SEC Annual Report 2003
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Contents 2 Members of the Commission 4 Principal officers of the Secretariat 5 Chairman’s Review 7 An overview of the Performance of the SL Economy 9 Equity Market - 2003 11 Review of the Director General OPERATIONAL DIVISIONS 16 Corporate Affairs Division 21 Investigations Division 23 Legal and Enforcement Division 26 Supervision Division 30 Public Relations and Market Development Division 33 Finance and Administration Division 36 Unit on Policy Development 38 Calendar of events for 2003 PERFORMANCE IN FINANCE 42 Balance Sheet 43 Income and Expenditure Statement 44 Statement of changes in Net Assets 45 Cash flow Statement 46 Cess fund - Cash Flow Statement 47 Compensation fund - Cash Flow Statement 48 Notes to the Financial Statements 60 Report of the Auditors 62 Auditors Comments MEMBERS OF THE COMMISSION 12345 678910 1 Lt. Gen. J.E. DENIS PERERA VSV.D Litt (Honoris Causa) FCMI also a Chartered Engineer and a Fellow of the Institution of CHAIRMAN - (from March 2003) Engineers,Sri Lanka. Lt. Gen. Perera having had his professional training at Dr.Jinasena was appointed as a Member of the Securities and prestigious institutes in Britain and India concluded a Exchange Commission of Sri Lanka in October 1995 and is the successful career of 32 years as a soldier reaching the rank of Senior Most Member of the Commission. Commander of the Sri Lanka Army and retiring after a period of 4 years, at which point he was the first officer of the Armed Dr.Jinasena is a Board Member of DFCC Bank since December Forces to be decorated by the President with the Vishista Seva 1991.He is also a member of the Presidential Task Force on Vibushana (VSV) for his distinguished services. Science and Technology and a Member of the Presidential Commission on Trade and Tariffs. He was then appointed High Commissioner for Sri Lanka to Australia and the South Pacific States for four years and on his 3 MR. D. K. HETTIARACHCHI return, was appointed Adviser to the President on Manpower COMMISSION MEMBER Mobilization and headed the Reserve Affairs Council. An Attorney at Law by profession, he joined the Department of In 1989 he joined the private sector where he was a Director Registrar of Companies in 1986 as an Assistant Registrar and and Chairman of six leading companies and Chief Executive of was promoted to the position of the Registrar of Companies in one multinational company. He has been the President of many 1997. Servicemen's Associations and has been a Fellow of the Institute of British Management (now known as the Chartered He is also an Ex-officio member of the Sri Lanka Accounting Institute of Management) for 30 years and was awarded the and Auditing Standards Monitoring Board. Honorary Fellowship in 2003 by the Sri Lanka Institute of Mr. Hettiarachchi has many years of management experience. Management. He has been conferred with the Honorary Degree of Doctor of 4 MR. MANIK NAGAHAWATTE Letters by the General Sir. John Kotelawala Defence Academy COMMISSION MEMBER for his services towards National Security and for initiating and Holds a Bachelor of Laws Honours degree and a Master of Laws establishing the said Academy in 1980 and is it's present degree.Since joining the Central Bank in 1966 he held the Chancellor. positions of Controller of Exchange, Superintendent of the EPF, Additional Chief Accountant and Executive Director till 1999, He brings with him over 50 years of management experience to when he was appointed to his present position as Deputy the SEC. Governor. 2Dr. NIHAL JINASENA He served in several government institutions and has been a COMMISSION MEMBER Director of the National Development Bank and of the Private Dr.Nihal Jinasena is an eminent Industrialist and is the Sector Infrastructure Development Company. Chairman/Managing Director of the Jinasena Group of Presently, he serves as a member of the Insurance Board of Sri Companies. Lanka and Chairman of the Credit Information Bureau of Sri He has a B.Tech Degree in Mechanical Engineering and an Lanka. Honorary Doctorate from Loughborough University, U.K. He is He brings over 48 years of management experience. 2 Annual Report 2003 SECURITIES & EXCHANGE COMMISSION OF SRI LANKA 5 MR. FAIZ MOHIDEEN council of the University of Kelaniya. He Counts over 26 years COMMISSION MEMBER of experience with the Merchant & Investment Banking and Presently, holds a prestigious position as Deputy Secretary to Business Consulting. the Treasury. Mr. Mohideen holds a B.Sc in Mathematics from Mr. Peiris is an Attorney – at – Law holding a BSc in Economics the University of London and a M.Sc in Econometrics from the and Law and a MBA from Post Graduate Institute of London School of Economics. Management, University of Sri Jayawardenapura. 6 MR. CUBBY WIJETUNGE 9 MR. W. UNAMBOOWA COMMISSION MEMBER COMMISSION MEMBER Holds the prestigious position as Executive Vice President, A distinguished planter for 17 years before joining Carson Corporate Affairs and Executive Director of Nestle, Sri Lanka Cumberbatch & Co.Ltd. and elected to the Board of Directors and is the Chairman of The Industrial Association of Sri Lanka, within 5 years. He was appointed as Acting Chairman in 1987 Ceylon Breweries Ltd. , Lion Breweries Ceylon Ltd. and Union and was confirmed as Chairman in 1988 and continued in this Residencies (Pvt) Ltd. (Jaic Hilton). capacity for a period of 5 years. After retiring in 1993 he remained He is also a Director on the board of four leading Organizations as Non-executive Chairman and Consultant to the Company's Oil and is a Committee Member of the Ceylon Chamber of Palm plantations in Malaysia and Indonesia till 2003. Commerce and also the Ministry of Agriculture & Livestock He was also appointed to the Board of Directors of Union Development, as well as a Trustee of Joseph Fraser Memorial Assurance Ltd. in 1988 and was elected Chairman 1991 –1993. Hospital. Mr. Wijetunge has several years of management experience. Mr. Unamboowa has over 50 years of management experience. 7 MR. G. C. B. WIJEYESINGHE 10 MR. A. I. FERNANDO COMMISSION MEMBER COMMISSION MEMBER Mr Wijeyesinghe is a Past President of the Institute of Chartered A Chartered Accountant by profession he currently holds the Accountants of Sri Lanka and the Organisation of Professional position of Director / Chief Financial Officer of Forbes & Walker Associations of Sri Lanka and former Precedent Partner of Group. He is also the Director of F&W Tea Brokers (pvt) KPMG Ford Rhodes, Thornton & Co. He also served on the Limited., F&W Commodity Brokers (pvt) Ltd., and Forbes KPMG Asia Pacific Board of Study, Post Graduate Institute of Services (pvt) Ltd. Management the Accounting & Auditing Standards Monitoring Currently the President of the Institute of Chartered Board and a Council member of the Commonwealth Accountants of Sri Lanka (ICASL), he has been a Council Association of Corporate Governance. He is a Fellow of the Member and the Vice-President of the organization and has Institute of Chartered Accountants of Sri Lanka and a Fellow of chaired several committees. the Association of Authorized Public Accountants-UK He is a Fellow of the Institute of Chartered Accountants of Sri Lanka (FCA), the Chartered Institute of Management 8 MR. W. R. JOHNSON PEIRIS Accountants United Kingdom (FCMA) and was a Director of COMMISSION MEMBER the National Investment of Business Management and Post Holds the position of Deputy Secretary General of the National Graduate Institute of Management. Commission of Sri Lanka (UNESCO). He is also a member of the Mr. Fernando has many years of experience to his credit. SECURITIES & EXCHANGE COMMISSION OF SRI LANKA Annual Report 2003 3 PRINCIPAL OFFICERS OF THE SECRETARIAT 1 Ianthie Jayaratne Director Finance & Administration 2 Palitha Silva Gunawardene Director General 3 Lasinee Seresinhe Director Corporate Affairs 6 5 7 4 Marina L Fernando 2 Director Legal & Enforcement 1 3 4 5 Benny Tissera Director Supervision 6Malik Cader Director Public Relations & Market Development 7 Dhammika Perera Director Investigations 4 Annual Report 2003 SECURITIES & EXCHANGE COMMISSION OF SRI LANKA CHAIRMAN’S REVIEW short span of time, we have been able to harness the pragmatism displayed by the country in general and map out a path of growth and development for the SEC, working on some areas that had already been paved the previous year. In today’s highly impulsive corporate context, the spotlight, more often than not has fallen on the role of auditors and good governance, both priorities in the context of accountability, transparency and responsible management. The SEC for its part has finalized guidelines for auditing of Listed Companies, creating a responsible and disciplined environment where all stakeholders of companies can be confident that the Listed Companies will take up the mantle of complete transparency in disclosure and related requirements. Governance too, being almost a buzzword in corporate circles is a high priority area for the SEC, which appointed a high powered Committee to formulate a Code of Governance for companies. After the Parliamentary amendment of the Securities and Exchange Commission Act, which aimed to give more strength and relevance to the workings and requirements of the SEC, we embarked on a strategic review of the SEC with the objective of creating a more pragmatic and pertinent Macro Economic Overview environment for us to function in. The year under review can be deemed as one of pragmatism and renaissance with the economy showing signs of further Concurrently, the SEC nominated an expert panel to resurgence, closing on a growth of 5.5% compared to 4% in conduct a Human Resources Review, which will carve the 2002, despite the political uncertainty generated in path of our human resources, their career aspirations and November 2003. Sagacious growth policies saw an future development as well as compatibility and improvement of macro-economic conditions, the convergence to our corporate goals and vision.