IFS to deploy ERP solution for 9 firms at Flinth Ind. Park

The Sri Lankan unit of global business solutions provider, IFS has recently been awarded with a major contract from owners of Flinth Industrial Park (FIP) to swiftly deploy Enterprise Resource Planning (ERP) systems for all nine companies operating within the park.
IFS has already deployed its fully-fledged solutions for two companies in the park, Cable Solutions Private Ltd and Flinth Industrial Park (the main company managing the firms in the park) while a third company, AeroSense Private Ltd is expected to go live on October 1, officials said.
“We decided from the outset that we needed a globally-reputed ERP provider for the park to ensure that all the functions process smoothly and that is why we selected IFS. We have also given them a target to complete the implementation of ERP to all the companies in the park by the end of this year, which promise we are confident the IFS team could live up to,” Flinth Industrial Park’s Managing Director Michael Thorburn told reporters at a recent press conference.
He said that while there were only a few global companies that could cover all the functions carried out by FIP with their ERP systems, only IFS from the outset had a strong exposure and expertise in manufacturing and supply chain sector and a fully fledged offering that satisfied the senior management.
“IFS had no competition in that aspect as their compliant ability with the most rigid quality requirements necessary in the airspace industry ideally suited our requirements,” Thornburn explained.
FIP is home to AeroSense Ltd, a company manufacturing sensors for aircrafts across the world, and which needs to adhere to the highest levels of quality. This in turn benefited all the other companies in the park, Thorburn pointed out, since the quality assurance system embedded in the ERP had to be of the highest standard.
Meanwhile, IFS South Asia Vice President Jayatha De Silva explained that Flinth’s requirements in an ERP were challenging from the start but IFS was bold and took it on.
“For the success of any ERP implementation there are four factors that need to fall in place. The first factor of success is that the business solution must match the requirements of the business”.
“In this situation, the ERP we offered covered all the functions required by Flinth Industrial Park, including HR, finance, and quality assurance”.
The second factor was the consultants and experienced personnel that went into the task.
“IFS had the potential and the capacity, with its hugely experienced team of consultants to take on this challenge, work long hours, and get the ERP going well within the prescribed time frame.”
The third factor for a successful implementation was the post-implementation, De Silva explained. “The hand-holding is vital for the entire process to run smoothly, and in a project of this scale and magnitude, this is even more important.
“With this in mind, IFS will have two of its own personnel working with FIP, on-the-ground and at-hand, after the ERP goes live in order to ensure the system functions smoothly and to train any new personnel entering FIP, on the ERP.”
The fourth factor was the customer’s readiness, and Jayantha pointed out that in this respect, FIP were extremely supportive.
“When you want the ERP implemented so fast, you need the customer to set his priorities and let us know what is most important first. We found FIP ready with their guidelines and recommendations and ready to compromise in order to focus on what was most vital”, Jayantha explained.
FIP, which brings a unique industrial park concept to Sri Lanka, is the brain child of Swedish entrepreneur and visionary Rune Flinth. The park is based upon the concept that companies should focus mainly on production, while supporting functions such as finance, IT, legal services, quality control and human resources, are handled by the park itself.
Located in a 10-acrea area in Kadawatha, FIP already has eight export-oriented companies in residence, creating products that are highly technical, state-of-the-art and demanding stringent levels of quality in both hardware and software.
FIP is a subsidiary of the Swedish holding company Swedcord Development AB owned by Rune Flinth, who has been an industrialist in Sri Lanka for over 20 years having founded two major companies, Flintec and Toroid. (AR)


http://www.thebottomline.lk/2010/09/19/it3.html

 

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PABC confident of meeting minimum capital requirement organically – Official

By Azhar Razak

PABC Bank says it is confident of raising the additional capital requirement of around Rs. 500 million through organic growth and would not need to go for another Rights issue to fund the recently stipulated Rs. 3 billion capital requirement by end 2011. Presently, PABC Bank, which has a core capital (Tier 1 capital) of Rs. 2.54 billion as at 30.06.2010, is the only private commercial bank that is short of the increased minimum capital stipulated by the Central Bank of Sri Lanka (CBSL).
“Given the existing strength of PABC Bank’s core capital adequacy ratio and the total adequacy ratio, we are very much confident of easily reaching the Rs 3 billion Tier 1 required through significantly expanding our business in the near future,” Director-CEO, PABC Bank, Claude Peiris told The Bottom Line in a recent interview.
The amended regulations of CBSL requires existing private commercial banks to increase their minimum capital to Rs 3 billion by end 2011, and further raise it to Rs. 4 billion by end 2013 and Rs 5 billion by end 2015.
He stated that, according to recent interim financials as at June 30, 2010, PABC Bank’s core capital adequacy ratio, calculated as a percentage of Risk Weighted Assets, stood at a healthy 19.24%, which is well above the minimum requirement of 5%, while total capital adequacy ratio, also calculated as a percentage of Risk Weighted Assets, was 19.91%, as opposed to the minimum requirement of 10%.
“The fact that we have maintained a higher capital adequacy ratio means that we will have a greater capability to deal with risk going forward, and therefore, we are already planning for a rigorous expansion drive,” he said, pointing further that the Bank will have sufficient time until end 2011 to meet the new requirement.
Expansion plans
According to Peiris, PABC Bank plans to open at least five branches around the island before the end of this year, which could take the bank’s Branch network to 42 by December 2010.
“We have plans to open branches in Embilipitiya, Matale, Ambalangoda, Batticaloa and Kalmunai before the end of this year,” Peiris said.
It has to be noted that PABC Bank went for a Rights issue last year to infuse fresh capital amounting to Rs 563 million, which had been needed at the time to meet a CBSL minimum capital requirement of Rs 2.5 billion by December 2009. In 2006, the CBSL had increased a minimum capital requirement for licensed commercial banks from 0.5 billion to 2.5 billion, to be met by end 2009. However, the deadline was later extended until June 30, 2010.
PABC Bank’s net profit for the June 2010 quarter fell 60% to Rs 83 million from a year earlier, despite lower loan loss provisions, as fee income fell steeply.
Listing requirement
Meanwhile, new regulations set out by the CBSL a fortnight ago, also requires unlisted locally incorporated private banks to list on the Colombo Bourse by end 2011. Union Bank and DFCC Vardhana Bank, at present, are the only two ‘locally incorporated’ private commercial banks that are not listed on the Colombo Stock Exchange. Union Bank is however in line with the ‘minimum capital requirement’, following the receipt of an Rs 2 billion private placement in May 2010. Prior to the private placement being received, the Bank’s equity stood at Rs 1.5 billion.
According to recent media reports, Union Bank is planning to go public at the end of this year or early next year, to comply with the CBSL directive.
However, Sri Lanka’s three largest banks, State-run Bank of Ceylon, Peoples Bank and National Savings Bank are not listed, and the CBSL has not requited them to do so. (AR)

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LIRNEasia urges implementation of mHealth programme

By Azhar Razak

Sri Lanka’s ICT policy think tank, LIRNEasia has urged Sri Lanka to implement a ‘real-time bio-surveillance programme’ (RTBP) which uses mobile phones for sharing information following its successful completion of a recent pilot research project.
The findings of the research survey shows that implementation of the project could enable early detection and notification of potential health outbreaks (more importantly some killer communicable diseases) while at the same time reducing costs by 30 percent as the system only uses mobile phones, software applications and a Web interface.
“I am proud to say that we are extremely pleased that the research and pilot project has led to the unprecedented milestone of a significant improvement in capturing and documenting health information. We now have solid proven evidence to support RTBP as an important tool in preventing the spread of devastating diseases. Had these monitoring systems been in place before, we would have prevented the deaths of many,” Nuwan Waidyanathan, Senior Research Manager, LlRNEasia, told a press conference recently.
Some of the findings from the project noted that respiratory infectious diseases are the most common in Sri Lanka, common cold is the most popular but gastrointestinal infectious are, relatively, the most visible, people over 45 years are most vulnerable to both hypertension (high blood pressure) and Diabetes-Mellitus.
RTBP is designed to collect timely relevant health surveillance data and to process this data in order to reliably and quickly detect possible outbreaks of diseases. The pilot project carried out with the aid of a grant of US $ 300,000 from the International Development Research Centre, Canada, was tested out in 12 hospitals and clinics in the Kurunegala District from July 2008 onwards accumulating an average of 7,200 records per week or 300,000 patient records in total.
“They detected 25 prioritised infectious diseases like dengue, malaria and dysentery. They were also the first to utilise other options of investigating other communicable like common colds and non-communicable diseases like diabetes or arthritis,” Waidyanathan said.
Cost reduction
The research which was also carried out simultaneously in South India also concluded that Sri Lanka could reduce its overall expenses by 30 percent with RTBP while India could reduce by 50 percent. It further noted that both India and Sri Lanka presently dedicate very little or no resources to event detection or alerting and that RTBP allows allocating more resources to the upkeep of situational awareness and to crisis response activity
“Bulk of the health departments expenses are spent on data collection and consolidation. They can be reduced by RTBP with the introduction of mHealth at the point of care,” the research findings pointed out.
The research paper urged authorities to invest more in alerting to empower health workers with information on the state of affairs of the health in their regions.
“Following a feasibility analysis, researchers have found that the project would require US $12,000 per month per district to be implemented island wide in Sri Lanka,” Waidyanathan noted.
Technical aspects
mHealthSurvey software works on any available standard java mobile phone. A typical record contains the patient visitation date, location, gender, age, disease, symptoms, and signs. Data is transmitted over GPRS cellular networks. T-Cube Web Interface (TCWI) is an Internet browser based tool to visualise and manipulate large spatio-temporal data sets. Epidemiologists can pin down a potential outbreak of, for instance, a gastrointestinal disease among children in the Wariyapola. Sahana Alerting Module (SAM) allows for the generic dissemination of localised and standardised interoperable messages. Selected groups of recipients would receive the single-entry of the message via SMS, Email, and Web.
“The key paradigm of the bio-surveillance programme is not just about computerising the present day processes but it is about complementing them with revolutionary techniques like “syndromic” surveillance. RTBP’s real time bio surveillance capabilities will enhance the present day passive or non-active passive surveillance to an active surveillance system,” Wayamba Provincial Director of Health Services, Dr. R. M. S. K. Ratnayake said.
He added that since the manner in which responses are sent back to health workers follow a global standard recognised by the International Telecommunications Union, RTBP makes it possible for information dissemination with other national organisations such as the boarder control health authorities as well as across borders with neighbouring countries or global organisations.

 http://www.thebottomline.lk/2010/09/19/it1.html

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Colombo Bourse likely to buzz this week- Analysts

By Azhar Razak

Sri Lanka’s stock market is expected to bustle with more activity again from tomorrow as a highly-debated ten percent price band rule becomes ineffective and is replaced by a formula to curb fishy transactions, analysts opine.
According to them, the bourse will flurry again with activity, similar to the pre-price band period that was however driven by speculations rather than proper fundamentals.
“The market has been fairing pretty well even when the price band was in place. So there is no reason why it should not continue to do so,” a top market analyst, who however wished to remain anonymous, told The Bottom Line.
The analyst said the market will be further boosted by the more recent positive reports of the economy, political stability, strong financial performances reported by firms in the recent quarter and other macro economic factors.

“I feel the removal of the ten percent price band rule by the SEC will be taken in a positive light by the retailers although regulation is only one aspect of what investors will look into prior to investing and factors such as transparency also plays a part specially for long term investors,” Nikita Tissera, manager, research, at SC Securities said.
Alternatively, he said, SEC could have even kept the price band rule in place as investors had started getting used to the system but made other changes such as to ensure flexibility is given to genuine long term investors.

Capital Trust Securities director Sarath Rajapaksa, meanwhile, said the market was anyway expected to take a bull run irrespective of the price band rule being in place as the country is presently bustling with positive sentiments.
“What is further encouraging is to see that the banks have also lowered interest rates following directives given by the Central Bank as non-availability of cheap financing had always been a major detriment to investor activity,” Rajapaksa pointed out.
Critics of the price band rule had earlier argued that the rule had imposed a flat punishment to all listed securities in the market due to actions of a few ‘so called manipulators’ whom the SEC had even not named todate.
The new formula that replaces the price band takes into account ‘unusual activity’ in both volume and price movements based on the last five trading days of the share which will then be captured into a list and will remain there for 15 days.

During this time, SEC will place restrictions on these shares such as the applicability of the 10 percent price band and the 50 percent margin upfront for trading such shares. On a further development, the SEC has also asked all stock broking companies to refrain from extending credit to any investor beyond three days from January 1 next year.
“If credit is to be extended beyond this specified period it could be done only through a Margin Provider duly registered with the SEC, the regulator said in a statement made to the Colombo Stock Exchange recently.
However, according to Sarath Rajapaksa, the new changes to be introduced from January 1 will harm the small retailers who used margins to sell and would only provide more benefits for big corporates to do their ventures.

http://www.thebottomline.lk/2010/09/19/page2.html

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Fitch assigns positive outlook to Sri Lanka

Fitch assigns positive outlook to Sri Lanka

Fitch Ratings a while ago affirmed Sri Lanka's Long-term foreign and local currency Issuer Default Ratings (IDRs) at 'B+', and simultaneously revised the Outlook to Positive from Stable. Fitch also has affirmed Sri Lanka's Short-term IDR at 'B' and Country Ceiling at 'B+'.
The Outlook revision is in large part a reflection of Sri Lanka's economy benefitting from the end of a prolonged civil war in 2009, from a more disciplined policy framework put in place under the Stand-By Arrangement (SBA) with the IMF, and from an improved external liquidity position bolstered by the IMF programme. Fitch believes these developments support the prospects for Sri Lanka to achieve sustained medium-term growth, without a resurgence in inflation or another bout of external liquidity stress (as experienced over end-2008 to early-2009). Foreign exchange reserves stood at USD5.8bn at end- July 2010, well above the low of USD1.1bn in March 2009, bolstered by USD1.0bn of IMF funds.
Sri Lanka's authorities have made headway in rebuilding and integrating the two war-torn Northern and Eastern provinces into the rest of the local economy, which is helping to boost Sri Lanka's productive capacity, particularly in the agriculture and tourism sectors. This is highlighted by real GDP growing 8.5% yoy in Q210, from a 7.1% yoy rise in Q110. Fitch is forecasting real GDP growth to average 7.2% in 2010-2012, versus an average of 5.1% over the last 20 years.
The authorities look to be implementing a more prudent macroeconomic policy framework under the IMF SBA. The Central Bank of Sri Lanka (CBSL) appears to have shifted the focus of monetary policy towards fighting inflation and away from supporting growth. As evidence, the CBSL has maintained a positive real interest rate environment since February 2009 (versus an average of -12% in 2008). Fitch views the CBSL's management of monetary policy as broadly appropriate, which along with more benign global energy and food prices, is helping to keep the inflation rate in the single-digit range (up 5.6% yoy in January-to-August 2010).
Sri Lanka's authorities also appear more ready to tackle the sovereign's biggest ratings constraint - weak public finances. The budget deficit of 9.9% of GDP in 2009 and public debt of 86.2% of GDP were both well above the medians for the 'B' rating peer group of 4.9% and 37.3%, respectively. Similarly, the government revenue-to-GDP ratio stood at just 15% in 2009, which is well below the 'B' rating peer group median of 28.1%. The Presidential Commission on Taxation is set to release its final recommendations in November 2010. New tax measures will be crucial in determining if the authorities can get the public finances on a more sustainable path. Equally vital, the end of the civil war should provide the authorities much needed flexibility in cutting spending on defence and resettling refugees.
Maintained policy discipline would support the case for a ratings upgrade. If the Sri Lankan authorities can sustainably boost the tax revenue base and restrain spending to consolidate the budget deficit, this would help lower the country's overall public debt burden and directly address a key rating weakness. Similarly, a sustained period of stronger GDP growth that does not see a return to accelerating inflation or a sharp deterioration in the current account deficit would also support Sri Lanka's ratings. Fitch would also view a pick-up in foreign direct investment as a positive development as this could help bolster the country's external finances and also improve the overall competitiveness of the economy. More specifically, this could help stem concern over Sri Lanka's export sector following the loss of reduced tariff rates via the GSP Plus facility to the European Union in mid-August 2010.
On the other hand, the agency would negatively view an erosion of macroeconomic policy discipline as an acceleration of inflation would undermine Sri Lanka's export competitiveness and result in a sharp rise in domestic borrowing costs for the fiscal authorities and raise overall interest payments. These already stood at 43% of government revenues in 2009, which is well above the 'B' rating peer group median of 5.7%.

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Thai model mulled in place of SEC’s price band

By Indika Sakalasooriya

A system prevailing on the Thai bourse is being proposed to curb excessive manipulation at the stock market here, a Securities and Exchange Commission (SEC) source told The Bottom Line.
His remarks came amid the commission’s indecisiveness over the 10 percent price band issue.
Suggestions have been made to adopt the Thai stock market (SET) model to curb excessive manipulation if the price band is lifted in the near future, the SEC source explained. 
“The price band would go but it won’t just go. If it is to go, a proper monitoring system should be in place. So, we are contemplating several models we could adopt and Thai model is one of them,” the source said. 
As he further pointed out, the Thai model imposes price bands only on selected shares which look too vulnerable due to possible manipulative attempts. The SET model does not place price bands across the board.
According to the literature available on the Internet, SET imposed a 10 percent price band during the early part of 1990s to curb excessive manipulation even though it hurt the vibrancy of the market to some extent. But they introduced a set of new floor and ceiling price limits in 1997, letting a stock to fluctuate with a range of 30 percent of the previous closing price.
Along with these new measures, SET also introduced circuit-breakers to ease any unusual volatility in the market that may cause investor panic.

However, TBL’s attempt to get an official confirmation on the matter was fruitless as senior SEC officials maintained a tight-lip policy over the price band issue.
SEC Deputy Director-General Malik Cader, while confirming that a final decision had not yet been reached on the price band, refused to comment on the possible adoption of the Thai-market model saying that “nothing of that sort was suggested during the commissioners’ meeting held last week”.
The 10 percent price band, which was imposed by the SEC a few weeks ago, has been subjected to a lot of criticism - for and against. 
The key argument against the price band was that it could kill a day’s trading, an aspect according to many, a market should facilitate.
The Colombo bourse dipped immediately after the imposition of the price band, but rebounded a few days later, pushing the investor community’s hopes up - though the sentiments are not fully recovered yet. 

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Sixth Senses CEO to visit Lank

Sixth Senses CEO to visit Lanka

By Indika Sakalasooriya
The Chief Executive of luxury spa operator Sixth Senses, Sonu Shivadasani, is to visit Sri Lanka next month, to announce the joint venture between his company and Sri Lanka’s resort operator Aitken Spence to construct an up market resort in the Southern Coastal line of the country.
“Mr Shivadasani will be here to open the construction of the Ahungalle Luxury Resort and Spa Complex, which was originally billed as Evason Hideaway next month,” an Aitken Spence official said.
Aitken Spence Hotels managing director Malin Hapugoda told the media earlier that the joint venture project is to come up near Ahungalla, in Beruwala, a prime beach resort where it has two properties, Heritance and Neptune.
The investment for the project is estimated at USD 20 million and the ownership structure would be 50:50. Presently Sixth Senses operates spas at Aitken Spence-owned hotels, Kandalama and Tea Factory.
Sonu Shivdasani, Chairman and CEO, founded the Six Senses group together with his wife, Eva. British born, he is a former student of Eton College, and holds a M.A. in English Literature from Oxford University.
Sonu began his career with a two-year induction in the family business which covered many businesses except tourism.
According to an interview he has given to Meridia Capital in 1991, Sonu reduced the amount of time he spent in the family businesses and made a small investment in Pavilion Resorts. The original shareholding was later extended to full ownership and renamed as Six Senses Hotels & Resorts, later to become Six Senses Resorts & Spas.
The company’s focus was changed to the higher end 5 star designer niche. The executive team also changed so that the management’s skills reflected the requirements of the new strategic direction.
In October 1995, he opened his first new build resort in the Maldives, and created the brand: Soneva. This was followed by the Evason brand, initially in Thailand and Vietnam, and Six Senses Spas.

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