Mr. Lalith Kotelawala is not offering himself for re-election to the Board of Directors of Ceylinco Seylan Developments PLC, the owners of the up-market commercial/residential building on Galle Road, Kollupitiya where Seylan Bank’s Millennium Branch is located.

The recently issued annual report of the company stated that “Deshamanya Dr. J.L.B. Kotelawala being over 70 years of age does not offer himself for re-election in terms of Section 210 of the Companies Act No.7 of 2007.’’

Directors of listed companies may continue on their boards beyond the age of 70-years by special resolution approved by shareholders as many do.

Kotelawala has not included the customary Chairman’s Review in this annual report with the company’s Deputy Chairman, Mr. S.R. Wijesinghe, undertaking this task.

Wijesinghe said that since the inception of the company 17 years ago it had concentrated on its core business of renting office space and leasing luxury apartments and had continued to focus on this during the financial year ended December 31, 2008.

“Due to the depressed market conditions and the external markets not being very conducive for the property development sector, the company had to make significant provisions for changes in fair value under the fair value model accounting as necessitated by the Sri Lanka Accounting Standard No.40 during the year,” he said.

Wijesinghe said that the company had announced an operational profit before-tax and finance cost of Rs.4.1 million and a net loss after-tax of Rs.358.8 million for the year under review.

“This includes a substantial ‘fair value decrease’ from the value depreciation of our acquired assets. I consider this situation to be a result of significant decline in the property prices in the market,” he said.

Wijesinghe was however hopeful that with peace returning to the country, the property market and the property development industry will prosper in the years to come and consequently the company will be able to make a favourable fair value adjustment in accordance with its revaluation procedure.

The company’s auditors, Lawrie Muthu Krishna & Company, Chartered Accountants, said that no declarations “on transactions with the company and transactions with close family members” have been received from Messrs. Lalith Kotelawala, Mrs. Sicille Kotelawala, A.D. Jegasothy and W.G.B.M. Ranaweera.

According to the company’s income statements a debit of Rs.251.7 million has been written into its books as “changes in the fair value of investments/investment property.’’ This compared to a credit of Rs.203.8 million written on this account in the previous year.

Investment property written down includes Rs.75.1 million in the West Tower of Ceylinco Seylan’s Kollupitiya building, Rs.212.8 million in a project at Nawala, Rs.26.5 million on a shopping complex at Ja-Ela and the diminution in value of unquoted investments of Rs.16.8 million. A credit of Rs.33.7 million has been accounted on a project at Moratuwa and Rs.45.7 million on a Union Place property held for sale.

This property valued the previous year at Rs.204.2 million had been revalued in December last year with an upward change in fair value of Rs.45.7 million written into the books raising the total value of this property to Rs.250.3 million.

Seylan Bank PLC is the controlling shareholder of Ceylinco Seylan with 50.29% of its shares with other Ceylinco group companies including Ceylinco Finance (1.01%), Ceylinco Insurance (1%) and Mr. Lalith Kotelawala (0.24%) being among the 20 top shareholders. The ETF too owns 2.69% of the company.

Three members of the Board, Mrs. Sicille Kotelawala and Messers. W.G.B.M. Ranaweera and Mr. R. Renganathan have resigned this year while Mr. S.J. Ratnadas had retired in November last year.

Three new nominees of the Seylan Bank, Rear Admiral J.G. Peiris, Mr. R. Nadarajah and S. Palihawadana have been proposed for appointment to the Board at the AGM to be held on September 11.

Ceylinco Seylan has a stated capital of Rs.1.36 billion, a revaluation reserve of Rs.926.3 million and retained earnings of Rs.41.2 million, down from Rs.437 million the previous year, in its books

Interest bearing borrowings were running at Rs.460.3 million

The directors of the company are: Mr. Lalith Kotelawala, Mrs. Sicille Kotelawala (Resigned 02.01.2009), Messrs. S.R. Wijesinghe, W.G.B.M. Ranaweera (Resigned 19.01.2009), S.J. Ratnadas (Retired 5.11.2008), T.N.M. Peiris, R. Renganathan (Resigned 15.05.2009), A.D. Jegasothy, M.A.D.A.I. Madurapperuma, H.L. Gunasekera, M.L.P. Jayatilaka and K.P.H. Priyankara.

Name change at Ceylinco Seylan

An extraordinary general meeting of Ceylinco Seylan Developments PLC has been summoned on September 11 immediately after the AGM of the company to consider a resolution to change the name of the company to Seylan Developments PLC.

The decision to change the name of the company has been taken by its board and a special resolution for this purpose is being placed before the shareholders.