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"Our friendship remains as strong as ever’’
No fall out between Ceylinco chief and loyal deputy

Ceylinco and Seylan Group Chairman Lalith Kotelawala yesterday described the major restructuring underetaken by his conglomerate which had grown rapidly in recent years as a decentralisation and management strengthening exercise with highly experienced and talented executives taking sectoral responsibility as deputy chairpersons.

He dismissed uninformed market speculation that there has been a parting of the ways between him and Mr. Daya Senanayake, who occupied the No. 2 slot in all group companies and said that their friendship remains as strong as ever.

``Daya and I have known each other since we were 5-year-olds at the kindergarten at Bishop’s College. Our friendship and relationship is as strong as ever. That is why I have been able to do this,’’ Kotelawala said yesterday.

The Ceylinco/Seylan Group is today a sprawling diversified conglomerate with over 77 companies and 200 branches. It has between 15 - 17,000 employees on board and has a turnover of Rs. 27 billion a year. ``We deal with over a million people,’’ Kotelawala remarked.

After the Central Bank bomb blast when Ceylinco House was extensively damaged and Kotelawala himself suffered a serious eye injury by splintered glass, the company bounced back in days relocating its offices, reconstructing records and getting back into business at a speed that won considerable admiration.

Kotelawala said that at that time, what had been done was to named chief executive directors for the dozen sectoral groups. These senior managers all of whom, with one exception, has over 20 years experience in the group, have taken over as deputy chairpersons of the group.

Two group women veterans, Padmini Karunanayake and Mala Sabaratnam are among these deputy chairpersons who succeed Senanayake who has decided to retire from the deputy chairmanship of the sectoral

companies. Kotelawala remains chairman with Senanayake Deputy Chairman of Ceylinco Consolidated, which stands at the apex of the pyramid, as well as the Seylan Bank and a few other group companies.

Close associates said that Kotelawala’s pragmatism (``he doesn’t care whether a manager is a man or woman, Sinhalese, Tamil, Muslim or any other’’) in the choice of people and the excellent relationship he enjoys with all group employees has made the changes announced possible without heartburn.

The formal company announcement, signed by both Kotelawala and Senanayake, said that both of them ``will pay particular attention’’ to the ongoing restructuring of Blue Diamonds Jewellery Worldwide. Senanayake who is credited with Ceylinco bringing the diamond industry to the country and making it an extremely strong and profitable performer before the current recession hit will specially concentrate on revitalising this sector.

The group is strong in its determination that the three deposit takers within it, Seylan Bank, The Finance and Ceylinco Insurance are stand alone companies that will be unaffected by fluctuating fortunes elsewhere in the group.

``We have to ensure the perpetuity of the institutions. We are not going to be here every day,’’ Kotelawala said. ``The next stage will involve sorting out the shares. We want a mix of employees and investors owning the various companies.

The following is the text of the formal Ceylinco Consolidated announcement:

"The Chairman of the Ceylinco Group Deshamanya Lalith Kotelawala and the Deputy Chairman Mr. Daya Senanayake are pleased to announce that a major restructuring operation has been carried out in the Ceylinco Group since end 1996 and a new structure has been created. The group is now called Ceylinco Consolidated with Chief Executive Directors in charge of sectoral groups with a total of over 77 individual companies.

"To pave the way for a smooth delegation of responsibilities and provide for future growth of the total business and to concentrate on the Blue Diamonds Group the Deputy Chairman, Mr. Daya Senanayake has decided to retire as Deputy Chairman of these sectoral groups. Mr. Senanayake will continue as Deputy Chairman of Ceylinco Diamond Trading Co. Private Ltd., Ceylinco Worldwide Trading Private Ltd., Ceylinco Development Bank Ltd., Ceylinco Savings Bank Ltd., Blue Diamonds Ltd., Blue Diamonds Jewellery Worldwide Ltd., Seylan Merchant Bank and Seylan Bank Ltd.

"The Chairman Deshamanya Lalith Kotelawala and Mr. Daya Senanayake will pay particular attention to the ongoing restructuring of Blue Diamonds Jewellery Worldwide Ltd., and are pleased to announce that the restructuring undertaken by them is progressing satisfactorily.

"The Chief Executive Directors of the sectoral groups will now be appointed Deputy Chairman of each group, namely:-

Ceylinco Consultancy & Allied Services (Pvt) Ltd. - Miss Mala Sabaratnam, Deputy Chairperson.

Ceylinco Homes Group - Mrs.P. Karunanayake, Deputy Chairperson.
Ceylinco Investment Group - Mr. K.H.S. Jayatissa, Deputy Chairman.
Ceylinco International & Realty Group - Mr. Sanka Wijesinghe, Deputy Chairman.
Ceylinco International Trading Group - Mr. Ajith Gunawardena, Deputy Chairman.
Ceylinco Serene Group - Mr. R. Renganathan, Deputy Chairman.
Ceylinco Securities & Financial Services Group - Mr.W.G.B.M. Ranaweera, Deputy Chairman.
Ceylinco Universal Group - Mr. Roshan Gurusinghe, Deputy Chairman.
Golden Key Group - Mr. Khavan Perera, Deputy Chairman.
The Finance & Guarantee Group - Mr. Mervyn Jayasinghe, Deputy Chairman.

"The Chairman and Deputy Chairman believe that the new structure that has been created will place the business on a stronger foundation ready to face the new millennium and to provide excellent service to all customers.’’

Cheaper raw materials & shrimp boom helps
Record 1998 profit posted by Ceylon Grain Elevators

Ceylon Grain Elevators Limited (CGE) has reported a record profit of Rs.278.4 million for the year ending December 31, 1998, on the back of an above-expected performance of the poultry and livestock sector and declining prices of major raw materials, the company said in an announcement to shareholders.

Turnover during the year under review was up 9% to Rs.3.3 billion with the shrimp division performing impressively by growing 181% over the previous year despite severe problems faced by all shrimp farmers.

The group operating profit before-tax had grown 36% to cross the Rs.300 million mark for the first time. Turnover in the shrimp division was up to Rs.73 million, a record performance from shrimp operations.

CGE said that relatively stable economic conditions in the country had helped this performance boosted by stronger volumes of commercial day-old-chicks and improved demand for poultry products.

Group profits of Rs.278.4 million attributable to shareholders exceeded the company’s 1977 record of Rs.200.8 million. CGE had net assets of Rs.32.65 per share before appropriation, 14% above the previous year’s figure.

The directors have proposed a second and final dividend of 10% for the year under review on top of 5% paid in May 1998. This gives shareholders a tax-free return of 15% for the year. No dividend was paid on the 1997 result.

The company said that their recommended dividend takes the group’s present and future cash position and projected capital commitments into consideration. Although the company can support a higher dividend pay out, the directors said that they were mindful about the need for conserving surplus funds for expansion which will reinforce the company’s leadership position and take advantage of future growth opportunities.

The company believes that barring unforeseen circumstances, they could do even better during the current financial year.

CGE which is controlled by the Prima group of Singapore has an issued share capital of Rs.600 million and a share premium of Rs.626.3 million in its books.

Record tea crop in Jan. - Feb. 1999

Tea production in February at 23 million kg. has been an all time record for the month, according to trade statistics. January production too was an all time record and national production for the first two months of the year at 43.5 million kg. was up 9.9% from a year earlier.

The trade said that Sri Lanka’s tea crops have set new records for the past three consecutive years and if the 1999 production trend can be maintained, this year’s crop too will be a record.

Once again, low growns have been the largest contributor with 11.7 million kg. compared to 9.3 million kg. a year earlier - up 25.6%.

High growns too were up 10.7% with a crop of 6.7 million kg. while mid growns had marginally declined 4.8%.

Forbes and Walker Tea Brokers said that the total production of 23 million kg. in February was up 13.8% from a year earlier while the cumulative production for the first two months of the year at 47.7 million kg. was up 9.9% from the corresponding figure last year.

The Euro — Europe’s single currency

By Kanes
The launching of the new single currency for 11 European Union members - the Euro - on the 4th of January 1999, is undoubtedly a historic event. It is the first time a number of important countries have got together to share a single currency and to pool their monetary sovereignty. What is more significant is that these countries were enemies fighting one another for centuries. This is the culmination of the European Union founded in 1957 with the objective of avoiding war on the one hand and establishing an economic union on the other, to create a United States of Europe, economically and politically as powerful as the United States of America.

The crux of the European Monetary Union is the use of a common currency by all the member countries and the adoption of a common monetary policy. The first stage was the establishment of a fully independent European Central Bank ((ECB) - independent of all governments and institutions and not accountable to anyone. The Maastricht Treaty which established the European Central Bank clearly states its objective as price stability which has now been defined to mean inflation of less than 2 per cent a year. The ECB will support the general economic policies of the European Community but it will do so without prejudice to the objective of price stability. Under no circumstances can the ECB bail out national governments which are in difficulties. Just as the member countries had earlier handed over to the various regional authorities powers over external trade, state subsidies, tariffs and common market rules, the rights of individual member countries to inflate, to print money, to meet budget deficits, to encourage exports by currency devaluation have now been handed over to the European Central Bank

The second stage will be the replacement of all national currencies in the European Union by the single European currency - the Euro - in 2002. National currencies will circulate until then but at permanently fixed parities with the Euro. The European System of Central Banks undertakes to defend these parities; for example, if Italians decide to switch all their fire into D-marks, the supply of D- marks will be expanded without limit to accommodate them. The parity between the Euro and the participating national currencies are as follows:

Four members of the European Union - UK, Sweden, Denmark and Greece — will not participate in the Euro just now. There are no Euro currency notes and coins yet; they will be issued to replace national notes and coins only in 2002. The Euro began trading on currency markets at about $1.17, £ 0.75 and 133 yen. It has fallen in value in relation to the dollar, perhaps because of America’s growing economic strength and the weakening German economy or the European politicians’ demand for lower interest rates. Opinion among financial analysts on the Euro’s outlook is divided. Some predict the weakness in the European economy combined with strong US growth could drive the currency to under one dollar by the end of 1999. Others say a cut in US interest rates is likely in the medium term which, coupled with signs of recovery in Europe will help the Euro to recover.

Benefits

The switch-over to the Euro will necessitate some initial costs; a large firm like Daimler-Benz will incur an expenditure of 200 million D-marks. The benefits of a single regional currency, however, are several. The Euro will reduce the "transactions costs" - costs of currency conversion and currency hedges - for buyers and sellers of goods and services in Europe. Daimler-Benz, for instance, will save 100 million D-marks every year by eliminating currency exchange charges. A tourist with $1000 just going through the 11 EMU countries without buying anything but only converting into local currencies will lose about $500 on conversion alone. The Euro will further eliminate exchange rate fluctuation risks which hinder business. A stable Euro will allow European business to plan investments, set prices and sign contracts on a reliable long-term basis; an economic community can hardly operate efficiently if monetary and exchange rate policies are determined at a national level.

It has also been pointed out that the large and more efficient financial market brought about by a common currency will tend to lower the cost of capital, increase the supply of savings and raise the demand for investment of capital to stimulate economic growth. A single currency is also expected to help multinational companies to consolidate such units as distribution into a single location instead of having them scattered in separate countries. In addition, it will prompt manufacturers to move production facilities to other countries of the Union in order to increase productivity and lower costs; this process is also expected to result in increasing mergers and acquisitions. Price transparency resulting from a single currency will push firms to be more competitive and bring about uniform and lower prices to the consumer; a bottle of Coca Cola in Germany now is twice as high as in Spain. Shopping as well as travelling will be easier.

Euro as a world currency

The European Union is a powerful grouping with a population of 290 million accounting for about 20 per cent of the world GDP (same as that of USA). It trades more with the world as trade contributes 23 per cent of its GDP as compared to 19 per cent in USA. The European Union accounts for 35 per cent of the world’s foreign exchange transactions as compared to 41.5 per cent by the US, but the dollar is used for about 62 per cent of the world’s currency reserves while the European currencies are used only for 20 per cent. It is likely that Euro will be used more for currency reserves in the future if it becomes a strong and stable currency; in any case, many countries are likely to have more Euro as they do not want to put all eggs in one basket. Already, China and Japan have announced their plans to switch a part of their reserves to the Euro.

The United States sees the Euro as an instrument which will stimulate economic growth in Europe and thereby contribute to growth in the US itself but at the same time it fears that the dollar could weaken as other countries diversify out of it in order to lay in Euros. If the Euro becomes popular and is widely used the pressure on the dollar may push up the US interest rates; a surge in Europe’s exports by virtue of a strong Euro may increase the U.S. trade deficit with Europe and tend to strengthen the protectionist lobby. The US may also lose $10 to $13 billion it receives annually in "seigniorage" - use of dollars by foreigners in their own countries. On the other hand, an integrated Europe will provide vast opportunities for big American banks and business houses and the EMU may also help to solve dollars’ overvaluation which handicaps exports. The ECB should ensure that the Euro does not become too strong so as to discourage exports which are needed now to stimulate growth and employment. The facts that intra-European movements in exchange rates were slight even at the height of the East Asian turmoil and that not one of the 11 countries has devalued its currency in the past to increase its competitiveness may give some assurance that the Euro will be managed well.

As far as Asian countries like Sri Lanka are concerned, they need to move over to the settlement of European traders in Euros. Asian banks and financial institutions will no doubt incur initial costs in effecting changes in their accounting systems and practices, but they will find it easier to maintain accounts in one currency instead of 11. The Euro zone will provide one large unified market for export and distribution and a large capital market to borrow funds at low cost. On the other hand, a recession or competitive pressures could push the European Union to use its strength to keep out low-cost goods from Asia and tamper with import tariffs to safeguard their vital economic interests. If that were to happen, then Asian countries will find the Euro a threat to their trade.

Monetary Constraint

There can be some major risks which the European Monetary Union has to face in the near future. One is the possibility that the Euro will lead Europe to an economic recession on account of the rigidity of the European Central Bank’s mandate. It was mentioned earlier that the ECB is required to focus only on price stability or inflation of less than 2 per cent a year regardless of wider economic repercussions. This limit is too demanding a constraint. In the first place, no major economy has achieved such a low rate of inflation over a run of years. The US for instance had an average inflation rate of 3.3 per cent over the past 10 years while Germany had an average rate of 2.8 per cent. At present, the Euro countries as a whole are growing at 2.5 per cent a year with an inflation rate of 1.4 per cent and an average short-term interest rate of 3 per cent, but this situation may not last long.

Perhaps the biggest problem of the European Union is its 16 million of unemployed exceeding 10 per cent of the labour force. The European leaders have discussed this problem in several meetings but have not come up with a common approach. European leaders like the German Minister of Finance - Oscar Lafontaine - advocate a European monetary and fiscal policy with lower interest rates to stimulate economic growth and employment creation. The conflict between the ECB’s goal of price stability and government’s goal of employment creation has been temporarily settled by the ECB engineering a cut in short-term interest rates in December in all the Euro Zone countries with 10 of them reducing to 3 per cent and only Italy holding to 3.5 per cent. If the actual growth rates fall below the forecasts and Europe is threatened by a recession the governments may implement loose fiscal policy to stimulate growth and create some inflation. Then the ECB will be forced to raise interest rates resulting in a conflict between loose fiscal policy and tight monetary policy. This will be a bad start for the Euro. On the other hand, if Europe shows signs of recession despite loose fiscal policy, the ECB will be forced to lower interest rates. But the question is whether the ECB will cut interest rates soon enough to avoid recession or wait for inflation to fall below 2 per cent before acting in which case it will be too late.

Concern is also expressed by many analysts whether the ECB can have an effective regional monetary policy for so diverse an economy as Europe, with Ireland growing rapidly at more than 9 per cent a year, Germany growing sluggishly, at 2 per cent, Finland in a recession and Italy with 10 per cent of its economy underground and immune to policy changes. A regional monetary policy appropriate for some may be unsuitable for others.

Fiscal Restraint

The European Monetary Union is characterized by national divergences, beside culture and language, in economic growth, unemployment and prices which can give use to asymmetric shocks. The costs of these divergences, according to some, can be reduced by deregulation, cuts in social welfare, flexibility in labour markets and lower taxation, but the governments are not ready to make such radical structural changes. That leaves macro-economic policy, but fiscal policy changes to overcome asymmetric shocks or recession is constrained by the Maastricht treaty that stipulates budget deficits must be 3 per cent of GDP or less, unless output has fallen by 2 per cent or more in a year. This rule is considered as too severe for decline in output of 2 per cent is rare and what is more, recession can be caused by falls less than 2 per cent. Further, governments which anticipate a recession and relaxes fiscal policy early - i.e. before the output falls by 2 per cent - also face fines.

Budget deficits of EMU countries in 1999 are lower than in 1998: Germany for instance, has reduced it from 2.4 per cent to 2.1 per cent, France from 2.9 per cent to 2.4 per cent and Italy from 2.6 per cent to 2.2 per cent. If demand grows slower than expected, these deficits will tend to become larger and the governments will be required to raise taxes and cut public spending even when they are heading towards recession. Some countries are now searching for ways to get round the Maastricht rule. One is a regional ‘Euro fund’ for infrastructural projects; another is ‘to include consumption but not investment expenditure in calculating budget deficits; yet another is to reward fiscal restraint at national level by loose regional monetary policy although the ECB is opposed to such quid pro quo deals.

It is now admitted by many that the restriction on national budget deficits to 3 per cent of GDP deprives governments of the power to use national fiscal policy to counteract recession, which affect one member more than others. If there is a recession in one or more countries, the EMU is likely to be blamed for their inability to fight the recession and become unpopular at least in some countries. There is clearly a need for the ECB under these circumstances to balance short-term requirements of low inflation with long-term aims of increasing output and inflation, but how it is going to reconcile these objectives when it is bound by the Maastricht Treaty, remains unclear. This problem illustrates the truth of the well known saying that treaties often solve one problem but cause the next.

It should be noted that the EMU has only unenthusiastic public support. It is true 66 per cent of the Europeans favour the EMU in mid-1998 but the support varied from 83 per cent in Italy to 51 per cent in Germany. Further only 25 per cent of the Europeans feel that they are well informed about the EMU - 43 per cent in Netherlands and 11 per cent in Portugal. In no country is the proportion of people who feel that they are well informed about the EMU above 50 per cent. If the Euro fail to deliver a better Europe, the Europeans may show little hesitation in rejecting it.

Garment buyers elect new office bearers

Mr. Errol Weerasinghe was elected Chairman of the Sri Lanka Garment Buying Offices Association at its 6th annual general meting recently.

Speaking on this occasion, Mr. Weerasinghe said that 1998 saw garment export growth falling around 8% in dollar terms.

"We are `the bridge over troubled waters’ of the outside world in tis industry. The domestic apparel sector directly employs over 350,000 people. The sustainability and growth of our industry is of great importance to the country both in terms of export earnings and employment’’, Weerasinghe said.

He said that his predecessor Trihene Gomez had in his two year tenure as chairman of the association truly transformed it into a dynamic, vibrant, pro-active and above all participative association.

He said that under hhis leadership the association would strive to guide its membership into the post MFA (Multi Fibre Agreement) era after 2005 and act as a catalyst to evolve a workable macro-economic plan for the industry as a whole to succeed and progress into the new order.

"I want our membership to be recognised for the enormous service we have provided in making Sri Lanka a primary apparel sector’’, he said. "I will try my best to provide the industry and policy makers a clear vision of the credibility, value and integrity of our membership’’.

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Convertible debenture plan to be changed?
Hotel Services expands its board to 12

Hotel Services (Ceylon) Limited, the owners of the Hotel Ceylon Inter-Continental, has amended its articles to expand its 9-member board to 12.

Mr. Ravi Thambiyah of the Renuka Hotels group which recently bought substantially into Hotel Services is expected to join the board. The Asian Hotels Corporation Limited, owners of the Lanka Oberoi and the major shareholder in the company, are likely to nominate two more directors.

Hotel Services have announced a rights issue under which it proposes to issue slightly over 5 million ten rupee debentures to existing shareholders on the basis of two debentures for every share held at an issue price of Rs.4. These debentures will carry no interest but will be converted to shares four years from the date of their issue.

The company has however not yet got the approval of the Colombo Stock Exchange for this convertible debenture issue at a discounted price. Business circles said that an alternative proposal now under consideration was a rights issue followed by a bonus issue so that the company can raise the Rs.20 million it needs to pay off an existing debt.

"This way, the shareholders who have got nothing for several years will at least get some bonus shares,’’ one source familiar with the company said.

Hotel Services has reported a loss of Rs.3.4 million for the first 9 months of the current financial year. Although this loss is less than the Rs.7.2 million incurred a year earlier, the company’s accumulated losses have now risen to Rs.46.4 million.

Broking circles indicated some interest in the company’s shares at a price above the Rs.12.50 level at which they were last transacted. Business circles indicated possible local interest to acquire a stake of this prime Colombo hotel property which is relatively unencumbered by debt.

The present directors of Hotel Services are: Messrs. Azmi Wan Hamzah, M.J.C. Amarasuriya, Ranjith Dahanayake, Daniel Desbaillets, Chanaka de Silva, Sanjeev Gardiner, George Ondaatjie, Daniel Roche and Mrs. Ramya Hewavitarne.

Revitalized Pure Beverages back to profit mode

Pure Beverages Company Limited, manufacturers of Coca Cola, has reported "a year of resurgence’’ ending September 30, 1998, with the group recording an after-tax profit of Rs.108.7 million, up from a loss of Rs.208.9 million a year earlier.

The company had an earning of Rs.1.44 per share during the period under review against a loss of Rs.2.76 the previous year.

The company’s Chairman, Mr. W.D.M. Fernando, said that the year turned out to be one of the most difficult and challenging in memory. After three years of continuous losses, they had recorded a pre-tax profit of Rs.108 million and the operating profit margin of 7% was the highest recorded in a decade.

In terms of sales volume, the year had shown exceptional sales growth of 68% with over a million cases of soft drinks sold during the months of February and March filling the gap created in the market as a result of the previous year’s labour dispute.

Fernando said that the company had been completely restructured during the year and a new dynamic management team had led the way to re-gain lost market share. Their products by the end of the year were once again market leaders with a 50% share.

"This is a significant growth, as well as innovative marketing and merchandising programmes, the company invested heavily in cold drink equipment by placing over 3,500 coolers and 230 cyclo vans to increase availability’’, the chairman said.

He said that the appointment of 14 new distributors adding 30 vehicles to the distribution system had brought significant improvement to the distribution channel. They have successfully concluded the sale of their Union Place property and negotiated improved rates for both imported and locally purchased key materials.

Pure Beverages which is now controlled by Fraser and Neave Coca Cola of Singapore currently has 1,394 shareholders in its books. It has not declared any dividends to shareholders since 1994/95.

The directors of the company are: Messrs. W.D.M. Fernando (Chairman), Ana Punchihewa (Managing Director - Resigned 15.7.98), W. Prakrama Fernando (Retired 21.5.98), S.E. Captain, M.R. Prelis, A.W. Wickremesinghe, T. Burke McKinney, Tan Yam Pin (Alternate Lai Seck Khui), Eric Davis, Michael Bascle (Appointed 15.1.98), Marc Mathieu (Appointed 15.1.98), Brad Roos (Appointed 15.1.98 - Resigned 2.9.98) and Alex Von Behr (Appointed 2.9.98).

Board changes in quoted companies

Arpico Finance Company Limited has named Mr. D.L.S.R. Perera as its new Joint Managing Director succeeding Mr. W.A.D.C. Abeyratne who will remain in the company as a consultant. Mr. H. Wijayatunga has been named as an Executive Director of the company.

Other changes in the directorates of quoted companies include the appointment of Mr. A.N.P. Wickramasuriya as a director of Central Industries Limited with effect from March 2.

Mr. Justin Meegoda, President/Chief Executive of the Vanik Group has joined the board of Soy Foods (F&W) Limited succeeding Mr. L.M. Pieris who has resigned from March 8 while Mrs. Rohini Nanayakkara, Director/CEO of the Seylan Bank has been appointed to the Ceylinco Seylan board with effect from February 22.

Union Carbide has announced the appointment of Mr. Peter Costello as a director with effect from February 17 with Mr. Gamini Gunasekera as alternate.

Mr. P.C.K.Abeykoon has been appointed a director of Lanka Ceramics Limited with effect from March 9 succeeding Mr. Ronnie Weerakoon who has resigned from the board.

The Colombo Stock Exchange (CSE) has also announced the resignation of Mr. A.C. Gunasinghe from the board of E.B. Creasy’s and Mr. A. Rajaratnam from the Muller & Phipps.

CSE also said that Mr. J.P.R. Silva has retired from the board of Ceylinco Seylan Developments with effect from February 23 and Mrs. Janet Karunaratne has retired from Eastern Merchants from January 31.

Colombo Pharmacy ups 9-month profit

The Colombo Pharmacy Company Limited has slightly boosted turnover and profitability during the first 9 months of the current financial year ending December 31, 1998 according to provisional figures now with shareholders.

The company posted a turnover of Rs.35.3 million for the period under review, up from Rs.32.1 million a year earlier. The trading profit was down slightly to Rs.1.6 million from Rs.1.7 million during the comparable period the previous year.

The company which is now mainly dependent on rental income had other income of Rs.4.7 million, up from Rs.4.5 million a year earlier to post a pre-tax profit of Rs.6.4 million, up slightly from Rs.6.2 million during the comparable period the previous year.

Since there was no tax liability, this remained Colombo Pharmacy’s after-tax result. With brought forward profits of Rs.0.3 million, the company has Rs.6.7 million available for appropriation as at December 31, 1998.

The company which owns valuable real estate at Union Place and at Galle Road, Bambalapitiya has an issued share capital of Rs.4.8 million.

It carries capital reserves of Rs.135.6 million and a revenue reserve of Rs.23.4 million on its balance sheet.

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