Sauraha Row on Service Charge Solved for Now
Hotel workers in Sauraha of Chitwan, one of the major tourist destinations in the country, have called off their strike that closed down the hotels there for nearly three weeks from late February following a dispute about enforcing the service charge agreement.
The latest development came after a dialogue between the agitating workers and Hotel Association Nepal (HAN) held by the Ministry of Labor and Transport Management on March 13. The meeting has formed a committee with representatives from trade union HAN and the ministry to find ways to enforce the service charge agreement of December 2006 in a manner satisfactory to all parties concerned.
The agitating workers led by Nepal Free Hotel Workers Union (NFHWU) affiliated to General Federation of Nepalese Trade Unions (GEFONT) were demanding to collect service charge also from services like elephant ride, canoeing jungle walk and other activities sold by the hotels. The hotels were insisting that the agreement is on levying such charge only on accommodation and food and beverages.
An agreement was reached between HAN and five national level trade unions on December 30, 2006 to introduce the system of levying 10 percent service charge on the bills replacing the practice of collecting cash tips from the customers. The agreement was to be implemented in some services from the beginning of 2008. The workers say they started their agitation when the directives to Chitwan hotels issued by HAN early this year did not meet their expectations.
In the course of the agitation, the workers accused HAN President Prakash Shrestha of misinterpreting the agreement for his personal business interests as he owns a hotel in Sauraha. However, Shrestha blames the union of going against the 2006 agreement.
The deepening row between HAN and union also led to division within HAN itself. For example, Tiger Tops, one of the premium hotels in Sauraha renounced its HAN membership in the course of the latest strike by the workers.
New IT products
Sambad Technologies Pvt Ltd. has launched new IT product for in-sourcing of human resources for formulation of information security policy.
The company has also launched education programs for managing information technology and information security for business and DoctorOnline, an internet application for teaching and practicing medical professionals.
While education courses on information technology and information security are targeted to system administrators, operation officers, branch managers, IT staff and managers, says the company.
The company promises to create ambitious business growth environment for banks and financial institutions and other corporates.
Unilever Nepal’s Q2 Profit 181 mio
Unilever Nepal has reported over 13 percent higher net profit this fiscal year up to February 1 as compared to the same period last year.
Though the company’s sales revenue this period of the current year was higher by 12 percent only than in the same period last year, the cost of sales was higher this year by a mere 2 percent thus helping to post 23 percent higher operating profit. Since the company earned mere 7.3 million this year as other income (scrap sales, interest income, compensation and others) as compared to 28.8 million in the same period last year, the profit before tax (after bonus) increased only 9.7 percent.
Financials of Unilever Nepal (Rs. In Lakhs) |
| |
Feb 1, 2007 |
Feb 1, 2008 |
Change (%) |
Paid Up Capital |
921 |
921 |
- |
Reserves& Retained Earnings |
2937 |
3264 |
11.13 |
Net Fixed Assets |
1389 |
1484 |
6.83 |
Total Assets |
7326 |
8026 |
9.55 |
Net Current Assets |
2469 |
2701 |
9.39 |
Sales |
9566 |
10725 |
12.11 |
Gross Profit |
2913 |
3926 |
34.77 |
Operating Profit |
1803 |
2220 |
23.12 |
Profit before tax and after bonus |
2131 |
2337 |
9.66 |
Profit after tax |
1608 |
1817 |
12.99 |
Garment Industry Sees New Hope 300k more jobs expected
Nepali readymade garment industry is expecting a speedy revival from present slump if the plans of India’s Reliance Group and America’s Shah Safari (SS) Inc. really get materialised. According to the sources, once the plans of these two buyers get materialised, Nepali garment industry will create nearly 300 thousand new jobs.
Enthusiasm among Nepali garment entrepreneurs soared up following a promise from Reliance Company, India to help rehabilitate the Nepali garment industry and buy the garments produced here. Likewise SS, based in Seattle, USA, too has a plan to set up a manufacturing facility in Nepal, say the industry sources.
Two representatives of Reliance visited Nepal recently and apprised themselves of the situation by meeting the industry leaders and the government officials, according to the same source. ‘They praised the quality of the Nepali garments and showed eagerness to place long-term orders which would engage 150,000 machines,’ said Prashant Pokhrel, the newly elected President of Garment Association Nepal (GAN), who had a meeting with the Reliance representatives Bipin Tyagi (Vice President) and Manas Sen (Quality In-Charge).
“If we get work only for 50,000 machines, that will be enough for us to be in the situation before the ongoing slump in the Nepali garment industry started,” Pokharel added. According to him, as one machine needs two persons to operate, the Reliance order, if materialised, will generate 300,000 jobs.
Pokharel also informed that while Reliance has already placed orders for samples, SS has appointed a local agent to negotiate with the garment manufacturers.
Similarly, other Indian companies such as Vishal, Megamart, Century and Pantaloon too are learned to be interested to source garments from Nepal
At present the Indian companies are sourcing readymade garments from Bangladesh, under a quota restriction of 8 million pieces, exceeding which attracts 15 percent duty. But as there is no such quota restriction in importing garments from Nepal to India, Nepal has become an attractive source for the Indians, say the industry sources.
SEBON to Search Missing Companies
Securities Board Nepal (SEBON) has initiated hunting for the public companies and their directors, which have been absconding after issuing shares to the general public, according to SEBON Chairman Dr. Chiranjibi Nepal.
Securities Act 2063 has granted special rights to SEBON to take actions necessary for the protection of investors. “On the basis of this legal provision we are now taking essential measures in coordination with Company Registrar’s Office (CRO),” Dr. Nepal said promising to help the duped investors regain the maximum possible portion of their investment.
According to him, the Board will thoroughly investigate how the money collected from the general public was used and what reasons behind the failure of the companies were. It will also look into whether the failure of the companies has affected the economic status of the company directors themselves.
Directors of such ‘fraud’ companies would be debarred from holding any position in the Board of Directors of any other companies, he said.
The list of such companies would be published soon and further actions would be taken subsequently, he added.
Directors of such companies in India are fined up to Rs. 250 million as per the provision of the India’s Company Act.
Though Nepal’s Securities Act 2063 has provided rights to the shareholders to file cases in the court against the directors and promoters of such fraud companies, the shareholders are found lacking capability to initiate such action on their own, said Dr. Nepal. “Therefore, we are taking these steps to help the shareholders under the law.”
Harisiddhi Audit Report Reveals Irregularities of NB Group
Angered by the summary conclusion of the Annual General Meeting on March 2, the public shareholders of the Harisiddhi Brick and Tile Factory Ltd. (HBTF) say they have decided to go to the court against NB Group that controls the management of the company.
Meanwhile, the Company Board (CB), a semi-judicial body formed under the Company Act, is learnt to be preparing to make public its findings of the investigation of HBTF on March 17 after studying the complaints of the shareholders.
Raghunath Agrawal, leader of the action group formed by a group of shareholders of the company, said that they would file a case at the court immediately after the Board makes its report public. “This is because we know that the maximum penalty that the CB could hand down is two-year imprisonment and some amount of fine which is too lenient considering the gravity of the crime,” he said.
NB Group had bought Harisiddhi Brick and Tile Factory from the government at the end of 1992, and its second, third, fourth, fifth and sixth AGM were held on 2nd March with the Annual Reports covering period up to 2003-2004. The first AGM was held in 2000.
Agrawal claims that the latest AGM was illegal as it was attended mainly by the members of the staff of other companies under NB Group who forged signatures of shareholders who were absent at the AGM. The Annual reports were declared approved in a hasty manner without allowing for any question-answer session.
The audit report of company prepared in September 2007 by auditor SR Pandey and submitted to the CB reveals a huge embezzlement of funds with active involvement of NB Group. The report shows that even the amount shown as tax expenditure in the books is not paid to the tax office.
According to the report, the company has cumulative losses of more than Rs. 308.13 million while its share capital is Rs. 185.75 million. It also shows that the company has taken loans amounting to Rs. 564.48 million. While the company stood guarantee for additional Rs. 697.78 million borrowed by other companies under NB Group, the possible liabilities under such guarantees are not shown in the books of account of the company, says the report.
The report also shows that the company’s expenditure is 124 percent higher than its income, the assets of the company are not properly accounted for or capitalized and lots of assets of the company are transferred to other companies under NB Group.
Secured Transaction Registry to take a Year More
Establishment of the Secured Transaction Registry may take more than a year from now as indicated by a study by International Finance Corporation (IFC) and World Bank (WB).
A feasibility study report prepared jointly by the World Bank and IFC, discussed at a workshop held late February in Kathmandu, has recommended setting up the Registry in Public-Private Partnership. It is suggested that the Ministry of Finance (MoF) should form The Secured Transaction Registry Office (STRO) and appoint Credit Information Centre Ltd (CICL) as the private partner to operate it. The proposed STR is a fully electronic, English language web-based system providing 24 hour service.
Also recommended is formation of a committee to draft the registry regulation to be issued before the registry comes into operation. As per the plan suggested, the appointment of the private partner is to complete within six months while it would take twelve months to complete the whole processes including the formulation of the regulations.
The Secured Transaction Law for the establishment of STR was first introduced in 2005 through an ordinance and was converted into an Act by the Parliament in 2006. But the law is yet to be enforced in the absence of STR.
The Act was introduced in order to facilitate the use of movable assets as collateral for bank loans. The STR would provide centralized electronic registry to moveable assets, which is expected to eliminate the fraudulent practice of taking loan from different sources against collateral of the same asset.
Rules for Commercial Bench finalized
Setting up six separate benches in the Appellate Courts to hear the business disputes is now in the final stage. The Supreme Court (SC) has already made necessary amendments in the concerned regulations and sent it to the government to publish in the Nepal gazette. The amendments were approved by a full court of all justices of the Supreme Court including the Chief Justice.
According to SC, at least 12 judges are required for the proposed six benches. However, SC spokesman Shrestha estimates that the government is most likely to sanction appointment of only six judges in the beginning considering the budget constraints.
As per the rules, the Chief Justice has the right to appoint the judges for these benches while the government fixes the number of judges to be thus appointed.
