Annual Report 2010 - Ministry of Finance and Planning

4 | State Owned Enterprises (SOE)Performance Issues ChallengesB.C.C. Lanka Ltd• Revenue continued its decreasing trendin 2010 to Rs.100 Mn• Outdated and dilapidatedmachinery that can not be used• Raising adequate funding forcapital expansion• Administration and finance costconstituted 93% of the total expenditureat Rs.26.4 Mn and Rs. 26.5 Mnrespectively• Net loss for 2010–Rs. 32.8 Mnproductively• Outdated technology• Lack of technical staff withnecessary competencies• Under valued assets that hasdistorted the balance sheetSri Lanka Handicrafts Board (SLHB)• SLHB made continuous losses up to2009 and in 2010 recorded a profit• Delay in payments of dues tohandicraft suppliers• Positioning to cater to thegrowing tourism industry• Sales from exports increased in 2010• Equity has eroded• Governance issues• Idle assets• Lack of marketing strategyPost Ptrivatization IssuesIn July 2007, The Cabinet of Ministers decided to close down the Public Enterprises Reform Commission of Sri Lanka(PERC) by repealing the PERC Act No 1 of 1996. Therefore, the post privatization monitoring of the institutions divestedby PERC was vested with the Department of Public Enterprises. (PED)At the time of PED taking over of post privatization activities from PERC, there were approximately 30 divestedenterprises with unresolved issues regarding, the land ( outright transfer or lease), court cases, employees mattersincluding 10% share distribution, violation of some clauses in the Share Sales and Purchase Agreements, non-payment ofinstallment payments to the Government etc. Since 2008, PED successfully finalized these outstanding matters and onlythe issues relating to the following institutions are still to be completed.Acland Insurance Services LtdAmbewela Livestock Company LtdColombo Commercial Company (Engineers) LtdLanka Tractors LtdLanka Canneries LtdMattegama Textile Lanka LtdPattipola Livestock Company LtdThulhiriya Textile LtdLanka Loha Hardware LtdSevanagala Sugar Industries Ltd242