Asian Cotton Mills PLC (ASCOT) plans to sell off the balance 309 perches of land it owns in Mt. Lavinia and take advantage of the current high interest rates which ASCOT Chairman Vijaya Malalasekera believes "will continue to prevail in the foreseeable future."

The current owners of ASCOT bought the company from its previous owners largely on the value of its extensive Mt. Lavinia property. Part of this land was sold as also the cotton yarn spinning machinery that serviced ASCOT’s original business.

In the year ended March 31, 2008, the company posted an after-tax loss of Rs.11.2 million, down from a profit of Rs.430.3 million earned the previous year when profits were boosted by the sale of a major part of the Mt. Lavinia land.

At group level the loss for the last year was Rs.20 million, down from a profit of Rs.427.2 million a year earlier.

Malalasekera said that given the gloomy economic conditions under which they operated during the year under review, closing the year with a small loss was "a commendable achievement."

ASCOT is now an investment holding company looking for strategic investments and lucrative business opportunities with resources raised from the land sale.

"I assure you that your board will be extremely clinical in the evaluation and the selection of any project to avoid all possible causes that would result in a deterioration of shareholder wealth," Malalasekera said.

"However we will be on the constant look out for feasible projects that will diversify the risks and the activities of the company."

He announced a "significant delay" in the ongoing construction of a commercial building undertaken by their subsidiary, ASCOT Developments (Pvt) Limited, due to a delay by the contractors from whom the company is in the process of claiming damages under terms of the agreement.

Their board was also negotiating with several parties to let the building and these are expected to be finalized in due course.

The parent had increased its investment in the subsidiary by a further Rs.60 million which Malalasekera said was was inevitable due to the rising construction cost. ASCOT’s holding in the subsidiary remained at 60% despite the new investment.

Four of the company’s directors, Messrs. Channa Amaratunga, Ariaratnam Sakthitharan, Amanda Weerasinghe and Nirosh de Silva have resigned from the board this year. Malalasekera thanked them for their services and wished them the best in their future endeavours.

Mr. R.C. de Silva, the Chairman of Kelani Tyres and associate companies as well as Chairman of Union Commodities has joined the ASCOT board with effect from September 20 last year. Malalasekera said that his experience and expertise will be beneficial to the company in its future activities.

ASCOT has a stated capital of Rs.92.4 million, a capital reserve fund of Rs.23.1 million, a revaluation reserve of Rs.142.7 million and retained earnings of Rs.282.5 million in its books. Borrowings were running at Rs.246.6 million.

Net book value per share had declined 3% to Rs.68 from Rs.70 the previous year.

The company’s share traded at a high of Rs.67 and a low of Rs.37.25 during the year against a trading range of Rs.80 to Rs.45 the previous year.

Axis Financial Services (Pvt) Ltd. with 54.58% of the company and Boston Capital (Pvt) Ltd. with 8.14% are the two largest shareholders of Ascot. The report said that Boston Capital is the company’s ultimate parent with Axis a fully owned subsidiary of Boston.