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Vol. 4 :: No. 2 February,
2002 (Magh
- Falgun)
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Business News |
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Budget Changed by Ordinance The government has made changes in the current fiscal year’s budget through a financial ordinance to meet increased expenses in the security following the imposition of state of emergency in the country. The ordinance was brought to meet revenue shortfall which has been a major challenge for the government after the imposition for emergency. According to the Finance Ministry, the first amendment to the Finance Act – 2058 has been effected as the present rates of revenue collection has been insufficient to provide additional means and resources to effectively mobilize all the security bodies following the imposition of the state of emergency. According to the new ordinance, import rates have been increased by 10 percent in an attempt to improve agriculture sector. The new provision has been made by levying one percent special charge on goods which are subject to five percent customs tariff and one percent special charge has been increased to three percent on import. Similarly, Rs. 1 per litre has been levied on petrol, diesel and kerosene as a special charge. Moreover, ten percent customs tariff has been levied on vegetable ghee and oil exports, six percent on cathodes, wire bundles, billet, wire, sheets and copper items and zinc oxide and two percent on acrylic weaving yarns. The government has also increased telecommunication service charge to 15 percent from its earlier 10 percent under the new arrangement. Likewise, the government has increased excise duty by 5 percent on average on cigarettes, alcohol, beer and pan parag. The special charges levied on net income for income tax purposes has been increased to three percent. As per the demand of the private sector the final date for the Voluntary Disclosure of Income Scheme (VDIS) has also been extended to mid February, as per the new arrangement of the Ministry of Finance. Similarly, arrangement has been made for export by export-oriented industries within 12 months of import through a simplified passbook system and special arrangements have been made to relax the old bank guarantee. During the current fiscal year, the government had proposed a Rs. 99.79 billion budget out of which Rs 14.12 billion is to be met through foreign assistance. Similarly, the government had sought to collect Rs 16.42 billion from loans and revenue. The total revenue target of the government during the fiscal year was Rs. 60 billion. NRB Issues New Directives With a view to safeguard the interests of depositors and to make the functioning of financial institutions more organized and dignified by enhancing transparency and competition, Nepal Rastra Bank (NRB) has issued new directives. The directives, among others, have also made some changes with regards to capital fund requirements and deposit collections by finance companies. According to a press release from by the central bank, the new directives have been issued as per the Nepal Rastra Bank Act 2012 and Finance Company Act 2042, and would be effective from February 14, 2002. As per the new directives, the capital fund of 10 percent would consist of 5 percent core capital, while the rest would be covered by supplementary capital for the current fiscal year. However, the finance companies will have to arrange for 5.5 percent of the core capital to increase the capital fund to 11 percent by the end of fiscal year 2000/03, and to 6 percent the next fiscal year to increase the capital fund to 12 percent, relates the release. Similarly, finance companies can collect financial resources up to 12 times of the capital fund by taking prior permission and confining themselves within the specified conditions of the central bank. Likewise, finance companies will have to maintain liquidity of at least 8 percent of the total deposits, out of which at least 3 percent will have to be in cash either in their own vaults, or with the NRB or in a current account of a commercial bank. The new directives have also reduced the categorisation of loan investment of the finance companies into 4 classes against 5 in the previous arrangement. Under the new arrangement, loans that have not been defaulted by over 3 months will be put into the inferior category if it is defaulted by 3 to 6 months. Similarly, suspected loans would be those that have been defaulted by 6 to 12 months and any loans defaulted by up to 1 year will be put in the category of bad loans. The finance companies will have to arrange for at least 1 percent, 25 percent, 50 percent and 100 percent in provisions for loan loss for the above four categories. The directives has also divided loans into active and passive classes and the passive loans would be rescheduled or restructured as per specific rules. The new directives has also made changes in sectoral loan investment, sale of promoters’ shares, auditing and distribution of net profit and dividends. Furthermore, the directives has laid emphasis on good governance under which it has issued clear cut direction on the appointment of the board of directors, the code of conduct of the directors and employees and their accountability and responsibility, appointment of chief executive and appointment of the auditing committee of the finance companies. Similarly, the new directives has also banned extension of loans by the finance companies to its board members, shareholders or employees, including their relatives. Likewise, promoters would not be allowed to sell their shares before the completion of five years of operation of the company. Also, sale of such shares would not be allowed before shares are issued to the general public and before it is listed in the stock exchange. The distribution of dividends, including bonus shares, has been banned until the company issue share to the general public. Padma Jyoti Appointed President of SAARC Chamber Padma Jyoti, former president of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI) has been unanimously elected to the post of President of SAARC Chambers of Commerce and Industry (SCCI). SCCI is the recognized regional apex organization of business sector. Jyoti was elected as the president of the chamber by the 8th General Assembly held in the capital, makes known a SCCI press release. SCCI was established in 1994 encompasses national federation of all SAARC countries. Formally trained in technology and management, Jyoti is the Chairman of Jyoti Group of Companies. FNCCI, FSCCI Sign Cooperation Accord An agreement has been signed between the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Federation of Sri Lankan Chambers of Commerce and Industry (FSCCI) to form an Economic Council (EC) in order to promote bilateral economic cooperation and joint investment in the two countries. The council will consist of six members from each federations and a different desk looking after the EC affairs will be established in the secretariat of both the federations, it is learned. The Presidents of the chambers will lead the EC respectively, it is also learned. It has also been agreed that the EC will carry out researches to promote bilateral economic cooperation, setting up industries through joint investment and finding out the existing problems and their remedies and suggest the concerned bodies for the promotion of the same. The EC is also said to even carry out exchange of information and legal provisions regarding bilateral economic transactions in the two countries and encourage the businessmen of both countries for their investments by conducting trade fairs, mutual visits, meetings and seminars in the both countries. New Office Bearers at HAN The 35th annual general meeting of Hotel Association Nepal (HAN) has re-elected Narendra Bajracharya as President. According to press communiqué Prakash Shrestha, Ajay Ratna Sthapit, Prasiddha Bahadur Pandey, and Shyam Sundarlal Kakshyapati were elected as First Vice President, Second Vice President, Secretary and Treasurer respectively. Likewise, Suresh Lal Shrestha, Samir Khanna, Stephen Walter Voggel, B.K. Shrestha, Binod Shankar Shrestha, Rajan Shrestha, Rajesh Kaji Shrestha, Manjeshree Rajya Laxmi Rana, Govinda Thapalia, Palsang Gurung, Palsang D. Lama, Hari Prasad Gurung, Raj Kumar Shrestha, M.A. Lari Amar Man Shakya were elected as members. In the same way, Gautam Das Shrestha has also been included in the newly formed committee. NTB Participates in Tourism Fair in Netherlands Nepal Tourism Board (NTB) participated in VAKANTIEBEURS 2002, held in Utrechat, The Netherlands, from January 8 – 13, informs a press release issued by the NTB. VAKANTIEBEURS was organized by Jabbeurs Exhibitions and Media on the occasion of its 32nd anniversary. The fair was participated in by 1600 exhibitors with some 160743 visitors from 102 countries from around the globe, the release informs. Nepal stand, during the fair, was visited by some 8000 people who collected travel-related information, it adds. Nepal’s participation in the VAKANTIEBEURS 2002 proved beneficial in promoting the country’s image as a premier holiday destination in the Dutch market that is already the seventh largest outbound market for Nepal, says the release. It may be noted that 10103 Dutch tourists visited Nepal during the last year. The participation of the NTB in the fair was sponsored by SNV/Nepal, the Netherlands Development Organization. Everest Bank Registers Profit Everest Bank Limited has registered a gross profit by 54 percent to Rs. 140 million and the net profit by 69 percent to 70 million during the fiscal year 2000/2001, says a press release issued by the bank. At the same time, the release informs that the shareholders also approved issue of bonus shares at the ratio of 5:1. However, bonus shares will be issued only after receiving the value of preference share of Rs. 150 million as per the directions of Nepal Rastra Bank (NRB). The shareholders have also approved issue of 9 percent preference share of the face value of Rs. 150 million in a meeting held on January 9. Himalayan Bank’s Profit up Himalayan Bank Limited, a joint venture with Habib Bank Limited of Pakistan, has increased its net profit by 40.79 to reach Rs 286.98 million during the fiscal year 2000/2001, says a press statement issued by the bank. According to the release, the last fiscal year’s growth rate was 20.65 percent. Likewise, the total assets of the bank grew by 22.48 percent over the last year’s figure and stood at Rs. 19.54 billion at the end of the fiscal year under review, the release says. Presenting the bank’s ninth annual report for the fiscal year 2000/2001, Himalayan Shumsher Rana, Chairman of the bank informed the shareholders that the total deposits of the bank amounted to Rs 17.3 billion at the end of the fiscal year under review, i.e. 24.85 percent more compared to the last fiscal year’s figure. He also informed that the loans and advances portfolio increased by 25.55 over the last fiscal year and stood at Rs. 8.65 billion at the end of the fiscal year under review. LFLC Approves 20 pc Dividend The sixth annual general meeting of Lumbini Finance and Leasing Company (LFLC) has approved dividend of 20 percent to its shareholders. A press communiqué issued by the company reveals that the AGM also approved the balance sheets for the fiscal year 1999/00 and 2000/01 and the profit and loss balance of the company. The company realised net profit of Rs 20.32 million during 2000/01, the communiqué notes. The AGM has also unanimously elected Narendra Kangsakar, Lokeswor Ranjit, Durga Prasad Ghimire and Subindra Shrestha as the shareholders’ representatives in the executive body of the company, according to the communique. Samrat’s Book Launch at Fulbari As Pokhara rang into the New Year, hundreds of local people, both young and old, including many visitors from Kathmandu and elsewhere, witnessed the first launching in Nepal of Samrat Upadhyaya’s now-famous collection of English short stories, "Arresting God in Kathmandu", amidst a glittering array of fun and feast at the Fulbari Resort & Spa on the 31st December 2001. Germany’s Ambassador to Nepal, H.E. Mr. Rudiger Lemp, who did the honours of the book-launching, congratulated Mr. Upadhyaya for doing his country proud by bringing in international accolades, such as the prestigious Whiting Prize Upadhyaya also made a special mention of The Hanging Garden, an upcoming restaurant at the Fulbari Resort & Spa, jutting out of the canyon and overlooking the Seti river with the Annapurna mountain in the background, adding, he was so thrilled by the entire setting that he would not only be writing some stories using Pokhara and the Resort as a backdrop, but would also make it a point to have his next book, now under publication, launched at The Hanging Garden itself. The function also coincided with the unveiling, by Mrs. Ganga Amatya, one of the promoters of The Fulbari Resort & Spa, of a plaque that dedicated the year 2002 as the year of "Tourism For A Cause". The First such "Cause", as spelt out by Geeta Jetley, the Resort’s General Manager, incorporated the promotion of Literature as was evidenced by the book-launching of Mr. Upadhyaya. The Second Cause included a commitment to help patients with HIV positive, which Mr. Michael Hahn, Country Programme Advisor, UNAID, said was a wonderful and pioneering gesture on the part of The Fulbari Resort & Spa. The Third Cause, which came from the audience, was Revival of Art, Culture and Heritage. New Year Golf Tourney at Fulbari About 30 golfers from various parts of Pokhara participated in the "Stable Ford ¾ Handicap" Golf Tournament organized by The Fulbari Resort & Spa to mark the New year on 5 Jan last at the Resort’s Green Canyon Country Club. Winners were felicitated and Gift hampers distributed to them by Ms. Geeta Jetley, General Manager, The Fulbari Resort & Spa, in the course of a function organized at the Resort’s Hanging Garden Restaurant followed by a barbeque lunch the same day. Distribution of the main trophy and other cups will follow on a separate occasion. AFCL Declares 16 pc Dividend Alpic Finance Company Limited (AFCL), at its eighth annual general meeting held recently, announced dividends of 16 percent to its shareholders. According to a press release, the company’s investments and deposits totalled Rs 181 million and Rs 190 million respectively as of fiscal year 2000/2001 end. RBB mgmt to US co. Nepal Rastra Bank (NRB) and the representative of Deloitte Touche Tomatsu, a US based International Consultancy Firm, signed an agreement on recently for revitalizing the management of the troubled Rastriya Banijya Bank (RBB), a state-owned bank. Rajan Singh Bhandari, Executive Director of NRB of the Banking Operations Department and Robert JF Mcphail, partner of Deloittee, signed the accord on behalf of their respective institutions. Bhandari, after signing the accord with Deloitte, talking at to a press meet said, "Under the agreement, Deloitte would prepare a comprehensive plan within 45 days as to how the ailing bank can be rescued from further financial crisis." As per the agreement, Deloitte consultants would be paid US dollars 57,99,790 in lieu of its service for two years. Deloitte consultants, according to Bhandari, would concentrate on identifying the ills surrounding the RBB, the largest commercial bank that has more than 200 branches across the country. Deloitte experts are assigned to wipe out the problems in accounting and auditing, bad loan recoveries, non-performing loans, internal systems and international financial management as the bank is currently facing inefficiency and poor performance as to allocation of savings within the economy. Deloitte partner Robert JF Mcphail, talking to journalists, assured that the new management would treat the sick RBB management and better it for the effective operation of the bank thereby boosting the banking activities. Deloitte is a global company that has branches in more than 140 countries and has been working in financial management and banking management, informed Mcphail. Deloitte’s local partner, Ram Krishna Neupane, who is associated with BRS Neupane and Co, after signing the agreement with the NRB said, "We will fulfill the promises made and work under RBB board to reform the banking system which is facing crisis." Neupane said, if need be, legal or policy changes would be made after closely monitoring the situation of the bank. Ram Krishna Neupane, Anup Shrestha, Gyanendra Bhandari and Narayan Bajaj are the local partners of Deloitte. Boardwalk Honours Firefighters "1905 Boardwalk" has offered a complimentary dinner to firemen in gratitude for their valour in controlling the fire that caught the restaurant on December 28. It is learnt that property worth approximately Rs 40-50 thousand was destroyed. Nine firemen were treated to a dinner which was organized by "1905 Boardwalk" on the 25th of January. |
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