Ceylon Leather Products PLC (CLP) has cleared its debts after selling its Mattakkuliya property for Rs.307 million, utilizing the proceeds both to liquidate all borrowings and also acquire a new site to locate its factory and corporate office, the companyChairman, Mr. Nimal Samarakkody has told shareholders in the annual report.

He said that the new premises comprise 72,000 sq. ft. of buildings on a land of just over two acres located at Mudungoda in the Gampaha District.

The buildings were being renovated at a total cost of around Rs.90 million and manufacturing operations have been transferred to the new location in June.

"The company enlisted the services of foreign experts to re-design the factory layout incorporating best practices for operational efficiency and productivity improvement," Samarakkody said.

"The sale of land has thus given us the opportunity to be a debt free company whilst also enabling a revamping of production facilities to achieve increased volumes."

He also reported that they had faced a serious drawback by the lack of a modern management information system and this was rectified during the year.

"Following the streamlining of our manufacturing operations we believe a sound foundation has been laid for future profitability on a sustainable basis," he said, thanking all employees for giving their fullest cooperation for the relocation of the factory.

He also thanked the Managing Director/CEO and senior management for planning and executing the move smoothly and attending to the numerous necessary transitional arrangements.

Samarakkody said that following significant changes in the shareholding of the company during the year under review, it was necessary to reconstitute the board to reflect these changes. Four directors of the previous board, Messrs. S.E. Satarasinghe, B.M. Amarasekera, M.A. Abeynaike and N. Abeysekera had resigned to make way for the new directors while the Deputy Chairman Mr. M.N. R. de Silva had informed the board that he was not seeking re-election.

Samarakkody thanked the outgoing directors for the services rendered and warmly welcomed four new directors Dr. Kosala Heengama and Messrs. Scott Newsome, Dilan Gooneratne and Kapila Dodamgoda.

The company posted an attributable group profit of Rs.41.2 million during the year, up from a loss of Rs.47.8 million the previous year while the company posted a profit of Rs.43 million, up from a loss of Rs.31.1 million although turnover at both group and company levels was down slightly.

CLP has a stated capital of Rs.125 million, reserves of Rs.478.7 million and retained earnings of Rs.109.2 million in its books.

Net assets per share were up to Rs.57.03 from Rs.27.11.

The three major shareholders of the company are: Galleon International Master Fund, SPC Ltd. (25.79%), Lionhart Investments Ltd. (23.79%) and S.A. Perera & Co. Ltd. (21.57%).