• CID probes ex Horana Plantation directors
• Net trading with Asia Cap
• The new bird has landed
• Refleeting will cost SriLankan airlines US$ 1.1bn
• Airbus tec specs
• Elections will slow economic activities
• Is WTC the most energy efficient building in Sri Lanka ?
• Stout sales go uphill
• Paris Aid postponed
• A worrying trend of increasing expenditure
• Ceylon Theatres buys into LCL
• Bringing the value of the human asset into the balance sheet
• Including Intellectual Capital
• DFCC in Asia Money's rankings
• Wanted: better index
• Profits on the rise
• How much tea is too much tea?
• JKH pushes up market
• Debug opens new showroom in Nugegoda
• Metropolitan Computers awarded ISO 9002 Certification
• Why pay with your money when you can pay with someone else's?
• Suntel signs major contract with DMC For US$ 1 million
• Australia funds 15 community projects
• Delmege Insurance completes five years
• Emirates services to Sydney start next year
• Private sector delegation to participate in the Joint Business Council
• Is the tyre industry running on a flat?
• Bunkering revenue dwindling fast
• Sri Lanka-Mauritius Business Council launched
• Star Alliance expands to 9 airlines with ANA
• Cargo alliance for subcontinent

CID probes ex Horana Plantation directors

By Dinali Goonewardene

The CID is investigating former directors of Horana Plantations Ltd (HPL) for fraud. The investigation got underway following a Securities and Exchange Commission (SEC) investigation which revealed a possible contravention of the penal code by former directors of HPL.

Rs 72 mn has been syphoned off in April 1998 from Horana Plantations to Uni Walkers Ltd the SEC investigation revealed. The transfer of money had not been evidenced by written documentation and there is no agreement to ensure repayment of the money or collect interest, a SEC press release stated.

The SEC is issuing notice of action on Mr J.Badra Wimalasekera, former director HPL for not furnishing information sought by the SEC and MR. P.J. Fernando former chairman, HPL for providing false and misleading information. These offences are punishable with a period of imprisonment not exceeding five years or a fine not exceeding Rs.10 mn or both.

A timely investigation by the SEC caused shareholders to remove key directors from the board whilst the investigation was in progress.

The SEC initiated an investigation into HPL when it received information that substantial sums of money had been transferred out of HPL to UniWalkers Ltd directly and through Ceyexxe Plantations Ltd which is the management company and majority shareholder of HPL.

The investigation revealed there had not been a recovery of the amount although there was an understanding to recover the money within four weeks.

HPL has a market capitalisation of Rs 275 mn and its share price is Rs11. Its present board of directors include M Arake, A Page, T. L. J.Peiris and M.Perera.

HPL has sixteen estates and controls an extent of 5300 hectares of tea and rubber in the Maskeliya Lindula region and Horana Ingiriya region.

Net trading with Asia Cap

Asia Securities has introduced the internet equity trader as a forerunner to on-line trading. The web based service automates transactions between stock market investors and the broker. "Clients can view live quotes on the Colombo Stock Exchange (CSE) on a real time basis and place orders via the internet." Manager Internet Trading, Asia Securities, Suresh Goonesekere told The Sunday Times Business. Orders will be printed out on a ticker at Asia Securities dealing room. The broker will phone the client to verify the order and then enter it into the system. The system is not linked to the CSE trading system at present but this development will take place once the interface is provided. "CSE guidelines on firewalls will also have to be provided," Mr Goonesekere said.

Asia Securities clients will also be provided access to a range of ancillary information needed to trade. Access to this information is password protected after logging into the web site http://www.asiacapital.net.

"We are positioned to attract a new group of investors such as Sri Lankan expatriates and internet traders," Managing Director, Asia Securities, Asanga Seneviratne said. The larger investors such as fund managers are catered to by Reuters and Bloomberg.

On line information provided includes a market view of global indices, PE ratios and market capitalisation. Research reports, investor portfolio summaries and order placement can be accessed through an additional password. Information on listed companies including annual reports, quarterly reports, corporate announcements and financial summaries are also provided. -DG

The new bird has landed

There was a burst of green with a touch of red on newly painted white background as soon as Sri Lankan Airline's new A330-200 airbus' door opened.

The cabin crew clad in the green sari we all know, decked to glory rushed out of the door only to stand to attention at the entrance, while privileged passengers who went to Toulouse, France descended to the tarmac and into the hangar where many awaited their arrival with baited breath.

It was disappointing to note that the uniform (sari), cutlery and crockery of the old Airlanka days remained unchanged, dampening the glory of the new bird.

Officials however were quick to tell a curious journalist that the new uniforms, cutlery and crockery and the rest of the logistics will be in place by the time the rest of the A330s come in.

This was the first of the nine (or optionally 12) Airbus A330s that the Airline has ordered as part of their re-fleeting process. However, having been at the launch of the new logo, (when a leased Airbus A340 landed in Katunayake with the new logo earlier this year) last week's ceremony was all too familiar.

However the interior with its new electronics and the inclusion of a Sinhalese movie is all it promised to be and in keeping with international standards and technological advances. -SF

Refleeting will cost SriLankan airlines US$ 1.1bn

By Mel Gunasekera

SriLankan Airlines (formerly AirLanka) will fork out a total of US$ 825 mn on a finance lease for their fleet of nine A330-200 aircrafts. The airline is also contemplating utilising the option to purchase three more aircraft, which will in turn raise the re-fleeting program's cost to US$ 1.1 bn, SriLankan Airlines CEO, Peter Hill told The Sunday Times Business.

"As part of our business plan, we signed up for 12 aircraft last year-six firm orders and six options, all at the same price. About four months ago, as a result of developments in the company and the success we had in getting bi-lateral agreements, we brought forward three of the options, and we have the option of converting the three remaining aircraft into twin engine version A330 or maybe some additional A340's," Hill said.

While a consortium of European banks backed by the European Credit Agency will fund the leases, the nine aircraft are scheduled to be delivered by the end of next year, he said.

Presently, the carrier has 10 aircraft - four Airbus A340-300 four-engine wide bodies, two Airbus A320-200 narrow body aircraft and four aging Lockheed Tristars.

The Tristars and the Airbus A320s will be phased out by the end of next year. Hill says SriLankan Airlines officials last week have succeeded in increasing flights to London.

"We will then fly nine times to London. We can't do that with the A330's we have to do that with the A340's. Because London is a bit too far for the A330's, it is likely we will convert the remaining options into A340's. It will be a mixture we may order two A340's and one A330 or vice versa. We will see how it goes".

Hill says, Emirates will finance the entire new fleet. "We take full responsibility for that finance involvement, there is no tax payers' money involved, nor government money. We financed it all ourselves and that's how we'll continue to finance our additional aircraft."

The three recent airbuses will be purchased on a financing package arranged by Credit Agrico Indosuez for a ten year period with a fixed interest rate of 6.68%.

Hill says the lending rates negotiated were 'definitely more favourable than the sovereign'.

PERC Chairman Dr. P B Jayasundara told The Sunday Times Business last year that AirLanka negotiated a long term financial package at better rates than the Sri Lankan government after its merger with Emirates.

When the government issued a US$ 50 mn floating rate note, it paid around 200 basis points above the London Inter-Bank Offered Rate (LIBOR).

However, the short-term debt component of the US$ 550 mn financing package arranged by Credit Agrico Indosuez to acquire six Airbus A330s, cost the airline only 175 basis points above LIBOR last year. Indosuez had also arranged the previous financing package to purchase the Airbus A340s.

Emirates had not even issued a corporate guarantee to cover the loan. But PERC officials say AirLanka got favourable terms simply because it is managed by Emirates, which enjoy the confidence of international lenders.

Airline officials also say the financing is expected to be an off balance sheet finance lease agreement with both assets and liabilities not being reflected in the airline's accounts.

Emirates Airlines bought 40% equity and a management stake in AriLanka last year for US$ 70 mn. Emirates paid US$ 45 mn down payment and the balance is due by December 31, 2000. However, Emirates does not charge a management fee from PERC.

SriLankan airlines is aiming for an annual 10% - 15% revenue growth under a 10-year plan.

Accounts

Srilankan airlines made a group profit of Rs. 1.45 bn compared to Rs. 1.40 bn in the financial year ending March 1998. Operating revenues improved to Rs. 19.48 bn in 1998/99 compared to Rs. 18 bn. Group operating profit recorded Rs. 2.94 bn.

1998/99 revenues included Rs. 17 mn from airline operations, Rs. 1.56 mn ground handling, Rs. 145 mn duty free sales and Rs. 431 mn flight catering.

SriLankan carried 1.26 mn passengers representing a healthy seat factor of 71%, while the cargo carried dropped marginally to 35,500 tonnes reflecting the economic downturn in the Far Eastern markets, Chairman S K Wickremasinghe told a media briefing.

"Our performance during the year was on target in terms of both our annual budget and our business plan," he said, adding that "this is an impressive result considering the difficult economic situation prevailing in many of our key markets and the large increase in our debt service costs due to the devaluation of the Sri Lankan rupee by 11.5% during the period under review." Group liquidity was strong and cash balances increased by 30% in US dollar terms.

During the period under review SriLankan acquired the remaining 40% shares held by Thai Airways International in Air Lanka Catering Services Ltd at a cost of Rs. 40 mn. SriLankan plans to establish a new flight kitchen with a capacity of 15,000 meals per day. Officials refused to disclose the investment in the new kitchen stating 'that it was part of our business plan', instead preferred to say the kitchen is is expected to be completed by 2001.

Airbus tec specs

By Shafraz Farook

The first of the nine Airbus A330-200 landed in Katunayake last Thursday.

This is in addition to the existing fleet of two A320s, four A340s and the four Tristars. However, the Tristars will be sold and the A320s will be phased out eventually.

Company officials said they had already received offers for the sale of the Tristars and were negotiating the sale. The proceeds of the sale will be utilised to finance the purchase of the new Airbuses.

The Business Desk gives our Tec savy readers a little inside look at the technical specifications of the new Airbus A330-200s.

The A330-200 is the Airbus Industrie's (this is how it is spelt on the web site.) second A330 version. It can carry 253 passengers in a typical first/business/economy cabin arrangement, with a range of 12,000 km for this payload.

The Sri Lankan Airlines flight is set in a business/economy cabin arrangement on 30/251 arrangement with the same flight range.

The A330 twin engine Airbus retains the popular A300/A310 widebody fuselage cross section. A330 are used for medium to long haul travel or in terms of number of hours it can fly for around 9 hours to 10 hours.

The A330 is the virtual twin of the A340 with a few differences that include four engines instead of the two, it can carry more passengers and it can fly longer.

In addition it also includes digital fly-by-wire flight controls, used for the first time on civil airlines in the A320, now equip the A330 too.

The Airbus Industrie documents reveal that customers have booked some 240 orders for the A330, with more than 70 in service.

Passenger load (Business/Econ) : 30+251
Maximum passenger load : 405
Range with typical passenger load : 6,450
Number of engines : 2
Engine : Trent 700
Engine thrust : 68-73,000
Fuselage diameter (ft) : 18.5
Overall length (ft) : 193.5
Wingspan (ft) : 197.8
Overall height (ft) : 58.7
Wing area (sq ft) 3,890
Wing sweep (degrees) : 30
Optimum cruise speed (Mach) : 0.82
Maximum operating speed (Mach) : 0.86
Maximum takeoff weight (1,000 lb) : 507.1
Maximum landing weight (1,000 lb) : 396.8
Operating weight empty (1,000 lb) : 256.6
Maximum payload (1,000 lb) : 80.2
Maximum fuel capacity (US gal) : 36,750

Elections will slow economic activities

The announcement of the Presiden- tial elections has been viewed in different ways by members of the financial and business community.Some are of the view that an early election is good as the sooner it is completed,the better.This is especially so as there has been a prospect of an early election for some time.

These analysts believe that certainty is better than uncertainty and sooner the election is completed the better it would be for business.

Interestingly, most commentators do not seem to think the result is particularly important, it is the election process that is viewed as disruptive." Let's finish with the elections and get to work", appears to be the thinking. If this was all,then the election may not be that much harmful to the economy.

In fact the private sector should carry on regardless of the electoral activity around and keep the economy ticking.The situation is far more complex.Even if we ignore the outcome of the election in terms of personalities involved, there are other political implications. Irrespective of the Presidential Election result, this election will be followed by a general election.

That is quite certain.And this is not because parliamentary elections are in any case due next year, but because either result dictates it.If the incumbent wins, she would go for a clear majority in the house, if a new president is elected he(not likely a she] would want to capitalise on the favourable election result and call for a general election to get a clear majority in parliament.

Either way the Presidential Election is a forerunner to another election. Even before the dust of the Presidential election settles down,there would be another election. So the disruption, even sans violence and other post electoral disruptions, will be costly to the economy for quite a long period. The economic set- backs are even more than that.The timing of the election was such that, the budget for 2000 will not be presented in parliament.Only a vote on account would be presented.

This implies that the country's expenditure would be routine till the next budget is presented. A moot question however is whether the budget should not have been presented as parliament continues and the Budget is the business of the house not of the President, although she is the Minister of Finance as well.

Another problem arising from the fact that the President is the Finance Minister. One of the cogent arguments for the Executive Presidency was that the office would be for a six-year period.

Whatever happens in parliamnet,the President could remain in office,quite unlike the parliamentary system we had, where the Prime Minister could remain in office only as she or he commands a majority in the house.This advantage is lost by the provision in the constitution to call for an election when the president decides.Our constitution is not like the American constitution where the term of the President of the United States is a fixed term.

The complexity of the situation is compounded if the newly elected President has only a minority in the house.Will such a President work with a cabinet from the opposition and evolve some kind of bipartisan government ? This is too much to expect in the context of our party political culture.Then are we to have a series of parliamentary elections till the President gets a majority in parliament? It is now blatantly clear that our political system is not conducive to economic development. Its elections all the time.

Afterall we finished two rounds of the provincial elections only the other day,and now there is a prospect of a series of elections.Just imagine the loss in productivity if the commanding heights of the economy were in the hands of the government.Despite the signifance of the private sector today,the distraction of the government by the elections and the inevitable disruptions to the economy would be a setback to the economy.Its time to look at the revision of our constitution from the point of view of its functionality to rapid economic growth.

Is WTC the most energy efficient building in Sri Lanka ?

The World Trade Center, Colombo is not only CEB's winner of the most energy efficient building for the year 1998, but an integrated business complex comparable with the world's best buildings. The selection of WTC [owned, managed and operated by Overseas Realty (Ceylon) Limited], for this prestigious award came as no surprise considering our quest for 'quality at no extra cost' policy. With quality as the guiding force in every phase of its operations, the WTC's method in its pursuit of excellence is continuing improvement.

Standing at a gross height of 156 m, the 39 story twin towers is more than great office space at a prime address. It is a world of conveniences, indulgences and a novel experience. It is simply "Colombo's ultimate business address" with its 'one-stop-shop' concept which includes facilities and services such as banking, shopping, trading, communication and office support facilities, shopping, entertainment and an excellent working environment that measures up to any international standard.

It would be of interest for most of us to see how this 'intelligent' building equipped with state-of-the-art technology and infrastructure facilities achieved its efficiency levels without compromising quality and standards.

How energy efficiency is achieved at WTC

Energy conservation or more appropriately energy efficiency in a commercial building means achieving the desired efficiency by energy management thus conserving energy without compromising productivity, comfort levels and safety and lowering costs for the occupants. Several factors have contributed to energy efficiency at the World Trade Center, Colombo, which comprises the 39 storyed twin towers, integrated with a 4 storyed commercial Low Block, a 3 storyed Podium and 9 staggered levels of car parking space, adding up to a gross floor area of 1.26 million sq. ft., a conditioned area of 1,009,653 sq. ft., and a rentable area of 707,591 sq. ft., (excluding public/service areas).

There are four important factors that have contributed to this achievement.

1. Designers' Contribution;

2. Integration of efficient operating/management systems;

3. Implementation of energy audits/energy management systems;

4. The continuing education of building operators and occupants emphasizing on the importance of energy management and conservation.

Designers contribution

World Trade Center (WTC) building has been designed to International Code requirements, which entitled the adherence to stringent codes and standards thus achieving energy efficiency. To elaborate further, this following basic elements are highlighted.

Building envelope - glazing

The entire envelope consists of a glazed area of 170,116 sq. ft., and wall area (precast) of 236,182 sq. ft., thus making the glass to wall ratio of (1): (1.4). One might say that installing glazed panels for better aesthetics will result in the penetration of UV radiation/heat resulting in an increase in cooling demand. However at the design phase, architects worked very closely with M & E Engineers to ensure selection of energy efficient systems. It is obvious that the perimeter glass will bring more daylight, which in turn will reduce artificial lighting required to maintain standard intensity of light. The glazing properly treated to achieve better shading co-efficient and U value, will limit solar heat penetration. Curtain walls, skylight and the perimeter glazing installed in World Trade Center building has a very good shading co-efficient and a U value. This will screen the solar radiation while facilitating penetration of sufficient daylight into the building.

The lighting energy consumption saving due to the day lighting technique generally can be greater than the cooling energy penalty from extra glazing when the building envelope is carefully designed. Glazing at the WTC has been designed to ensure effective day lighting, minimizing solar radiation gain thus reducing the cooling demand. The other important element is the introduction of perforated, semi-glazed horizontal slated windo blinds with reflective ability for effective control of direct sun light.

Building envelope - precast

Designers have taken care in designing the external envelope with composite perimeter walling comprising precast/gypsum board composite cavity wall filled with glass wool lining on precast panel within the cavity. This has contributed to further thermal resistance to the whole construction.

Air conditioning system

Consultants of this project adhered to energy efficient codes in designing mechanical and electrical systems, (air conditioning in particular). The elements addressed in the design stage (which led to potential savings in operations) are indoor design conditions, ventilation system equipment sizing, fan/pumping system design criteria, air distribution system, temperature control, air handling system insulation and A/C equipment performance etc.

To highlight few examples, designers opted for energy efficient variable air volume system (VAV), instead of constant volume system (CV) for the central A/C system. Air handling units too are provided with inlet guide vanes (IGV) for airflow and control valves (CV) for chilled water control and these IGV's and CV's are automatically controlled through the building management system to ensure desired comfort levels.

WTC is equipped with fully computerized efficient management systems

• Building Management System

• Elevator Management System

• Asset/Maintenance Management system

Building management system (BMS)

This is a local area network (Arcnet Lan) based system comprising network controllers (18 nos.) and operation work station (PCs). Equipment is interfaced with the LAN controllers through direct digital controller (stand-alone - remote).

Main functions of the BMS are:

• Monitoring of operations of equipment

• Controlling operating parameters of the equipment (eg. start/stop, valves etc.)

• Collecting historical data and retrieval

• Trouble shooting (fault tracing)

Advantages of BMS over the conventional systems are:

• Flexible system for expansion/modification with simple field wiring.

• User friendly operations through software models (eg. windows).

• Capability of accommodating a large number of monitoring points compared to the conventional system (due to the network operation).

• Historical data can be used as a maintenance and performance-monitoring tool.

• Operating parameters of equipment can be used for fault/trouble shooting.

Elevator management system (EMS)

High tech micro-processes control/software based elevator management system integrated to the elevator/escalator system is designed to work with the system which could control lift car operation modes and continuously update the information to ensure maintenance of constant surveillance of the elevator system performance. EMS installed at the WTC allow property managers to control access and to modify system operating parameter to tailor elevator performance to match the building traffic pattern on special needs resulting in better elevator service, operational costs (conserving energy) and more building profits. Following unique features as incorporated in the design ensures energy efficient operation and minimum wear and tear, hence improving lift cycle cost of the elevator/escalator system.

• Power regenerative control system

• Up peak/down peak facility - (facility available to adjust the waiting time until the car is loaded for start up journey during peak times. This enables maximum utilization of the system hence saving energy)

• Starting current being proportional to the load in the car.

• System deactivation during parking.

• Anti nuisance circuits - curtailing elevator operations for unnecessary calls

Asset maintenance management

The computerized asset management system installed in the WTC, has the facility to monitor, alter, modify or update the activities of maintenance, serving, control of costs, etc. This has four main modules:

• Property module

• Asset register history module

• Maintenance programme module

• Cost control module

This advocates preventive/predictive maintenance by implementing planned maintenance management, maintenance systems to achieve the following objectives.

• To ensure the safe & reliable operation of plant and equipment covering all services.

• To increase performance and improve efficiency.

• To provide management with the means to control maintenance costs.

• To reduce operating costs and increase profitability.

• To improve life cycle costs.

Energy - management auditing

It is imperative that property managers achieve the parameter set out by the designers/manufacturers (in relation to code requirements, wherever applicable) to ensure cost effective, energy efficient building operations. Having said that, it is important to determine what influences the building energy use and usage of energy against these factors and then to set targets for improving the demand of energy requirements of the building.

Main energy centers at the WTC are identified as air conditioning, lighting, vertical transportation, pumping etc. These centers are influenced by the constant "energy drivers" such as tenant occupancy levels, control settings, and variable "energy drivers" such as outside temperature, sun shine, wind speed, humidity.

Energy audits are carried out daily for the main centers, collating data available from BMS and these consumption patterns are compared against the set targets, which had been developed over a period of item, following the commissioning.

The basic programme that had been implemented by the WTC operators are:

• Controlling the lighting in common areas - i.e. de-lighting with a structured schedule

• Revision of mode/time of operation of AHU's in public areas in the main podium - for normal office hours and the non-working hours with a provision for cooling the lobbies in the night.

• Programming of the operating hours with rescheduling START/SHOP of the equipment in A/C plant - (to improve the energy consumption patterns by optimizing BMS operations.)

• Load management - the maximum demand is controlled by diversifying the loads, central A/C system, major pumps, fans in particular.

Continuous education of building operators and occupants with importance of energy management and conservation

Although the plant/equipment installed at the WTC are automated is still requires to be operated correctly to achieve cost effective operations. WTC operators/maintenance team received "hands on" training at the installation /commissioning stage. They receive continuous training and education of the changing environment within the WTC as the building continuously upgrades its technology by employing the latest developments in the field. Tenants are kept aware of the importance of energy conservation without compromising standards of operations in the building.

Occupants play a vital role in achieving these targets. This takes place in different stages.

At the time of the fit out - As a basic exercise, tenants are advised on appropriate occupancy densities (No. of persons per unit), space planning in relation to conditioned air supply patterns. Educating them of the efficient energy operations and making them feel that they are part of our team enables us to achieve our objective very clearly.

Operational stage - tenants are encouraged to have separate switching arrangements for lighting to operate work stations/cubicles to achieve cost effectiveness of energy within their premises. This facilitates maximum usage of daylight as and when necessary.

Despite winning this award the management and staff of Overseas Realty believe that the company can continue to improve in providing the best solutions to people's office needs at minimal cost. This constant quest for improvement keeps the WTC on top of the property marketers ladder and a role model for the next millenium.

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