Hatton Bank remains group's mainstay
Brown's arm directors to sell off surplus assets

Brown and Co. Ltd. has summoned an extraordinary general meeting of shareholders on October 22 to consider a resolution amending its articles of association to empower the directors to sell any property of the company - movable or immovable, corporeal or incorporeal, in whole or in part if the board considers it necessary or expedient to do so in the company's interest.

Shareholders have been told that following the closing of the company's engineering operations, some of the properties it holds are surplus to its requirements. It would therefore be prudent to sell off some of these immovable properties and assets.

According to the directors, the present articles are "unduly restrictive'' and require the summoning of extraordinary general meetings to obtain shareholder approval for the sale of its business properties. This was being changed in keeping with modern commercial practice and trends in company law recognising such practice.

According to the Brown's annual report for 1997/98, in addition to its main premises at T.B. Jayah Mawatha (Darley Road), Colombo, the company also owns land at Ratmalana and Negombo.

Browns owns 26.4% of the Hatton National Bank and the profit share from this company, which was Rs. 191.4 million during the year under review, has enabled the holding company which has for many years been burdened with heavy interest to remain operational.

Browns Chairman Chrisantha Cooray has reported group performance for the year ended March 31, 1998, as "satisfactory'' with turnover growing 15% to Rs. 1.3 billion on which a post tax profit of Rs. 120 million, up from Rs. 116.2 million a year earlier.

Cooray said that the year under review saw all subsidiaries - BG Air Services, Browns Group Industries, Browns Group Motels, Browns Tours, Hatton Transport and Agency Co., Snowcem Products and Walker and Greig operate at a profit. Similarly, the associated companies too had operated profitably.

The associate companies are Associated Battery Manufacturers, Browns Dimo Industrial Products, Browns (MT and E) Handicrafts, Hatton National Bank, IG Browns Rubber Industries and Masons Mixture.

The board has recommended a first and final dividend of 10% utilizing dividends received from resident companies which would be free of tax in shareholders hands. As a bonus issue of two new shares for every one share held had been made during the year under review, the dividend which is being paid on the increased capital amounts to a 30% return on the old capital, Cooray said.

He said the group remained committed to rationalize its business activities where profitability does not warrant continued engagement of resources. At the same time, they had diversified activities with the introduction of new business lines and enhanced sales and market shares of agencies hitherto serviced.

According to the accounts, group operating profits before interest was Rs. 21.3 million and other income Rs. 17.9 million. The dominant share of earnings came from share of associate companies' earnings before tax which amounted to Rs. 214.2 million, up from Rs. 171.1 million a year earlier.

This enabled the group to meet interest charges of Rs. 77.5 million during the year under review, up from Rs. 61.4 million a year earlier, and generate the surplus which made the bottom line.

The company's managing director Suraj Fernando reported that Browns have re-emerged "as a leading and vibrant blue chip company.'' He said that the year under review was a very successful one with the company reconstructing and modernising not only its infrastructure, human resources and organisation structure but also its showrooms and motor workshops. They also now have a core team of high calibre managers.

"The restructuring and corporate image building activities necessarily involved the incurring of heavy expenditure, especially on promotional activities and manpower resources. This expenditure, however, is considered to be a good investment,'' Fernando said.

The directors of Brown and Co. Ltd. are: Messrs. Chrisantha Cooray (chairman), Mrs. E. Cooray, M.V. Theagarajah (deputy chairman), Suraj. N. Fernando (managing director) and S.V. Wanigasekera.