Financial Times

Amnesty over: Collections start
The government's priority following the ending of the tax amnesty would be to collect the taxes owed by the more than 50,000 people who made declarations under the amnesty, the Finance Ministry's Fiscal Policy Advisor P. Guruge said.

"Under the law these people have been given time till September 30, 2003 to pay these taxes," he said. "Now the main focus will be those people who have made declarations and come into the tax net. They have become liable to pay taxes from April 1, 2002."

Making the transition to a public company
After 55 years as a family-owned conglomerate, Hemas Holding Ltd is making the transition to a public company for two reasons - raising funds for a mega power project and bringing in greater public input into the organisation.

Group CEO Husein Esufally believes the group can achieve greater heights with public support particularly because its best times have been during a period of strife and conflict.

"Our growth has been essentially during the last 20 years of conflict. We have built this organisation during the most traumatic times. If we have moved at this pace during difficult times, then one would expect far greater growth during peaceful times," he said in an interview ahead of this week's launch of the Initial Public Offer (IPO).

The company is offering Rs. 600 million worth of shares at Rs. 50 per share. Analysts said that given Hemas' exalted position as one of the country's largest conglomerates, shares are likely to be snapped up and oversubscribed when the issue opens on September 18.

Hemas is also offering a 1.5 million-share option to its staff. The group which has interests in healthcare, personal care, leisure, transportation and strategic investments, is seeking funds for its 100 MW thermal power plant to be commissioned in Puttalam in November 2004. Lakdhanavi Ltd is the Hemas partner in this project. The project costs Rs. 6.2 billion which would come from equity and project finance.

The group's board of directors includes three non-executive directors in Lalith de Mel, chairman at Reckitts, Sri Lanka, Maithri Wickremesinghe, a lawyer, and Simon Scarff, chairman and former managing director of Glaxo Smithkline in India.

Scarff, a British national, is retiring next year and plans to settle down with his wife in Sri Lanka in the coastal town of Matara where he has bought a property. "We would be fortunate to have him here in Sri Lanka," Esufally said.

The Esufally generation is now represented by the sons (four in number), of two brothers, who serve on the nine-member board as executive directors.

"We (brothers) are moving out of day-to-day activities, assigning responsibilities to a senior management team and concentrating on good corporate governance.
We want to progress to a well-run and socially responsible company," he added.
Esufally said that family-held companies in Asia generally tend to break up after two or three generations have passed.

"Often there are family disputes and companies split up. That not only destroys the brand but also its value," he said adding that much as there has been excellent relations in the family "we don't want traditional Asian breakups to occur because this is an excellent group that has been built."

The group's last quarter to June 2003 results shows a post-tax profit of Rs. 123 million and revenues at Rs. 1.4 billion. Post-tax profit in the year to March 2003 was Rs. 401 million and revenues Rs. 5.3 billion.

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