The Securities and Exchange Commission (SEC) is examining the Lanka Milk Foods PLC (LMF) accounts, which the company re-stated recently at the request of the Sri Lanka Accounting and Auditing Standards Monitoring Board.

An industry source said the SEC is to write to LMF shortly. The company in a statement early last month went on to declare additional Provisions in the Financial Statements for the year ended 31st March 2008.
The industry source said that LMF had loaned some monies and also invested in two of its subsidiaries - Ambewela Livestock Co. Ltd and Pattipola Livestock Co, but both these firms have negative assets.

According to accounting practices, the company has to provide for the irrecoverable monies to these two firms,” he said. The company in the statement said that Ambewela has investments at Rs 46 million and receivables at Rs 132 million. Pattipola Livestock Co. Ltd, the company said, has investments at Rs 42 million and the loans to this company are at Rs 40 million.