Industrial Finance Limited (IFL), a 47-year old finance company now controlled by Aspic Corporation (Pvt) Limited, has posted a loss of Rs.105.2 million in the year ended March 31, 2008, down from a profit of Rs.9.6 million a year earlier.

The company’s new Chairman, Mr. Shirley Perera, has told shareholders that Industrial Finance had gone through difficult times during the financial year under review due to high non-forming loans and weak sales performance.

Gross income of the company had reduced by 22.6% although interest income reduced only marginally by 2.7%.

"This resulted in an erosion of the net interest income by 38.9% and the company recorded a loss of Rs.105 million for the year," Perera said.

He said that it was in this background that Aspic acquired 61.67% of IFL’s shareholding on February 11, 2008. Consequently, the new owners appointed five directors to the board and the company was now making new recruitments for all segments of its business.

"Although the new management had very little time to effect any significant change during this financial year, I am indeed very happy to mention that we have launched an aggressive restructuring program and expect to position the company to pursue a vigorous growth strategy from 2009 onwards," Perera said.

He said that the company had to completely write-off specific non –performing loans extended by the previous management for the purchase of industrial equipment and machinery. Write-offs for the year under review had totaled Rs.88 million.

However, some borrowers were paying back their dues after the company had streamlined their recoveries division and such recoveries will be reflected in the next year’s results.

Perera said that Aspic had infused new equity capital by participating in the company’s last rights issue with an investment of Rs.81.7 million. This had strengthened IFL’s core capital requirement of Rs.200 million.

He announced they have now commissioned a few real estate projects and he was hopeful that the loss making situation would be reversed in the next financial year.

Perera thanked his chairman and board for their contribution and also thanked Mr. Rohan Tudawa, the outgoing managing director, and the company’s previous board for their contribution in operating and managing IFL over the years.

The company’s new CEO/Director is Mr. Suren Liyanage.

Industrial Finance has a stated capital of Rs.137.4 million, up from Rs.45.9 million the previous year, with the capital increasing on account of a rights issue infusing Rs.91.5 million.

Additionally, the company has a revaluation reserve of Rs.17.5 million, a statutory reserve fund of Rs.5.1 million, a general reserve of Rs.6 million and accumulated profits of Rs.55.9 million in its books.