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One of the positive actions taken by the government was the reduction of the excessive holidays by a few days. Unfortunately even this small reduction in holidays has offended a few sections of the population and they construe the reduction of their particular religious holidays as an affront to their beliefs.
This is a typical approach Sri Lankans have had which deters development. We have been unable to get to terms with the needs for economic growth and consequently development has lagged behind due to cultural and political factors. As a nation we aspire to higher economy growth, higher per capita incomes, reduction in unemployment and such gains in the economy but are unwilling to make the sacrifices to make these objectives a reality. It is imperative that we retionalise the holidays further and reduce them to a reasonable number.
If the objections to any system of holidays are sentimental and highly emotive, then one could find an objection to any way by which a system of holidays is devised. On the other hand, if the approach is one of safeguarding religious freedom and at the same time enabling the country to progress, then a rational system of holidays can be easily devised. Such a system should be least disruptive of work and would have a reasonable number of holidays.
For those who make religious sentiment run high on issue of holidays it is worth reminding ourselves that in a very theocratic and fundamentalist state like Saudi Arabia, Prophet Mohammed's birthday is not a holiday. Similarly, in the United States, Good Friday is a holiday only for Federal Government employees. If these countries can approach it in this manner why is it that Sri Lanka is unable to adopt a more rational approach towards holidays?
Sri Lanka is reputed to have the largest number of holidays of any country in the world. This is largely due to the religious sentiments of a pluralistic society. While the right to religious worship and celebration of one's religious and cultural festivities is unquestionable, why should the entire nation have holidays on such days which are of relevance and significance only to some? Holidays for all the religious days of the several varied communities in the country becomes an enormous burden on the economy.
The problem with respect to holidays is two-fold. First, the number of holidays is too many. Second, due to the frequency of these holidays there is a disruption of work. Both these aspects could be addressed by a system of holidays that we discuss here.
One has to find means by which the religious festivals are observed by those to whom it is relevant while the nation proceeds to work and production processes are not unnecessarily disrupted. This is one approach to the problem. If one accepts this approach, then it is possible to have only a core of national holidays for the main national events and perhaps one religious holiday for each community as a national holiday. As for the rest of the festivals, it should be possible to have a system whereby a number of days are given as leave which could be enjoyed during each particular employee's religious occasion. By such means, while the holidays of each one's religion is not denied, the country's normal activities would continue.
It is the responsibility of religious leaders to approach this issue from the point of view of the country's national interest rather than with sectarian emotions. It is only then that we could resolve it satisfactorily. They must surely accept the position that the country has too many holidays and too frequently to disrupt work.
We can hardly be competitive in world markets with a holiday system which disrupts work so frequently. Let our leaders of whatever religion look at it in this manner and enable the government to work out a rational and reasonable system of holidays conducive to our economic growth.
CTC Eagle recently became the first private insurance company in Sri Lanka to increase its share capital to Rs. 200 million in keeping with the recommendations of the Financial Sector Reforms Committee. This was done through a bonus issue of one share to every 15 held.
"This bonus issue is the final component of a planned strategy to increase the share capital of the company to the level recommended by the Financial Sector Reforms Committee", says CTC Eagle Chairman Michael Fenn.
Meanwhile, CTC Eagle recorded a 15.4% increase in profit before tax (Rs 96.4 million) and a 10.5% increase in profit after tax Rs. 83.8 million) last year, "a significant achievement in a difficult year" in the words of Mr. Fenn. "These operating results are believed to rank amongst the better performers in the financial services sector", he adds.
A competitive general insurance market and an adverse economic environment resulted in a marginal increase of 6.4% in the general insurance turnover (Rs. 464 million), while the life market was also affected by the economic downturn resulting in new business premium falling short of expectations. However, gross written premium in life business increased by 18.4% over 1995 to reach Rs. 142 million.
Commenting on the company's performance last year, Managing Director Chandra Jayaratne says that in the context of the difficult external environment that prevailed during the year together with fierce competitive market conditions, the achievement of significant growth in turnover proved to be difficult for a company committed to upholding a Core Value - 'assumption of risk with responsibility to provide a superior level of security to all stakeholders'.
"Instead of resorting to measures that could have led to short term gains at the expense to long-term viability and solvency, the Company focused on strategies that would ensure sustainable long-term growth in market share and profitability. These involved significant investments in systems and human resources aimed at building core competencies in the vital areas of service quality, policyholder security and productivity leading to the enhancement of brand value and competitiveness in the market," he adds.
He urges on the Authorities to closely examine the licensing and control process in general insurance to ensure that conflicts of interest, intended to be avoided by the regulatory framework are affectively in place to safeguard the interests of the industry.
"The industry must agree and enforce without further delay, a policy that assures self regulation in the application of tariff and other market agreements, a basis of payment of turnover taxes and accounting standards and the charging structure on the introduction of goods and services tax system must also be agreed", he stresses.
Referring to the life sector, he says that the policyholder dividends for 1996 declared on the recommendations of the consultant Actuary, yet gain comfortably exceeded the rate of dividend used in determining the illustrative value of life policies. He adds that this together with the discretionary special dividend declared early 1996 will provide competitive advantages to Eagle Insurance for Living policyholders.
The policy issue function has been restructured to improve the quality of service with 80% of life policies being issued within seven days of receipt of a proposal. The service quality and productivity is expected to improve further when an integrated workflow system within a PC network is expected to be commissioned this year. Four district offices have already been linked to the head office system achieving improved service quality and information access and this process will be extended to other district offices in the coming years.
As for the activities of CTC Eagle's subsidiary, CTC Eagle Fund Management Company, Mr Jayaratne says that funds under management has grown to nearly Rs. 3 billion making CTC Eagle one of the leading private sector fund management companies in Sri Lanka. The Company has received provisional approval to enter retail fund management through the launch of a series of open ended funds. Several options are being examined to decide on the most appropriate corporate structure system and distribution system.
CTC Eagle shareholders are to receive a 17.5% dividend on the increased capital once the AGM approves it on March 27. This represents a growth of 28.7% over the previous year and fulfils a commitment to provide real income growth in the hands of shareholders. A dividend yield of 35% accruing to investors of the initial public offering amply demonstrates the continuing value of CTC Eagle shares.
Now in its ninth year of operation, CTC Eagle provides direct employment to 355 and indirect employment to 945 persons.
Looking at the future, Chairman Fenn comments that the reduced level of new business growth in life assurance during 1996 will make the growth in operating performance more difficult in 1997. "Nevertheless, the Board will ensure that the Company enters into its tenth year of operation with strategies designed to optimise market growth, productivity and profitability. The management team is committed to several new initiatives including a business re-engineering programme that should ensure long-term market growth in both the life and general insurance businesses", he concludes.
Pramuka Management and Financial Services Ltd., the newest entrant to the Merchant Banking sector hopes to set up an islandwide fast food chain with a Sri Lankan flavour.
"As it stands right now we do not have a fast food chain of restaurants offering Sri Lankan dishes at a reasonable price," Pramuka Management Managing Director Dayantha Fernando said.
Pramuka Management is an associate company of the Pramuka Bank group.
Mr. Fernando admits there is stiff competition in the Merchant Banking sector but added that the sector still had much room for improvement.
Pramuka Management also plans to provide services in managing and supervising overseas money transfers and financial operations. "We have already identified lucrative international locations with large Sri Lankan expatriate populations in Canada, UK, USA, the SAARC region and the Middle East. Our company would supply a prompt service unlike any offered by the Commercial Banks where a transfer would be completed within 48 hours. The foreign operations will result in the company earning a fair portion of its revenue in foreign currency thereby limiting its corporate tax liability", Mr. Fernando added.
Pramuka Management initially would aim at an up-market clientele with the start up capital being around Rs. 20-25 million. Mr. Fernando however added, "we hope to become a public company within the first year of our operations with a considered offering of around Rs. 75-100 million.
The company engages in conventional Merchant Banking functions such as Management of Capital Issues, Credit Syndication, Project Counselling, Corporate Counselling and Portfolio Management.
The Management Consultancy arm of the bank will serve the clients with Feasibility Studies, Industry Reports, Executive and Trustee Businesses, BOI Approvals, Country Reports, Foreign Trade Partners/Technical Collaboration and Sourcing at small scale equity/venture capital.
The secretarial division of the company will undertake company secretarial services, company incorporations and other related work.
Mr. Fernando also stated that Pramuka Management will also handle all types of insurance for its clients as well as for other individuals and organisations. Towards this end the company had established ties with all insurance companies and is also geared to handle all of the general insurance of Pramuka Bank as well as mortgage insurance for the banks mortgage lending.
Citing the weak economy, Mr. Fernando said that they would mainly concentrate on offering fee based activities. As for fund based activities Pramuka Management will be selective and do short-term lending either directly or through corporate paper to selected Blue chip public companies.
Pramuka Management has a modest staff of 14 but among the future plans of the company is to open 12-15 offices in the outstations. Mr. Fernando in conclusion added that he hoped to make the company profitable within the first three months of operation.
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