07th, September 1997

New handover of duties, not yet

By Priyantha Gamage

Despite strong rumours that custom's collection of duties and the verification of cargo performed by the BOI, were to be handed over to the Customs Department from September 1, the change has not been effected even one week after the set date.

At present, a total of 37% of all imports and 55% of all exports are accounted for by BOI approved enterprises.

At the moment, the BOI provides all customs documentation facilities for all importers and exporters who come under the BOI law and jointly with the customs performs verification of cargo.

Senior Manager (Revenue) BOI, V. H. C. Mendis said, "No policy decision has been taken so far.

BOI chief Tilan Wijesinghe was not available for comment. But speaking to the Business Times in a previous interview, a few days ago Mr Wijesinghe said that,"ours is the only BOI in the world that performs customs duties".

He also added that the very reason as to why the BOI was requested to take on these functions were due to inherent institutional weaknesses of the customs itself and certain problems pertaining to the customs ordinance.

It was felt that the facilitation approach of the BOI as opposed to the enforcement and control approach of the customs would be more beneficial to the exporters.

BoC ranked word class

The Bank of Ceylon has had the distinct honour being of the first bank in Sri Lanka to be rated amongst the top 1000 banks in the world by the prestigious."The Banker"Magazine published by the Financial Times of London. The bank has been ranked 855th by the publication in its annual review of financial institutions which appeared in the July 1997 issue.

The aspects taken in to account by the publication are: strength, size , soundness, profit and performance. In this respect, the Bank of Ceylon has USD 229 mn of capital, USD 2,403 mn of assets (the highest in Sri Lanka ) and pre-tax profit of USD 61mn, which gives the bank the No:1 status in Sri Lanka.

"We are most competitve as regards lending rates amongst the other banks in Sri Lanka,"said General Manager Bank of Ceylon, Mrs. Savithri Jayasinghe speaking to 'The Sunday Times Business'.

The Bank believes that the interest rates will stabilise at these levels, though we do not rule out a further reduction of interest rates in the future, said R Nadarajah, Deputy General Manager Bank of Ceylon.

Asia Capital turns towards success

By Priyantha Gamage

Asia Capital recorded a phenomenal 7646% growth in turnover for this quarter in a year on year comparison with the same quarter last year.

The company made Rs 226.4 million this quarter as compared to Rs 2.9 million in this same period last year.

Asia Capital's Profit After Tax (PAT) also recorded a massive increase of 351.89%. PAT grew from Rs. 13.3 million to Rs. 60 million in an year on year comparison of this particular quarter.

The increase in Group profit after tax for the quarter concerned is a gigantic 683.79% which is an increase of Rs. 55.7 million over the previous year's Rs. 14.3 million .

The operating profit of the company which was a loss of Rs 5.7 million in the quarter ended 30th June 1996 has shot up to a profit of Rs. 45.4 million resulting in an increase of 890.98%.

But, the company's other income has gone-down by Rs. 7.2 million making a 28. 65% decrease, while the group's other income too has dropped by Rs 6.5 billion a decrease of 25.73%.

The profit before tax of the company has gone-up by Rs 43.9 million and that of the Group by Rs 55.7 milion, an increase of 224.94% and 388.42% respectively.

C. Ian Hardy the Chief Excecutive Officer/Director of Asia Capital told Business Times that he attributed this phenomenal success mainly to the regained confidence of the general public on the share market .

These results are not a flash in the pan, he added. Mr Hardy said that the company was able to capitalise on this growth by selling off a portion of it's portfolio at a good profit which was on a sound financial fothings investment wise . And there is a significant amount of unrealised profit even now and the company intends to sell more of it in the said near future , Mr Hardy said.

Asia Capital's investment in Listed Equities is around 60% - 65% and a significant percentage is also invested in government treasury bills.

The re-awakening of the Share Market, according to Mr.Hardy, has been due to many reasons. He says that the stock Market suffered as a result of the difficulties the country had to face over the past few years, specially, the severe drought that prevailed throughout the country, the resultant power-cut, and the Central Bank bombing to name a few. And the transition period in the change of power in August '94 too was a major factor in this regard, according to Mr Hardy.

Now that the country is out of those bad times the future can only look good, Mr Hardy told the Business-Times.

And the commencement of the unduly delayed privatisation programme of the government, the all-time record prices fetched by tea (the average price for tea was an all time high Rs 125.51 per kilo in the sale of 12th and 13th August) and other commodities are all plus factors to this end, he said.

While acknowledging the lower interest rates as a positive step, Mr Harday called for a speedy lowering of corporate and personal taxes.

It is unfair to tax domestic industry at 35% of turnover, while exportors do not pay any taxes, he said.

Lowering of corporate taxes will promote domestic industry, he added. Mr Hardy also said that a Central Depository System is necessary for debt instruments also.

The Group consists of Asian Securities PVT Ltd., Asia Growth Fund (Pvt) Ltd. Asia Font Asset Management (Pvt) Ltd. Asia Fort Sri Lanka Direct Investment Fund.

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