management finally arrived at a consensus and worked out matters amiably to go ahead with the advertisement. Initially the industry representatives on the board disapproved of the campaign stating they required the global promotion campaign to be expedited but later agreed to it once the process to gain approvals was adhered to.http://www.sundaytimes.lk/180520/business-times/techneeds-foray-into-sri-lankan-iot-industry-287121.html23 March 2018 @ 7:45 pmTechneed (Pvt) Ltd, one of Sri Lanka’s growing high-tech internet of things(IoT) start-ups, last week announced the deployment of its “Nurve IoT Gateway” in one of the largest telecom service providers in Sri Lanka. Essentially the gateway enables the service provider to centrally monitor the environment variables in the machine room, such as temperature, humidity, movements, water level, etc. from the Network Operations Centre (NOC), thus enabling improvements in operational efficiency. The cutting edge gateway device has been already deployed at close to 500 remote unmanned stations, the company said in a media release. The purpose built device is designed, fabricated and manufactured locally by Techneed’s own skilled resources consisting of hardware and software engineers. Essentially the sensors attached to the gateway primarily keep track on the environment, and based on the reading and the values set in the sensor, the signal is digitally converted and carried over the IP network, thus providing a representation of the state of the environment in the station, in a graphical format. Techneed has a rich portfolio of Low Power Wide Area Network (LPWAN) based IoT sensors for all situations such as water level monitoring, temperature and humidity monitoring, movement monitoring, to name a few. This is pivotal in providing solutions in Smart Car Park Management, Smart Waste Management, Smart Water Management. Particularly the Sensors and gateways are based on LORA protocol and CAT-M IOT technologies, the release added. ‘Techneed has fit for purpose Home based IoT Systems and sensors to cater the Smart Home requirement. There are three challenges in deploying any of the IoT based projects; First, Understanding the Use Case and Designing and Building out the Sensors, Gateway and the associated communication channel. Second is Aggregating all the sensor data and device information, to a hosted IoT middleware in the Cloud and Third challenge is Value adding to provide Management reports, Analytics, and integrating to the Enterprise productivity tools such as Enterprise Resource Planning (ERP),” said Buddhika Kondasinghe, Co-Founder & CTO of Techneed (Pvt) Ltd.http://www.sundaytimes.lk/180520/business-times/govt-to-brief-wa-media-on-kandy-at-atm-290107.html20 April 2018 @ 8:12 pmSri Lanka’s tourism authorities are currently eyeing the next influx of tourists from West Asia as these travellers were said to have cancelled their holiday plans for the post Ramazan season in the wake of the Kandy violence that broke out in March this year. Kandy Hoteliers Association President Samantha Ratnayaka said that they had spoken with hoteliers and found that though about 40 per cent of bookings were cancelled following the spate of violence in the hill capital, there was a surge in bookings by about 10 per cent to date for visits post June. The July and August arrivals seem promising, Mr. Ratnayake pointed out adding that they expect the Kandy Perahera to bring in the numbers as always even this year. It was noted that about 50 travel and tourism industry companies from here would participate at the Arabian Travel Mart (ATM) scheduled to start next week. Meanwhile, Sri Lanka Tourism Promotion Bureau (SLTPB) Managing Director Sutheash Balasubramaniam said that they expect the ATM to be the platform to attract more arrivals this year. This year’s travel mart is crucial in that the authorities would be planning to conduct a media conference to highlight that the situation in the country was returning to normal with about 60 media houses expected to attend the event. Meanwhile, a number of road shows would be held in all West Asia cities like Sharjah, Saudi Arabia and Bahrain this week. Feedback obtained from the travel industry there had indicated that they were convinced that the situation in Sri Lanka was returning to normal. Moreover, a team of 150 Spanish travel agents scheduled to visit Sri Lanka were expected to make a stop in Kandy as well that would give authorities the opportunity to showcase to the world the normalcy that prevails in this tourist destination. Kandy hoteliers incurred a loss of approximately over Rs.1 million for 982 room cancellations last month following communal clashes that affected the region.http://www.sundaytimes.lk/180520/business-times/orion-city-dialog-to-build-sls-first-ever-high-density-data-centre-287118.html23 March 2018 @ 7:43 pmSri Lanka’s premier connectivity provider, Dialog Axiata Group, recently announced a joint venture partnership with Orion City to build and manage the island’s first ever High-Density Data Centre at the Orion City IT Park in Colombo. [caption id="attachment_287119" align="alignright" width="400" caption="Representatives from both Dialog Axiata Group and Orion City."][/caption] The proposed Data Centre will be established through Digital Realty (Pvt) Ltd, a company jointly held by Dialog Broadband Network (Pvt) Ltd, a fully owned subsidiary of Dialog Axiata Plc and St. Anthony’s Property Developers (Pvt) Ltd (SAPD), a subsidiary of Orion City. The 200 rack High Density Data Centre is designed to offer world-class services to support the rapidly escalating demand for computing power in an increasingly digital Sri Lankan economy. Promising the highest energy efficiency, and robust capacity to support up to 8 kilowatts per rack, Digital Realty’s impressive capabilities are anticipated to drastically improve connectivity and accessibility to enhanced computing power, Orion City CEO and Digital Realty Managing Director, Jeevan Gnanam said in a media release. “The launch of Digital Realty and the impending establishment of our nation’s first, largest, and most efficient High-Density Data Centre is guaranteed to unleash a new wave of tech-enabled opportunities across the entire spectrum of local enterprises – from Small and Medium Enterprises(SMEs) and tech-startups to large corporates, and especially for the banking and finance sector,” he explained. Powered by its own team of employees and a dedicated management team, Digital Realty will offer co-location services – enabling an enterprise’s complete IT infrastructure to be hosted in the new state of the art facility, in addition to offering dedicated servers and cloud solutions. The joint venture is the most recent consolidation of a strong relationship between Orion City and Dialog Axiata Group. “Today marks a true milestone for the Sri Lankan digital economy as we join together to introduce a new paradigm in technological connectivity. All around us, we see the beginnings of advanced technology creeping into every aspect of the Sri Lankan economy. With the launch of Digital Realty, Dialog is pleased to help accelerate these invaluable developments, by providing enterprises with tools and infrastructure necessary to compete in an increasingly technologically sophisticated global market place,” noted Dialog Axiata Group CEO, Supun Weerasinghe. Digital Realty’s entire High Density Data Centre will be centrally located at the Orion City IT Park in Colombo, providing a particularly valuable option for Sri Lankan enterprises seeking a convenient, cost-effective site for their primary data centers. Notably, each data rack will be individually monitored for power delivery and consumption in order to ensure that clients only pay for what they use, enabling unmatched returns on their digital investments. Similarly, existing tenants at Orion City will also benefit tremendously from the enhanced processing capabilities present on site including the addition of plug and play cloud services for the facility. The proposed High Density Data Centre will be completed over the next 6-9 months.http://www.sundaytimes.lk/180520/business-times/safe-holidays-in-sri-lanka-get-mafia-bashing-290099.html20 April 2018 @ 8:11 pmTravelling safe has become a concern in Sri Lanka in the wake of a few attacks on tourists that have hurt holidaymakers trying to take home a memorable stay on the isle. Accusations have been levelled against mafia groups operating in the southern area of Mirissa who are said to have been carrying out orchestrated attacks on tourists while other government officials believe that such groups were linked politically as well. [caption id="attachment_290103" align="alignright" width="400" caption="Tourists on the Weligama beach"][/caption] The latest worry to the authorities comes after an April 8 physical assault on two male tourists and a sexual assault on a female tourist who had been visiting the popular surfing destination of Mirissa. After a police complaint was lodged, nine suspects were arrested and produced before the Matara Magistrate, the Police stated. It was also noted that the suspects were to have been produced for identification before the Magistrate on Thursday (April 19). In another incident there had been an attack carried out on five Israelis holidaying in the country at Midigama in Weligama and following a complaint lodged with the police, four arrests were made in this connection. The mafia group is reportedly operating in the area carrying out attacks on tourists and sometimes even on locals who even speak with foreign tourists that has become an issue. Added to this is the fact that these groups of beach boys are employed by some of the beach side surf bars operated mostly illegally by various parties allegedly connected to politicians in the area. Politicians back beach boys Tourism Development Minister John Amaratunga told the Business Times on Monday that the government believes “there is a political hand and an unseen hand involved in the escalation of violence” which authorities were currently investigating. As a second incident also occurred in Midigama after the Mirissa attack during the last couple of days, the minister attributed it to “some organised violence.” One of the measures adopted to contain the situation; Minister Amaratunga pointed out would be to “throw out the beach boys” as these persons would carry out such attacks if paid to do so. The Minister apologised to tourists for having to endure this trauma and assured them of their safety in Sri Lanka in future. He noted that an adequate police force needed to be deployed at the beaches to ensure the safety of holidaymakers and that the police needs to be decentralised to access tourist areas. Following investigations by the Sri Lanka Tourism Development Authority (SLTDA) on the Water Creatures Guest Restaurant and Surf Bar where the incident had taken place, the authorities had issued orders to close the establishment on Tuesday evening. During the investigations it was found that the establishment was operating as an eating place with a business license from the Pradehiya Sabha authorities with no permission from tourism authorities to entertain overseas visitors. SLTDA Director General P.U. Ratnayaka said that they had issued orders to close the surf bar and noted that the authority officers were present at the time the establishment was shut down. The authorities conducted investigations into the establishment and had even requested the owner Baduge Harsha Prasanna to come to the SLTDA office in Colombo for an inquiry. Mr. Ratnayaka noted that the informal sector needed to be gazetted and registered and pointed out that the publicity Sri Lanka was receiving following this incident was “damaging to the industry.” Harassing hotels Hoteliers Association President Sanath Ukwatte highlighted that there was a mafia group operating in the Weligama area and noted that some of the general managers of member hotels in the area also have faced harassment at the hands of these unscrupulous people. He pointed out that this was the first time the government had taken action seriously to address the problems faced in these areas. He pointed out that the harassment of tourists was an ongoing phenomenon on the beach, in public transport and even at standalone restaurants. The mafia group operating in the south has harassed managers in hotels in the area and in this respect, Mr. Ukwatte called for a halt to such operations noting that people visit Sri Lanka on the premise that the people of this land area a nice lot. Tourist Police OIC Prabhath Vidanagama speaking with the Business Times on the sidelines of the media briefing held on Tuesday said that the recent incidence of violent attacks against tourists that seemed to be on the rise were attributed to the large number of travellers visiting this destination. However, tourism industry veterans noted that though numbers were getting larger there needs to be an increase in ensuring tighter security and believed it to be the “height of stupidity” to assume that more tourists would mean more attacks. In fact, they pointed out that this should not be allowed to happen in the country and added that the reason could be attributed to the increase in the “visibility of the attacks” than before. Although most complain of similar incidents in the past, official records have no indication as to any complaints being made in the past against these groups. The SLTDA said that they would be requesting the Tourist Police to establish a temporary unit with a minimum of 15 officers to work in the area following the recent incidents in Weligama. This temporary measure would be taken up until a permanent Tourist Police force is established in the area. Getting attention Most of the industry was concerned about the news getting the spotlight on social media and if so it’s possible impact on the sector that was just picking up on the numbers. However, although it was noted that following the assault there had been some posts on social media like “Mirissa Don’t Go” the concerns were also mainly focused on the fact that tourists visiting Sri Lanka were not culturally sensitive. This is not the first instance when an incident of this nature had made it to the headlines of the news of the day infact a couple of months agoanother female tourist was sexually assaulted as a result of which the issue of how and when travellers should move around came up for discussion. In fact even this time, the subject Minister pointed out that the tourists must understand that they should travel outside during reasonable hours and not venture into jungle areas. But even tour operators and travel agents highlighted that tourists visiting Sri Lanka were either unaware or not simply following the guidelines on how to dress appropriately in this cultural outpost. Law and order taking effect could act as a deterrent for these kinds of acts and the industry believes that the fact that the police had been inactive in the past was since the local government authorities were behind these groups. In this respect, the industry urged the government to ensure that there could be central defense and tourism apparatus that would lay out clear policies and indicate clear instructions to police in a bid to initiate action in these types of cases. A police force patrolling the beaches is a requirement that would ensure the beaches would remain safe for anyone to visit. In fact, the minister’s request for the Special Task Force (STF) to be deployed patrolling the beaches is yet to be taken up. A safe environment for travellers to come home to and feel welcome is imperative to attracting the right travellers and ensuring proper guidelines are given them to assure them of a safe holiday on the paradise island of Sri Lanka.http://www.sundaytimes.lk/180520/business-times/earth-hour-movenpick-hotel-teams-up-with-st-marys-girls-school-kollupitiya-287114.html23 March 2018 @ 7:42 pmWith Earth Hour fast becoming one of the world’s largest grassroots movement for the environment, Mövenpick Hotel Colombo teamed up with St Mary’s Girls School, Kollupitiya, to not only celebrate this event but also carry out a long-term plan through a tea planting programme. The initial programme was conducted by Dr. Varuna Fernando, an Environment specialist, delivering a lecture to the students on March 14 in preparation for Earth Hour. Dr. Fernando is a Chartered Mechanical Engineer, previously holding top positions across the world, and currently a consultant in Hotel Engineering systems, environmental management systems and power generation. Over 75 students participated together with the school principal, the hotel said in a media release. The tree plantation programme was the second event conducted within the school premises together with the colleagues of Mövenpick Hotel Colombo, on March 21. The team assisted in fixing a gate for the herbal garden, levelling the ground and together, planted 15 herbal trees with the students of the school. [caption id="attachment_287116" align="aligncenter" width="400" caption="Mövenpick team with the staff and students of St. Mary's Kollupitiya."][/caption]http://www.sundaytimes.lk/180520/business-times/city-hotels-a-lady-comes-to-town-290094.html20 April 2018 @ 8:08 pmSri Lanka’s city hotels have been inspired by men to service the weary travellers walking through their doors but now the order is set to change and a breath of fresh air has entered Colombo Seven. [caption id="attachment_290095" align="alignright" width="240" caption="Ms. Rookamanie Fernando"][/caption] Ms. Rookamanie Fernando, the new General Manager at Jetwing Colombo Seven with her unique style and mentality is the ideal personality that will fill the vacuum to bring in the change that Colombo is searching for. She already has wonderful plans to liven up the city and ring back the authenticity of the Sri Lankan people to the fore with the Jetwing Colombo Seven Classic Eve on May 5 with an array of local food displaying the cooking tools as well like the grinding stone. Together with local music to revive more golden memories guests would be requested to attire themselves in Sri Lankan traditional outfits giving a feel of the place with a good party to go for. God-fearing Ms. Fernando is married with children; she noted that she has been able to balance family and career throughout these years through her sheer determination and passion in about everything she does. Colombo adds competition to her daily chores, due to which “I have to be very vigilant and know the target market and must know whom to tap and which channel to tap.” Having had previous experiences as the General Manager of Jetwing Pavilion and Jetwing Sea, Ms. Fernando pointed out however, that Colombo is different in that its network is different and the serving is different compared to the resort setting. As a creative thinker always attempting to churn out innovative ideas, Ms. Fernando said, “I am self-confident and my way of thinking is to do unique things that others have not done.” Her experience goes back to the days since she completed her Advanced Level examinations and joined the industry soon after in 1981 as a trainee receptionist at the Browns Beach Hotel. For four years she spent time in Vienna, Austria engaged in a study programme at the South Asian Environment Cooperative Programme where she continued her studies in German language and represented Sri Lanka at this institute. During this time, Ms. Fernando also took time out to work at a public relations company called Aces. Returning to the country in 1986, Jetwing opened the doors to a new career start as an Executive in Guest Relations at the Blue Oceanic Beach Hotel where she was promoted to the position of Public Relations Manager. There she was able to secure a place for herself having earned a good reputation within the company so much so that she was sent to represent the organisation at travel industry fairs. During this time Ms. Fernando took an active interest in 1992 in learning the intricacies of Ayurveda gaining a wide knowledge of herbs and plants and their impact on the body and its functions. Once she spoke to the management at Jetwing about the power of Ayurveda as a therapy for the weary traveller to Sri Lanka, she was allowed to market these treatments and promote the concept to their clientele. Initially the hotel allocated two rooms at the Blue Oceanic hotel for her to carry out these treatments. Later a bungalow situated in proximity to the hotel was given out to her and due to the thriving business it generated Jetwing readied itself to establish the purpose built Ayurveda hotel the Ayurveda Pavilion in 2001 where she served as its General Manager. Following this stint, she was then sent to an academy called the Shivasom Academy in Bangkok, Thailand in order to study more about spa treatments. She was also given the opportunity to undergo training at the UK based Elemis, which is considered to be the second largest spa providers in the world. Upon returning to Sri Lanka, Ms. Fernando also brought down two UK trainers to assist in training the spa therapists at Jetwing. Following this knowledge gained, she was then asked to oversee the spas at Jetwing’s hotels like the Lighthouse, Galle; Blue Oceanic; Vil Uyana and Blue Waters. Some of her milestones are the turning around of the Jetwing Sea property to a five star hotel and establishing deluxe rooms and raising the service charge from less than Rs.3000 in 2010 to Rs.25-30, 000 in 2017, she explained. In addition she noted that at Jetwing Pavilion she had been able to increase the accommodation units from the existing 12 villas to an additional 35 rooms. With a motto to deliver “beyond expectation,” Ms. Fernando said she wants to establish something unique in serving people who she said she loves.http://www.sundaytimes.lk/180520/business-times/inequality-of-the-sri-lankan-tax-system-287110.html23 March 2018 @ 7:38 pmTaxes are the primary source of income for any government to expend on education, health, defence, maintaining roads (and not to mention the lavish lifestyles of the politicians and their friends and families). All these expenses are met by collecting taxes in different forms from the general public. Other secondary objectives of taxes are import control, local industry protection, etc which are however not the subject matters of this feature. Depending on the nature of the tax, it is felt differently by the taxpayer. In simple terms, direct taxes are taxes directly paid to the government by the taxpayer and the most common examples include income tax and corporate tax. In contrast, indirect taxes are taxes on goods and services, that is, taxes on what people buy, rather than on what they earn. Examples include goods and services tax, import duty, etc. Payers do not feel the burden much partly because an indirect tax is paid in small amounts and partly because it is paid only when making purchases that include the tax in the price. Closer look at taxes According to the Inland Revenue Department, income taxes amounted to 37 per cent of the total tax income of the government, and indirect taxes on goods and services amounted to 44 per cent in 2016. Income tax collection has been reduced by 7 per cent whilst indirect taxes have grown by a colossal 33 per cent since 2015. The bitter truth is that the poorest 20 per cent pay as much as 13 per cent and the poorest 10 per cent pay as much as 23 per cent of their income in the form of indirect taxes. The richest 10 per cent pay less than 1 per cent as indirect taxes and a pathetic sum in direct taxes. Thus, the poorer you are, the heavier the (indirect) tax burden. Whether a rich man or poor man buys a commodity, the price in the market is the same for all because the taxes are included in the price. Hence, rich and poor pay the same amount, which is obviously unfair. However, when indirect taxes are imposed on luxury purchases or goods consumed by the rich, they are equitable as these goods are not essential or considered primary goods. In February, the Finance Ministry slapped a special commodity levy on imported potatoes on the pretext of protecting local farmers, which ultimately resulted in an increase of Rs.29 per kilo. Unless the rich decide to consume more potatoes, it does not take a pundit to realise such a levy is felt more by the poor rather than the rich. Social issues arise when a poverty-struck nation such as Sri Lanka imposes indirect taxes on staples such as sugar, rice, onions or, for that matter, cement or fuel. Indirect taxes on essentials are not equitable as these taxes are felt more heavily by the poor than by the rich, as mentioned before. Future direction The amount of indirect taxes paid by the rich and the poor is invisible in Sri Lanka. For this reason, the public underestimates what the poorest pay in taxes and wrongly believe the richest bear the biggest tax burden as they pay the higher portion of income taxes. About 46,000 companies and 1.2 million people pay income taxes. Some 1.2 million out of a population of 21 million is a very low percentage, and of that 1.2 million only 1.1 million pay taxes through employment, meaning that only 130,000 people file income taxes directly. The Inland Revenue Department should be ashamed of these statistics and should immediately turn it around. Many economists have recommended moving towards direct taxes. However, it is safe to conclude that no country can do with only one type of tax. Both types of taxes must be mixed in a good system of taxation. The rich can be taxed best directly, but the pockets of the poor also must be tapped through indirect taxes. The challenge is to achieve the magical balance between these two types of taxes. Until this sensitive issue with the tax system is tackled by a bold regime, despite anticipated hostility from the rich and influential, Sri Lanka will remain as a land of the poor becoming poorer whilst the few rich prosper.http://www.sundaytimes.lk/180520/business-times/hatch-giz-launch-first-maker-and-co-worker-space-in-jaffna-290090.html20 April 2018 @ 8:05 pmHatch Kalam, the first maker and co-worker space in Jaffna, was officially launched this month following the signing of the agreement between Hatch Works, GIZ SME Sector Development Programme and Yarl IT Hub. The state of the art space focuses on creating opportunities for the local community by acting as a platform for the thriving innovation and start-up community in the north through access to knowledge and networks enabling innovation, technology and entrepreneurship. [caption id="attachment_290092" align="aligncenter" width="400" caption="From left:Balathasan Sayanthan – Founding Member, Yarl IT Hub;Khema Wijegunawardane – Technical Advisor, GIZ SME; Randhula De Silva – Chief Disruptor, GIZ SME; Jeevan Gnanam – Co-Founder, Hatch WorksandNathan Sivagananathan – Co-Founder, Hatch Works."][/caption]http://www.sundaytimes.lk/180520/business-times/hotel-sector-shares-slated-to-rise-287108.html23 March 2018 @ 7:35 pmEast West Properties PLC's letter of intent to sell a stake in subsidiary, Weligama Hotel Properties Ltd and with a slew of city hotels in the market, the share market has seen a keen interest in hotel sector stocks, analysts say. East West Properties is the property owner of recently opened Weligama Bay Marriot Resort & Spa and the company earlier this month announced its intent to sell 72 per cent of the shares of Weligama Hotel Properties Ltd to Singapore's HPL Hotels & Resorts Pte Ltd. Many are keen on buying shares of firms that own city hotels, some analysts told the Business Times. So far Hilton and Hyatt Colombo hotels' state owned stakes, Bank of Ceylon's (BOC) intent to divest the Grand Oriental Hotel (GOH) and two prime 5-star Colombo hotels owned by different conglomerates are for sale. Businessman Nahil Wijesuriya and his children own about 85 per cent of East West Properties. "The announcement to sell Weligama Hotel Properties sort of triggered the intense buying from early this month," an analyst noted. Another analyst added the Ministry of Public Enterprise Development saying recently that Requests for Proposals (RFP) from 15 local and foreign companies to act as the transaction advisor (TA) in the scheduled divestment process for the Hilton and Hyatt Colombo hotels also triggered interest in hotel sector shares. This intensified with a news report that Weligama Hotel's intended buyer, HPL Hotels & Resorts has also made an offer to invest in and upgrade the heritage hotel, GOH. Later it was found that the Underperforming Enterprises Or Underutilised Assets Act 43 of 2011 where Hilton and Hyatt come under doesn't provide for any legal provision to sell these hotels. Almost all analysts said that city hotels aren't performing well another reason they are in the market. On a going concern, they are far below their net asset value. The hotel sector witnessed a decline in occupancies in many conglomerates last quarter primarily as a result of the increase in room inventory within Colombo. "The competition is catching up with additional rooms by international chains coming in which is the main reason many want to exit the hotels and possibly sell them to foreigners," the analyst said.http://www.sundaytimes.lk/180520/business-times/imf-makes-good-progress-in-talks-on-lankan-economic-reforms-290085.html20 April 2018 @ 8:04 pmThe International Monetary Fund (IMF) is expected to make good progress in discussions with Sri Lankan authorities on the economic reform programme supported by the fund at the IMF spring meetings now being held in Washington, the IMF has said. In a reply to an email query, IMF spokesperson Raphael Anspach told the Business Times that the IMF Executive Board will reach an agreement after completing the fourth review of the three year Extended Fund Facility(EFF) obtained by Sri Lanka. The successful conclusion of the review will enable the disbursement of the fifth tranche of the US$1.5 billion facility, he disclosed. Sri Lanka has so far received a total of $759.9 million under the EFF and there was no indication from the IMF that it will withhold the disbursement of next tranche over concerns that the government is yet to fulfill its commitments given to implement the fuel pricing formula and reforms to make state-owned enterprises (SOEs) more profitable, a senior Treasury official told the Business Times. Recently, an IMF mission led by Manuela Goretti had constructive discussions with the Sri Lankan authorities on the 2018 Article IV Consultation and made progress towards a staff-level agreement on the fourth review of the EFF-supported programme, he disclosed. Issuing a media release, the IMF noted that Sri Lanka’s progress in revenue-based fiscal consolidation has helped preserve space for public investment and social spending while bringing down public debt. It says further revenue mobilisation is needed to meet the 2018 primary surplus target and reduce the overall deficit to 3.5 per cent of GDP by 2020. The new Inland Revenue Act (IRA) represents a major achievement towards a simpler and more equitable tax system, and its smooth implementation will be critical, the IMF emphasised. According to the global lender, Sri Lanka should immediately tackle fiscal risks including ineffective implementation of the IRA, further delays in SOE reforms, and failure to provide for weather calamities.http://www.sundaytimes.lk/180520/business-times/securitisation-bill-to-be-ready-by-next-year-287105.html23 March 2018 @ 7:33 pmThe Securities and Exchange Commission (SEC) is revisiting an old piece of legislation in a bid to step into the future. The Securitisation Bill, drafted in 2009 at the height of the global financial crisis, is being re-considered by the regulator in a bid to hold those who deal in securitisation more accountable, SEC officials said. This was said by Suhadini Wickremesinghe, Assistant Manager - Legal and Enforcement SEC during a presentation on 'Changes in the Regulatory landscape' at the 6th Capital Markets Conference (CAPM) held on Wednesday in Colombo. “We hope to introduce it by next year,” she said. Securitisation is the process through which a company designs a financial instrument by combining its other financial assets and then marketing different tiers of the repackaged instruments to investors. This process can encompass any type of financial asset and promotes liquidity in the marketplace. As an example, a leasing firm can opt to pool various types of their customers’ leases and then in turn obtain a loan from a bank against these leases as a whole. Similarly contractual debt such as residential mortgages, commercial mortgages or credit card debt obligations can be combined and then marketed into different tiers of the repackaged instruments to investors. As per SEC data, in 2009 there was nearly Rs. 25 billion worth of issued paper in asset backed securities. "Most leasing firms are into this type of securitisation. They parcel well performing leases and sell it to investors through a trustee. The trustee will manage it for them," an SEC official told the Business Times, separately. He added that there are many small firms that aren’t regulated by any regulatory body which poses a threat. This is another reason why the SEC wants the Bill hastened. CAPM also saw discussions on the Inland Revenue Act, the Foreign Exchange Act as well as the SEC Act. Cryptocurrencies witnessed many questions of interest, whilst discussions revolving round the use of Blockchain Technology, Fintech and Digital Disruption were also featured at CAPM. (Duruthu)http://www.sundaytimes.lk/180520/business-times/lifted-by-india-south-asia-regains-growth-lead-still-lags-on-jobs-290082.html20 April 2018 @ 8:03 pmWASHINGTON – South Asia has regained its lead as the fastest growing region in the world, supported by recovery in India. With the right mix of policies and reforms, growth is expected to accelerate to 6.9 per cent in 2018 and 7.1 per cent next year, according to a new World Bank report. The twice-a-year South Asia Economic Focus (SAEF) finds that the region could even extend its lead over East Asia and the Pacific. Much of the progress, however, is driven by India’s growth rebound and is not consistent across countries. Despite accelerating global growth and trade, exports remain weak. Progress on fiscal consolidation is slow, and deficits are high. This edition, “Jobless Growth?” argues that growth alone will not be enough to attain the higher employment rates enjoyed by other developing countries, especially among women. “More than 1.8 million young people will reach working age every month in South Asia through 2025 and the good news is that economic growth is creating jobs in the region,” said Martin Rama, World Bank South Asia Region Chief Economist. “But providing opportunities to these young entrants while attracting more women into the labour market, will require generating even more jobs for every point of economic growth.” The report, released by the bank, said that while the number of working age people is increasing, the fraction of working-age people who are at work has declined in most countries in South Asia based on employment data analysed from 2005 to 2015. Some decline was to be expected, as higher incomes allow households to prioritise education, health and other commitments. But the fall in employment rates in South Asia has been much faster than in East Asia. And it has been particularly strong in India, Bhutan and Sri Lanka, especially for women, the report shows. With declining employment rates, the region is foregoing some of its potential demographic dividend. To arrest further declines in employment rates, South Asian countries would need to create 11.7 million jobs a year, which is feasible if the current growth momentum of the region is sustained. But if South Asia wants to increase employment rates to the levels seen in other regions with similar income levels, it would need to create many more jobs. The focus should also be on better jobs, as regular wage employment remains the exception more than the norm. “Growth is important, but even very high growth will alone not be enough to increase South Asia’s employment rate”, said report author Robert Beyer. “Policies and actions are needed to make growth more labour-intensive, and especially to create the kinds of jobs that can encourage greater labour force participation by women.” Afghanistan’s economic growth is projected to slow from 2.6 per cent in 2017 to 2.2 per cent in 2018 largely due to security and political challenges and a reduction in agriculture production due to lower than expected levels of rainfall. New sources of growth through agriculture, mining, and regional connectivity can create more jobs and growth. Every month, the working-age population increases by 64,000 people and Afghanistan must create 370,000 jobs a year to maintain its employment rate. Economic growth in Bangladesh remains strong with growing industrial production, remittances and investment. Growth is expected to moderate from 7.3 per cent in 2017 to 6.5 per cent in 2018. Inflation and budgetary pressures have been high and the trade deficit has expanded. Every month, the working age population increases by 170,000 people and Bangladesh must create 1.1 million jobs a year to maintain its employment rate. Delays in the completion of two hydropower projects may temper growth from 5.8 per cent in 2017 to 5.4 per cent in 2018 in Bhutan. While supported by hydropower projects and tourism, the country would benefit from a more robust private sector to create more jobs for its youth. Every month, the working age population increases by 830 people and hence Bhutan must create 6,000 jobs a year to maintain its employment rate. India’s economy has recovered from the withdrawal of large denomination bank notes and the Goods and Services tax. Growth is expected to accelerate from 6.7 in 2017 to 7.3 per cent in 2018 and to subsequently stabilise supported by a sustained recovery in private investment and private consumption. The country should strive to accelerate investments and exports to take advantage of the recovery in global growth. Every month, the working age increases by 1.3 million people and India must create 8.1 million jobs a year to maintain its employment rate, which has been declining based on employment data analysed from 2005 to 2015, largely due to women leaving the job market. In Maldives, economic growth has been driven by tourism and construction. However, political instability may have a negative impact on economic growth, expected to moderate from 6.2 per cent in 2017 to 5.5 per cent in 2018. Concentrating the population to larger islands may help the country to create jobs and become more resilient to climate change. Every month, the working age population increases by 510 people and Bhutan must create 4,000 jobs a year to maintain its employment rate. Nepal has seen an economic recovery after disruptions from earthquakes and a trade blockade but growth is expected to slow from 7.5 per cent in fiscal year 2017 to 4.6 per cent in 2018 due to the heaviest floods in decades combined with slow recovery of exports, slowdown in remittances, and an increase in lending rates. Every month, the working age population increases by 35,000 people and Nepal must create 240,000 jobs a year to maintain its employment rate. In Pakistan, economic growth increased from 5.4 per cent in 2017 to 5.8 per cent in 2018 supported by major infrastructure projects and low interest rates. Efforts to reverse the trade and fiscal imbalances and continued implementation of reforms will be needed for sustaining and accelerating growth and improving welfare. Every month, the working age population increases by 250,000 people and Pakistan must create 1.4 million jobs a year to maintain its employment rate. Sri Lanka’s economic performance has been hurt by prolonged drought but is expected to accelerate from 3.1 per cent in 2017 to 4.8 per cent in 2018. Accelerating reforms to promote competitiveness, better governance, and a more balanced budget are critical to ensure sustained growth and development. Every month, the working age population increases by 10,000 people and Sri Lanka must create 63,000 jobs a year to maintain its employment rate.http://www.sundaytimes.lk/180520/business-times/cautious-optimism-from-jones-on-sls-real-estate-market-287103.html23 March 2018 @ 7:32 pmGlobal real estate consultancy Jones Lang La Salle (JLL) has expressed cautious optimism about Sri Lanka’s real estate market in 2018 and beyond, “We remain optimistic about the commercial sector real estate space,” noted JLL, Lanka, Managing Director Steven Mayes. “However, we are advising our clients to remain cautious about retail and residential markets, both of which face challenges going forward.” In a media statement on the current and future prospects of the real estate market, the company said the commercial sector continues to gather pace buoyed by strong demand, especially in the international grade A space which is currently undersupplied in Colombo 1, 2 and 3. The residential sector, especially high end condominiums, faces over supply challenges, with the recent re-imposition of 15 per cent VAT on condominium sales, denting sentiment further. Retail markets too demonstrate less sustainability, in the medium to longer term, due to the considerable number of ongoing mall development projects. The existing stock of office space in the grade ‘A’ sector in Colombo is just over 1.5 million square feet. “When considered in the context of anticipated total demand for Grade ‘A’ in 2018, at around 5 million square feet, it is very apparent that there is a shortage of about 200 per cent in supply. Absorption of most Grade ‘B’ spaces have also seen an uptick, as occupiers run out of Grade A options and are forced to compromise with alternatives,” it said. While a rise in demand is expected for spaces in Colombo from IT and related sectors stemming from 2018 budget provisions for the sector, it would be prudent to note that IT companies typically prefer out of town locations and lower cost options to fit with their business model. The newly signed Free Trade Agreements with India and Singapore are also positives for the economy and the maintenance of robust demand for commercial office space. Infrastructure development focused on connectivity between Colombo and Kandy could potentially increase tourism activity, further infrastructure developments, logistics activity, and generate more general business, which will bring in more demand for office space in both cities, the statement added. Prospects for the retail sector look encouraging over 2018/19, but beyond this lies potential excess supply issues. While the ongoing mall developments will experience the ‘first-mover’ advantage, those that follow may experience demand related issues due to a lack of brands to occupy space. The longer-term success of this sector is heavily dependent upon government policy, especially with import tariff rates and infrastructure spending, on roads and public transport, as traffic congestion is a major impediment to retail growth. In current retail outlets demand for space still outstrips supply, but the gap will narrow after 2019, with other malls coming on stream in central and secondary business districts and residential zones.http://www.sundaytimes.lk/180520/business-times/senior-citizens-can-petition-president-on-tax-on-their-deposits-290077.html20 April 2018 @ 8:02 pmFollowing the concerns raised by readers over taxes being enforced on deposits by senior citizens, the President’s Office has now created space on its website for citizens to comment on the proposal. Titled ‘Tell the President”, the page can be accessed from the link below: https://tell.president.gov.lk/petition/showSignPetition.mvc?id=881&title=introduction-of-withholding-tax-for-senior-citizens This information was conveyed to the Business Times by a reader Tissa Kulasekera who had raised these concerns in our “Letters” column. “After publishing several letters in your "letters to the editor" section in the Business Times about the with-holding tax deduction from senior citizens' bank deposits some results have been obtained. The "Tell the President" page handled by the President’s Office has started a survey on this and the link is given above,” he said, urging the newspaper to publish the link so that affected parties can also respond. However the Finance Ministry on Friday allayed the fears of senior citizens saying that anyone earning up to Rs.1.5 million (or Rs. 125,000 per month) in annual interest need not pay any tax and that 95 per cent of senior citizens will be exempt from this tax.http://www.sundaytimes.lk/180520/business-times/need-for-top-class-printing-school-in-sri-lanka-pm-287101.html23 March 2018 @ 7:31 pmWhile there is so much growth and potential seen in the printing industry in Sri Lanka, the country needs a top class printing school, Prime Minister Ranil Wickremesinghe emphasised. Attending the Sri Lanka Print Awards 2018 organised by the Sri Lanka Association of Printers at the Shangri-La Hotel in Colombo last Sunday as the chief guest, the PM said that it’s very exciting times for the printing industry of Sri Lanka. “Sri Lanka’s print must go global. We need a top class printing school in Sri Lanka to educate the upcoming generation of the country. While the industry grows with new technological enhancements, we need to look at how we can create export oriented products.” Coming from a family of more than 100 years of experience in the printing industry, Mr. Wickremesinghe stressed that Sri Lanka must become the ‘Print Hub’ of Asia while expressing the hope that many other sectors must also become the hub of Asia. He added that China today is on top of the world in terms of printing. “Sri Lanka is a middle income country with a stabilised economy where we can pay the debts now. The tradable services are not within Sri Lanka. The apparel, tourism and printing industry must grow hand-in-hand to achieve great heights,” noted Mr. Wickremesinghe while stressing that the country needs to focus more on biodegradable printing material where the world is moving towards a greener environment. Meanwhile Chairman of Graphic Systems (Pvt) Ltd, Keerthi Gunawardane who received the ‘Lifetime Achievement Award’ at the event told the Business Times, “Though Sri Lanka’s printing industry is slowly deviating towards digital printing practices the majority is still in the category of offset printing. 70 per cent of printers in Sri Lanka are offset printers while the remaining is only in the digital space.” He also stated that there is very high scope for Sri Lanka’s printing industry to go global with all new technology adoption that is taking place. At the awards night, Print Care PLC won the ‘Master Printer of the Year’ award, while Softwave Printing and Packaging, Aitken Spence Printing and Packaging, Gunaratne Offset (Pvt) Ltd and Commercial Printing and Packaging grabbed most of the awards under various categories. The three-day print exhibition prior to the Sri Lanka Print Awards was held on March 16-18 at the Sri Lanka Exhibition and Convention Centre in Colombo. The theme of the exhibition was ‘Sri Lanka Print 2018 – Going Global’. Many students and potential printing enthusiasts visited the exhibition to explore the new trends in the industry.http://www.sundaytimes.lk/180520/business-times/condo-developers-and-unsuspecting-buyers-290074.html20 April 2018 @ 8:01 pmI refer to two letters to the editor and a news item appearing in the Business Times on April 8 under the captions ‘Property development projects-grave danger to city dwellers” by P. Rubini, ‘Investments on apartments and condos,’ by Mahinda Wimalasena and a news item on ‘Kollupitiya resident complains against high rise builder’. This is not the first time complaints/warnings of this nature have been made by the affected parties. In fact we should be thankful to the Business Times for having brought to light various aspects of condominium living. Letters and articles On a perusal of the Condominium Management Corporation (CMA) files of a condominium apartment, I came across numerous cuttings of articles and letters regarding the trials and tribulations faced by the owners before/ after purchasing the apartments, in good faith. It may be relevant to mention the dates/captions of some of the letters and articles which appeared in your newspaper in the recent past and earlier. Interested parties may refer them: Crescat residents get respite (8/7/2008),Prevent Condominiums becoming vertical slums (3/10/2010),Woes of Wellawatte apartment dwellers (9/5/2010),Developers have wrecked Dehiwela (24/6/2012) ,Urgent need for condominium owners association (16/3/2014),Condominium residents sans title deed soon to be granted relief (25/5/14),Justice delayed in condo issues (6/7/14),Justice still awaits residents of Colombo condo (15/3/15),Colombo Apartments, residents waiting in hope for the title deeds (13/12/15 ). Almost all the above articles/ letters arise from the fact that the cause of the problems was due to the developers not adhering to the original approved building plan, backed by the law enforcing authorities CMA, Colombo Municipal Council (CMC) and Urban Development Authority (UDA). The developers coax their clients to occupy the apartments even before completion, promising to legalise/regularise the matters early. I am aware of some owners of the apartments being called upon to pay additional sums to ‘satisfy the authorities’ concerned to obtain the necessary documents to finalise matters. Even after payment, some are unable to regularise the pending issues. Inquiries It may be mentioned that with regard to the issues raised in item 7 and 8, I understand that the verdict is still pending despite the fact that the hearing was concluded in June 2016 at the Supreme Court after approximately five years of proceedings. Inquiry commenced at the CMA where the CMC and the UDA were associated along with the Consumer Affairs Authority (CAA) on whose initiative the inquiry at the CMA commenced in 2005 and went on till 2015. Complaints to the CMA were ignored despite the fact that they were considered the “Guardian Angels” for the apartment owners. Hence the CAA’s assistance was sought to commence the inquiry. The need to represent matters by way of Fundamental Rights petition to the Supreme Court arose due to deliberate delays experienced at the CMA. A total of over 12 years have elapsed from the time the inquiry commenced at the CMA. If not for the intervention of the Supreme Court, the CMA would not have submitted their findings and order to the Supreme Court even in December 2016. I understand i.e. approximately after 10 years from the commencement of the inquiry at the CMA. The case is pending at the Supreme Court from the year 2011. Ping Pong Item 3 indicates the fact as to how the developers and the trio play ‘ping pong', ball with the apartment owners. The developers have informed the MOH (CMC) that once they hand over the apartment to the purchaser, their responsibility ceases. This is a deliberate misrepresentation of facts .The developer gives a minimum 10 year guarantee against structural defects. Therefore it is their duty to ensure that it is adhered to. It is indeed a pity that the MOH who was interviewed by the press was not even aware of it? Of course one cannot expect anything better from a CMC employee whose primary responsibility is to safeguard his colleagues and through them the developer. Enticement It is customary for the developers to put out attractive brochures about their condos under construction with over 10 years or more guarantee on construction. Would-be purchasers are taken for a ride. They unhesitatingly give an advance based on the brochure and the sweet talk by the developer, even before the foundation is laid to take advantage of discounts offered. Thereafter they are at the mercy of the developer unable to get their advance back or get their apartment in time with the certificate of confirmation (COC) and deeds. Once they occupy the apartment without deeds they are compelled to stay put, unable to move out or sell the apartment. Arrogance At this point, when the purchaser demands the COC and the deeds, the developer turns arrogant and abusive as they are hand in glove with the law enforcing authorities like CMA, CMC and UDA. The purchaser becomes helpless and becomes a victim, between the devil and the deep ‘Blue Ocean’. Test check As a test check, it will be interesting to find out from the CMA the number of condominium apartments completed and occupied in Wellawatte, (referred to as Flat-watte) how many apartments are awaiting the COC and deeds, and the reason for non-issue of COC and deeds? How many are under construction and are they being constructed according to law. If not, what action the CMA, UDA, and CMC have jointly and severally or individually taken to regularise matters? Have the developers provided adequate parking space? Have the developers provided the building plans, the drawings of pipeline for water service and electricity wiring plans and fire fighting facilities? In some cases the developer has provided only the fire hoses without proper connection to water supply point. The building plans are not available even with the developer; leave alone the trio- CMA, CMC, and UDA, How many apartments collapsed totally or partially? I wonder whether the Right to Information Act will be of help in this regard. Lack of foresight It would be pertinent to state here that where there were three to five houses on a road, the number of houses increase to 200 to 300 with the construction of condominiums. But the width/length of the road remains the same. The pipe lines for water supply and sewerage too is not increased, e.g. Station Road, Wellawatte. It is the practice in Sri Lanka to wait till disaster happens, rather than adopt preventive measures. As stated by P. Rubini in a letter to the Business Times, the number of houses is damaged when excavations take place. The warning by Mahinda Wimalasena with regard to the financial aspects is also a food for thought. NBRO Have the trio ever obtained the services of the National Building Research Organisation (NBRO) which comes under the Ministry of Disaster Management, (may be an appropriate Ministry for condo apartments too) to certify the quality of the condominium apartments constructed especially with regard to water proofing and moisture presence prior to handing over the apartments, to the owners?. Invariably, almost all the apartments are burdened with defects of various magnitudes, especially easily untraceable water leaks. Conclusion It appears that condos are constructed by ‘bricks of deception’. Unfortunately the CMA, UDA, and CMC are not keen to assist the owners because it appears that they are under obligation to the developers. It is similar to a situation when the police are ineffective, the thieves have their way and so is the trio it appears. The developers have their way with impunity. The Chairman and the General Manager together with the board have changed after the so called Yahapalanaya government came in, but the officers in charge continue with the same deceptive attitude. Can somebody clarify as to which of the trio has the final say with regard to advising the purchaser, that the ‘apartment is fit for occupation.’ Is it not possible to have a one stop shop to regularise matters rather than sending purchasers from pillar to post? K. Anaga. Colombohttp://www.sundaytimes.lk/180520/business-times/cabinet-approval-sought-to-remove-glyphosate-ban-287099.html23 March 2018 @ 7:30 pmProposals submitted by the Agricultural Ministry and the Plantations Industries Ministry for the re-introduction of glyphosate on the plantations will be taken up next week by the cabinet, Plantations Minister Navin Dissanayake told reporters this week. He noted that the ban on glyphosate would be lifted following a decision taken by the National Economic Council headed by President Maithripala Sirisena after the recent local government polls. Two cabinet papers had been submitted in this regard and it is expected to be taken up next Tuesday at the Cabinet meeting, he said. The minister has been campaigning for the re-introduction of glyphosate to be used on the tea estates alone as it had a negative impact on the industry threatening even losing its traditional markets due to low yields and experimenting with unknown substances to kill weeds. He noted that the industry has faced a crop loss of about Rs. 20-30 million kg due to the ban on glyphosate application on the tea estates and approximately Rs.16 billion loss in value terms. The minister made these observations at the briefing held at the Sri Lanka Tea Board to announce the assumption of duties of Lucille Wijewardena as the establishment’s new Chairman after Dr. Rohan Pethiyagoda stepped down last month. Mr. Wijewardena has been in the plantations industry and is an accountant by profession with interests in other areas like hospitality, stockbroking and finance. The tea industry is planning on achieving 320 million kg in production this year and a revenue of US$.1.6 billion. Minister Dissanayake pointed out that they were also looking at ensuring the industry sustains a 2 per cent replanting level and the modernising of the factories into eco friendly systems. Meanwhile, the authorities are also tipped to take stern action against 53 of the 700 tea factories that have been involved in introducing sugar to teas. Though no closures of these factories are expected since it could have a direct impact on the livelihoods of workers, the minister said that they would be holding discussions with these managements next week in a bid to work out a solution and ensure they do not add external substances to the production of tea. Authorities have now found a mechanism to detect the presence of sugar in the teas and as a result were able to detect the presence of these substances and rein in the culprits. In the meantime, the draft report on restructuring of the tea plantations as proposed by the World Bank according to a study carried out by them would be forwarded to Minister Dissanayake on March 24. (SD)http://www.sundaytimes.lk/180520/business-times/work-with-passion-not-for-paychecks-to-succeed-in-life-290071.html20 April 2018 @ 7:59 pmWhile life in today’s world has changed over time among the growing young population that work expecting a big fat paycheck, success stories have proven that it’s the passion to work in a particular sector – not the money - that has driven most entrepreneurs to succeed. Women entrepreneurs from various industries shared their success stories to inspire many other women in the workforce today at the launch of ‘Womenwill Programme in Sri Lanka’ organised by Google Business Group at the MAS Innovation Centre in Colombo last week. The 2017 World Bank Report statistics reveal that only one in three women take part in the labour force. Out of 53 per cent of women in the world, 70 per cent are economically enactive while there are only 2.85 million working women from 8.5 million active women. The report further states that in Sri Lanka the female labour force participation rate has declined from 41 per cent in 2010 to 36 per cent in 2016. Ajita Kadirgamar, Editor and PR Consultant at the event stressed that Sri Lanka has the 17th largest gender gap in the world. She said, “Most women go for government jobs due to job security. The private sector must take the challenge to provide security for jobs for women.” She also elaborated that women in Sri Lanka must have the passion to work in an industry and not for the paycheck they receive by the end of the month. “Do what you love and do anything with passion not for the paycheck. Many women entrepreneurs in Sri Lanka have achieved success in their lives because of the passion they have for that sector.” zMessenger Co-founder and CEO, Jayomi Lokuliyana shared some of the challenges of building her company from scratch. “You won’t get paychecks for several months, things don’t go as you plan, juggling will take its toll on you and failure becomes an inevitable part of entrepreneurship,” she said. She also explained some barriers she came across such as it’s a men’s world still at large, lack of networking and access to funding. Come out with your own story as an entrepreneur, she noted. At the event it was also discussed that female entrepreneurs have the potential to create many job opportunities and also at companies headed by females, the chances of employees leaving the company is minimal. It was also pointed out that women need to start by believing in themselves first and later convince other women to join the workforce.http://www.sundaytimes.lk/180520/business-times/critical-dialogue-conversation-with-a-purpose-287096.html23 March 2018 @ 7:28 pm“I think it is time I ask my boss for a promotion. It’s been four years. I have sacrificed much for this job. I sincerely think I deserve it as I am already doing the work of a manager at the moment,” says Sumal. “You should. What’s the problem?” asks his colleague from a different department. “It’s not that easy; I am not used to asking for things. We have a good relationship now. I don’t want to spoil it in any way; but having said that, I feel demotivated because I don’t feel appreciated,” adds Sumal with frustration. “Well, it’s time for that crucial conversation don’t you think? No one remembers the cowards,” says his colleague. Asking for a promotion from your boss in the next performance management discussion? Convincing someone to leave or to stay? Winning a contract with a client or closing a sale? These are all critical conversations. Persuading someone to go out with you on a date or even break up with you? That conversation to describe, explain and reconcile the differences in a relationship? That very first meeting with your in-laws? These are all critical conversations. So why is it that despite knowing that a conversation is critical in advance, we often fail in convincing the other party; saying the wrong thing in the wrong place at the wrong time, not understanding the emotional state of the other party nor ours to begin with? The post-regret-stress, the ‘should have’s, the ‘would have’s and the ‘could have’s; we’ve all been through it at some stage in our lives. Generally, during a highly important conversation, we are biologically alert to protect ourselves rather than to be rational in our exchange of thoughts. We know that a conversation is crucial when our/their emotions are strong, we/they expect someone to disagree or agree with the other, or when the outcome can greatly impact our/their life. According to research, some of the reasons for handling critical conversations poorly are (1) biology: high adrenaline, high blood flow to arms and legs (prompting one to either fight or flee), and low blood flow to brain, (2) situations rising without warning, thereby catching us by surprise leading to confusion: the situations that require us to improvise, often without rehearsal time with limited information. Research suggests that success on a critical conversation relies on the ability to communicate openly about difficult topics. Conversations that are crucial should neither be rushed into, nor avoided completely. People become defensive not because of the content of the dialogue, but because of the intent they think the dialogue is about. One of the most important steps we need to achieve before a vital conversation is to identify what needs to be said first, as it sets the tone for the rest of the conversation. The first 30 seconds are crucial - where mutual trust needs to be created by showing that we care about them. Show respect through body language and be convinced that what you are asking is not unfair by anyone. Focus on what you want, and in the conversational flow of the relevant information, hold on to what you want without withholding your opinion or arguing against others opinions. State your path and explore the paths of others. Being involved in a dialogue without fighting back allows the conversation to be safe. It is important that you maintain a safe atmosphere if you want to be heard. Apologise and empathise if others feel disrespected in the conversation, and look for a mutual purpose that will motivate them to listen to your concerns. When you are at the stage of making decisions, make sure that it is not driven by one individual agenda, but by an outcome of a mutual agreement. Finally, note the commitments, take responsibility of the promises you make, and move to action. In most of today’s world, where leaders are smart, confident, and highly paid, people tend to hold back their opinions rather than risk infuriating someone in a state of such power. This is also common in a collectivist society like ours where many of us keep quiet or unwillingly agree to decisions made by others, leading to a sense of helplessness. This ‘learned helplessness’ over a period of time gives way to a very authoritative culture. One does not have to be an extrovert, out-going and domineering to be able to carry out effective conversations. Ask yourself before you enter the conversation; what do I really want for myself? What do I really want for others? What do I really want from this relationship? How would I behave if I am really keen on the results that I want? Think; be logical, rational and realistic. Be conscious of the emotions involved without being enslaved by them. Identify the role of emotions in your expression, but be above the emotion; it is then that you would be able to regulate and manage the emotions that can rise within the conversation. It is tough till you master it but practise is everything. (Rozaine is a Business Psychologist specialised in organisational culture analytics and HR Coaching. She can be contacted on rozaine@forte.lk)http://www.sundaytimes.lk/180520/business-times/unusual-step-from-central-bank-290069.html20 April 2018 @ 7:58 pmThe Central Bank (CB) last week took the unusual step of explaining to the public and the business community, here and abroad, that the prorogation of Parliament hasn’t affected normal government business. In a statement, the CB’s Public Debt Department said: “By a Gazette notification, with effect from midnight on Thursday April 12, in accordance with Article 70 of the Constitution the President has exercised his constitutional right to prorogue the Parliament. The next Parliament session will commence on May 8. During this time, no motions or questions can be tabled in Parliament and any prior actions by Parliament remain valid. The prorogation of Parliament has no impact on the functioning and operation of Government.” Economists and bankers didn’t recall any previous occasion, for example when parliament was dissolved in June 2015, where the banking regulator had issued any statement of this nature. “There seems to be a reason why it is being done this time,” one banker noted.http://www.sundaytimes.lk/180520/business-times/a-marriage-made-in-heaven-behind-bernard-botejues-success-287090.html23 March 2018 @ 7:26 pmIt wasn’t quite Romeo and Juliet. Bernard Botejue borrowed a friend’s motorcycle and went to visit Hema one day in 1955. He was one her many suitors and 17 years her elder. Inexplicably, she agreed to marry him, and thus became the driving force behind Bernard Botejue Industries which on April 1 celebrates its 70th anniversary. [caption id="attachment_287091" align="alignright" width="400" caption="Bernard Botejue's office complex at Kohuwela. Pix by Indika Handuwala"][/caption] “I never asked my mum why she decided to marry my father,” smiles Janaka Botejue, managing director of the company which lays claim to being the oldest garment manufacturer in Sri Lanka still around. “But it was an arranged marriage and he was one of the last persons to come and see her”. Hema had turned down every other suitor. But when she saw Bernard riding up the driveway of her home in Galle, something clicked. She decided this man was to be her husband. And so, began a long and fruitful relationship which created one of the most well-known brand names in Sri Lanka. Anyone from the older generation remembers those cotton ‘banians’ and famous Bernard’s T-shirts. “They say marriages are made in heaven,” shrugs Janaka as I try to pin down why the chemistry flowed between his parents. “But what I know definitely is that while my dad was the visionary and entrepreneur, it was my mum who was the driving force.” Until Hema turned up on the scene, Bernard had been struggling to find his feet in a business which he had fallen into almost by accident. Having studied at St. Thomas’ College and completed a degree at Colombo University, Bernard began his working career as a part-time library assistant at the Ceylon Medical College which was to play a part in his business later. The humdrum life of a library assistant wasn’t exactly to Bernard’s liking and soon after, he took up a posting as a supervisor at the Ceylon Hosiery Company. His creative juices were beginning to flow and when independence came to Ceylon in 1948, he too decided and it was best to be your own person than work for others, so he began a small operation manufacturing vests. Remember the Medical College? Well, he borrowed money from some doctors he knew well, including Dr. P.R. Anthonis, to raise capital and buy one knitting machine and two sewing machines. “My dad used to knit the fabric then bleach the fabric before giving it to three girls he had hired to do the stitching. He then took the finished product, and when he had a sizeable stock, got into a van and went around the country selling the vests. Then with the money he made, he would again buy fabric and the whole process would start all over again,” related Janaka. [caption id="attachment_287092" align="alignleft" width="400" caption="Janaka Botejue reflects on the past, present and the future, with a picture of his founder-parents above"][/caption] Small workforce It was a haphazard operation to begin with. At the beginning, when he was on the road, even going as far as Jaffna, the factory at Kohuwala was closed – for Bernard was the only person who knew how to operate the knitting machine. But all that changed soon. Within a year, his small workforce had grown 10 times and the ‘tagarrang’ sheds were a hive of activity. And then seven years later, in 1955, Hema arrived on the scene and things began to look even sunnier. She had an impact even before marriage – the ancestral two-acre coconut land at Kohuwela being bequeathed to Bernard. “My dad was single-minded and strong. He told his parents he would only get married if he got the land. They complied and my dad had the base for his operations. When he got married my mum’s business acumen and his vision were the perfect combination,” summed up Janaka. Janaka’s son, Bernard, and daughter Gayani – both key figures in the company today - are also listening raptly as their dad goes down memory lane relating how their grandparents created a dream which today benefits hundreds of people in Colombo, and Kolonna, Embilipitiya. By 1967, the business had transformed into Bernard Botejue Industries Ltd, and was given further impetus when Hema won a scholarship from The Colombo Plan for a six-month training programme in industrial development in Germany. Husband and wife left for West Germany which was itself transforming into an economic power. The days of just making ‘banians’ were over. With machines they brought down, the Botejues were looking at manufacturing everything from knitted garments to ladies’ blouses and men’s Polo shirts and underwear and socks. “It was a golden era for us,” recounts Janaka. Although still a schoolboy at St. Thomas’ he remembers the closed economy of the Sirimavo era meant whatever the company made was quickly snapped up locally as there was a huge demand for garments with the outside world all but closed out. Janaka, as enterprising as his dad and selling newspapers and bottles to augment his school days’ income – “My dad gave me 100 rupees pocket money just to see that I made sure all the windows around his factory were closed and that was quite a big sum those days” – joined the company in 1980, a few years after the green revolution swept J.R. Jayewardene into power. It was heady days. The company had started joint ventures with overseas partners based in Hong Kong, Sweden and the US. But storm clouds were rolling in. The 1983 riots heralded hard times were ahead for the country. Yet, the company expanded bravely. Embilipitiya In 1992 it became a BOI company and under President Premadasa’s 200 garment factory plan – to have one factory in each electorate – Bernard Botejue Industries opened in remote Kolonna, Embilipitiya. “We were originally given Kurunegala and then we thought we would move to Galle or Matara. But a relative of ours advised us to go to Embilipitiya, far from the beaten track where there is no tourism or any other attractions,” Janaka revealed. It was sound advice for the people of the area had no other distractions and came to work. The factory in Colombo by then had a workforce of 1,500 – workers lived in a hostel on the premises with the Botejues providing food too – but signs were starting to show that the operation was becoming a bit unwieldly. There was heartache in 1998, Bernard passed away at the age of 84. This led to introspection within the family and two years later, in 2000, an amicable split occurred between Janaka and his elder brother Ravi who took control of Texfabric and Bernards Philknit as Bernard Botejue Industries divested. The Colombo factory was also downsized due to labour shortages in 2003 with Kolonna and a new plant in Hambantota taking up the slack. But the business cliemate continued to remain bleak, not helped by the full-blown war. External forces also made matters worse with the European economic crisis affecting the garment industry badly. [caption id="attachment_287093" align="alignright" width="400" caption="An old machine once used by the company"][/caption] “It was tough and things got harder in 2009 when one of our main customers in the UK went bust and left us with huge debts,” Janaka narrated. His children, Bernard (jnr.) and Gayani, were now ready to follow in his footsteps both having completed degrees in UK, Liverpool and Durham, and joining in 2008 and 2010 respectively. “Both of them brought in new management techniques and new younger generation thinking into the company,” says a proud father. Bernard Jnr, 32, takes up the story: “We have restructured the company in a way that Bernard Botejue Industries (BBI) will become the holding company and all other subsidiaries will be owned by it, and the family will own the holding company. The company will be run by professionals and next generation family members will only be shareholders. It is vital we do this because most Sri Lankan family-run companies don’t tend to be successful after a few generations.” The long-haired Bernard (didn’t the song go ‘long-haired lover from Liverpool’?) graduated in business and music. It was just natural that he follows his heart and apart from handling the company’s Sentrino arm which deals in the corporate promotional T-shirt industry and the apparel embellishment industry, he is also the force behind an entertainment arm with the focus on rehearsal spaces for musicians and bands as well as equipment hiring. Gayani, 29, also holds a degree in business administration. Her love is the travel industry and she is in charge of BBI’s burgeoning hospitality division Everton Holidays. Travel agency “We have a travel agency – My Lankan Dream – where we specialise in tailormade and very personalised luxury holidays for the high-end market,” Gayani says. “We also manage holiday bungalows and villas.” The diversification also includes Bernards Business Park – the old ancestral home which is centrally located and offering 75,000 square feet of office space which has now become a business hub - housing more than 20 outside companies – as well as Cargills Food City. BBI is also headquartered in these premises. All the diversification would not have been possible without Brandix offering a helping hand when times were tough. “We had bad fortune but we turned it around. We downsized hugely from 2008 to 2010. A lot of people told me to get out and pay my debts. But this was a company started by my dad and I wanted to continue it,” reveals Janaka. “I decided to tighten the belt, and buckle down. We sold unproductive assets including tea estates. We sold many vehicles among other things. It took us six-years to pay back our creditors. We were in debt to the tune of US$2 million,” he adds. Bernard Jnr. believes it is a lesson well-learned: “This financial downside is definitely not an embarrassment. If we had a time machine to go back we would still make those decisions, for it is because we went into financial difficulties that our foundations today is solid, and we have to thank Brandix a great deal for helping us out.” Bernard Botejue Industries struck a “strategic relationship” with Brandix where they became a virtual supplier to one of Brandix’s main customers. It worked for both parties, mainly giving BBI a massive lifeline. Today, as it celebrates its 70th birthday, the company which Bernard created in 1948 is making a massive impact on the lives of many people. Hema, who passed away two years ago, and Bernard is sure to look down today and smile contentedly at their life’s work.http://www.sundaytimes.lk/180520/business-times/unit-trust-taxes-clarified-by-treasury-290064.html20 April 2018 @ 7:57 pmThe Treasury is recently learnt to have provided some clarity on the recent tax incentives or the lack of it to the unit trust (UT) industry, industry officials say. "We were 'verbally' informed that if the UT pays taxes, the unit holders don't need to pay again," Dilshan Wirasekara, CEO First Capital Holdings PLC told the Business Times. He added the nuts and bolts of the Inland Revenue Act interpretation will be issued in an operational manual by the Treasury. “This was told to us by Treasury officials in early April.” Since the inception of unit trusts in Sri Lanka, the Government has been granting some tax concessions to promote the industry. Through the 2012 Budget proposals the profits and income from redemption of units were exempted from income tax in the hands of the investors. This assisted the industry to collect funds from corporate investors who could enjoy a tax benefit of 18 per cent when investing in unit trust funds. In the recent budget proposals, such benefits to corporate investors were removed. This had resulted in an outflow of funds from the industry and exerted pressure on the unit trust management companies since last year. Unit trusts provide investors opportunities to invest in markets like treasury bills, bonds, commercial paper, etc which most may not have access to. In spite of the benefits available to retail investors, the industry remains small and under-penetrated with assets of Rs. 100 billion (versus bank assets of over Rs. 8 trillion), an analyst added.http://www.sundaytimes.lk/180520/business-times/sri-lankas-statistics-dept-defends-credibility-of-its-economic-data-287088.html23 March 2018 @ 7:20 pmShielding the credibility of the country’s economic data by the Department of Census and Statistics (DCS), its top bureaucrat says “they had to withdraw its 2017 full-year and fourth quarter GDP data on March 16, a day after posting it in the official web site as the calculations were done hurriedly without some data by using provisional figures at that time, as final set of data from institutions and surveys were yet to be received”. The relevant details and information to compute the GDP, economic growth rate and inflation are collected and compiled through scientifically designed surveys, census, special studies and administrative records, DCS Director General Dr. A.J. Satharasinghe told the Business Times The data computing procedure is carried out after conducting methodical consumer and producer surveys and considering data and information of 250 government institutions on the economic situation in the country, he emphasised. “We received the last set of data at the last minute, however we released the GDP data, but since this is last quarter we had to calculate the full year data and revisions,” he said. This process involves 850 employees of the department to compile, analyse and present an accurate estimation or reflection of the economy. All the calculation processes are done and figures are computed in accordance with international criteria and UN manuals. The department is in the practice of publishing economic data on its website for the benefit of state institutions, media and the public on stipulated dates and the responsibility of the heads of relevant divisions of the department to complete computing process before the deadline, he disclosed. This 2017 full-year and fourth quarter gross domestic product data economic data was scheduled to be published in mid March as the department takes at least two and half months to carry out the comprehensive methodology to arrive at the GDP figure, he revealed. “It’s a long process and we immediately withdrew the data compiled without receiving some final data as the department cannot make even a slight mistake in the economic statistics that present an accurate estimation or reflection of the economy,” he added. The department is saddled with the task of rebasing the GDP calculation year from 2010 to 2015, he said adding that the base year for calculating national accounts was previously changed from 2002 to 2010. Dr. Satharasinghe disclosed that the department is also engaged in computing and tracking economic growth better by taking into consideration of the new economic segments. The revised economic data was posted by the department on its website on Tuesday, March 20, revealing that the country has recorded a 3.1 per cent economic growth the slowest rate in 16 years and lower than the 4.4 per cent achieved in 2016. The department has issued the National Consumer Price Index (NCPI), for the month of February 2018 on Wednesday, March 21 announcing that the Year on Year inflation based on NCPI has declined to 3.2 per cent from 5.4 per cent in January 2018. Inflation of 3.2 per cent reported for February 2018 is the lowest inflation reported since April 2016. The reported inflation for the month of February 2018 was mainly due to comparatively higher price levels prevailed in February 2017 and decline in food prices in February 2018, the department said.http://www.sundaytimes.lk/180520/business-times/cifl-depositors-allowed-to-proceed-in-case-against-cb-285876.html16 March 2018 @ 7:58 pmWhen the fundamental rights application filed by the CIFL (Central Investment and Finance Ltd) Depositors Association (CIFLDA) against the Central Bank (CB) was taken up on Friday by a 2- member Bench of the Supreme Court, Justices Prasanna Jayawardene and Ms. Eva Wanasundera granted leave to proceed and the case will be taken up on August 2. In this case, the petitioners CIFLDA are seeking notice to be issued on the respondents – CB; to enforce the proposals set forth in the press release dated October 18, 2016 by the CB and to introduce a fair and reasonable repayment plan equal to all depositors of CIFL without considering the deposit amounts. Earlier on March 5, the CB Bank sealed the premises of CIFL following a decision to cancel the licence of CIFL. The CB said that all insured deposits of CIFL will be paid up to a maximum of Rs. 600,000 per depositor in line with the regulations of the Sri Lanka Deposit Insurance and Liquidity Support Scheme. (QP)http://www.sundaytimes.lk/180520/business-times/airasias-new-5-mn-seats-promotion-285116.html9 March 2018 @ 8:08 pmAirAsia and AirAsia X are offering five million promotional seats in its first major campaign of the year. Book from March 5 (0001h GMT +8) to March 11, 2018 (2359 GMT +8) for travel between September 3, 2018 and May 29, 2019 to enjoy fares from as low as Rs. 13,990 to Kuala Lumpur and destinations such as Singapore, Langkawi, Bangkok, Melbourne, Bali and many more through the Fly-Thru transit hub in Kuala Lumpur, Malaysia. For destinations in Japan, travel period is between September 3, 2018 and October 27, 2018, the airline said in a media release. AirAsia BIG Members are able to make bookings on airasia.com and the AirAsia mobile app or redeem flights via airasiabig.com and the AirAsia BIG mobile app from March 4 while AirAsiaGo and AirAsia Expedia members will also receive a special priority access booking link. Aside from flying directly to Kuala Lumpur, guests can make use of AirAsia’s seamless Fly-Thru service that connects travellers to other flights with their baggage checked-through to the final destination without the hassle of immigration clearance at the transit hub in Kuala Lumpur. AirAsia offers a total of 41 Fly-Thru routes across 14 countries in Asia, Australia, and the US.http://www.sundaytimes.lk/180520/business-times/slpa-runs-its-terminals-fully-occupied-during-seasonal-holidays-290061.html20 April 2018 @ 7:56 pmThe Sri Lanka Ports Authority (SLPA)-run terminals have been operating to capacity with 100 per cent attendance of operations and all other supportive staff during Sinhala and Tamil New Year season, a media release issued by the authority stated. In this respect, on both days April 13 and 14, the Jaya Container Terminal (JCT) and the Unity Container Terminal (UCT) of SLPA were competitive and successful in keeping all its berths fully occupied, the release said. On April 13, the JCT and the UCT together handled 7459TEUs whilst the two terminals recorded handling of 6259 TEUs on April 14. With the deployment of 20 STS cranes at the JCT and 18 at the UCT SLPA has operated 05 mother vessels and 08 feeder vessels during the two days. The JCT itself handled 2,010,702 TEUS out of the total volume of 6,209,068 TEUs at the Port of Colombo in 2017. Compared to the 1st quarter 2017, JCT has recorded a growth of 15.3 per cent during the 1st quarter 2018. The Drewry Port Connectivity Index in its most recent release had ranked the Port of Colombo as the 13th best Connectivity Port in the world for the 4th quarter 2017, up by five places from its previous positioning of ranks. According to the rankings the Port of Colombo is also the top best connectivity port in South Asia. SLPA recently signed a Memorandum of Understanding (MOU) with the terminals of the Port of Colombo to operate collectively to promote the Port of Colombo.http://www.sundaytimes.lk/180520/business-times/coconut-growers-promote-home-garden-coconut-cultivation-287086.html23 March 2018 @ 7:19 pmAimed at overcoming the growing demand for coconuts, the Coconut Growers Association (CGA) has taken the initiative to introduce coconut palm plants in home gardens, the association stated in a media release this week. Due to adverse weather conditions as a result of the prolonged drought in 2016 and 2017 the agriculture sector faced a setback. Whilst the Government had taken an initiative to import rice to bridge the shortfall, the CGAn vehemently opposed all moves to import fresh coconuts as it could have an ill effect on the local industry since imported fresh coconuts may bring in diseases from foreign countries, the release said. Therefore, a project was launched in Mabole to identify householders who could plant a special variety of coconut palm or two in their home gardens; and about 100 high quality dwarf x tall CRIC 65 coconut seedling were distributed to encourage the public to grow their own requirement of coconuts. The distribution of the coconut seedlings were carried out on March 3. Assistant Regional Manager from Coconut Cultivation Board (CCB) Gampaha Region H.A. Sarathchandra addressing the gathering said the demand for fresh coconuts by the industry had gone up tremendously with factories for products such as desiccated coconut, coconut milk, coconut powder, coconut water, virgin coconut oil been established in the country. It should also be noted that in Sri Lanka per capita consumption is 110 coconuts per person (the world’s highest) and the country needs 240 million coconuts annually for domestic consumption. “It is therefore useful for householders to grow their own coconuts for home consumption as we do not expect the price of coconuts to come down in the near future,” he said.http://www.sundaytimes.lk/180520/business-times/slt-chairman-reacts-promptly-to-presidents-directive-285874.html16 March 2018 @ 7:57 pmHeeding to the directive issued last week by President Maithripala Sirisena, his Sri Lanka Telecom (SLT) Chairman-brother P.G. Kumarasinghe Sirisena has assured the employees that he will take necessary action against officials involved in corrupt practices. He has informed that this action against corrupt officials will be taken after receiving the report of the special three member committee headed by retired Appeal Court Judge, N. Sunil Rajapaksha. This Committee was appointed to inquire into alleged malpractices and irregularities at the company since 2009. This committee has probed contributory factors and responsible officers for any malpractice or irregularity or failure in project governance, failure in project governance and management from project planning since 2008 as well as from present out-sourcing and vendor financing models. The Committee on Public Enterprises (COPE) and the Auditor General’s Department already conducted investigations into complaints made by Telecommunication Engineers’ Union (TEU) of SLT. These reports have also identified and made recommendations to punish corrupt officials allegedly involved in malpractices, a key office bearer of TEU told the Business Times. In a circular issued on March 12, the SLT Chairman noted that the special committee has informed him that it will take a couple of months to investigate into the high volume of cases comprising over 160 files. He assured that SLT board headed by him will be taking immediate action soon after the release of the committee report on or before April 30. A 10-member expenditure management committee comprising Chief Officers of SLT headed by SLT has been appointed to approve and monitor new SLT projects valued at Rs.25 million or less disbanding an earlier committee, TEU office bearer said. He noted that some of the Chief Officers in the committee appointed by SLT Chairman had been allegedly involved in corrupt practices.http://www.sundaytimes.lk/180520/business-times/the-blockchain-pipe-dream-285113.html9 March 2018 @ 8:07 pmNEW YORK – Predictions that Bitcoin and other cryptocurrencies will fail typically elicit a broader defence of the underlying blockchain technology. Yes, the argument goes, over half of all “initial coin offerings” to date have already failed, and most of the 1,500-plus cryptocurrencies also will fail, but “blockchain” will nonetheless revolutionize finance and human interactions generally. In reality, blockchain is one of the most overhyped technologies ever. For starters, blockchains are less efficient than existing databases. When someone says they are running something “on a blockchain,” what they usually mean is that they are running one instance of a software application that is replicated across many other devices. The required storage space and computational power is substantially greater, and the latency higher, than in the case of a centralized application. Blockchains that incorporate “proof-of-stake” or “zero-knowledge” technologies require that all transactions be verified cryptographically, which slows them down. Blockchains that use “proof-of-work,” as many popular cryptocurrencies do, raise yet another problem: they require a huge amount of raw energy to secure them. This explains why Bitcoin “mining” operations in Iceland are on track to consume more energy this year than all Icelandic households combined. Blockchains can make sense in cases where the speed/verifiability tradeoff is actually worth it, but this is rarely how the technology is marketed. Blockchain investment propositions routinely make wild promises to overthrow entire industries, such as cloud computing, without acknowledging the technology’s obvious limitations. Consider the many schemes that rest on the claim that blockchains are a distributed, universal “world computer.” That claim assumes that banks, which already use efficient systems to process millions of transactions per day, have reason to migrate to a markedly slower and less efficient single cryptocurrency. This contradicts everything we know about the financial industry’s use of software. Financial institutions, particularly those engaged in algorithmic trading, need fast and efficient transaction processing. For their purposes, a single globally distributed blockchain such as Ethereum would never be useful. Another false assumption is that blockchain represents something akin to a new universal protocol, like TCP-IP or HTML were for the Internet. Such claims imply that this or that blockchain will serve as the basis for most of the world’s transactions and communications in the future. Again, this makes little sense when one considers how blockchains actually work. For one thing, blockchains themselves rely on protocols like TCP-IP, so it isn’t clear how they would ever serve as a replacement. Furthermore, unlike base-level protocols, blockchains are “stateful,” meaning they store every valid communication that has ever been sent to them. As a result, well-designed blockchains need to consider the limitations of their users’ hardware and guard against spamming. This explains why Bitcoin Core, the Bitcoin software client, processes only 5-7 transactions per second, compared to Visa, which reliably processes 25,000 transactions per second. Just as we cannot record all of the world’s transactions in a single centralised database, nor shall we do so in a single distributed database. Indeed, the problem of “blockchain scaling” is still more or less unsolved, and is likely to remain so for a long time. Although we can be fairly sure that blockchain will not unseat TCP-IP, a particular blockchain component – such as Tezos or Ethereum’s smart-contract languages – could eventually set a standard for specific applications, just as Enterprise Linux and Windows did for PC operating systems. But betting on a particular “coin,” as many investors currently are, is not the same thing as betting on adoption of a larger “protocol.” Given what we know about how open-source software is used, there is little reason to think that the value to enterprises of specific blockchain applications will capitalize directly into only one or a few coins. A third false claim concerns the “trustless” utopia that blockchain will supposedly create by eliminating the need for financial or other reliable intermediaries. This is absurd for a simple reason: every financial contract in existence today can either be modified or deliberately breached by the participating parties. Automating away these possibilities with rigid “trustless” terms is commercially non-viable, not least because it would require all financial agreements to be cash collateralised at 100 per cent, which is insane from a cost-of-capital perspective. Moreover, it turns out that many likely appropriate applications of blockchain in finance – such as in securitization or supply-chain monitoring – will require intermediaries after all, because there will inevitably be circumstances where unforeseen contingencies arise, demanding the exercise of discretion. The most important thing blockchain will do in such a situation is ensure that all parties to a transaction are in agreement with one another about its status and their obligations. It is high time to end the hype. Bitcoin is a slow, energy-inefficient dinosaur that will never be able to process transactions as quickly or inexpensively as an Excel spreadsheet. Ethereum’s plans for an insecure proof-of-stake authentication system will render it vulnerable to manipulation by influential insiders. And Ripple’s technology for cross-border interbank financial transfers will soon be left in the dust by SWIFT, a non-blockchain consortium that all of the world’s major financial institutions already use. Similarly, centralized e-payment systems with almost no transaction costs – Faster Payments, AliPay, WeChat Pay, Venmo, Paypal, Square – are already being used by billions of people around the world. Today’s “coin mania” is not unlike the railway mania at the dawn of the industrial revolution in the mid-nineteenth century. On its own, blockchain is hardly revolutionary. In conjunction with the secure, remote automation of financial and machine processes, however, it can have potentially far-reaching implications. Ultimately, blockchain’s uses will be limited to specific, well-defined, and complex applications that require transparency and tamper-resistance more than they require speed – for example, communication with self-driving cars or drones. As for most of the coins, they are little different from railway stocks in the 1840s, which went bust when that bubble – like most bubbles – burst. (Nouriel Roubini is CEO of Roubini Macro Associates and Professor of Economics at the Stern School of Business, NYU. Preston Byrne is a Fellow of the Adam Smith Institute and Sole Member at Tomram Consulting.Copyright: Project Syndicate, 2018. www.project-syndicate.org)http://www.sundaytimes.lk/180520/business-times/roar-earns-top-digital-content-spot-in-bangladesh-eyes-india-290055.html20 April 2018 @ 7:56 pmSri Lanka-based digital content platform Roar has taken the top spot in its sector in Bangladesh, becoming the No. 1 New Media platform in that country. [caption id="attachment_290057" align="alignright" width="400" caption="Roar Bangladesh team (left) and the Sri Lankan team (right)"][/caption] In India, despite it being a virtually untapped market for the platform, Roar has already shown encouraging growth. And considering India's current overall Internet penetration is just 33 per cent, and that it is the second largest online market in the world, with digital ad spends of US$2 billion for 2018, there is immense potential for growth for Roar, with it set to become one of the top digital content players in India within 2018, Roar said in a media release. Roar has additionally become a dominant player in Sri Lanka, addressing topics from tech to travel to social issues in Sinhalese, Tamil and English. Helping its various initiatives along is the recent completion of Roar's Pre Series- A round of venture capital funding, which was led by the Digital Innovation Fund, powered by Dialog Axiata, and managed by BOV Capital. “The Digital Innovation Fund is pleased to support fast growing digital content provider Roar in its South Asian expansion. Following Dialog Axiata’s initial investment in the Fund, we are looking to finance and mentor high growth potential digital startups with a particular focus on new technologies like Fin Tech, Health Tech, e-commerce, Edutainment, IoT and Media/Ad Tech. In addition, we also continue to welcome interest from potential investors for this very important Fund, which will empower the Sri Lankan startup ecosystem to continue to grow and thrive,” commented BOV Capital Co-Founder Prajeeth Balasubramaniam. With plans to become the premier digital content organisation in South Asia, Roar has utilised good infotainment-led content in regional languages to dominate across markets. At the same time, Roar expects the majority of its growth to come from localised language content, with a particular focus on video. Besides the groups already served, Roar has plans to target many more language speakers in India who typically do not have access to good quality content. Today, by publishing digital content across eight different websites, Roar receives over 35 million monthly video views, with a 20 per cent month-on-month growth rate, along with more than six million website visitors, which increases 15 per cent month-on-month. Commenting on Roar’s recent string of successes, its CEO Mustafa Kassim said, “We have grown immensely across the South Asian continent over the last 24 months, and now, with backing from Dialog Axiata and BOV Capital, we can accelerate this growth even further. We can leverage these networks across South Asia to help us reach many more users and drive sales to the next level.”http://www.sundaytimes.lk/180520/business-times/leo-burnett-sri-lanka-earns-carbon-neutrality-certification-287084.html23 March 2018 @ 7:17 pmLeo Burnett Sri Lanka was recently awarded the Carbon Neutrality Certificate after a thorough analysis of the manner in which the agency conducts its business operations keeping in mind the natural environment. The certificate was handed over to Arosha Perera - CEO, Leo Burnett Sri Lanka. The CarbonNeutral® Protocol guarantees the integrity and credibility of clients’ carbon neutral certification and enables them to be certified CarbonNeutral®, Leo Burnett said in a media release. The company was evaluated on factors such as electricity details, on-site fuel details, fugitive emissions, inbound third-party deliveries (deliveries inward to the organisation eg. stationery, american water, etc), waste, vehicles and travel - company owned vehicles, vehicles and travel - leased vehicles, vehicles and travel - hired vehicles, foreign travel and employee commuting data summary. Commenting on the certification, the CEO of Leo Burnett, Arosha Perera, said, “We are proud to have earned the Carbon Neutrality Certification as it underscores our sustainable business outlook. By interweaving our sustainability goals with our financial and operational goals, we are creating win-win conditions for the agency to thrive into the long term. I believe this certification also drives greater self awareness amongst our staff when it comes to minimising impact to environment or society at large, besides affirming that the agency has reduced its greenhouse gas (GHG) emissions. We hope to build on this certification further by streamlining our systems and processes to eliminate waste and inefficiencies.”http://www.sundaytimes.lk/180520/business-times/kandy-crisis-irreparable-damage-to-industry-says-hoteliers-285872.html16 March 2018 @ 7:56 pmThe Tourist Hotels Association of Sri Lanka (THASL) on Friday condemned any kind of violence in the country and considered the cancellations on bookings during the period of tension was an “irreparable damage.” In a media release issued in the aftermath of the communal clashes that erupted in Kandy the previous week, THASL President Sanath Ukwatte noted that in an industry that considers itself one of the “biggest beneficiaries of peace” unity is important among all communities to move forward and urged the government to tighten laws and take “stern action against the perpetrators immediately.” “It is much to be regretted that because of the sad incidents that took place in Kandy over the last weekend, the hotel industry has lost a large number of bookings and, above all, the incidents have done irreparable damage to the credibility of the destination,” the release stated. The release also noted that exposure to “cultural exchanges among hospitality workers and guests offers increased opportunities to develop a vibrant tourism industry.” Tourism is one of the most sensitive industries globally. A slight disturbance in the country can have a very significant impact on visitor arrivals. “We have experienced this in the past and will not encourage any acts which will take us back to the dark era in our history" said Mr. Ukwatte. “We want the industry to grow further and reap its full potential, which will benefit the entire country, as it is now spread across all regions of the country THASL said it strongly believes that “we need to live in harmony in a multi ethnic, multi-racial and multi religious nation, and condemns any acts which will run counter to this belief”.http://www.sundaytimes.lk/180520/business-times/k-sivagananathan-awards-on-wednesday-285111.html9 March 2018 @ 8:06 pmThe 16th Annual K. Sivagananathan Memorial Trust (KSMT) awards and memorial oration will be held on Wednesday, March 14. This annual memorial oration and awards ceremony is conducted together with the Association of Professional Bankers of Sri Lanka (APB) in commemoration of the late Mr. K. Sivagananathan who was an innovative banker and contributed much to uplift and upgrade Sri Lanka’s premier state bank – the Bank of Ceylon. The chief guest at this year’s event is Ms. Amena Arif, IFS Country Manager for Sri Lanka and Maldives who will deliver the memorial oration, according to a media release from the KSMT. Over 40 students who have obtained the highest marks in the Diploma in Applied Banking & Finance (DABF) in the March and September 2017 examinations conducted by the Institute of Bankers of Sri Lanka will be awarded cash prizes and certificates at the awards this year. The KSMT is a non-profit organisation predominantly dedicated to providing assistance to students pursuing higher studies in the field of banking and finance and encouraging them to excel in their examinations to achieve a higher standard to be in par with the developed countries, which was one of late Mr. Sivagananathan’s wishes.http://www.sundaytimes.lk/180520/business-times/scarcity-of-office-space-in-colombo-287082.html23 March 2018 @ 7:16 pmThere is a major scarcity of office space in Sri Lanka where the demand is more for 1000 - 2500 square feet and this is where Ekroma wants to fill that void, said Ekroma's Managing Director Onesh Subasinghe at the launch of Ekroma Fortune Commercial space launch held at the Cinnamon Grand Hotel last week. State Minister of Defence Ruwan Wijewardene, the chief guest launched a 3D walkthrough of the building, followed by launching of the website by the project consultant. Mr. Subasinghe said that while many property developers were looking at residential space Ekroma was focusing its attention on office space to fill that gap. "We are launching the first office space buildings where we have 10 floors to be given out on a lease basis while five floors will be given out on a lot basis or sold outright. We want to create value for our customers," he said. Ekroma Fortune is a pioneer to sell office space on the lot system in the country. Globally commercial space is valued at 20 per cent more than residential space and in real estate the location is the key. "We have got a fantastic location with Viharamahadevi Park, the Beira Lake and the Indian ocean on both sides.” He said the new building is ideal as it is in close proximity to railway and the bus stations where 70 per cent of the working class use public transportation today. The project will be completed in a year and a half and parking space will be available for every 1000 square feet. "We have three more projects in the pipeline and invite the public to invest in Ekroma Fortune to make a fortune," he said. Ekroma Fortune was established in 2015 by Onesh Subasinghe who diversified his portfolio to real estate. His family was in the agriculture business for 40 years and was successful. Athula Amarasekera, architect of the Ekroma Fortune Commercial Space, said it will be an iconic building complex, the first of its kind with 15 floors to be sold as office space in the country. He said Colombo will be a global city with several iconic buildings coming up by 2020 and is going to be a vibrant international city such as Sydney or any other developed cities in the world. In this venture, Ekroma Fortune has introduced the concept of selling "lots" while allowing flexibility for full floor purchases. The office space will spiral upwards 15 storied high with a built up area of 153,000 sq feet with state of the art air conditioning ,high speed elevators.http://www.sundaytimes.lk/180520/business-times/mobility-transforming-workplaces-big-or-small-285869.html16 March 2018 @ 7:54 pmFrom the large enterprise to the small-to-medium business, mobility is transforming the workplace. Until recently, rising demands of the millennial workforce's use of personal mobile devices to access company data encouraged widespread BYOD policies. A new state of mind is trending across today's workforce and will influence those that follow. By 2020, millennials will represent over 50 per cent of the workforce, and they want to work wherever, whenever, and with connected mobile devices that are fun and easy to use, according to HR Director for Microsoft APAC, Kathy Tingate. By the same token, she says, employers around the globe now recognise mobility as a strategic tool to recruit top talent, automate processes and improve operational efficiency. But how does one envision a workspace that is collaborative, flexible, project-oriented, and unbounded by time or geography? Workspaces-that people access from anywhere on any device-must extend from unified communications and enterprise social media to business workflow applications, chatbots, document management and file sharing tools, she said in a keynote speech on February 20 to over 400 HR professionals and business leaders from the IT/ BPM industry at the SLASSCOM People Summit 2018 in Colombo. Excerpts were released to the media by SLASSCOM. Hinting at Microsoft's own HR transformation journey, Ms. Tingate said she believes that organisations need to encourage their employees to adopt a learn-it-all mindset and focus on building an inclusive work culture to nurture creativity, innovation and productivity. "For the first time in history, five generations will soon be working side by side. But whether this multi-generational workplace feels creative and productive or challenging and stressful is, in large part, up to their organizations. That's why Microsoft nurtures a culture that encourages learning it all as opposed to knowing it all," she said. A key area of Microsoft's culture transformation was reviewing the systems and processes that drive behaviour including its employee performance review system. All line managers would rate their subordinates' performances on a scale from top to bottom based on a bell curve (stack ranking). "This meant that some employees would always be classified as 'poor' regardless of their impact as per the nature of a bell curve," Ms.Tingate said. This approach led Microsoft to implement a system that would focus on employee impact and contribution through a process called Connects. It allows line managers to focus on the impact a particular employee is making instead of forced ranking peers against each other. "Whilst differentiation is still important, Managers now have the flexibility to allocate rewards in the manner that would best reflect the performance of their teams and individuals," she revealed. Equally important is creating an inclusive workforce. But unconscious bias-the stereotypes that shape our understanding, actions, and decisions in an unconscious manner-can work against this in inadvertent ways. "Building an inclusive organisation is very much about the actions and behaviour of our employees and leaders. It's why we have all our employees complete training on unconscious bias," she said. Artificial Intelligence is another avenue reaped with endless possibilities. In January, Colombo-based Microimage launched a multi-channel virtual assistant (or chatbot) built on top of the Microsoft Bot Framework, LUIS API and Azure Cognitive Services, allowing HR professionals to engage with peers, mentors and resources in real time. The solution allows employees to consult with the chatbot and request a range of services from leave management to company policy inquiries at any time and location. The chatbot can also be integrated into third-party HCM platforms. Today, 80 per cent of business leaders in Asia agree that every organisation needs to transform to enable future growth. But just 29 per cent of Asia's organisations have a full digital transformation in place. A people-centric approach to a digital workplace strategy allows for productivity and creativity to co-exist. But with only 15 percent of employees saying that they are engaged at work, organisations must re-examine their workspaces for improvements, she said.http://www.sundaytimes.lk/180520/business-times/first-national-symposium-on-data-for-sdgs-287079.html23 March 2018 @ 7:14 pmSri Lanka’s First National Symposium on Data for the SDGs jointly organised by the Government and UNDP was held in Colombo on Tuesday. [caption id="attachment_287080" align="alignright" width="400" caption="Parliament's Speaker Karu Jayasuriya speaking at the event."][/caption] It was inaugurated by Speaker of Parliament, Karu Jayasuriya, Deputy Speaker of Parliament and Chairman of the Parliament Select Committee for the UN 2030 Agenda for Sustainable Development, Thilanga Sumpathipala, and the UN Resident Coordinator, Simrin Singh. The two-day symposium was a platform for enhancing the use of data towards evidence-based policy making and coordination of monitoring the progress on the SDGs in Sri Lanka, UNDP said in a media statement. SDGs (Sustainable Development Goals) are far reaching, global goals aimed at transforming our world; a global movement to end poverty, protect the planet and ensure prosperity for all. Sri Lanka, along with 192 countries committed to this ambitious agenda by agreeing to achieve the 17 global goals. The role of data in this agenda is often downplayed. Data is the lifeblood of decision-making, without which policy makers are unable to make informed, effective and evidence-based decisions that lead to achieving the SDGs, the release said. Highlighting the importance of data, Ms. Singh, said, “Without data, we cannot know how many people are born and at what age they die; how many men, women and children still live in poverty; how many children need educating, and how many doctors to train.” Ten sessions were conducted during the two days by 24 esteemed local and international resource persons. The sessions covered impact and importance of data, context and challenges of SDG data in Sri Lanka, and strategy and way forward in using data for the SDGs. The discussions focused on the need for mapping baseline data in Sri Lanka, against the 244 SDG indicators, to understand where Sri Lanka currently stands in the journey towards achieving the SDGs by 2030. Speaking at the event, Speaker Jayasuriya, stated, “For a country such as Sri Lanka, with established digital infrastructure, and 20.4 million people, gathering data should be more cohesive, and forward thinking. We should see how we can move away from the traditional methods to more technologically advanced systems that can provide real-time data that can guide policymaking in the country.” Participants include multiple stakeholders from the Government, UN agencies, private sector, civil society organisations, academia, and data and research organisations.http://www.sundaytimes.lk/180520/business-times/hnb-unregistered-scrip-shares-likely-to-be-sold-285867.html16 March 2018 @ 7:52 pmThe Hatton National Bank PLC (HNB) is gearing to sell some 900, 000 voting shares accrued on account of scrip dividend payments made by the bank in 2012, 2015 and 2016 to certain parties whose names were struck off the HNB shareholders’ register in 2010 to comply with the law, industry sources say. The shares are now held in a suspense account at the Central Depository System (CDS), HNB said last week in a stock exchange filing adding this was because there is no specific beneficial owner to whom these shares could be allotted. The 11.3 million unregistered HNB voting shares had been disposed by the holders, which are three Harry Jayawardena-controlled companies in January and February this year, HNB said in a Stock Exchange filing without disclosing who the holders of these unregistered shares were. The sources told the Business Times that HNB is getting legal advice on the best possible way to sell scrip shares. Three Harry Jayawardena-related companies, Milford Exports (Ceylon) Ltd (7.94 per cent), Stassen Exports Ltd (6.88 per cent) and Distilleries Company of Sri Lanka (3.08 per cent), together held a total of 17.9 per cent of HNB in excess of limits prescribed by a Central Bank (CB) direction under the Banking Act which is 10 per cent and a maximum of 15 per cent with CB’s Monetary Board sanction. Sources said that for the past six years since 2012 the CB has written to HNB to dispose these shares but they hadn't audaciously heeded it. Finally they disposed 11.343 million (2.89 per cent) of the 18.35 million unregistered shares (4.6 per cent) of HNB during the past two months. On Tuesday another 5.6 million shares of the 7 million (1.78 per cent) remaining shares were sold in 5-crossings. All shares were bought by foreigners.http://www.sundaytimes.lk/180520/business-times/fairfirst-insurance-co-partners-with-the-iwmi-for-climate-risk-management-in-sri-lanka-287077.html23 March 2018 @ 7:12 pmThe International Water Management Institute (IWMI) in partnership with Fairfirst Insurance and Epic Research and Innovations recently organised a workshop on agricultural insurance in Sri Lanka. The workshop was aimed at bringing together various stakeholders in order to understand how insurance can contribute to agricultural and rural development, according to a media release from Fairfirst. With a general increase in extreme weather calamities all over the world including Sri Lanka, many institutions have begun to place considerable importance on agricultural risk management. Between the years of 2000 to 2017 a total of 33 flood events were reported with 8.736 million people affected and economic losses amounting to an approximate US$2 billion. (Source: IWMI reports) In this context, the workshop discussed the role of agricultural insurance in terms of minimising the immediate and long term financial impacts of extreme weather events. Speaking at the event Managing Director & CEO of Fairfirst Insurance Dr. Sanjeev Jha said, “We are happy to be in dialogue with IWMI and Epic Research & Innovations on this initiative. We are confident that our learnings and expertise both locally and globally, via Fairfax our parent company, will contribute to bridging the existing knowledge and protection gap in Sri Lanka on climate risk Management”. The workshop also brought forth a panel of international and national experts to discuss weather data, ICT early warnings, insurance products, policy, planning and institutional imperatives for upscale risk insurance in Sri Lanka. “To help policy makers better manage climate risks, IWMI and the CGIAR Research Programme CCAFS (Climate Change, Agriculture & Food security) and WLE (Water, Land and Eco-systems) are implementing innovative flood insurance in South Asia. This will bring the much needed practical expertise in the implementation of comprehensive climate risk solutions to Sri Lanka,” said Giriraj Amarnath, Research Group Leader: Water Risks and Disasters at IWMI. Also, speaking at the event was Claudia Sadoff, Director General, IWMI and Chief Guest Manjula de Silva, Chairman, National Insurance Trust Fund (NITF). “We are thankful to our co-partners Epic Research & Innovations and Fairfirst Insurance for being a part of such a unique knowledge forum in building new partnerships in Sri Lanka. Fairfirst as a leading general insurer has much to offer and we hope to work closely into the future and build community resilience against disasters if the people facing the hazard are insured,” stated Ms. Sadoff. IWMI is a non-profit, scientific research organisation focusing on the sustainable use of water and land resources in developing countries. They also work in partnership with governments, civil society and the private sector to develop scalable agricultural water management solutions. Fairfirst Insurance is part of the Canadian based Fairfax Group. Fairfax, through its subsidiaries, has an international insurance and reinsurance business with a global underwriting reach, longstanding relationships and a broad product range. Fairfax has a strong foothold in the growing insurance and reinsurance markets of Southeast Asia, Eastern Europe, the Middle East, and Brazil.http://www.sundaytimes.lk/180520/business-times/jat-holdings-setting-up-world-class-stadium-for-tennis-285864.html16 March 2018 @ 7:50 pmJAT Holdings (Pvt) Ltd, recently commenced a joint-initiative with the Sri Lanka Tennis Association (SLTA), laying the foundation stone for the state-of-the-art “JAT Stadium” at the SLTA premises. [caption id="attachment_285865" align="alignright" width="400" caption="Artist's drawing of the new facility"][/caption] This was during the official visit of Prince Edward, Earl of Wessex, and the Countess of Wessex Sophie to Sri Lanka. Minister of Sports Dayasiri Jayasekara, Managing Director of JAT Holdings Aelian Gunawardene and President of the SLTA Iqbal Bin Isac were also present. Financed and developed by JAT Holdings, the complex will consist of 80,000 square feet of exhibition space located on 2 levels, for high end interior design, life style and sports products.The five world class indoor tennis courts on the top level will be built to international standards in order to host and facilitate players, press and spectators. Ample parking facilities, a refurbished club house, sports library, 100 pax conference facility and restaurant are also on the cards. The existing ground-level outdoor tennis courts will also be revamped and flood lighting added for night time play, the company said in a media release. Speaking at the ceremony Managing Director of JAT Holdings Aelian Gunawardene said, “JAT Holdings has had a longstanding commitment to uplifting all sports in Sri Lanka and are happy to extend this support to the game of tennis. This initiative will no doubt take Sri Lankan tennis to the next level. The design and structure have been meticulously planned out with the involvement of renowned architect Bernard Gomez and our own experts to ensure that it is truly a world-class stadium”. Also speaking at the opening President of the SLTA Iqbal Bin Isac noted, “We are indeed happy to collaborate with JAT Holdings on this project and are thankful that corporate entities are now coming forward to support all sports in the country. With the right kind of sponsorship and support, tennis in Sri Lanka can also reach great heights. This is only the first step in a great journey.” As the sole local representative of the International Tennis Federation, and tennis in Sri Lanka, the SLTA has a broad based national agenda which includes improving standards through training, selection, conducting international and local tournaments, and increasing spectator and public awareness in the sport. This joint venture will help ensure these goals are met as well as provide a much needed world-class showroom space to Colombo for all leading brands to be a part of. The stadium is expected to be completed by early 2020, JAT said.http://www.sundaytimes.lk/180520/business-times/exporters-urge-decisive-state-action-against-future-unrest-285862.html16 March 2018 @ 7:48 pmThe National Chamber of Exporters (NCE) has expressed "deep concern" regarding the civil unrest which prevailed in certain parts of the country recently and urged that full compensation be paid to the victims to rebuild their lives. In a statement to the media, the chamber said it was strongly of the view that the actions of certain elements which led to the recent civil unrest would have been backed by groups with extremist political ideologies who have as their objective disruption of economic activities, and the wellbeing of the "ordinary citizens of our country, to achieve their parochial and selfish aims, without any regard to the future of our country". The chamber emphased that international trade, particularly exports and related investments, is the lifeblood of the country to achieve economic development objectives for the future prosperity of all citizens. "In this context, and at a time the Government is engaged through Public Private Partnerships, and sound international relationships, acceleration of economic development; it is vital that the wrong message is not conveyed to the external world, regarding the peace and stability that has been built up since the conclusion in 2009 of the protracted 30 year civil conflict, which caused untold economic damage and was a setback to the aspirations of all peace loving citizens, who wish to live in harmony to secure their future." The chamber said it was "very disconcerting" that this civil unrest, although short-lived, occurred at a time the country was embarking on trade negotiations to establish several free trade and economic partnership agreements with important partner countries, to facilitate trade and especially exports, to achieve national economic development targets, because the success of these trade deals depends upon other things, attraction of foreign investments to the country which in turn depends on peace, economic, and political stability. In this context the chamber urged the Government to act decisively to give a strong message to all, and especially to the trade partners of the country overseas, that there will be no room in the future for such civil unrest. The chamber also called on the Government to act without any delay on the following, to restore the confidence and goodwill of all concerned: (a) Dispense quick and firm punishment to all those who were directly or indirectly responsible for the unrest, to deter any such actions in the future; ((b) Provide full compensation to all those who were affected to rebuild their businesses and lives, to enable integration back to society in a meaningful manner without hard feelings.http://www.sundaytimes.lk/180520/business-times/correction-lack-of-recognition-for-innovation-in-sri-lanka-285860.html16 March 2018 @ 7:47 pmLast week the Business Times ran a story titled 'Lack of recognition for innovation in Sri Lanka' which should have read as "Lack of recognition for innovation during commercialisation in Sri Lanka.' (The words "during commercialisation" had erroneously dropped from the headline). Dr. Pujitha Silva from the University of Moratuwa, who was quoted in the story, has written in to say that his comments were misinterpreted. He had said that the need for recognition of innovation during commercialisation of a product is lacking in Sri Lanka and the mindset among the corporate giants is slowly shifting. Further he mentioned that it was student interns from the university who are expected to work at cheap labour (rates) in some instances at leading companies in Sri Lanka, and didn't state that this referred to graduates who pass out from the university (as reported in the story). The emphasis of the innovation evening that night was to highlight the role of industry in product commercialisation and to engage them in the discussion towards that end.http://www.sundaytimes.lk/180520/business-times/boardpac-concludes-successful-crm-event-in-malaysia-285858.html16 March 2018 @ 7:46 pmBoardPAC, home-gown multinational board meeting automation solutions provider, successfully conducted a special customer relationship management (CRM) event in Malaysia recently, which attracted a number of BoardPAC customers of the country. The meeting was a perfect platform to deliberate how boardroom level paperless automations by BoardPAC brought radical changes for their companies in 2017, BoardPAC said in a media release. Organised with the collaboration of Maxis, the top communications services provider in Malaysia and a main customer of BoardPAC, the CRM event was held at the end of last year at Maxis Tower. Key clients who participated at the event included Maybank, Ekuinas, Malaysia Airports Holdings Berhad, UTSB Management, MSIG Insurance, SME BANK and several other companies. During the CRM meeting, customers shared insights and highlighted case studies on how they leveraged with the help of BoardPAC during 2017 to save time and money by automating their paper-intense board meeting processes, while reducing inefficiencies and increasing transparency. Commenting on the enthusiasm of many Malaysian customers on choosing BoardPAC, Co-Founder and CEO of BoardPAC and IronOne Technologies, Lakmini Wijesundera said, “We are extremely happy to hear how BoardPAC has transformed our Malaysian customers in a significant way. Our easy to use, paperless platform has brought great changes for these companies in terms of improved boardroom collaboration, tighter boardroom security and synchronisation of information through real time updates.” Maxis Head of End Solutions Syed Othman said, “The outcome of the event was as planned, and while BoardPAC has been the leader in paperless automated board meeting solutions in Malaysia, we are working closely with BoardPAC to expand its presence further across Malaysia.”http://www.sundaytimes.lk/180520/business-times/start-ups-alarmed-by-communal-violence-calls-for-urgent-action-285856.html16 March 2018 @ 7:44 pmSri Lanka’s start-up community this week came together to issue a strong statement against the recent communal violence. The group condemned the attacks that have recently taken place in certain parts of the country, saying: “We may be Muslims, Tamils, Burghers and Sinhalese. We may practise Buddhism, Hinduism, Christianity and Islam. But we are all Sri Lankans, who believe and promote the idea that by living, playing and working together, we can help make Sri Lanka a peaceful, inspiring and prosperous leader in the global community.” The statement by more than 45 start-ups said that to help achieve this vision, the country’s political representatives and the police need to take urgent action to ensure that such organised violence never happens again. They urged the government officials to undertake the following actions: ● Investigate the evidence, arrest the perpetrators and make them accountable to the crimes committed. The law in Sri Lanka must be enforced, without political interference and justice must be carried out. ● Show strong leadership, ensuring there is zero tolerance to acts of racism and violence against our fellow citizens. ● Remove all restrictions on Internet services immediately. Instead of censoring the Internet, identify individuals and groups that use social media to promote hate and use legal mechanisms to bring them to justice. Signatories to the statement were: Sheran Corera (Creative eLearning (Pvt) Ltd; Manoj Ranaweera (UnifiedVU); Mario (LinearSix); Januka Samaranayake (BotFactory); Mangala Karunaratne (Calcey Technologies); Hiraash (Creately) ; Sanjaya Elvitigala (ELearning.lk); Ian Iddamalgoda (Umbrella Insights); Fathhi Mohamed (Yohobed); Chandika Jayasundara (Creately); Krishan (Mycabz); Harshi Samarasekera (Twinkling Dreams) Ganatharan Jeyakumar (Virtual Tuition (Pvt) Ltd); Shehan Selvanayagam (Loops Solutions); Ima Hassen (Quantei); Harinda Fonseka (gudppl); Keerthi Kodithuwakku (Effective Solutions -Pvt Ltd); Gayantha De Zoysa (Strive); Chaminda Kandamby (Superb Business Solutions); Nilangi Kulasinghe (Cropcircle); Omar Sahib (WEBXPAY); Dunilsha Hewage (Ocaloka); Ayami Wanasinghe (SW Colombo); Aloka Gunasekara (StartupX Foundry); Rehan Fernando (Mediajogger); Sam de Silva (Common Edge Pvt Ltd); Kanishka Weeramunda (PayMedia); Yoshith Weerakoone (Onsbay Ceylon Pvt. Ltd); Thangarajah Thavaruban (Speed IT net); Duval Anushka Weerakoone (Puppet Animations); Nithushan Uthayakumar (Blue lotus 360); Shageevan Sachithanandan (MyStore.lk); Vakeetharan Sivasubramanijam (EnXone technologies); Ranil Samarawickrema (Hostels Lanka) Robert Sandrasagara (ShopBox Pvt Ltd); C.D. Athuraliya (ConscientAI); Augustin Dinushka Medagoda (E-Law Solutions Pvt Ltd); Mahen Ratnayake (ShortKast); Chamara Peiris (Yoho Bed); Dulitha Rasanga Wijewantha (Alakazam); Imthiyaaz Hassim (SIXER VIDEO); Thawseef Jaleel (Rent Club); Rukmankan Sivaloganathan (Welanka Holidays); Teesha (Workout.lk); Sharanyan Sharma (Extreme SEO Internet Solutions); Damitha Jayarathna (iPlayDeal); Farhard Hussain (Cemex) and Shakya Lahiru Pathmalal (Takas.lk).