Capital Development and Investment Company PLC (CDIC), an almost wholly owned subsidiary of the NDB Bank, had seen a sharp fall in income and profit in the year ended December 31, 2011 with income down 54% to Rs.270 million and the after-tax profit down 56% to Rs.199 million.
The company’s recently released annual report indicates that this drop in performance is mostly attributable to last year’s downturn in the stock market. The company which will shortly change its name to NDB Capital Holdings PLC is largely dependent on returns from Aviva NDB Insurance PLC and other entities.
The company’s Chairman, Mr. A.K. Pathirage, has reported to shareholders that CDIC’s business performance in 2011 had been affected by adverse stock market conditions with consolidated group revenue falling by 55% to Rs.300.1 million during the year under review from Rs.664.8 million the previous year.
"The main reason for this drop in revenue was losses (both realized and unrealized) arising from the fall in value of equity investments by Rs.122.5 million during the year," Pathirage said.
"The profit from investment in associate company (Aviva NDB Insurance) increased to Rs.399.6 million during 2011 which is a 17% increase over the previous period."
NDB owns 99.66% of CDIC which in turn directly holds 41.3% in Aviva NDB Insurance PLC and through its investment in Aviva NDB Finance Lanka (Pvt) Limited.
Pathirage said that the company has formulated a new business plan for CDIC in line with NDB’s group strategic re-position under which CDIC is positioned as the strategic investment arm of the NDB group.
As part of this overall business plan, shareholding of the NDB Investment Bank Limited and NDB Stockbrokers (Pvt) Limited have recently been transferred to CDIC from the NDB Bank PLC.
Pathirage said that NDB Investment Bank is the leading investment bank in the country with market leadership in equity and debt capital markets as well as corporate advisory services.
Additionally, CDIC owns 51% of NDB Aviva Wealth Management Limited, the largest asset management company in the country.
"CDIC henceforth will be adopting a portfolio approach in managing the investments and excess cash within the group, with a view to mainlining sustainable earnings while optimizing returns," Pathirage said.
"With this strategic realignment and differentiated focus, CDIC is well positioned to leverage the group’s business expertise and knowledge base through a full range of capital market activities."
In line with this new strategic plan, CDIC in February appointed Mr. Vajira Kulatilaka as CEO and Mr. Kusal Jayawardana as the Chief Operating Officer of the company.
The directors of the company are: Messrs. A.K. Pathirage (Chairman - w.e.f. 28.09.2011), Sarath Wikramanayake (w.e.f. 24.11.2011), Russell de Mel, Ms. Aruni Rajakarier, Vajira Kulatilaka (CEO -w.e.f. 02.12.2011), Indrajit Wickramasinghe, Nihal Wadugodapitiya (Chairman - Resigned 18.01.2012), Hemaka Amarasuriya (w.e.f. 24.05.2011 – Resigned 28.09.2011) and Nihal Welikala (Resigned 24.05.2011).