Accounting policy for unit trusts to change

The proposed accounting policy facilitates the transfer of net income accumulated and capital to a distribution account from which distributions can be made. The transfer of capital to the distribution account can be made at the discretion of the manager after considering realised and unrealised gains. However the approval of the trustee to the fund is essential. Consideration of the funds investment and distribution policy and a basis of prudent distribution practices are also required. A statement of total return reflecting movements in capital and income will be introduced to facilitate the changes in policy.

The change is based on a UK Statement of Recommended Practice (SORP) for authorised unit trust schemes and is also consistent with International Accounting Standard 39.

Under the present accounting system the realisation of losses on the sale of an investment would affect the ability to pay dividends. The income statement now operative cumulates dividend income, interest income and realised losses to arrive at distributable income. This may cause unit trusts to "hang on" to poor quality portfolios rather than realise losses which would affect the ability to pay dividends.

The proposed change in accounting policy has led to concerns whether investors will be misled into thinking distributions made from capital are income distributions. However this will be averted through a dividend notice in the newspapers giving the composition of dividends. An explanation in the investment manager's report analysing the distribution is also required. 

SEC takes legal action against two fund managers

Two separate plaints were filed in the Colombo Fort Magistrate's court on January 24. 

The two cases will be taken up again on March 28, 2000.

The two fund managers who are attached to Eagle NDB Fund Management Co, have been pulled up for manipulating certain stocks on the bourse during the last few days trading in 1998.

In a plaint, the SEC says the fund managers had manipulated the stocks of Hayleys Ltd (11,300 shares), Commercial Bank (76,300 shares), DFCC Bank (57,700 shares), Printcare Ceylon Ltd (1,200 shares), Hatton National Bank (19,400 shares) and Light House Hotels Ltd (13,700 shares).

If found guilty, the brokers could face a five-year prison sentence or a maximum Rs. 10 mn fine.

Recently the SEC also issued a notice of action against a director of a top stockbroking firm for alleged market manipulation, on stocks of a leading commercial bank.

Mumbai and Colombo alliance gets going

A delegation headed by MSE's Vice President, Mrs. Deena Mehta, Corporate Affairs Director Dr. Manoj Vaish and Assistant General Manager Mr. Vaidiyanath visited the CSE last week.

The delegation met with the Directors and officials of the CSE, the Chief Executives of member firms of the CSE, the Central Bank Governor and officials of the Securities and Exchange Commission.

Those eligible to trade on Indian stocks listed on the MSE, will be able to trade from Sri Lanka. 

The alliance is expected to facilitate stocks listed on the MSE to be traded in Sri Lanka. Sri Lankan stocks would also be able to trade on the MSE through a corresponding membership arrangement between the two exchanges.

An alliance of this nature will also facilitate the dissemination of information between the two stock markets, exchange of information and provide training opportunities.

The CSE previously signed a Memorandum of Understanding with the Stock Exchange of Mauritius (SEM) in 1996 for the purchase of CDS software developed by the CSE. 

Tea Update

Eygpt dampens Lankan hopes

Shafraz Farook

As a result The Egyptian Embassy in Nairobi delayed the legislation of tea shipment documents worth US$ 20 million to Egypt. The process that usually takes less than 24 hours were held back for nearly a month until tariffs were lowered by Kenya on rice imports from Egypt. However, since then The Egyptian Embassy in Nairobi has held back another US$ 20 million worth of documents awaiting approval up to the time of this report.

Meanwhile, in local auctions, the better grades proved their worth as they managed to fetch good prices. The reduced quantity on offer resulted in bringing about a price for tea auction as the better grades sold like hot cakes. 

Another notable factor last week was the release of crop figures for 1999. Though it turned out to be a record year with a crop of 283.76 million kilos, it was only 3.71 million kilos higher. Tea brokers forecast a crop of around 280 million kilos and 290 million kilos for this year. 

Captive sources buy in

Despite heavy foreign selling, locals stepped in and drove up the market marginally last week.

The exodus of foreign funds was caused by one foreign fund exiting Sri Lanka and another moving out of the region. But, purchasing by captive funds is adding a glimmer of hope to this grim scenario. 

The highlight of the week was National Development Bank's announcement of a bonus issue, of one share for two and a 45 percent dividend.

Average turnover during the week was Rs. 109.8 mn. The All Share Price Index rose 1.2 percent to close at 561.8, while the Milanka Price Index gained 1.9 percent to register 925.3. The MBSL Midcap Index fell 0.1 per cent to close at 975.32.

Directors transactions for the week include a purchase of 1,050,000 shares of Talawakele Plantations, 25,700 of Eden Hotel, 3,500 shares of Riverina Hotel and 3,300 of Stafford Hotel. AitkenSpence Ltd directors sold 140,000 of their shares in the company.

"Some fresh enthusiasm can be seen among institutional investors, specially captive sources such as the People's Bank and EPF," Head of Research, MMBL Phillip Securities, Nouzab Fareed said. "This is conducive for a stagnated market of this nature. There is speculation that there is room for the market to move further — inactive investors have got signals," he said "Budgetary speculation may cause the market to move, and there will be increased activity next week," he added.

"The market has found fairly strong support in the mid 500 range. Favourable fourth quarter 1999 earnings should help retail buying interest to revive," Head of Research, Asia Securities, Dushyanth Wijaysingha said.

"The rubber sector performance will be better than expected and surprise the market positively," General manager, Forbes ABN Amro Securities, Alistair Corera said. Corporate earnings for December will be positive and this will affect the market favourably, he said. 

Right of reply

"The above report states that the Textile Quota Board (TQB) has landed itself in the dock after an alleged irregular decision to allocate a large parcel of hot quotas to one single exporter and that several exporters are planning to appeal against this decision by way of a fundamental rights application. The report also states that the TQB officials declined to comment on the issue.

At the outset, it is necessary to correct some inaccuracies in the report. Nobody from The Sunday Times contacted either the Director General of the TQB or myself on this issue. Therefore, it is not correct to state that the TQB officials "declined to comment on this issue". The U.S Cat.352/652 underwear is not considered a hot category as stated in the above report. This category is in the Cold Category Pool Quota Scheme for which applications were called by the notice of the Director General of the TQB published in the Daily News of December 13, 1999.

The above report does not mention some of the important and relevant factors pertaining to the decision under reference. This information was freely available as the TQB transacts its business in an open, transparent manner with the participation of industry representatives. My intention in writing this response is to place all relevant information, especially those that have been left out by the author of the above report, so that the ordinary reader could form and informed opinion on the issue.

In September last year, the TQB received an investment proposal from Linea Intimo (Pvt.) Ltd to set up a factory to produce underwear using a highly advanced technology, at present available only in advanced countries such as Germany, Italy and Israel. The proposed investment is US$ 50 mn or Rs.4.2 bn. The employment potential is 750 persons and not 100 persons as mentioned in the above news report. The investor requested an assurance that he will be given an allocation of 250,000 dozens - pin U.S quota cat 352/652 - underwear. The BOI which fully backed the investment proposal stated that it was with great difficulty that they persuaded the investor to divert this investment from Mexico to Sri Lanka. The BOI has described this as the largest single investment ever in the apparel sector in South Asia.

The TQB which considered this application at its meeting held on September 28, 1999 unanimously decided to grant the request having regard to the following important factors. 

(i) The sheer magnitude of the investment which is approximately Rs. 4.2 bn (ii) The advanced technology that the investor was planning to adopt. As everybody knows, quotas will be phased-out by 2005 after which competitiveness will depend largely on the technology. The TQB felt that this investment will serve the others also as a model. (iii) The large amount of unutilised quota left in this category even by the end of the third quarter of 1999. In 1998, the total utilisation of this category was 81 percent which meant that a quota of about 267,000 dozens had been left unutilised, even though the entirety of the quota which was 1.4 million dozens has been allocated to the registered exporters.

At the time the investment proposal was made, utilisation was only 47 percent. The projection of the TQB showed that even in 1999 there will be a large unutilised balance. (This proved to be correct because at the end of 1999 the unutilised balance in this category was 290,000 dozens). (iv) By this time the entitlements of all the exporters had been met. (v) Substantial balances would be left to meet any further requests even after making the commitment of 250,000 dozens to the investor. (vi) Although the amount requested i.e 250,000 dozens appears to be large, in comparison to the investment the amount was in fact small. Under the 50 Garment Factories Programme, a factory with an investment of about Rs.100 mn located in a non-difficult area is entitled to 10,000 dozens in the ratio of 60 percent in fast moving categories and 40 percent in slow moving categories. On this basis, an investment of Rs 4.2 bn should be entitled to about 400,000 dozens with a ratio of 60 percent in fast moving categories and 40 per cent in slow moving categories whereas this investor was requesting only 250,000 dozens in a slow moving category. (vii) This was the only request of this nature for an allocation in Cat. 352/652 before the TQB at that time. (viii) This category is manufactured only by about 10 percent of the registered exporters. (ix) In the past, the TQB has taken similar decisions as long as all the entitlements of other exporters under the approved Scheme for quota management has been met.

Having examined the investment proposal from all angles, the TQB unanimously decided to accede to the request of the investor. In fact, it was the considered view of all the members of the TQB that this investment opportunity should not be allowed to slip by holding back the requested quota. 

The fact that it was a unanimous decision of the TQB should be emphasised because all the Industry Associations namely, Sri Lanka Apparel Exporters' Association, National Apparel Exporters' Association (200-GFP), Free Trade Zone Manufacturers' Association, Sri Lanka Chamber of Garment Exporters and Sri Lanka Garment Buying Officer's Association are represented on the TQB. (Four associations are represented by their Chairmen. The National Apparel Exporters' Association (200-GFP) is represented by a nominee of the Association). It is therefore, difficult to understand how representatives of some of the Industry Associations, having agreed to the decision and also having confirmed the minutes of the meeting concerned at a subsequent meeting without any question could now have a different opinion on this matter. 

In fact, even after the TQB meeting under reference, similar decisions have been taken and the Industry Associations have not expressed any dissenting view. 

The decision of any government official, tribunal, board or corporation is subject to review by courts. The right to have an administrative decision reviewed by a court is a right, enjoyed by any citizen of this country. 

Therefore, I would welcome an opportunity for a Court to review the above decision of the TQB, to ascertain whether the TQB in the circumstances mentioned above, has acted fairly and reasonably in the public interest or whether it has acted arbitrarily, unreasonably, unfairly or maliciously, in the interest of any individual. 

Our reporter says: We did contact Mr. Jayamaha on Friday, but were told that he was busy at a meeting. Due to pressure of deadlines, we were unable to pursue the matter further.

The initial application by Linea Intimo (Pvt) Ltd was approved by the BOI as a non quota factory. Subsequently the application was amended to include the 250,000 dozens Cat 352/652 which again was again was approved by the BOI in November 1999.

The approval states that the factory is to be situated in the Biyagama Export promotion zone in the Gampaha District. Factories located in the Colombo and Gampaha Districts do not come under the difficult or most difficult areas. As such these factories can only enhance their quota, compliment by strictly adhering to the 'basis of allocation' as stated in the TQB Act. 

It is wrong to say 352/652 is a cold category. Last year this category performed over 85 percent and criteria to be in the cold category is performed below 60 percent in a year. as a result of allocating 250,000 dozens to Linea Intimo (Pvt) Ltd - which is more than 12.5 percent of the country's quota. This quota was withdrawn from the seven day cold category due to non availability. Cat 352/652 was available in the seven day pool scheme throughout 1999 and this withdrawal from the said pool has adversely affected the entire industry.

1) Granted, the primary objective of the TQB is to maximise the utilisation of textile quota available to the country, but the basis of allocation is, as a rule, done on an equitable ratio. In fact, the quota distribution scheme approved by the Industrial Development Ministry under section 4 of the TQB Act does not mention quota allocation based on the quantum of investments. The spirit of the Act is based on the principle of quota to all.

2) High investment and advanced technological projects should be welcomed to Sri Lanka. Unfortunately, the apparel industry revolves round the quota constraints, and hence quota should not be used as an incentive. Furthermore, high investment would mean more automisation and less job creation. Again, the TQB is going back on its principle of enhancing job creation.

3) Accepted the utilisation of Cat 352/652 stood at 47 percent in September 1999. The end of year utilisation was 83 percent, an increase of 36 percent. This means 44 percent of the total utilisation amount was performed in the last three months of the year. The TQB obviously had not taken future demand into consideration, when allocating this quota.

4) As the 250,000 dozens was allocated on a permanent basis and not on performance, who is to say that the trend experienced in the last three months of 1999 will not continue into the new year and beyond?

5) If this is so, why were those who performed this category in 1999 only granted 50 percent of pool performance. If enough quota is available (the TQB says that this is a cold category), why not grant 100 percent performance credit for year 2000?

6) Again the spirit of the TQB Act is to discourage quota allocation based on investment and to encourage quota distribution on job creation. Furthermore, under the 50-garment factory programme, quota was not released on the quantum of investments. Instead, quota was allocated based on the location and the number of employees. Factories located in the Gampaha district were excluded from this scheme.

7) Many exporters would agree that requests for similar allocations in cold categories have been rejected by the TQB on numerous occasions as such allocations fell outside the 'rules and regulations' of the TQB.

Of the five representatives of the industry association, one is directly involved in this project and three subsequently sent letters to the TQB withdrawing their support after consultation with their respective association members. A representative of the other association who has self-interest in this project has declined to join the three associations. 

Hutchison invests HK $ 1 billion in India 

The investment was to acquire a 49% equity in New Delhi's cellular operator Sterling Cellular. The move is part of HTIL's major efforts to further consolidate its position in the South Asian cellular telecom business, a company release says.

This is the second Cellular license in India with Hutchison Max providing cellular service in Mumbai, being the first. With this latest acquisition, HTIL now controls 50% of the New Delhi market.

The new business partner in New Delhi, Essar Group has described Hutchison as a company that has demonstrated a unique ability to bring high quality and low cost telecom service in many parts of the world.

HTIL, one of the fastest growing telecom companies in the world has over 4.5 million cellular subscribers worldwide. Subsequent to the new investment in India, HTIL will also explore new opportunities for investment in the telecommunications sector in India and the sub continent.

HTIL believes that the new investment and the initiative will provide anchor points for further investments down the road as Hutchison is a leading cellular service provider with a long term commitment to India.

Hutchison Telecom's Managing Director in Sri Lanka Philippe Loridon said in the release that HTIL's strong focus in the region augurs well for Sri Lanka too.

"A similar growth is also expected for Sri Lanka," Mr. Loridon added.

Commercial operations of Hutchison was launched in December 1998 and recently Hutchison Telecom celebrated its first anniversary with a positive note. Its revolutionary "Home Zone" concept - a first in the world, has enabled it to win 28,000 subscribers in its first year of operation.

Hutchison Telecom is a member of Hutchison Whampoa Ltd. (HWL), the Hong Kong-based conglomerate with rapid growth, globally.

HWL specializes in five core businesses - telecom, ports and related services; property development and holdings; retail, manufacturing and other services; and energy infrastructure, finance and investment. The Group turnover in 1998 was over US $ 6.6 billion and after tax earnings were around US $ 1.1 billion.

AA+ for good track record

With recent debenture issues trading below par in the secondary market, DCR Lanka chief Ravi Abeysuriya says once SLT's debenture is listed, his main concern is whether the secondary market can function well to sustain the issue.

The issue is advantageous, he says because it was priced (interest rate was fixed) even before the rating was issued. 

A lot of favourable conditions have happened thereafter. SLT is having much more public attention now and the market interest rates have come down, and there are indications it will go down further, he said. 

"If that trend continues, once it is listed, it may trade at a premium," he said. 

When we gave a SL AA+ rating, we not only looked at the credit factor but the qualitative factor have played a role in giving high rating. 

DCR Lanka's rating assessment of SLT is based on the following key factors: 

*Robust financial performance supported by EBITDA/Interest coverage of 3.9 times, EBITDA margin of 58% and debt to EBITDA 2.7 which is projected to improve after 2001 as capital expenditure will be funded largely by internally generated revenue. 

*NTT's success in making SLT more competitive through modernisation and expansion of its network, computerisation of financial and operational systems, improvement of service quality and internal efficiency. 

*Increased competition due to industry deregulation, technological developments and growth of the cellular market.

*Adoption of a tariff rebalancing strategy to mitigate reduction in international revenue due to loss of monopoly in August 2002 and decline in international settlement rates.

*Implementation of capital expansion strategy to benefit from future growth potential with flexibility to curb the level of spending. Reduction in funding from multilateral sources following privatisation. 

*Moderate exposure to economic and business risks as the industry is less vulnerable to cyclicality. High level of political risk due to protracted civil conflict.

Abeysuriya says, they also looked closely at cash flow generation and what difficulties SLT can run into like how much of external and internal shocks SLT can sustain can withstand. 

We also looked at a possible scenario where the monopoly was lifted earlier, accounting rates falling further from US$ 0.23 to US$ 0.14 and local call tariffs not rising much. SLT came out fairly stable on all these possible scenarios, he said.

Utility companies are usually highly rated, because their cash flows are much more predictable. For instance if there is a rate hike in a utility like telecom, people don't stop using it, just because the rates are high. 

At the same time telecom shares are the most valued shares for investors. At present, telecom stocks are trading at a P/E over 20 times in the region. 

With economies expanding, the growth in the telecom sector becomes very lucrative and therefore, telecom stocks are extremely attractive, Abeysuriya says.

Speaking of the possible downsides to the issue, he said, the infringement of the monopoly and lower the accounting rates may affect SLT's rating status. 

Lower accounting rates translates to cheaper foreign calls, which in turn should boost outbound overseas traffic volume.

Abeysuriya says, despite accounting rates decreasing by eight percent over the last two years, SLT's volumes have not increased sufficiently. 

"If they (SLT) cant generate sufficient international revenue, they will face problems as nearly 50 percent of their loans are in foreign currency. 

But now they are moving away from borrowing foreign currency because they are going to be more dependent on local revenues in the future, so therefore they are tapping the local market," he said.

As at June 30, 1999, SLT's total debt outstanding was Rs. 28,103 Mn (US$ 395 Mn), of which 92 percent was long-term debt obtained from multinational agencies and foreign supplier credit facilities. Around 40 percent of loans are foreign currency denominated, with 27 percent of total loans in US dollars. 

Foreign loans, a syndicated loan and other domestic loans in addition to the local debenture issue of Rs. 1 bn to 1.5 billion will fund capital expenditure planned for 2000. 

Free cash flow will be constrained until 2001 due to high levels of capital spending. 

The total debt-to-capital ratio is projected to remain below 58%, and improve steadily from this year, as future capital expenditure will be funded increasingly by internally generated funds. 

In 1999 around 56 percent of projects were financed with SLT's own funds, 27 percent by Overseas Development Agency funding and 17 percent with suppliers credit.

Trade receivable days of 163 for 1999 (1998:167) remain at previously high levels however this includes a component for government debtors and international receivables, which take longer to settle and distort the figure. Trade days receivable outstanding for domestic revenues has improved to two months. 

Current and quick ratios are both low and free cash flow becomes positive only after 2001 when capital expenditure slows going forward. Although liquidity and cash management appear weak SLT has access to funds through local financing. As it is considered an infrastructure development company, DCR Lanka says Central Bank can grant permission to banks to increase lending limits.

Apart from debt issues, Abeysuriya says being a recently privatised entity, the inability to retrench staff is also another key drawback.

While staff levels are high, labour is relatively cheap and staff costs make up only 16 percent of total expenses. Staff levels have remained fairly static, but costs rose by 33 percent in 1997, and 26 percent in 1998 to Rs. 2,088 mn in 1998, due to upward salary revision carried out in both years. 

In order to control costs overtime payments have been reduced by 75 percent, as approval is now more stringent. 

SLT has benefited from economies of scale as productivity has improved. Employees per 10,000 lines have fallen from 328 in 1996 to 147 in 1999. 

SLT also has powerful unions to placate. The company is in the process of educating its employees to make them aware of the benefits of privatisation.

Abeysuriya reckons the culture has to move faster to enable the company to move into a more dynamic customer focus company. 

Since SLT's shares were divested giving employees 3.5 percent of the company's stock, 0.2 percent of the employees made use of the offer to sell their stake back to NTT at the same price NTT purchased its shares at the time of privatisation.

With analyst putting SLT's market capitalisation at US$ 1 bn, analyst believe the employees stock would now fetch a market price of Rs. 35 or even more, depending on how well the stock performs in the future.

DCR Lanka's detailed report is available FREE on www.dcrco.com - by typing 'SLT' in the search menu.

What is Enhanced Voice?

These modern technologies promise a more efficient, fast and cheap mode of voice communication. 

One of these modern technologies that is taking the industry by storm, is enhanced voice services. 

Basically enhanced voice means that the single 64 kilo bit line we now use to make a call will be able to carry more than one call simultaneously. 

In Sri Lanka, three companies have been licensed to offer enhanced voice services, but local authorities are still not sure as to the scope of an enhanced voice licence. 

However, the dominant carrier, Sri Lanka Telecom (SLT), sued one operator who took the liberty to put his licence to use when the company provided international calls to customers of one of the Wireless Local Loop operators (WLL). 

The case was based on the grounds that an Internet Service Provider (ISP) did not have a licence to interconnect with a telecommunications operator. In other words disseminate voice messages over the licensed telecom operators network. 

At present, only the three-fixed phone operators and the four cellular operators have an interconnection agreement, though the dominant carrier has challenged that too. This agreement allows the operators to connect their customers calls to the customers of another operator. 

The case is also based on the fact that it eats into the dominant carriers international voice monopoly that ends in the year 2002. 

However, industry sources say that SLT is also planning to use enhanced voice services in future. It is also rumoured that SLT already uses this technology to make international calls. 

How it works

Unlike a conventional phone call, which uses a 64 bit line to make a single call, new digital technology allows multiple users to make calls on the same line. This is also called compressed voice because of its ability to travel along with other calls on a single 64 bit line. 

In other words, a normal telephone call uses a whole circuit or channel, which is kept open throughout the call, so that the callers can talk simultaneously and still hear each other. 

Voice messages sent over the Internet, by contrast, are broken into 'packets' which, can be slotted in with packets of other messages and sent to be reassembled at their destination, sometimes via different routes. A server in the destination you are calling de-converts the data back to voice and directs the call over local lines there to its destination. You pay only for the local connections on either end of the servers.

The final result, a cheap and efficient service to the customers. 

However, since this is similar to the way the Internet works it is supposed to cost the same. But, since both telecom tariffs and Internet charges are not cost, based (in most instances) companies are not sure as to the charges of such international calls. Long-distance calls are currently expensive simply because charges are based on how far the calls travel. So, the further a call goes, the more money you cough up. 

The ITU calculates that the average price for a one-minute international telephone call at peak rates is just under US$ 1.00. Through an ISP, a message can be sent anywhere in the world for the price of a local call.

Degrees through the internet 

Informative Holdings Ltd. of Singapore was the first educational institution in Singapore to launch the first full cyber-campus study in collaboration with the University of Portsmouth to provide virtual education to the world, the release added.

Singapore Informatics Computer Institute is the subsidiary company of Informatics Holdings Ltd. of Singapore. This company has now been able to provide the latest Internet Virtual Learning University (IVLU) - the new world-class cyber learning environment that will propel you to the new millennium. 

Established in 1870 the University of Portsmouth is a leading UK university with a student population of more than 14,500. Like other British universities it is an independent self governing body, deriving its rights and privileges from the Royal Charter by Act of Parliament. The university is also a member of the Association of Commonwealth Universities (ACU) and is recognized by the Institute of Quality Assurance of the UK as a Centre of Excellence in the quality field based on a detailed evaluation of their teaching research and consultancy work.

The University of Portsmouth Bachelor of Science (Hons) in Computing programme is offered through cyber-campus. It is a specialist degree course for candidates interested in the area of data base and systems development. At the end of the programme students will be able to understand the technologies and methods that are relevant for the creation and maintenance of computing systems. 

They will also be able to solve business problems with the creation of effective information technology systems.

ISO 9001 for Bata

The Bata Shoe Organisation founded in the Republic of Czechoslovakia in 1894 is the world's largest manufacturer and marketer of footwear operating in over 66 countries in every continent. The B.S.O. operates 5,000 company owned stores worldwide, in addition to servicing 100,000 independent retailers and franchises, a company release says. 

Bata Shoe Company of Ceylon Limited, the pioneer shoe company in Sri Lanka was incorporated in 1950 and has since been manufacturing footwear for the past 50 years. The present staff strength at Bata Shoe Company is 1,100 direct employees and over 10,000 indirect employees through a diversified sourcing system. A chain of 140 retail shops, 1,500 independent dealers and 5 distributors provide the vital network. Bata Shoe Company won the National Quality Award in 1997, under the large scale manufacturing companies and is the only shoe maker in Sri Lanka to win the National Quality Award to -date . Bata's total quality management which was given a new dimension by winning the National Quality Award was an encouragement to strive for the ISO 9001.The release said.

Zeneca and Astra Merge 

Incorporated in 1964, Chemical Industries (Colombo) Limited is the local associate of ICI Plc UK. In a strategic move to separate their bioscience business inclusive of pharmaceuticals, agrochemicals speciality chemicals and seeds, ICI established Zeneca in 1993 to handle these rapidly developing segments. The CIC marketing team in Sri Lanka took up the challenge of establishing Zeneca which replaced ICI Pharmaceuticals. This has been achieved with tremendous success and today Zeneca is placed strongly in the market providing a range of prescription Pharmaceuticals in the therapeutic category to the medical profession. The categories include cardiovascular, oncology, antibiotics and anesthesia, the release added. 

Astra AB yet another leader in the field of pharmaceuticals manufactures and markets a wide range of products in the therapeutic categories which include respiratory, gastrointestinal, cardiovascular and local anesthesia. 

In Sri Lanka AstraZeneca will be one of the largest companies for prescription pharmaceuticals, building on both Astra and Zeneaca's past experience and expertise in the field and their combined capabilities and potential to deliver increased value to customers, employees and community. In particular, the merger of the two market leaders into one Company AstraZeneca would ensure an improved stronger and more comprehensive service offered to the medical profession by the Healthcare Division of CIC. With over 40 years of experience in healthcare, CIC today has grown to be one of the leading Pharmaceutical distributors in Sri Lanka and have rightly earned the reputation as a Company providing excellent, quality, consistent and continuous supplies and ethical services to the medical profession.

Namal returns exceed 12%

The NIF paid a dividend of 55 cents per unit for the first half of the year in July 1999. Together with the current dividend of 62 cents per unit, investors in the fund have received a total dividend of Rs 1.17 per unit for 1999, which represents an annualized return of more than 12 per cent per annum, Namal said in a news release. 

Last year, the fund invested in fixed income securities in an environment where short term inter-bank money market rates were volatile in the range of 9 to 14 per cent, while long term Treasury bond rates depicted marginal movements in the region of 12.5 per cent and 14 per cent, the company said. 

"Investors received lower returns for their deposits as saving and deposit rates offered by financial institutions declined over the past few years. Under these circumstances it is vital that investors invest in instruments which offer reasonable returns with lower risk" Namal's General Manager S.Jeyavarman said, in the release. 

"When an investor invests in NIF, he or she is given the option of cash dividends or re-investing in the fund to achieve compounded growth in the medium term. The fund also accommodates cash withdrawals for urgent needs which is a consolation to investors while giving them the assurance that their money is professionally managed by experienced managers at Namal," he adds in the release. 

The fund's returns for 1999 was marginally higher than the savings rates and other deposit rates. In the long term this excess return generated by the fund will amount to substantial gains to investors who seek long term capital growth for their investments due to the compounding effect Mr. Jeyavarman explained. 

Launched in December 1997, The Namal Income Fund provides an opportunity for investors to earn a regular income in six monthly intervals. The fund invests in Treasury bills, bonds and other banking products and corporate debt instruments to ensure a continuous income to investors. 

Emirates Airline of the year 2000

This is Emirates third successive victorious year, and the airline's fourth Airline of the Year title. It is also the second time in the 17-year history of the OAG Travel awards that any carrier has won the Airline of the Year title three years in a row, a company release said.

Emirates beat close contenders Qantas, Singapore Airlines, South African Airways and Virgin Atlantic, to become the world's Number One carrier among world carriers once again. In another category, Emirates took top spot as Best Middle East/Indian Subcontinent Airline.

Airlines and forwarders abandon Cargo 2000 plan to beat integrators

Set up in March 1997 by IATA, Cargo 2000 was mandated to provide its 35 membership - a mix of leading airlines and forwarders - with a tool to beat the service offer of integrated carriers such as FedEx and United Parcel Services.

Nearly three years down the line it has opted instead to become "a standards certification agency for the air freight industry," a major climbdown from its stated objective of a master operating plan.

In a seven paragraph statement issued yesterday, three weeks after the Chicago meeting which decided the turnaround, Cargo 2000 said it "should not dictate an information technology solution to its members."

Cargo 2000 has rejected rival proposals from Syntegra and Unisys for a "common data management platform", the heart of the IT system that would speed up data flows between airlines and forwarders. This would help reduce door-to-door-delivery times for air freight which, at just over six days, are little changed in 20 years. Far slower than the integrators. Cargo 2000 members include Singapore Airlines, British Airways, Cargolux, Lufthansa Cargo, AEI, Danzas, Emery and Panalpina.

Jim Hartigan, chairman of Cargo 2000 and vice president cargo of United Airlines, said Syntegra and Unisys "had clearly demonstrated that they could provide the technology we were looking for," but added that" a single source solution was not in the group's interest as it would have slowed members down. A multi-phase solution that enabled members to move at internet speed was preferable."

No Cargo 2000 members were willing to go on record about the decision, but all those spoken to by Lloyd's List indicated that the cost of the management platform, up to $60m by some accounts, was not the deciding factor.

"The present average cost per data message is $1. The new system would reduce that cost to a third, plus further savings by eliminating manual input errors and duplication through bar code technology," said one insider.

Another said that the big bang approach, introducing an expensive IT system in one hit, had failed to take account of cautious finance directors who are more disposed to discreate chunks of expenditure, evenly spread out and with tangible paybacks at each stage.

Other factors were the additional costs of re-engineering the forwarder or airline's own inhouse IT system, something almost ignored by Cargo 2000 until it was too late.

Another problem area was materials handling in the typical freight for water, up to 40 separate process per shipment, compared with up to 12 for DHL or FedEx.

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