Friday 22 May 2015

Sri Lankan shares nudge higher; concerns remain

Reuters: May 22 Sri Lankan shares edged up on Friday, but investors awaited clarity on the political front and the timing of a parliamentary election as concerns over political stability weighed on sentiment, stockbrokers said.

The main stock index gained 0.21 percent, or 15.05 points, to close at 7,288.74. The index rose 0.4 percent for the week, positing its sixth straight weekly gain

"The market is waiting for the election announcement. Investors will wait until the parliamentary election is over," a stockbroker said on condition of anonymity.

"A new stable government with some strong economic policy measures would boost confidence," the stockbroker said.

Analysts said the market shrugged off the central bank's decision to keep the key monetary rates steady at record lows.

The central bank in its monetary policy statement said on Friday the private sector credit grew 13.9 percent on-year in March from 12.6 percent in February. Analysts said the credit growth will help boost banking and financial shares.

Turnover was 904.6 million rupees ($6.77 million), above this year's daily average of about 1.14 billion rupees.

Foreign investors were net sellers on Friday for a third straight session, offloading 83.9 million rupees worth of shares. But they have been net buyers of 5.93 million rupees worth of stocks so far this year.

Lanka Orix Leasing Co Plc gained 1.8 percent, while shares in LB Finance jumped 3.56 percent. Illiquid shares such as Nestle Lanka Plc and Carson Cumberbatch Plc gained 1.84 percent and 3.36 percent respectively.

Political uncertainty due to Prime Minister Ranil Wickremesinghe-led UNP not having a parliament majority has been a drag on the market, though the trend reversed after the central bank cut key monetary policy rates to record lows on April 15.

The index has gained 5.6 percent since the rate cut. 

($1 = 133.6000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Anand Basu)

Hayleys MGT Knitting Mills returns to profit in March 2015 quarter

COLOMBO (EconomyNext) – Fabric manufacturer Hayleys MGT Knitting Mills reported a net profit of 36 million rupees in the March 2015 quarter compared with a loss of 89 million rupees a year ago.

Earnings per share for the quarter of the firm, a unit of the Hayleys group, were 19 cents, as the company recovered after suffering losses stemming from a fraud in 2011.

A stock exchange filing said quarterly sales fell three percent to two billion rupees with cost of sales falling six percent to 1.8 billion rupees.

For the full financial year ended 31st March 2015, EPS was 47 cents while net profit was 90 million rupees compared with a loss of 183 million rupees the year before.

Sri Lanka’s Guardian Capital Partners profit up sharply on sale of Expo, Access stakes

EconomyNext – Gains from the sale of stakes in two investments helped Sri Lanka’s Guardian Capital Partners increase net profit to 184 million rupees in the financial year ended March 31, 2015 from 15.5 million the year before.

Earnings per share for the year were 7.13 rupees compared with 60 cents previously, its annual report filed with the stock exchange showed.

A statement by the company, the private equity investment arm of the Ceylon Guardian Investment Trust Group, said the improvement was mainly driven by profits realized on the divestments of holdings in two investments it had.

Annual revenue rose 591 percent to almost 200 million rupees which was driven by gains made on the sell down of stakes in Expolanka Holdings and Access Engineering which yielded gains of 171 million rupees.

The report said a total gain of 130 million rupees was realized on the sale of 28 million shares of Expolanka and the balance gain of 41.3 million rupees as realized on Access Engineering.

“The sell down was executed in order to reduce the exposure to the company as the risk profile of the company changed significantly during the last quarter of the year,” Guardian Capital Partners told shareholders in its annual report.

The company’s portfolio is managed by Guardian Fund Management Limited.

The company statement said it believes the private equity market to be gaining traction, albeit at a very slow pace.

“With the end of the war have seen some of the largest and most respected global private equity players and investors committing funds into Sri Lanka.

“Guardian Capital Partners PLC is on the lookout for good quality businesses backed by strong entrepreneurial and management teams who seek capital to fund their growth plans,” it said.

Sri Lanka’s Malwatte Valley Plantations makes Rs59mn loss in March 2015 quarter

COLOMBO (EconomyNext) – Sri Lanka’s Malwatte Valley Plantations suffered a loss of 59 million rupees in the March 2015 quarter compared with a net profit of 14 million rupees a year ago as it was affected by the commodities price slump.

The loss per share for the quarter was 27 cents, according to provisional results filed with the stock exchange.

Sales fell 17 percent to 737 million rupees from a year ago with cost of sales at 755 million rupees although lower than the year before.

According to segmental results, the firm’s tea business suffered a loss while rubber and coconut made a marginal gross profit.

Gross profit from other crops like pepper and cinnamon rose to 35 million rupees from 15 million rupees the year before.

Sri Lanka Monetary Policy Review – May 2015 - Policy rates unchanged

Following the reduction in policy rates of the Central Bank in April 2015, market interest rates have adjusted downwards as expected. The continuation of the low interest rate regime has induced demand for bank credit from the private sector. Accordingly, credit obtained by the private sector from commercial banks increased by 13.9 per cent in March 2015 on a year-on-year basis. In absolute value terms, the increase during the month was Rs. 41.4 billion, raising the cumulative increase in credit to the private sector by commercial banks to Rs. 86.9 billion in the first quarter of 2015. As per the Quarterly Survey of Commercial Banks’ Loans and Advances to the Private Sector, the sustained expansion in credit was driven mainly by credit flows to the Industry and the Services sectors. Given continued low market interest rates, it is projected that private sector credit would increase further in the period ahead supporting the growth momentum of the economy. As a result of increased credit flows to both private and public sectors, broad money (M2b) grew by 12.5 per cent in March 2015 on a year-on-year basis, along the expected path for monetary expansion. 

Inflation, as measured by the year-on-year change in the Colombo Consumers’ Price Index (CCPI), remained at 0.1 per cent in April 2015 unchanged from the previous month. Year-on-year headline inflation has remained below 1 per cent from February 2015 largely reflecting the downward revision of domestic energy prices and the reduction in prices of selected consumer items. Annual average inflation declined further to 2.1 per cent in April 2015 from 2.5 per cent in the previous month. Meanwhile, core inflation, on a year-on-year basis increased to 2.4 per cent in April 2015 from 1.4 per cent in March, with price increases being recorded mainly in non-food items such as health services and clothing. Going forward, with improved domestic supply conditions and subdued prices of key commodities in the international market, it is projected that inflation would remain at low levels in the months ahead. 

In the external sector, the recent currency swap agreement with the Reserve Bank of India amounting to US dollars 400 million has strengthened official reserves of the country. The realisation of expected capital inflows in the period ahead and sustained regular inflows in the form of earnings from the export of goods and services, including tourism and workers’ remittances would improve the balance of payments during the year. So far in 2015, the Sri Lankan rupee has depreciated against the US dollar by around 2.0 per cent. 

In this background, the Monetary Board was of the view that the current monetary policy stance is appropriate. Accordingly, the Monetary Board, at its meeting held on 21 May 2015, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank unchanged at 6.00 per cent and 7.50 per cent, respectively. 


Troubled CIFL Directors write to Central Bank ‘Cabraal ignored our revival proposals’

By Ishara Gamage
Ceylon Finance Today: The remaining Directors of troubled Central Investments and Finance PLC (CIFL) in a scathing attack yesterday, alleged that the former Central Bank Governor Ajit Nivard Cabraal ignored all the revival proposals which were put forward by them in 2013.

Four remaining Non Executive Directors of CIFL, Lakshman Rupasinghe, P.V. Pathirana, D.J.D. Jayakody and H.G.A.P. Samarasinghe, in a letter to the Central Bank Director of Non Banking Financial Institutions Supervision Mrs. N. Daulagala yesterday, said:

" All our revival proposals made above were ignored by the Governor and the Director NBFIS of the CBSL and proceeded with the appointment of Roscoe Maloney and 2 of his nominees to CIFL board by their letter dated 3 May 2013.

They also alleged that the appointment resulted in Roscoe Meloney becoming the Chairman of the company and 'our' CEO resigning his position.

"We were forced to continue on the Board, obviously in non executive capacity. The asset recovery process completely halted because they became the owners of the entire group and took over the management of CIFL," the letter said.

Meloney family managed CIFL for almost two months but did not infuse any capital, but managed to sell one block of land in Beragala and the share portfolio against our objections in the Board. We have not seen the minutes of the said board meeting......because the company secretaries did not provide the minutes of the board meeting to us for approval. The CBSL did not take any action against them, but decided to appoint People's Leasing and Finance PLC (PLC) as the managing Agent of CIFL, making all the existing directors Non Executive, by their letter dated 1 July 2013.

We were in fact surprised about the ignorance of the former Governor (Cabraal) and the Director NBFIS about the bad reputation of the Chairman of Touchwood in financial circles without verifying the financial background or checking about their financial capability to invest USD 12 Million promised. On this basis, we even recommended to organize a meeting with them and to force them to infuse their capital and if they fail to do so, to consider a short term facility under deposit insurance scheme funds by keeping the value of CIFL shares owned by this investor as security for such advance.

Although we did not get any response to this request, the Central Bank proposed the 'liquidity support scheme' to troubled finance companies almost 6 months after our proposal and granted Rs 6 Billion to another finance company, while our company remained in the same situation.

In our opinion, the CBSL repeated the previous mistake by appointing PLC, particularly in an Honourary capacity. This was a 'repeating of history' of the case of previously failed Finance Company Industrial Finance Limited, which was also owned by the same owner Deepthi Perera) We pointed out many losses incurred due to the negligent attitude of PLC to the Director NBFIS, but they did not even listen to the former Governor to deploy a full time CEO to CIFL.

We maintained the position that it was a violation of the Monetary Board decision of making us non executive directors, if we get involved in executive capacity although both PLC and even CBSL officials misinterpreted the wording of this direction, the CIFL Directors' letter to the Central Bank said.
www.ceylontoday.lk

CIFL presents its case to Central Bank

Central Investments and Finance PLC (CIFL) yesterday wrote to the Central Bank of Sri Lanka, listing in detail the chain of events which has led to the present predicament of the company, while mentioning in detail, the actions taken by the company to recover the investments. We reproduce the full letter of the company which has been sent to the Central Bank's Director-Non Bank Financial Institution Supervision Mrs. N. Daulagala.

21 May, 2015, The Director-Non Bank Financial Institution Supervision The Central Bank of Sri Lanka 8th Floor, No. 30, Janadhipathi Mawatha, Colombo 1. For the kind attention of Mrs. N. Daulagala


Dear Sir,

Detailed Report on Actions already taken by CIFL to recover the investments This refers to your letter ref. 24/03/005/021 dated 19 May 2015 regarding above.

We take this opportunity to recap all actions taken by the current members of the Board of Directors to revive the company and to recover the investments, since we were asked to get involved more closely with the operations of the company by the Central Bank of Sri Lanka by their letter dated 23 December 2012. We give below the events with documentary proof (in chronological order) to prove that the directors have used 'due care and skill' within their capacity to revive the company:

1. We recruited a retired banker Gamini Karunathilake to fill the vacancy created by removal of the former CEO J.K. Wickramarathna within 2 weeks (i.e. 15 January 2013).

2. The actual status of the company's finances were analyzed and the following facts were reported to your office by our letter dated 24 January 2013. This covered the following critical points: (refer 'conclusions' on page 6 of the letter)

a. CIFL funds of approximately Rs 1.5 M have been siphon out by the ASPIC group and its Chairman.

b. Company has lost further assets by operating at below break-even levels incurring around Rs 60 M a month.

c. Public funds have been mobilized by offering rates exceeding CBSL listed rates.

d. The Board has resolved in their meeting held on 21 January 2013 that the company cannot be continued as a going concern.

We went on to propose the following action to CBSL: (Refer 'Proposal' on page 6 and 7 of the letter)

i. To send an order to all share brokers through CSE suspending trading of major shareholders of CIFL (i.e. Deepthi Perera, Aspic Homes, Aspic Corporation etc.)

ii. Register caveats against properties of those responsible for the fraud.

iii. Requested CBSL to grant a loan of one billion immediately to arrest the liquidity crisis.

3. We updated your office on 8 February 2013 giving the following information: (Refer items 5 (a) and (b))

a. The Chairman and the CEO had a discussion with the group chairman of Aspic Deepthi Perera and requested to execute the deeds of transfers over the mortgaged properties against Homagama investment to which he verbally agreed.

b. CIFL also requested from him to infuse at least Rs 1.5 Billion either directly or indirectly to CIFL to operate as a going concern.

Dr. Perera accepted the views expressed by the Board and promised to recommend a suitable investor on urgent basis. We also emphasized the fact that if he fails to introduce new capital in whatever form, to grant his consent to divest his stake for us to find a suitable investor.

c. In the same letter, we stressed the 'insolvency status' of the company and its inability to prepare revival plan to go before shareholders and informing that the Board resolved that the company should be immediately liquidated to minimize further losses to the depositors and to protect the legal binding of directors. Further the Board decided to meet the CBSL officials specially the Director NBFIS and the Governor, before implementation of its decision and requested to organize a meeting with the Governor.

4. Instead of responding to our letter, we received a letter on 12 February 2013 from the Chairman of Touchwood Investments PLC, that they have concluded the acquisition of Aspic group which included CIFL, Aspic Homes and Aspic Corporation with the blessings of the Governor and the Director NBFIS and instructed us not to dispose and assets or to go into mergers, offers to sell etc. of any assets.

5. Despite the above letter they did not invest in CIFL or take over the management of the company for a considerable period. Therefore, we wrote another letter on 1 March 2013 (Acknowledged copy attached) to your office indicating the new problems we are facing on the transfer of Aspic properties to CIFL. We have categorically mentioned that Deepthi Perera's promise to transfer the properties will not take place with our reasons for such thinking. We also mentioned that we have lost confidence about Touchwood and its chairman and expressed our belief that this may be a plot between the former Aspic owners to divert the responsibilities.

We were in fact surprised about the ignorance of the former Governor and the Director NBFIS about the bad reputation of the Chairman of Touchwood in financial circles (without verifying the financial background or checking about their financial capability to invest USD 12 Million promised). On this basis, we even recommended to organize a meeting with them and to force them to infuse their capital and if they fail to do so, to consider a short-term facility under deposit insurance scheme funds by keeping the value of CIFL shares owned by this investor as security for such advance. Although we did not get any response to this request, the Central Bank proposed the 'liquidity support scheme' to troubled finance companies almost 6 months after our proposal and granted Rs 6 Billion to another finance company, while our company remained in the same situation.

6. All our revival proposals made above were ignored by the Governor and the Director NBFIS of the CBSL and proceeded with the appointment of Roscoe Meloney and 2 of his nominees to CIFL board by their letter dated 3 May 2013 (copy attached), which resulted in Roscoe Meloney becoming the Chairman of the Company and our CEO resigning from his position. We were forced to continue on the Board, obviously in non executive capacity. The asset recovery process completely halted because they became the owners of the entire group and took over the management of CIFL.

Meloney family managed CIFL for almost 2 months but did not infuse any capital, but managed to sell one block of land in Beragala and the share portfolio against our objections in the Board. We have not seen the minutes of the said board meeting because the company secretaries did not provide the minutes of the Board meeting to us for approval. The CBSL did not take any action against them, but decided to appoint People's Leasing and Finance PLC (PLC) as the managing Agent of CIFL, making all the existing directors Non Executive, by their letter dated 1 July 2013. (letter attached)

7. In our opinion, the CBSL repeated the previous mistake by appointing PLC, particularly in an honorary capacity. This was a 'repeating of history' of the case of previously failed Finance Company Industrial Finance Limited, which was also owned by the same owner Deepthi Perera) We pointed out many losses incurred due to the negligent attitude of PLC to the Director NBFIS, but they did not even listen to the former Governor to deploy a full time CEO to CIFL. We maintained the position that it was a violation of the Monetary Board decision of making us non executive directors, if we get involved in executive capacity although both PLC and even CBSL officials misinterpreted the wording of this direction.

8. Despite the above direction, even in non executive capacities, we took action to get the Aspic properties transferred to CIFL and made a request through CBSL to arrange PLC to advance funds required for the stamp duty payment.

This request was ignored by PLC despite a strong support extended to this request by the former governor based on the intervention of a politically influential former director of CIFL.

9. Meanwhile, we realized the importance of stopping the main suspect Deepthi Perera leaving the country and made a board resolution and submitted a letter to the Director, SSP Mathurata of Criminal Investigations Department (CID) on 5 July 2013 to impose a travel ban on him and a copy submitted to the Director NBFIS. To our surprise, there was no action taken by the CID to stop him from leaving the country until he finally left the country sometime in September 2013. If any action instituted on our timely request, filing recovery action against Deepthi Perera would not have been difficult.

10. Our Legal Counsel Jeevantha Jayathilake submitted a letter dated 20 August 2013 to CID requesting to accept a complaint against Deepthi Perera from us about the fraudulent activities of CIFL so that we could get a Court order to stop him from leaving the country. When our lawyers followed up this request, they had been informed by the CID office that they sought approval from the Director NBFIS which was not granted.

11. Meanwhile, the CID commenced their investigations based on a complaint made by Ekanayake (former Director NBFIS) and at the request of the CID officers, we got involved with the existing staff and also got the support from past employees and managed to prepare a very useful report for CID to carry out their investigations which helped us to understand the gravity of the fraud.

However, this report was treated as unofficial as there was an official forensic investigation done by KPMG. (We have already submitted this report to you personally when we met you at the Governor's office)

12. The above report described in 11 above, revealed that some of the properties mortgaged to us by Aspic Homes had been purchased out of our own funds and we have sought assistance from CID to get these transferred without paying stamp duty.

13. Since there were no responses to any of our above communications from the CBSL, we wrote a letter to your office on 7 December 2013 indicating that the matter is getting unduly dragged and the company is losing all its strengths and most importantly the key employees. We also pointed out the negligent attitude of PLC and requested you to activate them. Then to grant us a loan of Rs 500 million enabling us to re-commence operations so that the receivable portfolios could be made active. We also submitted a project proposal based on our business plan with this letter.

14. We have now established that the ownership of Aspic Homes has not changed despite letters written by Meloney to CBSL and to us in the past. Therefore, we have now reactivated the process of sending the letter of demand and filing action to recover the monies siphoned out by Deepthi Perera and his group of companies.

15. The legal counsel reviewed various JV agreements and their amendments and requested us to resolve the basis of computation of the claim. We have now computed the claim including the interest and penal interest as per terms of the relevant JV agreements and arrived at a total claim of Rs 3.9 Billion. The extracts of the relevant Board resolution passed on 12 May 2015 is enclosed for your ready reference.

16. In the case of Rajagiriya project, we have found a blatant fraud of CIFL funds and have directed Samantha Nandirathna to discuss and get advice from the CID officials about making a fresh complaint to CID based on the information available with us and those revealed in their investigations. We are planning to proceed on such advice.

We believe the above is a comprehensive report of our efforts made in recovering all the assets fraudulently taken out by the former group chairman and his companies (not only 'Park Lane Residencies). All four of us joined the company in or after 2011, by which all the fraudulent activities had taken place. Funds siphoned out from IPO funds had been made in the pretext of refunding public deposits to avoid attracting the attention of the Board members. When we were independent directors, we have based our decisions on financial reports submitted by 2 qualified professional accountants who held the position of Chief Finance Officer of CIFL (signed board papers available as proof). We have acted promptly on our getting to know the actual situation after getting involved in the operation at the request of the CBSL from 23 December 2012. We have acted with 'due care and skill' at all times to propose the best solutions to the CBSL to revive the company within our capacities.

However, we could not go to the shareholders to declare insolvency within the specified period from becoming aware of the insolvency situation, because CIFL is a licensed finance company and any such action could have triggered a serious impact on the finance industry.

Therefore, we sought approval from the Governor and the CBSL who forced us an alternate solution of accepting a new investor. The process of transferring assets including any recovery action died a 'natural death' due to the investor being the owner of the group. In fact, the Central Bank should have released the remaining non executive directors when a new investor was given the 'go ahead' in May 2013, but unjustifiably decided to force the remaining directors to continue on the Board. We cannot be held responsible when the company suffered due to an incorrect and negligent decision of the Central Bank officials and the fraudulent act of the new investor after managing the company for almost 2 months.

Therefore, we believe that the above facts of the case will receive your careful attention (unlike in the past) and have some mercy on the remaining directors from this unfair harassment, as we have sufficient proof that we have done our duty under the circumstances to revive the company.

Meanwhile, we assure you of our best efforts towards any positive action to revive the company.

Thank you,

Yours sincerely

Central Investments and Finance PLC (CIFL) Non Executive Directors Lakshman Rupasinghe, P.V. Pathirana, D.J.D. Jayakody and H.G.A.P. Samarasinghe.
www.ceylontoday.lk

Union Bank first to implement Microsoft Cloud Technology

Union Bank (UBC) has been recognised by Microsoft Sri Lanka as the first Bank in the country to move into Microsoft's Office 365 (O 365) Cloud Technology, further enhancing the Bank's operational excellence.

Microsoft Cloud is an outsourced hosting platform that provides an array of features with greater security and convenience for real time connectivity across Union Bank.

The shift to Microsoft Cloud will provide UBC, uninterrupted availability of email and office applications enabling greater efficiencies in the Bank's operations.

Further, it leverages on the shared infrastructure to support the innovation and introduction of new initiatives, adding value to the Bank's premise to deliver unparalleled service to customers.

Rajeev Munasinghe, Vice President - Information Technology of Union Bank said, “this is yet another milestone in the Bank's IT initiatives. We are the first bank to move into “O 365” cloud technology which further exemplifies Union Bank's continued efforts to use its IT interventions to grow its business more emphatically.”

“The deployment of the Cloud technology at Union Bank will result in greater operational efficiencies those results in enhanced service standards to its customers. This platform will reduce costs and increase the speed of delivery of IT services.

With the new technology our employees will be able to serve our customers more efficiently and effectively in a confidential and secure manner,” said Munasinghe. The Union Bank Team will work with Microsoft Sri Lanka in driving this IT Strategy forward.

Imran Vilcassim, Country Manager for Microsoft Sri Lanka and Maldives said, “The partnership between Union Bank and Microsoft makes UBC the first Major Commercial bank in Sri Lanka to move to Cloud Technology with Microsoft. With many initiatives taken in counteracting Cyber security along with Digital Crimes Unit, Microsoft continues to thrive in the security platform to enable the valued customers in banking sector.”
www.dailynews.lk

Keells Food Products makes come back with Rs 331 m PBT

Keells Food Products PLC has posted a consolidated profit before tax of Rs. 331 million for the financial year 2014/15 compared to a loss of Rs. 12 million in the previous financial year.

On a recurring basis, the PBT of Rs. 331 million is an increase of 161 per cent over the corresponding figure for 2013/14, which excludes the impact of the one off charge of Rs. 139 million associated

with the Voluntary Retirement Scheme (VRS).

The profit attributable to equity holders of the parent was Rs. 261 million, representing a significant increase over the Rs. 0.47 million recorded in 2013/14, whilst the recurring profit attributable to equity holders of the parent was Rs. 261 million, representing an increase of 87 per cent over the previous financial year.

Revenue for the financial year 2014/15 was Rs. 2.62 billion, this being an increase of 15 per cent over the Rs. 2.28 billion recorded in the previous financial year.

The Directors have declared a final dividend of Rs.7 per share for the year ended March 31, 2015 on May 11, 2015 to be paid on May 29, 2015. The Board of Directors have confirmed that the Company satisfies the solvency test in accordance with section 57 of the Companies Act, No.7 of 2007, and has obtained a certificate from the Auditors, prior to approving a final dividend of Rs. 7 per share to be paid on May 29,2015.

The total dividend payout amounts to Rs.178.5 million.
www.dailynews.lk

Asian Alliance Insurance posts Rs 250m PAT

Asian Alliance Insurance achieved a Gross Written Premium (GWP) of Rs. 867 million for Life, a 21% increase compared with the previous year.

The consolidated Group premiums that included General Insurance were recorded at Rs. 1,317 million for the first quarter of the 2015 financial year.

Profit after tax for the period was Rs. 251 million for the company and Group profit was Rs. 200 million.

The company has stepped up the intensity of its operations with a number of industry firsts in its Life business.

Higher non-medical and financial underwriting limits have been provided to top Sales Advisors based on certain parameters whilst non-medical straight forward businesses are underwritten and processed on a straight-through basis, utilising the robustness of the Company’s proprietary IT system.

Self-service Insurance facilities that are linked to kiosks are being rolled out to branches to enable Sales Advisors and even customers to carry out their requirements without depending on any office staff, at their own convenience and on their own time.

The General Insurance business launched a revolution in the motor industry with the most innovative Click2Claim product that delivers the fastest claim settlement in the market, whilst eliminating the hassle and inconvenience that follows a motor accident.

The product is receiving rave reviews and has picked up strongly, enabling considerable operational convenience and cost efficiencies that are at the centre of the new GI strategy that is being executed with a strong focus.

“The growth in the Life insurance business in particular is a strong endorsement that reflects the success of Asian Alliance Insurance PLC’s innovation-driven strategy,” Asian Alliance Insurance Chairman, Ashok Pathirage said this performance is especially noteworthy, considering that this comes during a challenging period – the first financial quarter since the segregation of Life and General insurance segments.

Asian Alliance Insurance Managing Director, Iftikar Ahamed said, “We are confident that this will increasingly reflect in our future financial performance.”
www.dailynews.lk

Orient, Bartleet Finance to merge with Janashakthi

The Boards of Directors of Orient Finance (OFP) and Bartleet Finance (BFP) have decided to amalgamate with Janashakthi.

Both are subsidiary companies of Janashakthi which is a licensed finance company.

An official from Janashakthi said that the board members of OFP and BEF after due consideration have decided that in the best interest of both companies, their shareholders and other stakeholders to amalgamate and continue their activities as a single legal entity. 
www.dailynews.lk

HNB Assurance maintains Q1 growth momentum

HNB Assurance PLC (HNBA) maintained its growth momentum in the first quarter of 2015, despite challenging market conditions.

The company, which recorded above market growth in 2014, achieved a 20% in group turnover recording Rs. 1.37 bn as consolidated premiums, up from Rs. 1.15 bn achieved during the corresponding period of last year.

Premium income of Rs.626 mn. was achieved by HNB Assurance , the parent company conducting the life Insurance business. Life insurance premiums recorded a 10% growth while General Insurance which is carried out by the fully owned subsidiary, HNB General Insurance Ltd, recorded an impressive 29% growth by generating a premium income of Rs. 743 mn.

The consolidated profit after tax for the first quarter of 2015 was Rs. 15.5 m which is lower than Rs. 53.9 m recorded during the corresponding period of last year.

This was mainly due to an increase in claims in the General Insurance business and the current investment climate also affected both lines of business. However, the company is confident profits would improve, since value from the substantial growth achieved in life and general insurance businesses would accrue in future.

The current profit is only attributable to General Insurance and investment income from Shareholder’s funds, with the profits emanating from the surplus of the Life Insurance business being calculated and declared at the end of the year.

Acting CEO, Niranjan Manickam said the strong growth seen in both lines of business is very promising as focused efforts to develop identified areas are beginning to meet expectations.
www.dailynews.lk

Cathay Pacific extends ‘Do it yourself’ policy to SL; ends deal with Finlays

Given the strong and sustained growth in Sri Lanka, Cathay Pacific has decided to shift to self-handling operations in Sri Lanka and the Maldives.

The move will result in the termination of the General Sales Agency (GSA) agreement with Finlays Plc.

The global carrier said internationally it has moved away from GSA arrangements for online ports and the GSAs in Sri Lanka and the Maldives are some of the few remaining online ports in the network.

“Therefore the GSA arrangement between Cathay Pacific Airways and Finlays Colombo Plc will not be renewed and will terminate on 31 December 2015, the end of the current agreement,” a joint statement said.

Cathay Pacific Airways is one of the world’s leading airlines, offering scheduled cargo and passenger services to 174 destinations around the world, including daily return flights to Colombo from its Hong Kong hub. The airline also offers direct services from Colombo to Bangkok and Hong Kong. Finlays has served as a general sales agent for Cathay Pacific for Sri Lanka and the Maldives.
Cathay Pacific Airways launched the first and only direct non-stop service between Colombo and Hong Kong on 27 October 2014.

Passenger performance remained well above target with healthy year-on-year growth in 2014. On the Cargo front, the new direct flights helped increase tonnage and narrowed a revenue gap arising from earlier sub-optimal connection times to Japan and North America. The daily passenger aircraft service continues to be complemented by a bi-weekly freighter from Colombo.

Cathay Pacific Airways was once again named ‘World’s Best Airline’ in the annual Skytrax World Airline Awards in 2014. This is the fourth time Cathay Pacific has received the World’s Best Airline honour - the only airline to achieve such a feat. The carrier also took the title in 2003, 2005 and 2009.

Finlays Colombo Plc, which is the holding company of entities of the Finlays Group, continues with its principal activities which include blending and packaging of tea for export.

Established in Sri Lanka in 1893 when Sir John Muir opened an office in Colombo, the initial business of Finlays was managing tea and rubber plantations. Currently it also does tea warehousing, temperature controlled logistics, wholesale courier and environmental services and pest control businesses as well as insurance broking and marine cargo surveying.
www.ft.lk

Commercial Credit’s Rs. 1 b debenture issue oversubscribed

Commercial Credit and Finance PLC’s issue of 10 million rated, subordinated, guaranteed, redeemable five-year debentures at a par value of Rs. 100 each has been oversubscribed on opening day.

Interest on the debentures will be paid at a fixed rate of 10.50% per annum (AER 10.92%) on the principal sum quarterly each year. The Issue opened on Thursday 21 May.

Chief Operating Officer of Commercial Credit and Finance PLC Rajiv Casie Chitty said: “We’re indeed very happy with the performance of this debenture issue and thank the public of Sri Lanka for the overwhelming trust they have placed in Commercial Credit. This debenture issue has parallely given our investors the unique chance to be a part of our continuing efforts to reach out to more people in this country and thereby further enhance the quality of their lives.”

The five-year rated, subordinated, guaranteed, redeemable debentures will be listed on the Colombo Stock Exchange. Bankers to the Issue are Hatton National Bank PLC while the Manager and Registrars to the Issue are First Capital Ltd. and S.S.P. Corporate Services Ltd., respectively. The Trustee to the Issue is Bank of Ceylon. Lanka Rating Agency Ltd has assigned a long term rating of ‘AA’ to these Debentures.
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Hayleys records 32% increase in year end PAT

Hayleys PLC closed its financial year ending March 2014/15 on a high, consolidating the growth momentum generated over past years. In its filing to the Colombo Stock Exchange, the group reported a 32% increase in Profit After Tax (PAT), to close the year with Rs. 4.9 billion.
Sector wise contribution was led by the Hand Protection Sector, showing strong recovery from a challenging period, supported by investments in new production facilities and expansions. The Hand Protection sector will add additional capacity to its recently commissioned household glove factory in the Biyagama Zone and will also see a new industrial glove manufacturing facility commencing operations in the new financial year in keeping with the continued growth. 

The Transportation and Logistics Sector recovered a commendable growth during the year, and continues to increase its benchmark on service delivery and new business innovations.

The Purification Products Sector recorded profit growth despite challenging conditions including elevated raw material prices and a downturn in the gold market. It is noteworthy that the Purification sector is leading a programme, together with the other sectors in the company, to provide clean drinking water to some of the villages that are worst affected by the Chronic Kidney Disease (CKD). To date over 5,000 families have access to clean drinking water through this initiative.

The Textile sector showcased the success of its turnaround programme, posting a profit, a robust growth from the loss recorded in the previous year. The sector has initiated a number of projects that are helping to redefine the business and gain recognition as an industry leader and an innovator.

The Agriculture Sector PBT increased during the financial year, reflecting positive results from a number of new business ventures, including the seaweed cultivation project in the Mannar region, which engages women in the locality to farm and harvest seaweed, providing them with a supplementary income source.

The Plantation Sector recorded lower profits than in previous years due to the decline in global rubber prices, and economic and political turmoil in key markets in the Middle East and Russia. However, the industry is hopeful that prices have bottomed out and steps are being taken to optimise productivity in the plantations.

The Power and Energy Sector maintained its positive contribution to the consolidated results, as did the Leisure and Aviation Sector, where earnings were supported by steady growth at The Kingsbury, which is gaining recognition as a much sought after venue for events and receptions.
Construction Materials recorded a notable increase in profit, whilst the Fibre Sector recorded appreciable growth in earnings during the year, as the results of restructuring are beginning to materialise.
Hayleys Chairman and CEO Mohan Pandithage stated: “Our current management team has exhibited strong leadership in sustaining growth and turning around businesses in the last financial year. The results from the Textiles and Hand Protection among others are particularly noteworthy. We look forward to seeing the teams building on their efforts in the last year and post further growth in the new financial year.”

The Board of Directors of Hayleys PLC comprises Mohan Pandithage (Chairman and Chief Executive), Dhammika Perera (Co-Chairman), Rizvi Zaheed, Nimal Perera, Sarath Ganegoda, Rajitha Kariyawasan, Dr. Harsha Cabral PC, Dr. Mahesha Ranasoma, Mangala Goonatileke, M. H. Jamaldeen, Lalin Samarawickrama and Ruwan Waidyaratne.
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