• Arduous year, says Lalith Kotelawela
  Seylan Merchant posts Rs. 77 million loss for 1997
• Mercantile Leasing explain board changes
• Rot not yet stemmed
  First quarter losses rise at MBSL
• Asset rich Watapota enhances value
• The dangers of consumerism

• Los Angeles based Sri Lanka trade chamber installs new President
• If government's anti-liquor policies take shape
  Brewers anticipate lower profits
• Browns say they are well positioned for growth
• Central Industries' profits dip in 1997/98
• Committee hands report on capital market development
• Morison's boosts profits

The Seylan Merchant Bank has posted a Rs. 77 million loss in the year ended Dec. 31, 1997, described as "arduous'' by its chairman and managing director, Mr. Lalith Kotelawela.

But he claimed that the year under review had seen a phase of restructuring "which enabled (the company) to harness vital elements into its system of operations, essential for cruising into clear waters.''

"All these concerted efforts, I am sure, will produce positive financial results in the years ahead,'' Kotelawela said.

KPMG Ford, Rhodes, Thornton and Co., Seylan Merchant's auditors have reported that the company had included in its accounts quoted investments at a cost of Rs. 43.7 million. The market value of these is Rs. 21.7 million.

"The diminution in value of these investments are Rs. 22 million of which Rs. 5 million has been charged to the profit and loss account,'' they have said. They said that except for the effect of this, the company's accounts gave a true and fair view of its affairs.

Mr. R.S.W. Senanayake, director/general manager of the company had said the year under review had seen a 35% decline in income from the previous year translating into a Rs. 77.2 million loss against the Rs. 1.4 million profit posted a year earlier.

The reduction in income had been primarily due to margin trading earnings which contributed 26% of the company's income the previous year. Their Rs. 185 million margin trading portfolio has been sold to a factoring company "to be recovered over ten annual installments with no recourse.''

"The portion of the income accrued, attributable to this portfolio in the previous financial year was approx. Rs. 38.5 million, which is forfeited in its entirety in the year under review,'' Senanayake said.

He explained that this was tantamount to a write-off and should therefore be viewed in the light of providing them a footing to run their fund based activities on a clean sheet.

Senanayake reported that they have also made provisions amounting to approx. Rs. 17 million including Rs. 5 million on the dealing investment portfolio. "These compared conservatively with that of the previous year which were stated at approx. Rs. 2.8 million,'' he said.

The director/GM said that the company's revenue in the year under review was primarily generated from corporate finance and capital markets, commercial credit, banking and management services, treasury and projects.

Discussing the future outlook, he said that as part of their medium term strategy included steps to intensify expand fund based operations.

Senanayake concluded: "Considering our financial results, I sincerely understand that the year ended Dec. 31, 1997 was a disappointing year for our shareholders. However, I wish to mention that the results of the last quarter of the financial year under review signified a considerable improvement in our performances which I reckon is a denotation of an optimistic future ahead.''

The directors of the company are Messrs. Lalith Kotelawela (chairman), D.R. Senanayake (deputy chairman), Mrs. S.P.C. Kotelawela, S.A. Chapman, R.S.W. Senanayake (general manager), A.D. Jegasothy, R. Renganathan, J.P.R. Silva, Dr. P.R. Anthonis, A.I. Macan Makar and J.E.R. Perera.

We have been informed by the secretaries of Mercantile Leasing Ltd. (MLL) that Dr. H.S.D. Soysa, who has ceased to be a director of the company, continues in its service as a full-time executive.

Our report last week of board changes in quoted companies reported Dr. Soysa's resignation which had been communicated to the Colombo Stock Exchange.

MLL said that the board had decided to discontinue the practice of offering for election persons who are otherwise full-time employees f the company. Accordingly, Mr. M.N.R. de Silva and Dr. H.S.D. Soysa who are full-time executives have ceased to hold office as elected directors of the company.

However, the managing director, Mr. M.N.R. de Silva continues as an ex officio director in terms of the company's articles

The MLL board comprises Messrs. N.U. Jayawardena (chairman), A.N.U. Jayawardena (deputy chairman), M.N.R. de Silva, R.M.S. Fernando, R. Senathi Rajah, A. Kathiravelupillai and M.O.F. Salieh.

The Merchant Bank of Ceylon Ltd. (MBSL) which had a disastrous 1997 is continuing to post losses in the current financial year according to provisional unaudited figures for the first quarter.

A quarterly statement to shareholders indicates that the bank had a net trading loss of Rs. 63.4 million during the quarter under review, up from a loss of Rs. 42.4 million in the comparative period last year.

Other income too at Rs. 8.9 million was down from Rs. 10.8 million earned a year earlier. The pre-tax loss was Rs. 54.5 million, up from a loss of Rs. 31.6 million a year earlier and the after tax loss Rs. 56.6 million, up from the Rs. 39 million loss in the first quarter of 1997.

MBSL is now carrying unappropriated losses of Rs, 1,053.7 million in its books. The bank has a Rs. 500 million issued share capital and a share premium of rs. 770 million.

Asset rich and modestly capitalised Watapota Investments Ltd., a member of the Carsons Group, has seen a drop in both turnover and profits in the year ended March 31, 1998.

The company which has an issued capital of slightly over Rs. 1 million (Rs, 1,048,450) owns 108,000 shares in The Selinsing Co. Ltd., a Sri Lanka incorporated company with Malaysian plantation holdings and 3,881 shares in the Ceylon Guardian Investment Trust Ltd., a company with a very valuable share portfolio.

The value of Watapota's long term investments exceed Rs. 18 million according to its annual report and accounts.

Carsons Management Services who manage the company have attributed the drop in turnover to the decline in interest income as a result of lower rates. Turnover during the period under review, at Rs. 0.75 million was down from Rs. 0.84 million a year earlier.

Resulting from the drop in turnover, the company's net profit after tax dropped 9.7% to Rs. 0.65 million from the previous year's Rs. 0.72 million. With unappropriated profits of Rs. 1.99 million brought forward, the company had Rs. 2.64 million available for appropriation as at balance sheet date.

The managers said that no dividend had been proposed at it was considered prudent to retain the profits earned to facilitate the growth of the company.

They said that despite the upturn in the stock market last year, the market value of the company's investment portfolio was down 33.8% to Rs. 18.65 million from Rs. 28.17 million a year earlier.

"The net worth of the company is mainly driven by its net assets values, which stood at Rs. 47.07 a share compared to Rs. 34.91 recorded in the preceding year.

The directors of the company are I Paulraj (chairman), H. Selvanathan. S. Weerasekera, S. Mahendrarajah, D.C.R. Gunawardene (appointed w.e.f. Aug. 27, 1997) and P. Ratnayake (resigned w.e.f. July 1, 1997)

By analyst
There are many social evils today - drug abuse, alcoholism, violence against women and children, pornography, vandalism and terrorism. Some people consider the aggravation of these evils as due to the open economy with its free access not only to goods and services but also to social and cultural values of the west. Social activists in the west consider these evils as due to consumerism - which is a marked feature in the developed countries. What is consumerism? Economists have long been familiar with consumption which is and important component in the process of economic growth. There is the under-consumption theory of the business cycle, which says the fall in aggregate output is due to a contraction in consumption or under-consumption. But the basic needs of all human beings are far from being satisfied even in developed countries where there is still a significant percentage of poverty and an urban under-class.

Living like the Jones's
In the past some people tended to base their consumption on the class expectations and earnings status of the class they considered themselves to belong to. Social scientists have known for long that consumption is linked to the social status of the person. People spend on things like consumer durables, a radio, a refrigerator etc. As they move into the middle class status families buy refrigerators, washing machines etc. Generally the families look to the consumption patterns of their neighbours. If one's neighbour buys a radio so should you. This is called keeping up with the Jones's. But with the widespread habit of watching television, its no longer the next door neighbour, the Jones's, that a family tries to emulate. Television has widened the aspirations of people as to what they want, what they should have and what they should consume. While one's next door neighbour was by and large of the same class and income status as one-self, the aspirations were limited to what one could afford with some possible marginal increase in income. The aspirations were not too far in excess of the income. But with the habit of watching television, such limits to aspirations to consumption are no longer applicable.

There is also the increase in the number of women entering employment which enable families to have two incomes. Women in the work force experience a much larger exposure to different styles and standards of living. They come into contact with a wide range of people with whom to compare their standards of living. So consumption as a habit of indulging in the latest styles has come into vogue. Consumption had become a value and a lifestyle. Previously it was a trait or characteristic of profligate rulers and the nobles in the courts of the monarchs. But even when they did so, the aristocracies of the past dared not advertise this fact. Only the newly rich would flaunt their wealth and it was assumed that they did so to cover their own feelings of social inadequacy and personal inferiority. This factor operates in society as the new rich spend lavishly to impress others and prove their importance - high consumption has become a feature of the newly rich. So we have individuals who consider it normal to consume for the sake of consuming. Of course this tendency of consumerism is more marked in societies in the west, particularly in U.S.A. where consumerism has become institutionalised. As Ashis Nardy has written in "Consumerism: Its hidden beauties and politics (SID Development Journal) "these are societies where not only is consumption an end in itself, but the entire country often looks to a casual observer like a huge supermarket...... and the country's political economy if not life itself is organised around consumption". There are people who are famous only because of their flamboyant consumption. They are admired by the masses. While such a consumption oriented development may be suitable for a developed mass consumption economy, the position with regard to developing countries is different. Capitalism cannot develop without capital and capital can be created only by savings which involves forgoing consumption.

Importance of Savings
The most urgent need for developing countries like ours, is to increase savings. Some have argued that television leads to a decline in savings in the economy. The spread of consumerism has different implications for the developed and developing countries. In the case of developed countries there is less need for reducing consumption except on the grounds of its adverse impact on the environment. There has been a vast increase in the use of energy and materials that have put considerable pressure on the environment. The demand for timber and wood products has led to the cutting down of tropical forests disturbing the ecological balance. There is global warming caused by the emission of noxious gases. As Paul Hawker points out "For every 100 pounds of product we manufacture in the United States, we create at least 3200 pounds of waste.... We are far better at making waste than at making products. The U.K. Royal Society as well as the U.S National Academy of Sciences have declared that "the future of the planet is in the balance".

While we too suffer from pollution and environmental degradation; we have development concerns too. We have to limit consumption. But we can't limit the consumption of the poor. So we have to limit the consumption of the rich. But the poor may be producing for the rich, in which case reduction of their consumption may reduce the income of the poor even further. So it is necessary to limit the consumption of imported products rather than of locally produced goods, produced by local farmers, manufacturers and service producers. We have to limit consumption and create a surplus for investment. Although we have been running deficits in the Balance of trade with imports exceeding ext ports. We cannot limit imports through tariffs owing to the obligations under the World Trade Organisation. Its only by Patriotic consumer activism as done by the Japanese and the Koreans that we can limit the consumption of imported consumer goods and use our foreign exchange resources to import capital goods and intermediate goods.

Reducing consumption of the rich
It is neither possible nor desirable to reduce the consumption of the poor. Their basic needs at least must be satisfied. Economists talk about the law of diminishing marginal utility in the consumption of any goods. It says that each extra unit of a goods gives less pleasure or satisfaction than the one consumed before it. This doesn't however seem to hold for income as such. There is no evidence that rich people are less keen to increase their income and consumption as their income increases. In the case of workers they may prefer leisure against work as their income increases. But the rich are not necessarily contented. Mahatma Gandhi said that there is enough goods in the world to satisfy man's needs but not man's greed. So the concept of sufficiency is important.

Sufficiency
Economists have tended to over-emphasize the satisfaction of material wants as the path to happiness. This attitude arose partly from the desire to delineate the scope of their discipline from related disciplines. All the great religions of the world have stressed spiritual or non material wants. They have stated that simple living and contentment are important for spiritual progress. The Bible exhorts people to seek first the kingdom of heaven and that everything else will be added to them. According to Jesus Christ that it is harder for the richman to enter the kingdom of heaven than for a camel to go through the eye of a needle. So the exhortation is not to indulge in luxuries like wine and food. Christianity preaches penance and mortification of the desires of the flesh. The Muslims fast for forty days. Although people are not conscious of it their attitudes to consumption and pleasure seeking are based on their world view and their conception of what constitutes the good life. Hedonism or the seeking out of pleasure as the objective of living, has gripped more people than ever before in history. The dominant trend is towards consumerism. Peoples' aspirations to consume in the past were thought not to exceed 20% of their current income levels and earning capacity. But today there seems to be no limit to their aspirations. So people are competing for status with other people who have very much greater economic means. People's aspirations are way beyond their income levels. Television and the mass media have made such aspirations widespread among the masses.

Two sets of values
Why not have both material and spiritual values at the same time? This raises deep questions which belong to the realm of religion. Christianity seems to imply that you cannot pursue both - you belong to the world of Mammon or the world of the spirit, whichever you choose. Fred Hirsch in his book "The social limits to growth" (1976) argued that the very process of competition, the competition among individuals in consumption, was corrosive of the values that sustain human relationships and the institutions of family, community etc. that spring from them. This is certainly true of the consumption driven by the desire to improve one's consumption relative to others rather than competition per se to satisfy ones felt needs. But one doesn't have to be an ascetic to identify with sufficienty. Sufficiency can be practised in society. The notions of sacrifice, of doing without or giving up certain types of consumption like alcohol, tobacco or drugs which are positively harmful to health are taught implicitly or explicitly in all religions and people claim to follow their religions. Vegetarianism is desirable not only because it is kind to save the lives of innocent animals, but because the grain fed to animals reared for food could feed a large number of people who are living in hunger. Animal flesh is a process of conversion of grain with several pounds of grain required to produce one pound of flesh be it chicken or beef the latter requiring a much higher creation of grain to meat.

Apart from providing better health sufficiency in consumption enables one to have a greater range of human experiences, which are ultimately more personally rewarding and fulfilling than consumption. Instead of being absorbed in consuming more and more or acquiring more and more material things, an individual will obtain more happiness by pursuing other values, other than consumption. In U.S.A. the foremost consumerist nation, it has been observed that more and more people are reducing their employment commitments to spend more time with their families or to engage in social activities and this inspite of having to reduce their incomes. They find they are faced with less stress. This movement prompted the Wall Street journal to speculate whether people cutting down on their consumption would affect the share prices adversely.

People in the east have always stressed spiritual, non material aspects of living as important for achieving happiness. Happiness to people in the east has never been the multiplication of wants and their satisfaction Jonathan Watts and David Loy in the Religion of Consumption: A Buddist perspective (development March 1998) has analysed consumerism, calling it the new religion - "a way of living which locates the meaning of one's life in acquisition and consumption. Buddhism denies the self that the sense of self is not real. But people are under the illusion of self so they identify themselves with a religion a community, a race, class, occupation etc.; such identification creates intolerance of other religions, races, etc.; there is now a new kind of salvation - that is a different way to became happy, consumerism. The new creed is being preached through advertising in the media. No advertising is required for the basic products needed by people. But various new fanged products require advertising. The consumer needs must be created, be they for Keells meat products or Kraft cheese. But consumerism doesn't work in the deepest sense. Buddhism sees desire or 'greed' as the fundamental motivating factor in consumerist society. Greed naturally leads to delusion - people are unable to see the difference between needs and wants. Advertising keeps on projecting new needs which become wants. So advertising spreads greed among people. There are also the leisure industries like sports and tourism. Cricket is now an absorbing passion among our people. It is now in the grip of money. Many hours in the work place are wasted as people watch cricket matches on television or absent themselves to go to the cricket grounds. The consumption of leisure with sports and entertainment has thus become another area of consumerist delusion or illusion. With so many games to watch so much shopping to do, so much entertainment to enjoy, people have less and less time for family, children for relations with neighbours or the community.

Buddhism stresses renunciation - letting go of certain pleasures for the chance to experience a higher meaning in life. renunciation must be restored as an active social value. Perhaps the village temple and the village monk can still try to wean away the people from gambling, drinking and consumerism, by stressing the values of the religion. But there are trends that run counter even at the village level. Some monks themselves have succumbed to consumerism.

We need to develop new models of consumption giving pride of place to our local products. We must combat the process of import substitution. Those who developed first, those in the developed societies of the west have benefited enormously from economic growth. Their economic output has increased many times over. This has undoubtedly brought many benefits to their population which have participated in such growth. We, in the developing countries are not going to be so lucky in our efforts to emulate them and achieve similar levels of output and similar standards of living. Grave doubts have been expressed by scientists and environmentalist whether such development on a global scale is possible without serious impact on the environment and social dislocation. "It is simply impossible for the world as a whole to sustain western levels of consumption - Bruntland.

Consumer Action
Consumers in developed countries have discovered that by withholding their consumption of particular products they can force producers to change. "Adbusters" a journal in Canada is challenging the creation of desire for polluting and unhealthy products through advertising and marketing.

Anti-consumerist movements have developed in several developed countries. In Norway for example "The Future in Our Hands" movement was launched to reduce consumption and introduce simpler life styles. A "Buy Nothing Day" is held each year in Holland by social activists changing life styles is no doubt difficult.

Consumer action groups have organised consumer boycotts. There are movements to reduce the consumption of meat in order to promote food security. Reducing consumption must be directed at those who are living beyond their needs. The globalisation of the consumer culture and life styles through the media such as television has to be curbed. Regulating advertising is perhaps also necessary. A distinction has to be drawn between advertising which is providing product information and advertising directed at promoting the message of consuming.

There has to be a consumer movement to counter the globalising tendencies for commercial agriculture. The distance between production and consumption must be shortened. Sustainable societies must satisfy consumer needs by local production. Never mind the trend towards free trade and globalisation. But such action has to be directed by consumers themselves for producers have to respond to market demand.

It is necessary to stress local production and local consumption whether they be for the food we eat or the non-consumable products that we use and throw away. In this UK food scares concerning B.S.E. (Mad Cow disease) E. Coli. and salmonella in eggs have increased consumer pressure on retailers to stock organic products. The public are still not aware of the dangers in genetically engineered products. It's time to stress the advantages and safety of our local agriculture. In Spain on world Biodiversity Day leaflets were distributed highlighting the loss of indigenous varieties of pulses and urging the public to consume local pulses instead of imported ones. In today's context of de-regulation and free trade governments have become less willing to safeguard the consumer. So it is necessary that consumers themselves organise themselves. No government can today introduce legislation to openly encourage local production and local consumption for fear of being seen as a non-tariff banner to trade and challenged under world trade organisation rulings. This will also inhibit governments from introducing more stringent safety and environmental standards because they might be regarded as protectionist measures. But non-governmental organisations will have to address these issues - the safety and quality of products, the abuses by the advertising industry, the dangers of industrially processed food and agricultural products. NGO's in other countries have led consumer boycotts, lobbied for better laws, and policies, resorted to courts against produce corporations etc.; There is a need for our courts to realise the need for public interest litigation. The Indian supreme court has been able to accomplish much through decisions given and enforced in cases brought before it by the public.

(This articles borrows heavily from the magazine of the Society for International Development issue on "Consumption, Civil Action and Sustainable Development').

A Sri Lankan expatriate lawyer, Mr. Don Gunasekera, was instaled as the new President of the Sri Lanka-American Trade Chamber at its ninth annual general meeting recently.

Mr. Gunasekera said that the Chamber was incorporated in 1990 as a non-profit organization by a team of emigre Sri Lankan residents in Los Angeles. The main objective of the Chamber is to promote trade and investment and other economic ties between Sri Lanka and the United States, emphasising the role the private sector could play in this regard.

He said that an excellent investment climate is prevailing in Sri Lanka for entrepreneurs interested in investing in a dynamic Asian economy.

Mr. Newton Samarasinghe, a former Ambassador of Sri Lanka in China, was the guest of honour at the meeting.

The Chamber also held a symposium on an internet based programme being assembled to provide business information on Sri Lanka. Named the "Lanka Business Information Exchange" or LABIE, it was set up as a non-profit project at George Mason University, Northern Virginia, last Autumn by Prof. G. Chris Rodrigo and students, Manjula Jayasinghe and Lasath Suriyaperuma. Consultancy assistance was provided by Prasad Dharmadasa of the University of Maryland.

Prof. Rodrigo told the symposium that this website could become fully operational only with the active participation of Sri Lanka companies and users abroad. Persons abroad with specialised business or technical skills, business interests or training such as students in colleges and universities are expected to benefit from the program.

The main objective, he said, is to identify feasible technology strategies Sri Lankan companies could adopt to build industrial technology in an open economy framework. LABIE could be used to find a job or a short consulting assignment with a Sri Lankan organisation, identify Sri Lankan export products that could be marketed abroad, find customers or markets in Sri Lanka for American products or services and get information about Sri Lankan business and support organisations.

The Ceylon Brewery Ltd. and its subsidiary, Lion Brewery Ltd. has formally communicated to the Colombo Stock Exchange the probability of their operations and profitability being negatively affected if the government goes ahead with the proposal to legislate towards reducing the consumption of alcoholic beverages including soft liquor.

In a letter to the Director General of the CSE, Mr. Suresh. K. Shah, had said on behalf of the two companies that they have been "made to understand'' the government's intentions in this regard.

"The proposed legislation envisages a complete ban on advertising and a pricing policy aimed at increasing the real price of alcoholic beverages in order to reduce affordability and thus consumption.

"These proposals, if formalised as legislation, will have a substantial negative impact on the operations and profitability of our company,'' he has said.

He said that they were keeping the CSE informed of these developments in terms of the relative rules of the exchange.

Brown and Co. Ltd. and its subsidiaries who saw a decline in trading income during the year ended March 31, 1998, says that the recently concluded financial year has seen restructuring and strategic reorganization that will bring tangible results in the future.

Reacting to our July 5 report on the provisional profit and loss figures for the last financial year submitted to shareholders, the company's managing director, Suraj Fernando, said that what's important are the "activities behind the financial figures.''

"Many restructuring a strategic reogranisation activities have taken place. We've modernised our buildings, showrooms and workshop facilities. We have recruited high calibre chief executive officers (CEOs) to head our various directorates (divisions) and taken on necessary supporting staff.

"All this naturally added to overheads and interest on the facilities extended by many banks after studying our future plans,'' Fernando said.

Turnover last year had grown to Rs. 1.3 billion from Rs. 1.1 billion a year earlier. Fernando, who described this as an "increase in performance level'' said this was no surprise as it was all planned.

"I said as much in my review published with our last report and annual accounts. I said there that our on-going activities on business construction organisation and resource building would naturally add to the cost of our current operation. As I said there, `this expenditure is being incurred by sacrificing short term profit in the anticipation of long term gains','' Fernando said.

He pointed out that he had reported there that "the profitability of the ensuing year would therefore be very low and modest and the focus would be on cash flow management rather than profitability.''

Fernando also said that Browns whose bottom line last year was boosted with its share of profits of associate companies, notably the Hatton National Bank, had commenced many new activities in the current financial year. Among these was their entry into the light commercial vehicle market with a franchise from Swaraj Mazda and the lubricant oil industry with the franchise from Valvoline of the USA.

They have also launched a range of consumer electronics and domestic appliances of Sharp of Japan two months ago.

"That was a tremendous success. Within a few months we are one of the leaders in this field,'' Fernando said.

With the profit share from associate companies rising to Rs. 215.1 million from the previous year's Rs. 171.1 million, Browns have posted a provisional after tax profit of 154 million, up marginally from the previous year's Rs. 153.5 million.

Browns have an issued capital of Rs. 21 million, boosted last year by a bonus share issue of 2 for 1 from the very low Rs. 7 million previously. The company's eight-rupee share was last traded in June at Rs. 101. Buyers are quoted at Rs. 75. There were no sellers.

Central Industries Ltd., the Central Finance subsidiary, has substantially boosted turnover but seen a sharp decline in profitability in the year ended March 31, 1998, according to provisional unaudited results submitted to shareholders.

The consolidated turnover at Rs. 302.7 million was up from the previous year's Rs. 223.8 million but the operating profit was down to Rs. 19 million from Rs. 27 million a year earlier.

With interest charged up to Rs. 16.7 million from the previous year's Rs. 12.4 million, the trading profit during the year under review was Rs. 2.3 million, down from Rs. 14.6 million a year earlier.

The pre-tax result was helped by Rs. 2.3 million interest received and Rs. 0.5 million other income to read Rs. 5.1 million, down from Rs. 16.2 million the previous year. The after tax bottom line read Rs. 2.6 million, down from Rs. 11.4 million a year earlier.

With unappropriated profits of Rs. 97.2 million brought forward, the company had Rs. 99.8 million available for appropriation as at March 31, 1998.

Central Industries which manufactures plastic water supply pipes and wiring ducts has an issued capital of Rs. 32.9 million. The company declared a 15% dividend in the last financial year but has not proposed any dividend payment for the year under review.

The committee set up to make recommendations on the financial aspects of corporate governance recently handed its report to the Council of the Institute of Chartered Accountants of Sri Lanka.

Subsequently a public seminar was held at the Institute auditorium on June 27 where the outcome and recommendations of the committee were explained and discussed. The seminar was well attended. Copies of the report were later officially handed over to the relevant institutions involved in capital market development.

Pictured here is the chairman of the Corporate Governance Committee, Mr. Nivard. A.L. Cabraal, handing over a copy of the report to Mr. Rienzie. T. Wijetillake, Chairman of the Colombo Stock Exchange. The CSE's director general, Mr. Hiran Mendis, and Mr. Reyaz Mihular, immediate past president of the Institute of Chartered Accountants of Sri Lanka, were also present on this occasion.

J.L. Morison Son & Jones (Ceylon) Ltd. has improved both turnover and profitability in the year ended March 31, 1998, according to provisional unaudited figures circulated among shareholders.

The company which manufactures and distributes a range of pharmaceutical and consumer products has posted an operating profit of Rs. 32 million, up from the previous year's Rs. 27.4 million and a net profit of Rs. 20 million compared to Rs. 16.5 million earned the previous year.

Shareholders have been told that no decision has yet been made regarding the declaration of dividends, the transfer to reserves and writing off advances made to Compak Morison, a listed straw board manufacturing subsidiary which has been a failure.

J.L. Morison has a modest issued capital of Rs. 5.8 million. The company carried a capital reserve of Rs. 17.9 million, a general reserve of Rs. 32.9 million and retained profits Rs. 38.4 million in its books as at March 31, 1998.