Chilaw Finance maintains healthy financial ratios

Chilaw Finance Ltd 31st AGM is scheduled to be held on September 30, 2010 at the Royal Lotus Hall in Chilaw.

Chilaw Finance Ltd is a Chilaw born finance company registered with the Monetary Board of the Central Bank of Sri Lanka. The company’s audited financial statements for the financial year 2009/2010 reveal satisfactory improvement in the financial management and marketing strategies of the organization.

During the financial year ended March 31, 2010 the company’s deposit base increased to Rs 335 m demonstrating a growth rate of 23 percent, significantly important for any company in unsettled macro economy situations as seen in the past year.

The company’s liquid investment portfolio also grew by 23 percent from the financial year 2008/2009 figure of Rs 342 m to Rs 419 m in the financial year just ended.

The profit before tax for the financial year 2009/2010 increased by 54 percent to Rs 34 m while the profit after tax saw a staggering increase of 116 percent over the previous year to Rs 22 m. The net interest income advanced slightly and as a percentage of total interest income the figures for the financial years 2008/2009 and 2009/2010 were 52 percent and 55 percent respectively.

The company’s capital adequacy ratios at the end of the last financial year remain above the regulatory minima and on par with well capitalized finance companies in the country. For example, the company’s core capital to risk weighted assets ratio (minimum 5 percent) is 43.04 percent. Total capital to risk weighted assets ratio (minimum 10 percent) is 56.25 percent and Capital funds to total deposit liabilities ratio (minimum 10 percent) is 88.36 percent.

The total assets growth was 19 percent up from Rs. 571 m in the financial year 2008/2009 to Rs 680 m in the financial year 2009/2010. Meanwhile, the company strengthened the shareholders funds by 17 percent increasing it to Rs 297 m during the financial period just ended.

The company had no institutional borrowings during the period under review and therefore, the public deposits and sharesholders funds with the company were well secured. Furthermore, the company maintains over 50 percent of its assets in income generating liquid investments such as in leasing, hire purchase, mortgage loans and pawning advances.

In view of the company’s satisfactory performance for the financial year 2009/2010 the Board of Directors has proposed a first and final dividend of Rs 0.75 per voting ordinary share and Rs 0.65 per non-voting ordinary share.