The Colombo Fort Land & Building Company PLC (CFLB), controlling a group portfolio of quoted securities with a market value of over Rs.5.3 billion, has posted group revenue of Rs.31.7 billion in the year ended March 31, 2012, up 14% from a year earlier and a profit attributable to equity holders of the parent of Rs.1.29 billion, up 12% from the previous year according to the company’s recently published annual report.
The cost of investments in quoted securities as at March 31, 2012 had been Rs.759.3 million and the market value of such investments Rs.5.3 billion.
The Colombo Fort Land & Buildings owns 64.06% of Colonial Motors, 59.75% of E.B. Creasy & Company, 30.65% of Muller & Phipps, 49.83% of York Arcade Holdings, 60.07% of Lankem Ceylon PLC, 31.64% of Marawila Resorts, 39.72% of Sigiriya Village Hotels and 33.51% of C.W. Mackie.
The company’s Chairman, Mr. A. Rajaratnam, had described the year under review as one of consolidation for the group following acquisitions made in the previous year.
"Over the years The Colombo Fort Land group has invested in some of the most attractive sectors of the Sri Lankan economy. These investments have endowed the group with a diversified portfolio of business that provides the group with a stable earnings outlook," he said.
However, the company’s auditors, KPMG, has raised questions about the `going concern’ assumption in the accounts saying there was a string of unquoted loss-making companies in the groups and the financial statements do not include any adjustment in relation to recoverability of liabilities in case the companies are unable to continue as going concerns.
Rajaratnam reported that the reduction of the very high duties on motor vehicles imported into the country resulted in a significant improvement in the performance of the group’s auto subsidiaries with a contribution made by this sector helping to offset the poor performance of plantations.
The plantations sector continues to struggle with escalating cost and falling tea prices, he said.
"The operation of Lankem Ceylon PLC, E.B. Creasy & Company PLC and C.W. Mackie PLC, three of the group companies involved in the distribution of chemicals, FMCG, engineering products and rubber and sugar trading continued to improve and is expected to be a substantial contributor to the group in the coming years," he said.
"The Agro Chemical Division within the Lankem group performed well below expectations due to delays by the Pesticide Regulatory Authorities in approving the release of chemicals on time."
He reported that despite the improved performance of most of their subsidiary companies, the poor performance of the plantation sector, particularly Agrapatana Plantations, "weighed heavily on the overall group results".
At company level, turnover was down to Rs.36.6 million from the previous year’s Rs.53.9 million and with other income the profit after-tax of Rs.144.4 million was an improvement from Rs.83.2 million achieved the previous year.
The directors have proposed a dividend of Rs.0.30 per share.
Rajaratnam reported with profound regret the death of R. Senathi Rajah who had served the board as Chairman for almost 20 years ``providing leadership and making enormous contribution to the growth of the group.’’
"We shall miss his advice, counsel and judgment and leadership," he said.
The company’s Auditors, KPMG, has reported that the group does not adopt uniform accounting policy for the measurement of property, plant and equipment after initial recognition in the financial statements as required by the Sri Lanka Accounting Standards.
Except for this, the financial statements gave a true and fair view of the state of affairs of the company as at March 31, 2012.They have also drawn shareholder attention to a note in the accounts regarding the group’s going concern assumption referring to the state of affairs of several group companies including Agarapatana Plantations (net loss Rs.555.3 million) as well as other subsidiaries.
The stated capital of the company is Rs.327 million with a capital reserve of Rs.1.8 billion and revenue reserves of Rs.3.54 billion in its books.
Total assets were stated at Rs.27.1 billion and total liabilities at Rs.16.3 billion.
Net assets per share had grown to Rs.31.55 from Rs.24.74 the previous year and the company’s share traded at a high of Rs.492 and a low of Rs.30 during the period under review. This compared with a trading range of Rs.580 to Rs.65 the previous year.
In the year under review every existing share was sub-divided into five without any change in the stated capital.
The major shareholders of the company are: Property & Investment Holdings (Pvt) Ltd (15.70%), Colombo Investment Trust PLC (13.77%), Capital Investments Ltd (12.81%), Colombo Fort Investment PLC 10.84%, Financial Trust Ltd (4.58%) and Mr. R. Senathi Rajah (Deceased) 4.00%).
The directors of the company are: Messrs. A. Rajaratnam (Chairman – Alternate Anushman Rajaratnam), S.D.R. Arudpragasam, N.H.B.S. Perera, A.M. de S. Jayaratne, R. Seevaratnam, Anushman Rajaratnam and Ms. A.K. Gunawardhana.