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Page 1: CENTRAL FINANCE COMPANY PLC - Colombo Stock Exchange · 2016-09-29 · central finance company plc prospectus an initial issue of one million (1,000,000) rated unsecured redeemable
Page 2: CENTRAL FINANCE COMPANY PLC - Colombo Stock Exchange · 2016-09-29 · central finance company plc prospectus an initial issue of one million (1,000,000) rated unsecured redeemable

CENTRAL FINANCE COMPANY PLC

PROSPECTUS

AN INITIAL ISSUE OF ONE MILLION (1,000,000) RATED UNSECURED REDEEMABLE DEBENTURES AT THE FACE VALUE OF LKR 1,000/- EACH TO

RAISE SRI LANKA RUPEES ONE BILLION (LKR 1,000,000,000/-)

WITH AN OPTION TO ISSUE UPTO A FURTHER ONE MILLION (1,000,000) OF SAID DEBENTURES TO RAISE UPTO SRI LANKA RUPEES ONE BILLION

(LKR 1,000,000,000/-), AT THE DISCRETION OF THE COMPANY IN THE EVENT OF AN OVERSUBSCRIPTION OF THE INITIAL ISSUE

Rated A+ (lka) by Fitch Ratings Lanka Limited

ISSUE OPENS ON

11th June 2013

Financial Advisors and Managers to the Issue

TO BE LISTED ON THE MAIN BOARD OF THE

COLOMBO STOCK EXCHANGE

Page 3: CENTRAL FINANCE COMPANY PLC - Colombo Stock Exchange · 2016-09-29 · central finance company plc prospectus an initial issue of one million (1,000,000) rated unsecured redeemable

Central Finance Company PLC – Debenture Issue 2013 i

This Prospectus is dated 30th May 2013

Responsibility for the Content of the Prospectus

This Prospectus has been prepared from information provided by Central Finance Company PLC (hereinafter referred to as the “Company”, “CFIN” or the “Issuer”) and from publicly available sources.

The Directors of the Company have seen and approved this Prospectus and collectively and individually, accept full responsibility for the accuracy of the information given and confirm that after making all reasonable enquires and to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading or inaccurate.

Where representations regarding the future performance of CFIN have been given in this Prospectus, such representations have been made after due and careful enquiry of the information available to CFIN and making assumptions that are considered to be reasonable at the present point in time in their best judgment.

CFIN accepts responsibility for the information contained in this Prospectus. While the Company has taken reasonable care to ensure full and fair disclosure of information, prospective Investors are advised to carefully read this Prospectus and rely on their own examination and assessment of the Company including the risks involved prior to making any investment decision. FOR ENQUIRIES, PLEASE CONTACT FINANCIAL ADVISORS AND MANAGERS TO THE ISSUE

Registration of the Prospectus

A copy of the Prospectus has been delivered to the Registrar of Companies for registration in compliance with the provisions of Section 40 of the Companies Act No. 7 of 2007. The following are the documents attached to the copy of the Prospectus delivered to the Registrar of Companies for registration pursuant to Section 40 (1) of the Companies Act.

a) The written consent of the Auditors and Reporting Accountants for the inclusion of their name in the

Prospectus as Auditors and Reporting Accountants to the Issue and to the Company. b) The written consent of the Lawyers to the Issue for the inclusion of their name in the Prospectus as

Lawyers to the Issue. c) The written consent of the Trustee to the Issue for the inclusion of their name in the Prospectus as

Trustee to the Issue.

d) The written consent of the Bankers to the Issue for the inclusion of their name in the Prospectus as Bankers to the Issue.

The delivery of this Prospectus will not under any circumstance constitute a representation or create any implication or suggestion that there has been no material change in the affairs of the Company since the date of this Prospectus.

If you are in doubt regarding the contents of this document, you should consult your stockbroker, bank manager, lawyer or any other professional advisor.

Page 4: CENTRAL FINANCE COMPANY PLC - Colombo Stock Exchange · 2016-09-29 · central finance company plc prospectus an initial issue of one million (1,000,000) rated unsecured redeemable

Central Finance Company PLC – Debenture Issue 2013 ii

e) The written consent of the Company Secretary for the inclusion of their name in the Prospectus as Company Secretary to the Company.

f) The written consent of the Financial Advisors and the Managers to the Issue for the inclusion of their

name in the Prospectus as Financial Advisors and the Managers to the Issue.

g) The written consent of the Registrars to the Issue for the inclusion of their name in the Prospectus as Registrars to the Issue.

h) The declaration made and subscribed to, by each of the Directors of the Company herein named as a

Director, jointly and severally confirming that each of them have read the provisions of the Companies Act and the CSE Listing Rules relating to the Issue of the Prospectus and that those provisions have been complied with.

The said Auditors and Reporting Accountants to the Company and to the Issue, Lawyers to the Issue, Trustee to the Issue, Bankers to the Issue, Company Secretary, Financial Advisors and the Managers to the Issue and Registrars to the Issue have not, before the delivery of a copy of the Prospectus for registration with the Registrar General of Companies in Sri Lanka withdrawn such consent.

Registration of the Prospectus in Jurisdictions Outside of Sri Lanka

This Prospectus has not been registered with any authority outside of Sri Lanka. Non-Resident Investors may be affected by the laws of the jurisdiction of their residence. Such Investors are responsible to comply with the laws relevant to the country of residence and the laws of Sri Lanka, when making the investment. Representation

The Debentures are issued solely on the basis of the information contained and representations made in this Prospectus. No dealer, sales person or any other person has been authorised to give any information or to make any representations in connection with the Issue other than the information and representations contained in this Prospectus, and if given or made, such information or representations must not be relied upon as having been authorised by the Company. Forward Looking Statements

Any statements included in this Prospectus that are not statements of historical fact constitute “Forward Looking Statements”. These can be identified by the use of forward looking terms such as “expect”, “anticipate”, “intend”, “may”, “plan to”, “believe”, “could” and similar terms or variations of such terms. However, these words are not the exclusive means of identifying Forward Looking Statements. As such, all or any statements pertaining to expected financial position, business strategy, plans and prospects of the Company are classified as Forward Looking Statements.

Such Forward Looking Statements involve known and unknown risks, uncertainties and other factors including but not limited to regulatory changes in the sectors in which the Company operates and its ability to respond to them, the Company’s ability to successfully adapt to technological changes, exposure to market risks, general economic and fiscal policies of Sri Lanka, inflationary pressures, interest rate volatilities, the performance of financial markets both globally and locally, changes in domestic and foreign laws, regulation of taxes and changes in competition in the industry and further uncertainties that may or may not be in the control of the Company.

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Central Finance Company PLC – Debenture Issue 2013 iii

Such factors may cause actual results, performance and achievements to materially differ from any future results, performance or achievements expressed or implied by Forward Looking Statements herein. Forward Looking Statements are also based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future.

Given the risks and uncertainties that may cause the Company’s actual future results, performance or achievements to materially differ from that expected, expressed or implied by Forward Looking Statements in this Prospectus, Investors are advised not to place sole reliance on such statements.

Presentation of Currency Information and Other Numerical Data

The financial statements of the Company and currency values of economic data or industry data in a local context will be expressed in Sri Lanka Rupees. References in the Prospectus to “LKR”, “Rupees” or “Rs.” are to the lawful currency of Sri Lanka.

Certain numerical figures in the Prospectus have been subject to rounding adjustments, accordingly numerical figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

The Colombo Stock Exchange (CSE) has taken reasonable care to ensure full and fair disclosure of information in this Prospectus. However, the CSE assumes no responsibility for accuracy of the statements made, opinions expressed or reports included in this Prospectus. The interest rate, Redemption and other terms and conditions of the Debentures issued herein have been decided by the Company.

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Central Finance Company PLC – Debenture Issue 2013 iv

All Applicants should indicate in the Application for Debentures, their Central Depository Systems (Private) Limited (CDS) account number. In the event the name, address or NIC number/passport number/company number of the Applicant mentioned in the Application Form differ from the name, address or NIC number/passport number/company number as per the CDS records, the name, address or NIC number/passport number/company number as per the CDS records will prevail and be considered as the name, address or NIC number/passport number/company number of such Applicant. Therefore Applicants are advised to ensure that the name, address or NIC number/passport number/company number mentioned in the Application Form tally with the name, address or NIC number/passport number/company number given in the CDS account as mentioned in the Application Form. As per the directive of the Securities and Exchange Commission made under Circular No. 08/2010 dated 22nd November 2010 and Circular No. 13/2010 issued by the CDS dated 30th November 2010, all Debentures are required to be directly deposited in to the CDS. To facilitate compliance with this directive, all Applicants are required to indicate their CDS accounts number. In line with this directive, THE DEBENTURES ALLOTTED TO AN APPLICANT WILL BE DIRECTLY DEPOSITED IN THE CDS ACCOUNT OF SUCH APPLICANT, the details of which is indicated in his Application Form. PLEASE NOTE THAT DEBENTURE CERTIFICATES WILL NOT BE ISSUED. Debentures will not be allotted to Applicants who have not indicated their CDS account details in the Application Form. Applications which do not specify a CDS account number will be rejected. Applicants who wish to open a CDS account, may do so through a Member/Trading Member of the CSE as set out in Annexure II or through any Custodian Bank as set out in Annexure III of this Prospectus. If the CDS account number indicated in the Application Form is found to be inaccurate/incorrect or there is no CDS number indicated, the Application will be rejected and no allotments will be made.

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Central Finance Company PLC – Debenture Issue 2013 v

CORPORATE INFORMATION

The Company/Issuer Central Finance Company PLC

Legal Status A public quoted company with limited liability incorporated on 5th December 1957 under the Companies Ordinance No. 51 of 1938. Official listing of the Colombo Stock Exchange obtained in 1969, Re-registered on 9th August 2007 under the Companies Act No.7 of 2007

Company Number PQ 67

Place of Incorporation Colombo, Sri Lanka

Registered Address Central Finance Company PLC No. 84, Raja Veediya Kandy

Tel: +94 81 2 227 000 Fax: +94 81 2 232 047

Company Secretary Corporate Services (Private) Limited No. 216, De Saram Place Colombo 10

Tel: +94 11 4 605 100 Fax: +94 11 4 718 220

Ratings Agency Fitch Ratings Lanka Limited No. 15-04, East Tower World Trade Centre Colombo 01

Tel: +94 11 2 541 900 Fax: +94 11 2 501 903

Auditors and Reporting Accountants

M/s SJMS Associates Chartered Accountants No. 2, Castle Lane Colombo 04

Tel: +94 11 2 580 409 Fax:+94 11 2 582 452

Board of Directors Mr. Jayampathi Divale Bandaranayake (Chairman) Mr. Eranjith Harendra Wijenaike Mr. Gerad Shamil Niranjan Peiris Mr. Ravindra Erle Rambukwelle Mr. Arjuna Kapila Gunaratne Mr. Dhammika Prasanna de Silva Mr. Chandima Lalith Kumara Perera Jayasuriya Mr. Sunil Chandra Sillapana Wickramasinghe Mr. Faiz Mohideen Mr. Anthony Nirmal Fernando

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Central Finance Company PLC – Debenture Issue 2013 vi

RELEVANT PARTIES TO THE ISSUE

Financial Advisors and Managers to the Issue

NDB Investment Bank Limited No. 40, Navam Mawatha Colombo 02 Tel: +94 11 2 300 385 Fax: +94 11 2 300 393

Lawyers to the Issue

F.J.& G. De Saram No. 216, De Saram Place Colombo 10 Tel: +94 11 4 605 100 Fax: +94 11 4 718 220

Registrars to the Issue

Corporate Services (Pvt) Limited No. 216, De Saram Place Colombo 10 Tel: +94 11 4 605 100 Fax: +94 11 4 718 220

Bankers to the Issue

Nations Trust Bank PLC No. 242, Union Place Colombo 02 Tel: +94 11 4 313 200 Fax: +94 11 4 313 202

Trustee to the Issue

Deutsche Bank AG, Colombo Branch No. 86, Galle Road Colombo 03 Tel: +94 11 4 791 114 Fax: +94 11 2 343 336

Auditors and Reporting Accountants to the Issue

M/s SJMS Associates Chartered Accountants No. 2, Castle Lane Colombo 04 Tel: +94 11 2 580 409 Fax:+94 11 2 582 452

Page 9: CENTRAL FINANCE COMPANY PLC - Colombo Stock Exchange · 2016-09-29 · central finance company plc prospectus an initial issue of one million (1,000,000) rated unsecured redeemable

Central Finance Company PLC – Debenture Issue 2013 vii

LIST OF ABBREVIATIONS

AER Annual Effective Rate

ATS Automated Trading System of the Colombo Stock Exchange

CDS Central Depository Systems (Private) Limited

CSE Colombo Stock Exchange

NIC National Identity Card

POA Power of Attorney

RTGS Real Time Gross Settlements

SEC Securities and Exchange Commission of Sri Lanka

SIA Securities Investment Account

SLIPS Sri Lanka Inter Bank Payment System

Page 10: CENTRAL FINANCE COMPANY PLC - Colombo Stock Exchange · 2016-09-29 · central finance company plc prospectus an initial issue of one million (1,000,000) rated unsecured redeemable

Central Finance Company PLC – Debenture Issue 2013 viii

GLOSSARY OF TERMS RELATED TO THE ISSUE

Applicant Any person who submits an Application Form under this Prospectus

Application Form/ Application

The application form that constitutes part of this Prospectus through which an Applicant may apply for the Debentures in Issue

Business Day A day (other than a Saturday or Sunday or any statutory holiday) on which licensed commercial banks are open for business in Sri Lanka

Closure Date 28th June 2013 or such earlier date on which;

The maximum of 2,000,000 Debentures are fully subscribed; or Board of Directors of the Company decides to close the Issue upon the

initial Issue of 1,000,000 Debentures becoming fully subscribed

The Company/CFIN/ Issuer

Central Finance Company PLC

Date of Allotment The date on which the Debentures will be allotted by the Company to Applicants subscribing thereto

Date of Redemption The date on which Redemption of the Debentures will take place as referred to in Section 1.6 of this Prospectus

Debentures Rated Unsecured Redeemable Debentures to be issued pursuant to this Prospectus

Debenture Holder(s) Any person who is for the time being the holder of the Debentures and includes his/her respective successors in title

Face Value LKR 1,000/- per each Debenture

Final Interest Period

The period commencing from the date immediately succeeding the last Interest Payment Date before the Date of Redemption and ending on the date immediately preceding the Date of Redemption (inclusive of the aforementioned commencement date and end date)

First Interest Payment Date

30th June 2013

First Interest Period The period commencing from the Date of Allotment and ending on the First Interest Payment Date (inclusive of the aforementioned commencement date and end date)

Interest Entitlement Date The day immediately preceding the Interest Payment Date

Interest Payment Date(s) 31st March, 30th June, 30th September and 31st December of each year from the Date of Allotment up to the Date of Redemption Interest would be paid within Three (03) Business Days from each Interest Payment Date

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Central Finance Company PLC – Debenture Issue 2013 ix

GLOSSARY OF TERMS RELATED TO THE ISSUE

Interest Period The three (3) month period commencing from the date immediately succeeding a particular Interest Payment Date and ending on the next Interest Payment Date (inclusive of the aforementioned commencement date and end date)

Issue The offer of Debentures pursuant to this Prospectus

Issue Price LKR 1,000/- per each Debenture

Market Day Any day on which trading takes place at the CSE

Non- Resident(s) Institutional investors, corporate bodies incorporated outside Sri Lanka, individuals resident outside Sri Lanka and Sri Lankans resident outside Sri Lanka

Principal Sum The product of the number of Debentures allotted and the Face Value

Prospectus This prospectus dated 30th May 2013 issued by CFIN

Redemption Repayment of the face value and unpaid and accrued interest (if any) with regard to a Debenture to a Debenture Holder by the Company

Trust Deed Trust deed executed between CFIN and the Deutsche Bank AG, Colombo Branch on 21st May 2013

Tax Revision An amendment to or repeal of any law or regulation or provision thereof for the time being in Sri Lanka in terms of which interest income of the Debentures has been exempted from the imposition of income tax (whether by way of a withholding or otherwise) under the Inland Revenue Act No. 10 of 2006 (as amended) resulting in such interest income becoming subject to the imposition of income tax (whether by way of a withholding or otherwise) under the Inland Revenue Act No. 10 of 2006

Tax Revision Law The law, regulation, rule, direction or other means by which a Tax Revision is given effect to

Unsecured Repayment of the Principal Sum and payment of interest on the Debentures are not secured by a charge on any assets of CFIN

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Central Finance Company PLC – Debenture Issue 2013 x

ISSUE AT A GLANCE Issuer Central Finance Company PLC

Instrument Rated Unsecured Redeemable Debentures

Listing The Debentures will be listed on the Main Board of the Colombo Stock Exchange

Number of Debentures to be issued

An initial Issue of One Million (1,000,000) Rated Unsecured Redeemable Debentures with an option to issue up to a further One Million (1,000,000) of said Debentures, at the discretion of the Company, in the event of an oversubscription of the initial Issue

Amount to be Raised Sri Lanka Rupees One Billion (LKR 1,000,000,000/-) with an option to raise further up to Sri Lanka Rupees One Billion (LKR 1,000,000,000/-), at the discretion of the Company in the event of an oversubscription of the initial Issue

Company Rating A+(lka) by Fitch Ratings Lanka Limited

Issue Rating A+(lka) by Fitch Ratings Lanka Limited

Issue Price LKR 1,000/- per each Debenture

Face Value LKR 1,000/- per each Debenture

Types of Debentures (Fixed Rate Debentures)

Types of Debentures

Interest Rate (per annum)

payable quarterly

Annual Effective Rate (per annum)

Redemption (from the Date of Allotment)

Type A 14.25% 15.03% 36 Months (3 Years)

Type B 14.50% 15.31% 48 Months (4 Years)

Type C 14.75% 15.59% 60 Months (5 Years)

Number of Debentures to be subscribed

Applicants are allowed to invest in either;

Debentures of Type A; and/or Debentures of Type B; and/or Debentures of Type C

Subject to the minimum subscription under each type; A minimum of One Hundred (100) Debentures (LKR 100,000/-) and in multiples of One Hundred (100) Debentures (LKR 100,000/-) thereafter

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Central Finance Company PLC – Debenture Issue 2013 xi

ISSUE AT A GLANCE

Interest Payment Date(s) 31st March, 30th June, 30th September and 31st December of each year from the Date of Allotment up to the Date of Redemption Interest would be paid within Three (03) Business Days from each Interest Payment Date

Mode of Payment of Principal Sum and Interest

By cheque marked “"ACCOUNT PAYEE ONLY" or through electronic fund transfer mechanism recognised by the banking system of Sri Lanka such as SLIPS and RTGS

Issue Opening Date 11th June 2013

Closure Date of the Subscription list

28th June 2013 or such earlier date on which; The maximum of 2,000,000 Debentures are fully subscribed; or Board of Directors of the Company decides to close the Issue upon the

initial Issue of 1,000,000 Debentures becoming fully subscribed

Date of Allotment The date on which the Debentures will be allotted by the Company to Investors subscribing thereto

Basis of Allotment In the event of an over subscription, the Board of Directors will endeavour to decide the basis of allotment of the Debentures in a fair manner as soon as practicable

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Central Finance Company PLC – Debenture Issue 2013 xii

TABLE OF CONTENTS

1.0 PRINCIPAL FEATURES OF THE RATED UNSECURED REDEEMABLE DEBENTURES ................. 1 1.1 INVITATION TO SUBSCRIBE ........................................................................................................1 1.2 SUBSCRIPTION LIST .....................................................................................................................1 1.3 OBJECTIVES OF THE ISSUE ..........................................................................................................2 1.4 TYPES OF DEBENTURES ...............................................................................................................2 1.5 INTEREST .....................................................................................................................................2 1.6 REDEMPTION ..............................................................................................................................3 1.7 PAYMENT OF PRINCIPAL SUM AND INTEREST ..........................................................................4 1.8 TRUSTEE TO DEBENTURE HOLDERS ...........................................................................................4 1.9 RATING OF THE DEBENTURES ....................................................................................................5 1.10 CONSEQUENCES OF A TAX REVISION ........................................................................................5 1.11 RIGHTS AND OBLIGATIONS OF DEBENTURE HOLDERS ............................................................6 1.12 BENEFITS OF INVESTING IN DEBENTURES OFFERED BY THE COMPANY ..................................6 1.13 RISKS INVOLVED IN INVESTING IN THE DEBENTURES .............................................................7 1.14 TRANSFER OF DEBENTURES .......................................................................................................8 1.15 LISTING ........................................................................................................................................8 1.16 COST OF THE ISSUE .....................................................................................................................8 1.17 BROKERAGE FEE..........................................................................................................................9 1.18 UNDERWRITING ..........................................................................................................................9 2.0 PROCEDURE FOR APPLICATION .............................................................................................................. 10 2.1 INSPECTION OF DOCUMENTS ..................................................................................................10 2.2 ELIGIBLE APPLICANTS ..............................................................................................................10 2.3 HOW TO APPLY .........................................................................................................................11 2.4 NUMBER OF DEBENTURES TO BE SUBSCRIBED ........................................................................14 2.5 MODE OF PAYMENT OF THE INVESTMENT BY THE APPLICANTS ...........................................14 2.6 REJECTION OF APPLICATIONS..................................................................................................16 2.7 BANKING OF PAYMENTS ..........................................................................................................16 2.8 BASIS OF ALLOTMENT OF DEBENTURES ..................................................................................17 2.9 REFUNDS ...................................................................................................................................17 2.10 CDS ACCOUNTS AND SECONDARY MARKET TRADING ..........................................................18 3.0 THE COMPANY ................................................................................................................................................ 19 3.1 BACKGROUND OF THE COMPANY ...........................................................................................19 3.2 VISION OF THE COMPANY ........................................................................................................19 3.3 MISSION OF THE COMPANY .....................................................................................................19 3.4 NATURE OF BUSINESS ...............................................................................................................19 3.5 PRODUCT PORTFOLIO OF CFIN ................................................................................................20 3.6 STATED CAPITAL ......................................................................................................................21 3.7 TOP 10 SHAREHOLDERS OF CFIN AS AT 31ST MARCH 2013 .....................................................21 3.8 SUBSIDIARY/ASSOCIATE COMPANIES OF CFIN .......................................................................22 3.9 HUMAN RESOURCES .................................................................................................................23 3.10 PARTICULARS OF LOAN FACILITIES ........................................................................................23 3.11 OTHER DEBT SECURITIES ..........................................................................................................23

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Central Finance Company PLC – Debenture Issue 2013 xiii

3.12 CONVERTIBLE DEBT SECURITIES ..............................................................................................24 3.13 CONTINGENT LIABILITIES ........................................................................................................24 3.14 FINANCIAL RATIOS ...................................................................................................................24 3.15 FUTURE STRATEGIES, RISKS AND ASSUMPTIONS ....................................................................24 3.16 CORPORATE GOVERNANCE PRACTICES ..................................................................................28 3.17 LITIGATION AGAINST THE COMPANY ....................................................................................30 3.18 DETAILS OF PENALTIES IMPOSED BY REGULATORY AND STATE AUTHORITIES ...................30 3.19 DETAILS OF MATERIAL CONTRACTS OF THE COMPANY ........................................................30 3.20 DEGREE OF DEPENDENCE ON KEY CUSTOMERS AND SUPPLIERS ..........................................30 3.21 DETAILS OF COMMISSIONS PAID .............................................................................................30 3.22 MANAGEMENT AGREEMENTS .................................................................................................31 3.23 TRANSACTIONS RELATING TO THE PROPERTY .......................................................................31 3.24 DETAILS OF BENEFITS PAID TO PROMOTERS ...........................................................................31 3.25 DIVIDEND POLICY .....................................................................................................................31 3.26 TAXATION .................................................................................................................................31 4.0 BOARD OF DIRECTORS ................................................................................................................................ 32 4.1 DETAILS OF THE DIRECTORS ....................................................................................................32 4.2 PROFILES OF THE DIRECTORS ...................................................................................................35 4.3 DIRECTORS’ STATEMENT ..........................................................................................................37 4.4 DIRECTORS’ INTEREST IN SHARES OF THE COMPANY ............................................................37 4.5 DIRECTORS’ INTEREST IN ASSETS .............................................................................................38 4.6 DIRECTORS’ INTEREST IN CONTRACTS OR ARRANGEMENTS .................................................38 4.7 DIRECTORS’ EMOLUMENTS ......................................................................................................38 5.0 CORPORATE MANAGEMENT ..................................................................................................................... 39 5.1 CHIEF EXECUTIVE OFFICE/ MANAGING DIRECTOR................................................................39 5.2 PROFILES OF THE CORPORATE MANAGEMENT ......................................................................39 5.3 EMOLUMENTS OF THE CORPORATE MANAGEMENT ..............................................................42 6.0 STATUTORY DECLARATIONS ................................................................................................................... 43 6.1 STATUTORY DECLARATION BY THE DIRECTORS ....................................................................43 6.2 STATUTORY DECLARATION BY FINANCIAL ADVISORS AND MANAGERS TO THE ISSUE .....44 6.3 STATUTORY DECLARATION BY THE COMPANY ......................................................................44 7.0 FINANCIAL INFORMATION ........................................................................................................................ 45 7.1 ACCOUNTANT’S REPORT AND FIVE YEAR SUMMARY OF FINANCIAL STATEMENTS ............45 7.2 AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2012 ..55 7.3 INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST DECEMBER 2012.............100 ANNEXURE I - COPY OF THE RATING CERTIFICATE ................................................................................ 110 ANNEXURE II - COLLECTION POINTS ........................................................................................................... 113 ANNEXURE III - CUSTODIAN BANKS ........................................................................................................... 121

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Central Finance Company PLC – Debenture Issue 2013 1

1.0 PRINCIPAL FEATURES OF THE RATED UNSECURED REDEEMABLE DEBENTURES

1.1 INVITATION TO SUBSCRIBE Board of Directors of Central Finance Company PLC (hereinafter referred to as the “Board”) by resolution dated 13th March 2013 resolved to raise a sum of upto Sri Lanka Rupees One Billion (LKR 1,000,000,000/-) by an initial issue of upto One Million (1,000,000) Debentures each with a the Face Value of LKR 1,000/- and to raise a further sum of upto Sri Lanka Rupees One Billion (LKR 1,000,000,000/-) by an issue of up to a further One Million (1,000,000) of said Debentures, in the event of an oversubscription of the initial Issue. As such, a maximum amount of Sri Lanka Rupees Two Billion (LKR 2,000,000,000/-) would be raised by the issue of a maximum of Two Million (2,000,000) Debentures each with the Face Value of LKR 1,000/-. The rights of the Debenture Holders with respect to payment of the Principal Sum and accrued interest due thereon upon a winding-up of the Company will rank equal and pari passu with all other unsecured creditors of the Company, but in priority to and over the rights of any preference and ordinary shareholders. CFIN invites Applications for Debentures of Type A and/or; Debentures of Type B and/or; Debentures of Type C, which will rank equal and pari passu with each other without any preference or priority of any one or more than over the others except for tenor of the Debentures and the interest rates, as morefully described in Section 1.5. The face value of the Debentures will not be considered as forming part of Tier I and Tier II capital of the Company within the meaning of the Finance Business Act No. 42 of 2011 and any rules, regulations, directions or determinations issued thereunder for purposes of computation of its capital adequacy ratios. It is the intention of the Company to list the Debentures on the Main Board of the Colombo Stock Exchange. The CSE has given its in-principle approval for the listing of the Debentures on the CSE.

1.2 SUBSCRIPTION LIST

Subject to the provisions contained below, the subscription list for the Debentures will open at 9.30 a.m. on 11th June 2013 and will remain open for fourteen (14) Market Days including the Issue Opening Date until closure at 4.30 p.m. on 28th June 2013. The invitation for this Issue will be closed on 28th June 2013 or such earlier date at 4.30 p.m. with the notification to the CSE on which; The maximum of 2,000,000 Debentures are fully subscribed; or Board of Directors of the Company decides to close the Issue upon the initial Issue of 1,000,000

Debentures becoming fully subscribed.

Applications can be made forthwith in the manner set out in Section 2.0 and duly completed Application Forms will be accepted at any one of the collection points set out in Annexure II of this Prospectus.

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Central Finance Company PLC – Debenture Issue 2013 2

1.3 OBJECTIVES OF THE ISSUE The Company proposes to utilise the entirety of the funds raised through this Issue for the purpose of; Enhancing the Company’s working capital base Strengthening medium term funding base of the Company Financing the growth of the lending portfolio of leases and hire purchases

1.4 TYPES OF DEBENTURES

The Issue consists of three types of Debentures, namely Debentures of Type A, Debentures of Type B and Debentures of Type C, each with a Face Value of Rupees One Thousand (LKR 1,000/-). The Investors have the discretion of applying for Debentures issued under Debentures of Type A; and/ or Debentures of Type B; and/or Debentures of Type C.

1.5 INTEREST The Debentures comprise of Debentures of Type A, Debentures of Type B and Debentures of Type C and will carry a fixed rate of interest as described in the table below.

Type A

Fourteen decimal Two Five per centum (14.25%) per annum, payable quarterly on the Interest Payment Dates Annual Effective Rate of 15.03% per annum

Type B

Fourteen decimal Five Zero per centum (14.50%) per annum, payable quarterly on the Interest Payment Dates Annual Effective Rate of 15.31% per annum

Type C

Fourteen decimal Seven Five per centum (14.75%) per annum, payable quarterly on the Interest Payment Dates Annual Effective Rate of 15.59% per annum

Interest on the Debentures accruing on a daily basis will be paid quarterly in each year on 31st March, 30th June, 30th September and 31st December from the Date of Allotment until the Date of Redemption on the outstanding Principal Sum. The interest due on the Debentures for a particular Interest Period will be calculated based on the actual number of days in such Interest Period and be paid within three (03) Business Days from the Interest Payment Date on which such Interest Period ends. The interest due on the Debentures for the First Interest Period will be calculated based on the actual number of days within the First Interest Period and be paid within three (3) Business Days from the First Interest Payment Date.

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The interest due on the Debentures for the Final Interest Period will be calculated based on the actual number of days within the Final Interest Period and be paid together with the Principal Sum within three (03) Business Days from the Date of Redemption. For avoidance of doubt, the Date of Redemption will not be included or taken into account for purposes of calculating the interest due on the Debentures for the Final Interest Period. Interest calculation will be based on an actual number of days in each year. In order to accommodate the debenture interest cycles in the Automated Trading System of the CSE, the payment of interest for a particular Interest Payment Date will not include Debenture Holders holding Debentures in the CDS as at the last day of the payment cycle but one day prior to the Interest Payment Date (Interest Entitlement Date). Payment of the interest on the Debentures will be made after deducting any taxes and charges thereon (if any) in Sri Lanka Rupees as per the applicable law prevalent at the time of interest payment to the Debenture Holders. As per the Government Budget proposals 2013, it is proposed that interests income from investment made on or after the 1st January 2013 in corporate debt securities (i.e. debentures), quoted in any stock exchange licensed by the SEC are not subject to imposition of income tax.

1.6 REDEMPTION Redemption of the Debentures will take place on the respective Dates of Redemption in respect of each type of Debentures as described in the table below in accordance with the provisions of the Trust Deed. The Principal Sum and unpaid and accrued interest payable on the Redemption of Debentures will be paid to the Debenture Holders within three (03) Business Days from the Date of Redemption.

Redemption Schedule

Type of Debentures Date of Redemption

Type A

The date on which a period of Thirty Six (36) months from the Date of Allotment expires or if such date on which a period of Thirty Six (36) months from the Date of Allotment expires is not a Market Day, the Market Day immediately succeeding such date

Type B

The date on which a period of Forty Eight (48) months from the Date of Allotment expires or if such date on which a period of Forty Eight (48) months from the Date of Allotment expires is not a Market Day, the Market Day immediately succeeding such date

Type C

The date on which a period of Sixty (60) months from the Date of Allotment expires or if such date on which a period of Sixty (60) months from the Date of Allotment expires is not a Market Day, the Market Day immediately succeeding such date

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These Debentures shall not be subject to Redemption by the Company prior to the Date of Redemption other than in the circumstances set out in Section 1.10 below and in the Trust Deed.

1.7 PAYMENT OF PRINCIPAL SUM AND INTEREST The Company will redeem the Debentures on the respective Date of Redemption as specified in Section 1.6 and the interest payments will be made as specified in Section 1.5. The payment of Principal Sum and interest will be made either by cheque/s marked “ACCOUNT PAYEE ONLY" dispatched to the address provided by the Debenture Holders to the CDS at the risk of the Debenture Holders or through electronic fund transfer mechanism recognised by the banking system of Sri Lanka to a bank account provided to the CDS by the Applicant, such as SLIPS and RTGS. However, in the event such payment is over the maximum amount that can be accommodated through electronic fund transfer mechanism recognised by the banking system of Sri Lanka or if the Debenture Holder has not provided to the CDS accurate and correct details of his bank account for the payment of Principal Sum and interest, such payment to the Debenture Holder will be made by way of a cheque and sent by post at the risk of the Debenture Holder. The payment of interest will be made in Sri Lanka Rupees in favour of the Debenture Holders as at the Interest Entitlement Date (in the case of Joint Debenture Holders to the one whose name stands first in the register of Debenture Holders). The payment of Principal Sum and unpaid and accrued interest payable on the Redemption of Debentures will be made in Sri Lanka Rupees in favour of the Debenture Holders as at end of trading on the Market Day immediately preceding the Date of Redemption (in the case of Joint Debenture Holders to the one whose name stands first in the register of Debenture Holders).

1.8 TRUSTEE TO DEBENTURE HOLDERS

Deutsche Bank AG, Colombo Branch has agreed to act as the Trustee to the Debenture Holders. The Company has entered into an agreement with the Trustee (hereinafter called the "Trust Deed"). Debenture Holders in their Application Forms for subscription will be required to authorise the Trustee to act as their agent in entering into such deeds, writings, and instruments with the Company and to act as the agent and Trustee for the Debenture Holders. The rights and obligations of the Trustee are set out in the Trust Deed and the Debentures will be subject to the terms and conditions incorporated in the said Trust Deed. The fee payable to the Trustee will be LKR 25,000.00 per month plus statutory levies. There is no conflict of interest with the Company, except that the Trustee is one of the banks rendering banking services to the Company.

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1.9 RATING OF THE DEBENTURES Fitch Ratings Lanka Limited has assigned a credit rating of “A+ (lka)” to the Debentures. 'A' National Ratings denote expectations of low default risk relative to other issuers or obligations in the same country. However, changes in circumstances or economic conditions may affect the capacity for timely repayment to a greater degree than is the case for financial commitments denoted by a higher rated category. "+" or "-" may be appended to a credit rating to denote relative status within a major rating category. Source: www.fitchratings.com A copy of the rating certificate is given in Annexure I of the Prospectus.

1.10 CONSEQUENCES OF A TAX REVISION

(a) In the event of a Tax Revision, the interest payable on each type of Debentures will be revised to such

higher rate, that is a rate however that does not exceed an increase of two per centum (2.00%) per annum above the Interest Rate applicable to any type of Debentures, as may be mutually agreed upon between the Company and;

(i) in the case of Type A Debentures, the Debenture Holders of an aggregate of at least two third (2/3rd)

of the Type A Debentures for the time being outstanding;

(ii) in the case of Type B Debentures, the Debenture Holders of an aggregate of at least two third (2/3rd) of the Type B Debentures for the time being outstanding;

(iii) in the case of Type C Debentures, the Debenture Holders of an aggregate at least two third (2/3rd) of

the Type C Debentures for the time being outstanding.

(b) In the event the Company and the Debenture Holders for a particular type of Debenture do not reach an agreement on revision to the interest payable as described above within thirty (30) calendar days from the effective date of the Tax Revision or the date of enactment or promulgation of the Tax Revision Law, whichever is later, the Company will be required to within thirty (30) calendar days from the expiry of the aforementioned thirty (30) calendar day period, redeem that type of Debentures only, by repaying the Principal Sum on that type of Debentures together with the interest accrued thereon up to such date.

The early Redemption of a type of Debenture as set out above will not have any effect howsoever on the tenor of the type or types of Debentures for which the Debenture Holders have reached an agreement on the revision of interest as explained in 1.10 (a) above.

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1.11 RIGHTS AND OBLIGATIONS OF DEBENTURE HOLDERS (a) Debenture Holders are entitled to the following rights: Receiving Principal Sum at Redemption and quarterly interest at the rate set out in Sections 1.5 and

1.6 of this Prospectus. In the event of a Tax Revision, interest will be paid at such mutually agreed interest rate as set out in Section 1.10

Ranking equal and pari passu with unsecured creditors in the event of liquidation and above the preference shareholders and ordinary shareholders

Calling and attending meetings of Debenture Holders as set out in the Trust Deed (b) Debenture Holders do not have the following rights: Attending and voting at meetings of holders of shares and other debentures Sharing in the profits of the Company Participating in any surplus in the event of liquidation

(c) Each Debenture Holder must ensure that the information in respect of the securities account

maintained with the CDS is up to date and accurate. Each Debenture Holder shall absolve the Company from any responsibility or liability in respect of any error or inaccuracy or absence of necessary changes in the information recorded with the CDS. Provided further that the Debenture Holder shall absolve the CSE and the CDS from any responsibility or liability in respect of any error or inaccuracy or absence of necessary changes in the information recorded with the CDS where such errors or inaccuracies or absence of changes are attributable to any act or omission of the Debenture Holders.

1.12 BENEFITS OF INVESTING IN DEBENTURES OFFERED BY THE COMPANY

(a) Provides an opportunity to diversify the investment portfolio of the investors (b) Provides the investor with a regular cash inflow of quarterly interest payments (c) Provides the investor with an opportunity to invest in Debentures issued by a leading corporate in

Sri Lanka (d) Being listed on the CSE, the Debentures will have a secondary market, thus providing the investor

with an opportunity to exit at the market price prevailing at the time of divestiture (e) The Debentures may be used as collateral to obtain credit facilities from banks and financial

institutions (f) As per the Government Budget proposals 2013, it is proposed that interests income from investment

made on or after the 1st January 2013 in corporate debt securities (i.e. debentures), quoted in any stock exchange licensed by the SEC are not subject to imposition of income tax

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1.13 RISKS INVOLVED IN INVESTING IN THE DEBENTURES

Subscribers to the Debentures could be exposed to the following risks: (a) Interest Rate Risk

Provided all other factors are equal, the market price of the Debentures will generally fluctuate in the opposite direction of the market interest rates if there is a change in “market interest rates”. Thus, the interest rate risk could be identified as the reduction in the market price of Debentures resulting from a rise in interest rates.

(b) Reinvestment Risk

Interest on Debentures are payable quarterly. An investor may decide to reinvest this interest payment and earn interest from that point onwards. Depending on the prevailing interest rates at the point of reinvestment, the interest rates at which Debenture Holders will reinvest such interest received would be higher or lower than the return offered by the Debentures is known as reinvestment risk.

(c) Call Risk

The uncertainty to the debenture investor is that when the Company has the option of redeeming the Debentures before the Date of Redemption, thus being called upon to terminate the investment early is known as "Call Risk". However, these Debentures do not carry this risk as call options are not available with these Debentures. However in a situation of a Tax Revision, the Company is obliged to redeem the Debenture if a revision of interest rates cannot be agreed mutually between the Company and the Debenture Holder(s) as described in Section 1.10.

(d) Credit Risk

Credit Risk is also referred to as default risk. This is the risk that the issuer of a debenture may default, i.e. the Issuer will not be able to pay interest and principal payments on a timely basis. Eventually in the capital markets, this risk is gauged in terms of rating assigned by different rating agencies. Fitch Ratings Lanka Limited has assigned a National Long-term Rating of A+(lka) to these Debentures and will be periodically reviewed.

(e) Liquidity Risk

Liquidity risk is associated with the ease with which the Debentures can be sold after the initial placement. In order to reduce the liquidity risk, in-principle the Company has applied for a listing of these Debentures on the CSE and the CSE has granted its approval for such listing.

(f) Duration Risk

The term duration risk has a special meaning in the context of debentures. Duration is a measure of the price sensitivity of fixed income investments to a change in interest rates. Calculation is based on the price sensitivity of a fixed income security to a prevailing market interest rate change of 100 basis points. The above result for duration is also interpreted as the number of years to repay the price from the different cash flows incurred during the period of the Debenture to its Redemption. The duration indicator addresses the risk of interest rate fluctuations. The higher the duration, the greater the price volatility or duration risk, while the lower duration risk carries a lower risk.

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1.14 TRANSFER OF DEBENTURES The Debentures will be transferable and transmittable in the manner set out in the Trust Deed, which is reproduced below. (a) The Debentures shall be freely transferable and registration of such transfer shall not be subject to any

restriction, save and except to the extent required for compliance with the applicable law. The Debentures shall be transferable through the CDS as long as the Debentures are listed in the CSE. The Company may register without assuming any liability any transfer of Debentures, which are in accordance with the rules and regulations in force for the time being and from time to time as laid down by SEC, CSE and the CDS.

(b) In the case of the death of a Debenture Holder

(i) the survivor where the deceased was a joint holder; and

(ii) the executors or administrators of the deceased (or where the estate of the deceased is under the administrable value, the heirs of the deceased) where he was the sole or only surviving holder shall be the only persons recognised by the Company as having any title to his Debentures but nothing herein contained shall release the estate of the deceased holder (whether sole or joint) from any liability in respect of any Debentures solely or jointly held by him.

(c) Any person becoming entitled to a Debenture in consequence of bankruptcy or winding up of any Debenture Holder, upon producing proper evidence that he sustains the character in respect of which he proposes to act or his title as the Board thinks sufficient may in the discretion of the Board be substituted and accordingly registered as a Debenture Holder in respect of such Debenture subject to the applicable laws, rules and regulations of the Company, CDS, SEC and CSE.

1.15 LISTING An application has been made to the CSE for permission to obtain a listing for the Debentures and the CSE has granted its approval in-principle for the same. It is the intention of the Company to list the Debentures on the Main Board of the Colombo Stock Exchange upon the allotment thereof. The CSE however, assumes no responsibility for the correctness of the statements made or opinions expressed or reports included in this Prospectus. Admission to the official list is not to be taken as an indication of the merits of the Company or of its Debentures.

1.16 COST OF THE ISSUE Directors estimate that the total cost of the Issue including fees to professionals, printing, advertising and other costs connected with the Issue will be approximately LKR 31.16 Million. Such costs will be financed by the internally generated funds of the Company.

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1.17 BROKERAGE FEE Brokerage fee of 50 cents (LKR 0.50) per Debenture shall be paid in respect of the number of Debentures allotted on Applications bearing the original seal of any bank operating in Sri Lanka or a member/trading member of the CSE or NDB Investment Bank Limited or any other intermediary appointed by the Company involved in the marketing of the Issue.

1.18 UNDERWRITING

This Issue is not underwritten. The offering is not conditional to any minimum amount to be raised through this Issue. In the event of an under subscription, the Company is confident that any short fall in the funds required to meet the objectives of the Issue can be financed through internally generated funds and other credit facilities.

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2.0 PROCEDURE FOR APPLICATION

2.1 INSPECTION OF DOCUMENTS Articles of Association, the Trust Deed, Auditors’ Reports and Audited Financial Statements for the five (05) financial years ended 31st March 2012 (i.e. the five (05) financial years immediately preceding the date of this Prospectus) and Interim Financial Statements for the nine (09) month period ended 31st December 2012 and all other documents referred to in Rule 3.2.16 (a) of the CSE Listing Rules, including material contracts and management agreements entered into by the Company (if any) would be made available for inspection by the public during normal working hours at the registered office of the Company, No. 84, Raja Veediya until the Date of Redemption of the Debenture. The Prospectus, the Trust Deed and Articles of Association of the Company will be available on the websites of CSE, www.cse.lk and website of the Company, www.cf.lk from the date of opening of the subscription list until the Date of Redemption of the Debenture as stipulated in Rule 3.2.16 (b) of the CSE Listing Rules. Furthermore, the copies of the Prospectus and Application Forms will be made available free of charge from the collection points as set out in Annexure II.

2.2 ELIGIBLE APPLICANTS

Applications are invited for the subscription of Debentures from the following categories of applicants; (a) Citizens of Sri Lanka, resident in Sri Lanka and above 18 years of age. (b) Corporate bodies and societies registered/incorporated/established in Sri Lanka and authorized to

invest in Debentures. (c) Approved provident funds and contributory pension schemes registered/incorporated/established

in Sri Lanka and authorized to invest in Debentures. In the case of approved provident funds and approved contributory pension schemes, the Application should be in the name of the trustee/board of management.

(d) Non - Residents : Foreign institutional investors, corporate bodies incorporated outside Sri Lanka,

individuals resident outside Sri Lanka and Sri Lankans resident outside Sri Lanka. (e) Applications will not be accepted from individuals and Sri Lankans residing outside of Sri Lanka

who are under the age of 18 years, or in the names of sole proprietorships, partnerships or unincorporated trusts.

(f) “Individuals resident outside Sri Lanka” will have the same meaning as in the notice published

under the exchange control act in gazette no. 15007 dated 21st April 1972.

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2.3 HOW TO APPLY The terms and conditions applicable to the Applicants are as follows;

(a) Applications should be made on the Application Forms, which accompany and constitute a part of

this Prospectus (exact size photocopies of Application Forms will also be accepted). Care must be taken to follow the instructions given herein and in the Application Form. Applicants using photocopies are requested to inspect the Prospectus which is available for inspection with the Registrar to the Issue and also issued free of charge by the parties listed in Annexure II.

The Application Form can also be downloaded from the website of CSE, www.cse.lk, the website of CFIN, www.cf.lk and the website of Financial Advisors and Managers to the Issue, www.ndbib.com from the date of opening of the subscription list until the Closure Date.

The Prospectus will be made available and can be downloaded from the website of CSE, www.cse.lk and the website of CFIN, www.cf.lk from the date of opening of the subscription list until the Date of Redemption of the Debenture and from the website of Financial Advisors and Managers to the Issue, www.ndbib.com from the date of opening of the subscription list until the Closure Date.

Applications which do not strictly conform to instructions and the other conditions set out herein or which are incomplete or illegible may be rejected.

(b) Applicants should apply only for one Type of Debentures (i.e. either Type A or Type B or Type C

Debentures) under one Application Form.

(c) In the event an Applicant wishes to apply for more than one Type of Debentures, separate Application Forms should be used. Once an Application Form has been submitted for a particular Type of Debentures, it will not be possible for an Applicant to switch between the Types of Debentures.

(d) More than one Applications submitted by an Applicant under the same Type of Debentures will not

be accepted. If more than one Application Forms are submitted for one Type of Debentures from a single Applicant, those would be construed as multiple Applications and the Company reserves the right to reject such multiple Applications or suspected multiple Applications.

(e) If the ownership of the Debentures is desired in the name of one Applicant, full details should be

given only under the heading SOLE/FIRST APPLICANT in the Application Form. In the case of joint Applicants, the signatures and particulars in respect of all Applicants must be given under the relevant headings in the Application Form.

(f) An Applicant of a joint Application will not be eligible to apply through a separate Application Form

either individually or jointly. Such Applicants are also deemed to have made multiple Applications and will be rejected. In the case of joint Applications, the refunds (if any), interest payment and the Redemption will be remitted in favour of the first Applicant as identified in the Application Form.

The Company shall not be bound to register more than three (03) natural persons as joint holders of any Debentures (except in the case of executors, administrators or heirs of a deceased member).

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Joint Applicants should note that all parties should either be residents of Sri Lanka or Non- Residents.

(g) Applications by companies, corporate bodies, societies, approved provident funds, trust funds and

approved contributory pension schemes registered/incorporated/established in Sri Lanka should have obtained necessary internal approvals as provided by their internal approval procedures at the time of applying for the Debentures and should be made under their common seal or in any other manner as provided by their articles of association or such other constitutional documents of such Applicant or as per the statutes governing them. In the case of approved provident funds, trust funds and approved contributory pension schemes, the Applications should be in the name of the trustee/board of management.

(h) All Applicants should indicate in the Application for Debentures, their CDS account number.

In the event the name, address or NIC number/passport number/company number of the Applicant mentioned in the Application Form differ from the name, address or NIC number/passport number/company number as per the CDS records, the name, address or NIC number/passport number/company number as per the CDS records will prevail and be considered as the name, address or NIC number/passport number/company number of such Applicant. Therefore Applicants are advised to ensure that the name, address or NIC number/passport number/company number mentioned in the Application Form tally with the name, address or NIC number/passport number/company number given in the CDS account as mentioned in the Application Form.

Application Forms stating third party CDS accounts, instead of Applicants’ own CDS account numbers, except in the case of margin trading, will be rejected.

(i) Applicants who wish to apply through their margin trading accounts should submit the Application

Forms in the name of the “Margin Provider/Applicant’s name” signed by the margin provider, requesting a direct deposit of the Debentures to the Applicant’s margin trading account in CDS. The margin provider should indicate the relevant CDS account number relating to the margin trading account in the Application Form. A photocopy of the margin trading agreement must be submitted along with the Application.

Margin providers can apply under their own name and such Applications will not be construed as multiple Applications.

(j) Application Forms may be signed by third party on behalf of the Applicant(s) provided that such

person holds the Power of Attorney (POA) of the Applicant(s). A copy of such POA certified by a Notary Public as “True Copy” should be attached with the Application Form. Original of the POA should not be attached.

(k) Funds for the investments in Debentures and the payment for Debentures by foreign institutional

investors, corporate bodies incorporated outside Sri Lanka, individuals resident outside Sri Lanka and Sri Lankans resident outside Sri Lanka should be made only out of funds received as inward remittances or available to the credit of “Securities Investment Account” (SIA) of the foreign investor opened and maintained in a licensed commercial bank in Sri Lanka in accordance with directions given by the Controller of Exchange in that regard to commercial banks.

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An endorsement by way of a letter by the licensed commercial bank in Sri Lanka in which the Applicant maintains the SIA, should be attached to the Application Form to the effect that such payment through bank draft/bank guarantee/RTGS has been made out of the funds available in the SIA.

(l) Non-Residents should have obtained necessary internal approvals as provided by their internal

approval procedures at the time of applying for the Debentures and may be affected by the laws of the jurisdiction of their residence. If the Non-Resident Applicants wish to apply for the Debentures, it is their responsibility to comply with the laws relevant to the jurisdiction of their residence and of Sri Lanka.

Application Forms properly filled in accordance with the instructions thereof together with the remittance for the full amount payable on Application should be enclosed in an envelope marked “CENTRAL FINANCE COMPANY PLC – DEBENTURE ISSUE 2013” on the top left hand corner in capital letters and dispatched by post or courier or delivered by hand to Registrars to the Issue or collection points mentioned in Annexure II.

Applications sent by post or courier or delivered to any collection point set out in Annexure II should reach the office of the Registrars to the Issue at least by 4.30 p.m. on the following Business Day immediately upon the Closure Date. Applications received after the said period will be rejected even though they have been delivered to any of the said collection points prior to the Closure Date or carry a postmark dated prior to the Closure Date.

Applications delivered by hand to the Registrars to the Issue after the Closure Date of the Issue will also be rejected.

Please note that Applicant information such as full name, address, National Identity Card (NIC) number/passport number/company number and residency will be downloaded from the database of CDS, based on the CDS account number indicated in the Application Form. Such information will take precedence over information provided in the Application Form. Care must be taken to follow the instructions on the reverse of the Application Form. Applications that do not strictly conform to such instructions and additional conditions set out hereunder or which are illegible may be rejected. PLEASE NOTE THAT ALLOTMENT OF DEBENTURES WILL ONLY BE MADE IF THE APPLICANT HAS A VALID CDS ACCOUNT AT THE TIME OF SUBMISSION OF APPLICATION. Please note that upon the allotment of Debentures under this issue, the allotted Debentures would be credited to the Applicant’s CDS account so indicated. Hence, Debenture Certificates shall not be issued.

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2.4 NUMBER OF DEBENTURES TO BE SUBSCRIBED Applicants are allowed to invest in either; Debentures of Type A; and/or Debentures of Type B; and/or Debentures of Type C;

subject to the minimum subscription under each type.

A minimum of One Hundred (100) Debentures (LKR 100,000/-) and in multiples of One Hundred (100) Debentures (LKR 100,000/-) thereafter under each type.

2.5 MODE OF PAYMENT OF THE INVESTMENT BY THE APPLICANTS

(a) Payment in full for the total value of Debentures applied for should be made separately in respect of

each Application either by cheque/s, bank draft/s, bank guarantee drawn upon any licensed commercial bank operating in Sri Lanka or RTGS transfer directed through any licensed commercial bank operating in Sri Lanka, as the case may be, subject to (b) below.

(b) Payments for Applications for values above and inclusive of Sri Lanka Rupees One Hundred Million

(LKR 100,000,000/-) should be supported by either a;

Bank guarantee issued by a licensed commercial bank; or Multiple bank drafts/cheques drawn upon any commercial bank operating in Sri Lanka, each of

which should be for a value less than LKR 100,000,000/-; or RTGS transfer with value on the date of opening the Issue.

Multiple cheques or RTGS transfers will not be accepted for Application value below Sri Lanka Rupees One Hundred Million (LKR 100,000,000/-).

(c) Cheques or bank drafts should be made payable to “CENTRAL FINANCE COMPANY PLC –

DEBENTURE ISSUE ACCOUNT 2013” and crossed "ACCOUNT PAYEE ONLY", and must be honoured on the first presentation.

(d) In case of bank guarantees, such bank guarantees should be issued by any licensed commercial bank

in Sri Lanka in favour of “CENTRAL FINANCE COMPANY PLC – DEBENTURE ISSUE ACCOUNT 2013” in a manner acceptable to the Company, and be valid for a minimum of one (01) month from the Issue Opening Date (i.e. 11th June 2013).

Applicants are advised to ensure that sufficient funds are available in order to honour the bank guarantees, inclusive of charges when called upon to do so by the Registrars to the Issue. It is advisable that the Applicants discuss with their respective bankers the matters with regard to the issuance of bank guarantees and all charges involved. All expenses with regard to such bank guarantees should be borne by the Applicants.

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(e) In case of RTGS transfers (only for Application values above and inclusive of Sri Lanka Rupees One Hundred Million (LKR 100,000,000/-), such transfers should be made to the credit of “CENTRAL FINANCE COMPANY PLC – DEBENTURE ISSUE ACCOUNT 2013” bearing the account number 006100020835 at Nations Trust Bank PLC with value on the date of opening the Issue (i.e. the funds to be made available to the above account on the date of opening the Issue). The Applicant should obtain a confirmation from the Applicant’s bank, to the effect that arrangements have been made to transfer payment in full for the total value of Debentures applied for to the credit of “CENTRAL FINANCE COMPANY PLC – DEBENTURE ISSUE ACCOUNT 2013” bearing the account number 006100020835 at Nations Trust Bank PLC with value on the date of opening the Issue (i.e. the funds to be made available to the above account on the date of opening the Issue) and should be attached with the Application Form.

For RTGS transfers above and inclusive of Sri Lanka Rupees Two Hundred Million (LKR 200,000,000/-), the Applicants are entitled to an interest at the rate of Ten per centum (10.00%) per annum from the date of such transfers up to the Date of Allotment. However, no interest will be paid if the RTGS transfers are not realised before the end of Issue Closing Date. Furthermore, even if such RTGS transfers are effected prior to the date of opening the Issue, no interest will be paid for the period prior to the opening of the Issue.

The Applicants are not entitled to an interest at the rate of Ten per centum (10.00%) per annum for RTGS transfers below Sri Lanka Rupees Two Hundred Million (LKR 200,000,000/-).

(f) Cash will not be accepted.

(g) Payment for the Debentures by Non- residents should be made through a “Securities Investment

Account” (SIA) maintained with any licensed commercial bank in Sri Lanka in accordance with directions given by the Controller of Exchange in that be regard to commercial banks.

(h) The amount payable should be calculated by multiplying the number of Debentures applied for

under a particular Type by the Face Value (LKR 1,000/-). If there is a discrepancy in the amount payable and the amount specified in the cheque/bank draft or bank guarantee, the Application will be rejected.

(i) In the event that cheques are not realised prior to the date of deciding the basis of allotment, the

monies will be refunded and no allotment of Debentures will be made. Cheques must be honoured on first presentation for the Application to be valid.

(j) All cheques/bank drafts received in respect of the Applications for Debentures will be banked

commencing from the Business Day immediately following the Closure Date.

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2.6 REJECTION OF APPLICATIONS Application Forms and the accompanying cheques/bank drafts/bank guarantees or RTGS transfers, which are illegible or incomplete in any way and/or not in accordance with the terms, conditions and instructions, set out in this Prospectus and in the Application Form will be rejected at the sole discretion of CFIN. Applications from individuals and Sri Lankans residing outside of Sri Lanka who are under the age of 18 years or in the names of sole proprietorships, partnerships, unincorporated trusts will also be rejected. Any Application Form, which does not state a valid CDS account number will be rejected. More than one Applications submitted by an Applicant under the same Type of Debentures will not be accepted. If more than one Application Forms are submitted for one Type of Debentures from a single Applicant, those would be considered as multiple Applications and the Company reserves the right to reject such multiple Applications or suspected multiple Applications. Any Application Form with more than three (03) natural persons as joint Applicants for any Type of Debentures will be rejected. Applications delivered by hand to the Registrars to the Issue after the subscription list is closed will be rejected. Applications received by post or courier after 4.30 p.m. on the Business Day immediately following the Closure Date, will also be rejected even if they carry a post mark dated prior to the Closure Date. Applications delivered to any place mentioned in Annexure II should also reach the office of the Registrars to the Issue at least by 4.30 p.m. on the Business Day immediately following the Closure Date. Applications received after the said duration will be rejected even though they have been delivered to any of the said collection points prior to the Closure Date. In the event that cheques are not realised prior to the date of deciding the basis of allotment and realised after such date, the monies will be refunded and no allotment of Debentures will be made. Cheques must be honoured on first presentation for the Application to be valid. In the event cheques are dishonoured/returned on first presentation, such Applications will be rejected.

2.7 BANKING OF PAYMENTS All cheques or bank drafts or bank guarantees received in respect of Applications will not be banked or called on until the Business Day immediately after the Closure Date as set out in Section 1.2, in terms of the CSE Listing Rules.

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2.8 BASIS OF ALLOTMENT OF DEBENTURES In the event of an over subscription, the Board of Directors of the Company will endeavour to decide the basis of allotment in a fair manner as soon as practicable so as to ensure compliance with the CSE Listing Rules. Upon the allotments being decided, an announcement will be made to the CSE. The number of Debentures to be issued under Debentures of Type A, Debentures of Type B and Debentures of Type C shall be in accordance with the basis of allotment which shall be decided at the discretion of the Board of Directors of CFIN in a fair manner in the event of an over subscription. The Company reserves the right to refuse any Application or to accept any Application in part only, without assigning any reason thereto. A written confirmation informing successful Applicants on their allotment of Debentures will be dispatched within ten (10) Market Days from the Closure Date as required by the CSE.

2.9 REFUNDS Monies will be refunded where; an Application is rejected for reasons given in Section 2.6 the Application is accepted only in part

If the Applicant has provided accurate and complete details of his bank account in the Application, the Bankers to the Issue will make refund payments up to and inclusive of Rupees Five Million (LKR 5,000,000/-) to the bank account specified by the Applicant, through SLIPS and a payment advice will be sent.

In the event of refunds over Rupees Five Million (LKR 5,000,000/-) or if the Applicant has not provided accurate and correct details of his bank account in the Application or if the Applicant has not provided details of the bank account in the Application Form, the bank will make such refund payment to the Applicant by way of a cheque and sent by post at the risk of the Applicant.

In the case of joint Application, the cheques will be drawn in favour of the Applicant’s name appearing first in the Application Form. Applicants can obtain details on bank and branch codes required for providing instructions on SLIP transfers at the following website; http://www.lankaclear.com/products_and_services/sl_interbank_payment_system_guideline.php Refunds on Applications rejected or partly allotted Debentures would be made within ten (10) Market Days excluding the Closure Date. Applicants would be entitled to receive interest at the rate of last quoted Average Weighted Prime Lending Rate (AWPLR) published immediately preceding week by the Central Bank of Sri Lanka or any other authority (in the event that the Central Bank of Sri Lanka ceases to publish the AWPLR) plus five per centum (5.00%) for the delayed period on any refunds not made within this period.

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2.10 CDS ACCOUNTS AND SECONDARY MARKET TRADING Debentures allotted will be directly deposited to the respective CDS accounts given in the Application Forms before the expiry of eighteen (18) Market Days, from the Closure Date. A written confirmation of the credit will be sent to the Applicant within two (02) Market Days of crediting the CDS account, by ordinary post to the address provided by each Applicant. The Company will submit to the CSE a 'Declaration' on direct upload to CDS on the Market Day immediately following the day on which the Applicants’ CDS accounts are credited with the Debentures.

Trading of Debentures on the secondary market will commence on or before the third (3rd) Market Day from the receipt of the Declaration by the CSE as per the CSE Listing Rules.

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3.0 THE COMPANY

3.1 BACKGROUND OF THE COMPANY Central Finance Company PLC is a finance company licensed under the Finance Business Act, No. 42 of 2011. CFIN was incorporated in December 1957 by the Wijenaike family, as a private limited liability company based in Kandy. Its principal activity was to provide financial services in the form of hire purchase facilities to the passenger transport and goods haulage of the Central region. In 1969, the Company was converted to a public company with a quotation from the Colombo Brokers Association. It was the first company outside Colombo to obtain such a listing. The first branch was opened in Colombo in April 1979, on an agency basis and managed by Forbes & Walker Limited. It has now developed into the status of a fully fledged premises in the hub of the commercial sector.

3.2 VISION OF THE COMPANY “Central Finance shall be the first choice for progressive customers in delivering innovative financial solutions.”

3.3 MISSION OF THE COMPANY “To be the leader in our industry, conducting business with responsibility, using our expertise in helping customers grow and prosper whilst creating lasting value for our shareholders.”

3.4 NATURE OF BUSINESS

The principal activities of the Company are leasing, hire purchase financing, vehicle hire, deposit mobilisation, vehicle trading, providing money transfer facilities and provision of other financial services.

The Company’s other activities and services are diversified widely and range over commercial, investment, and private banking; real estate development, property development, housing, insurance broking, power generation and manufacturing through its several subsidiary and associate companies.

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3.5 PRODUCT PORTFOLIO OF CFIN

CFIN product portfolio includes the following financial services:

(a) Leasing facilities are marketed under the brand name of CF Leasing.

(b) Vehicle hiring facilities are provided under the brands of CF Budget Hire, Contract Hire and Short Hire

(c) Fixed deposits are offered under the brand names of CF EXCEL, CF OPTIMA, CF ULTRA, CF SENIOR CITIZENS DEPOSIT SCHEME.

(d) Savings deposits are offered under the brand names of CF Savings, CF Super Savings, CF “Lamã”,

Children’s Savings Account, CF Senior Citizens.

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3.6 STATED CAPITAL

The capital structure of the Company over the last three years is given below: As at 31st March 2010 2011 2012

Stated Capital (LKR '000) 203,020 203,020 568,420

Number of Shares ('000) 20,300 20,300 104,883 The movement in the stated capital during FY 2011/2012 is given below:

Details of Stated Capital Number of

Shares ('000) Stated Capital

(LKR '000) Balance as at 1st April 2011 20,300 203,020 Increase in shares due to subdivision of shares (1 share into 5 shares) 81,200 - Capitalisation of reserves by way of 1 new share for every 30 shares held at a price of LKR 108.00 per share 3,383 365,400 Balance as at 31st March 2012 104,883 568,420

3.7 TOP 10 SHAREHOLDERS OF CFIN AS AT 31ST MARCH 2013

Name of Ordinary Voting Shareholder

Number of Ordinary Voting

Shares

Shareholding Percentage (%)

Corporate Services (Pvt) Ltd. 16,895,461 16.11 E.H. Wijenaike 16,164,123 15.41 Employees' Provident Fund. 7,911,630 7.54 Thurston Investments Ltd. 6,032,701 5.75 Perpetual Capital (Pvt) Ltd. 4,929,151 4.70 A.J. Wijenaike 3,271,357 3.12 N.W. Wijegoonawardene 2,162,353 2.06 G.S.N. Peiris 1,828,168 1.74 B P de Silva Holdings (Pte) Ltd. 1,752,900 1.67 J.B. Cocoshell (Pvt) Ltd. 1,605,827 1.53 Others 42,329,662 40.37 Total 104,883,333 100.00

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3.8 SUBSIDIARY/ASSOCIATE COMPANIES OF CFIN

As at 31st March 2013, the Company is not a subsidiary of any entity.

The subsidiary companies as at 31st March 2013 are as follows:

The associate companies as at 31st March 2013 are as follows:

Company Name CFIN’s Share

Holding (Direct and Indirect)

Core Business

Central Industries PLC 49.98% Manufacture and distribution of PVC pipes and fittings

Central Developments Limited

99.99% Investment company

Central Construction and Development (Private) Limited

99.90% Investment company

Central Mineral Industries (Private) Limited

99.99% Manufacture of mineral products

Central Homes (Private) Limited

99.99% Property development and sale of real estate

CF Growth Fund Limited 99.99% Investment company CF Insurance Brokers (Private) Limited

99.99% Insurance broking

Dehigama Hotels Company Limited

79.69% Renting of commercial property

Expanded Plastic Products Limited

99.99% Investment company

Hedges Court Residencies (Private) Limited

99.99% Construction and sale of apartments

Kandy Private Hospitals Limited

66.35% Provision of healthcare services

Mark Marine Services (Private) Limited

58.12% Hydro power generation

Central Transport and Travels Limited

99.99% Hiring of vehicles

Company Name CFIN’s Share

Holding (Direct and Indirect)

Core Business

Nations Trust Bank PLC 20.00% Commercial, investment, and private banking

Capital Suisse Asia Limited 24.58% Provision of management services

Tea Smallholder Factories PLC 29.30% Processing tea from green leaf purchased from small holders

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3.9 HUMAN RESOURCES

The total number of employees as at the date of the Prospectus is 1,457. The details of the employees are given below:

Employee Category Number of Employees

Senior Management 26

Line Management 167

Executives 304

Staff Assistants 857

Minor Staff 103

Total 1,457 The employees of the Company are not engaged in any labour union activities and there are no labour unions or any significant agreements entered into between the Company and any labour unions.

3.10 PARTICULARS OF LOAN FACILITIES The details of the bank and non-bank facilities outstanding as at 31st December 2012 are set out below:

Nature of Facility As at 31st December 2012 ( LKR '000) Bank overdrafts 948,660 Bank loans 4,883,533 Non-bank loans 1,401,784

Non-bank loans include securitisation facilities of LKR 1,114,900,000 outstanding as at 31st December 2012.

3.11 OTHER DEBT SECURITIES The details of other debt securities outstanding as at 31st March 2013 are given below:

Issued Date Maturity

Date Listing

Outstanding (LKR)

Classification Rights of

Debenture Holders

09th March 2011 03rd March

2016 Unlisted 250,000,000/-

Rated, Unsecured, Redeemable Five Year Debentures

Subordinated debt

24th May 2012 24th May

2015 Unlisted 500,000,000/-

Rated, Unsecured, Redeemable Three Year Debentures

Senior debt

30th May 2012 30th May

2015 Unlisted 20,000,000/-

Rated, Unsecured, Redeemable Three Year Debentures

Senior debt

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3.12 CONVERTIBLE DEBT SECURITIES The Company does not have convertible debt securities in issue.

3.13 CONTINGENT LIABILITIES

In the normal course of business, CFIN incurs contingent liabilities. The contingent liabilities of the Company as at 31st March 2013 are as follows:

Contingent Liabilities as at 31st March 2013 LKR '000 Guarantees issued on behalf of depositors, fully secured on their deposits 14,865

Performance bonds and warranties in respect of letter of credit facilities 60,977

Except for the above, there are no material contingent liabilities that would affect current and future profits of the Company.

3.14 FINANCIAL RATIOS

Financial ratios for the last three financial years are as follows.

As at 31st March 2010 2011 2012

Interest Cover Ratio (Times) 1.56 2.21 2.23

Net Debt/EBITDA 2.93 3.49 3.97

Financial ratios for the nine month period ending 31st December 2012 are as follows.

As at 31st December 2012

Interest Cover Ratio (Times) 1.97

Net Debt/EBITDA 4.72

3.15 FUTURE STRATEGIES, RISKS AND ASSUMPTIONS

3.15.1 FUTURE STRATEGIES OF THE COMPANY

A strategic plan for three years has been formulated to steer the Company and this is being rolled forward based on an annual assessment from the financial year 2012/13. The growth strategy is organic and based on the core business strengths of CFIN. Branch network expansion will be similar as in the previous years. In addition, the Company will also add several micro branches each year. Risks associated with the strategies are regularly reviewed by the Board Integrated Risk Management Committee and Assets and Liabilities Committee.

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3.15.2 ASSUMPTIONS IN RELATION TO FUTURE STRATEGIES

The future plans and prospects of the Company are based on the assumption that there will be a conducive environment in terms of macroeconomic, social and political stability; and interest rate stability and consumer momentum for credit demand. In addition, the Company anticipates that the current improvements in the macro-economic environment will sustain. Further, these future plans/strategies are expected to be sustainable on the assumption that changes in Government regulations, taxations or changes in directions to finance companies will not have severe adverse affects to the operations and profitability of the Company.

3.15.3 RISKS ATTACHED TO FUTURE STRATEGIES

The finance industry is considerably sensitive to various risks attached to the economy and thus CFIN has recognised the need to be prudent and the importance of strengthening risk management capabilities.

Finance companies are exposed to numerous risk factors which include credit risk, credit concentration risk, market risk in the form of interest rate risk and equity price risk, operational risk, liquidity risk and strategic risk. (a) Credit Risk

Credit risk is the potential loss due to the failure of a counterparty to meet its obligations to pay the Company in accordance with agreed terms. Credit risk is managed through a framework that sets out policies and procedures covering the measurement and management of credit risk. A well defined delegated approval hierarchy supported by high ethical standards, well established policies and procedures provide a robust framework for the organisation and management of credit risk. There is a clear segregation of duties between major transaction originators in the businesses and approvers in the credit function. All credit exposure limits are approved within a delegated credit approval authority frame work. Risk indicators are also set by the credit division and monitored through the Board of Management (BoM) and Assets and Liabilities Committee (ALCO) on a monthly basis. Company-wide credit policies and procedures are considered and approved by BoM, with the inputs of the credit and recoveries departments. BoM also oversees the delegation of credit approval and loan loss provisioning processes through the regular review of operations. These policies are adequate to reflect the different risk environments and portfolio characteristics of CFIN. Major credit exposures to individual counterparties, groups of counterparties and product categories are reviewed and approved by the designated officers under the delegated approving limits set by BoM, with the oversight of the Board. The credit approving limits in place are structured based on the need of delegation required to manage the network of branches, without compromising the risk appetite of the Company.

(b) Credit Concentration Risk

Credit concentration risk is managed within limits set by counterparty or groups of connected counterparties, asset type, industry sectors etc. Credit concentrations are monitored by ALCO in each of the product type categories and such limits that are material to the Company are reviewed and approved by ALCO. CFIN has a diversified portfolio with low exposure to high risk asset classes and segments thus minimising concentration risk. The ALCO also reviews the top 20 lending exposures at its quarterly meetings. The performances of the large lending exposures are also reviewed periodically.

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CFIN regularly monitors credit exposures, portfolio performance, and external trends which may impact risk management outcomes. Internal management reports are presented to various committees, containing information on key environmental, political and economic trends. Portfolio delinquency and loan loss provisioning as well as portfolio quality are monitored by the recoveries department constantly. Most of CFIN lending activities are fully secured by tangible assets with majority of them being motor vehicles and equipments. Hence, the Company has a fall back in the event of default.

(c) Market Risk

Market risk are the risks arising from changes in interest rates, foreign currency, equity prices and risk related factors such as market volatilities. The objective of market risk management is to obtain the best balance of risk and return whilst meeting customers’ requirements. The primary categories of market risk include interest rate risk and equity price risk for CFIN. (d) Interest Rate Risk Interest rate risk arises from changes in yield curves and credit spreads. Market risks arising from interest rate volatility is managed with direction from ALCO which continuously monitors the cost of funds of the Company and initiates necessary action to ensure the required margins for the Company. The Board approves risk appetite for market risks. The Director-Finance is responsible for the funding operations, under delegated authority from the Board, which sets a framework of limits within the context of the approved market risk appetite. The Company has a strong controlled environment facilitated by a well structured oraganisation which has enabled it to strengthen segregation of duties in respect of critical functions.

Interest rate derivatives are used for managing interest rate risk. The interest rate swap is a mechanism which is used to manage the interest rate volatility of maturity mismatches, typically associated with finance business.

(e) Equity Price Risk

Central Finance is exposed to market movements in equity price fluctuations through the trading and investment securities portfolios. Equity price risk arises from changes in the prices of equities and equity indices. Integrated Risk Management Committees (IRMC) and ALCO consciously review the exposure limits. A comprehensive evaluation process is also carried out prior to investment decisions. Regular monitoring of price levels is done through the investment function within the finance department to mitigate adverse movements in the stock market.

(f) Operational Risk

Operational risk is the risk of direct or indirect loss due to an event or action resulting from the failure of internal processes, people and systems or from external events. CFIN seeks to minimize exposure to operational risk, subject to cost trade-offs. Operational risk exposures are managed through a consistent set of management processes that drive risk identification, assessment, control and monitoring. The Board appointed Board Audit Committee (BAC) and Integrated Risk Management Committee oversee the management of operational risks across the network and at the center, with the support of the independent internal audit department which is separate from the business functions. In addition, the BAC also receives and reviews the management letter of the external auditor.

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This formal structure of governance provides the Board with confidence that operational risks are being proactively identified and effectively managed. All business units are responsible for setting and maintaining standards for operational risk management. Possible losses to the Company assets due to unforeseen events have been covered with comprehensive insurance policies.

(g) Liquidity Risk

Liquidity risk is the risk that CFIN either does not have sufficient financial resources available to meet CFIN obligations as they fall due, or can only access these financial resources at excessive cost. Liquidity risk is heavily influenced by the maturity profile and mix of the Company’s funding base, as well as the quality and liquidity value of its liquid assets portfolio. It is CFIN policy to maintain adequate liquidity at all times and be in a position to meet all obligations as they fall due. Diversification of the Company’s funding base is central to its balance sheet management strategy. Customer deposits provide large pools of stable funding to support the majority of lending. CFIN accesses market funding by way of debt issuances on an unsecured and secured basis. CFIN also has a contingency funding plan by way of undrawn approved bank lines.

CFIN manages liquidity risk taking both short and medium-term requirement into consideration. In the short-term, focus is on ensuring that the cash flow demands can be met through asset maturities, customer deposits and bank funding where required. In the medium-term, the focus is on ensuring a structurally sound balance sheet. ALCO is the responsible governing body that oversees CFIN liquidity management policies. The treasury department receives direction from ALCO and is responsible for managing liquidity limits. Liquidity risk is a standing agenda item at CFIN monthly ALCO meetings. CFIN also has a strong advances–to-deposit ratio, which is testament to the Company’s liquidity management capabilities. The pricing of deposit maturities are done in a way to curb the maturity mismatches between lending and borrowing portfolios. Liquidity asset ratio is the ratio of liquid assets to total deposits. The significant level of holdings of liquid assets in the balance sheet reflects the application of CFIN liquidity policies and practices. (h) Strategic Risk

Strategic risk arises from the fundamental decisions that Directors take concerning organisation’s objectives. Strategic risks are the risks of failing to achieve the business objectives. The Company is continuously following developments taking place in the business environment and formulates its strategies to optimise the opportunities available whilst attempting to manage risks associated with such strategies. Business strategies are adopted after evaluating the overall risks associated with such strategies.

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3.16 CORPORATE GOVERNANCE PRACTICES

CFIN believes that good Corporate Governance is about creating the right culture throughout the entire organisation. Good Corporate Governance contributes to the long-term success of the Company, creating trust and engagement between the Company and its stakeholders. CFIN’s culture and values are deeply embedded within the organisation. CFIN culture stimulates transparency and accountability.

Corporate Governance is the system by which the Company is directed and managed and which influences the manner in which the objectives of the Company are formulated, communicated and achieved. Corporate Governance policies and practices of the Company have been designed to ensure that the Company is focused on its responsibilities to its stakeholders and on creating long term shareholder value. CFIN continuously reviews and finds ways to improve its Board’s effectiveness in this regard.

The Board of Directors of the Company comprises of ten (10) members of which three (3) are Independent Non-Executive Directors, two (2) are Non-Executive Directors and five (5) are Executive Directors.

3.16.1 INDEPENDENT DIRECTORS

The following directors were independent as at the date of the Prospectus.

Name of Director Designation Mr. S. C. S. Wickramasinghe Independent Non-Executive Director Mr. F. Mohideen Independent Non-Executive Director Mr. A. N. Fernando Independent Non-Executive Director

3.16.2 AUDIT COMMITTEE

The Audit Committee which is appointed by the Board of CFIN comprises of the following members as at the date of the Prospectus.

Role of the Audit Committee is to assist the Board of Directors in fulfilling effectively its responsibilities relating to financial and other related affairs of the Company. The Committee has been empowered to:

Examine internally any matter relating to the financial affairs of the Company Monitor and follow-up the internal and external audit programmes and plans, review the internal

audit and external audit reports Analyse and review risks and examine the adequacy, efficiency and effectiveness of the internal

control system and procedures in place to avoid or mitigate such risks. Review Accounting Policies, emerging accounting issues and disclosures according to SLAS/SLFRS Review information requirement of Companies Act No.7 of 2007 and other financial reporting

requirements and SEC and Central Bank of Sri Lanka regulations Review and approve Annual Financial Statements and Interim Financial Statements prepared for the

shareholders, prior to submission to the Board.

The Audit Committee Charter guides the workings of the Committee.

Director Name Designation Mr. A. N. Fernando (Chairman) Independent Non-Executive Director Mr. C. L. K. P. Jayasuriya Non-Executive Director Mr. F. Mohideen Independent Non-Executive Director

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3.16.3 REMUNERATION COMMITTEE

The Remuneration Committee which is appointed by the Board of CFIN comprises of the following members as at the date of the Prospectus.

Name of Director Designation Mr. J.D. Bandaranayake (Chairman) Non-Executive Director Mr. S.C.S. Wickramasinghe Independent Non-Executive Director Mr. A. N. Fernando Independent Non-Executive Director

The Company’s remuneration policy aims to attract, motivate and retain talent with the appropriate professional, managerial and operational expertise necessary to achieve the objectives of the Company. The Company’s remuneration framework for the Executive Directors and Corporate Management Team is designed to ensure alignment between short and long term interests of the Company and thereby create and enhance value for all stakeholders of the Company.

The Committee reviews all significant Human Resource policies and initiatives. The Committee deliberates and recommends to the Board of Directors, the annual increments and bonuses of the Executive Directors and Members of the Corporate Management based on individual and corporate performance. The committee also reviews salary structures and terms and conditions of service to ensure compatibility with the market. The Managing Director who is responsible for the overall management of the Company attends meetings by invitation and participates in the deliberations except when his own interest, performance and compensation are discussed

3.16.4 INTEGRATED RISK MANAGEMENT COMMITTEE

The Integrated Risk Management Committee which is appointed by the Board of CFIN comprises of the following members as at the date of the Prospectus.

Name Designation Mr. A.N. Fernando (Chairman) Independent Non-Executive Director Mr. J.D. Bandaranayake Non-Executive Director Mr. F. Mohideen Independent Non-Executive Director Mr. E. H. Wijenaike Managing Director Mr. G. S. N. Peiris Executive Director Mr. R. E. Rambukwelle Executive Director Mr. A. K. Gunaratne Executive Director Mr. D. P. de Silva Executive Director Mr. U. B. Elangasinha General Manager (Finance) Mr. J. Illangakoon General Manager (Branches) Mr. B.A.C.K. Jayawardena Deputy General Manager (Recoveries) Mr. K. Kandeepan Assistant General Manager (Finance)

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The Terms of Reference set out by the Board of Directors, include the following;

to ensure that the Company has a comprehensive risk management framework, appropriate compliance policies and systems in place.

to assess all risk types, including but not limited to credit, market, liquidity, operational and strategic risks to the Company through appropriate risk indicators and management information.

to ensure risk decisions are taken in accordance with established delegated authorities and corrective action is taken to mitigate risks taken beyond the tolerance set by the Committee, on the basis of Company’s policies and regulatory and supervisory requirements.

to monitor and assess the effectiveness of the Company’s risk management system and the robustness of the risk.

The primary responsibility of the Committee is to assist the Board of Directors in understanding and exercising regular risk oversight on risk management measures adopted by the Management in operating the Company’s business. The Committee determines the adequacy and effectiveness of measures taken by the Management in order to ensure that the overall risk of the Company conforms to parameters approved by the Board. The Committee meets on a quarterly basis.

3.17 LITIGATION AGAINST THE COMPANY

There are no any legal, arbitration or mediation proceedings, which may have or have had in the recent past significant effects on the Company’s financial position or profitability.

3.18 DETAILS OF PENALTIES IMPOSED BY REGULATORY AND STATE AUTHORITIES There are no penalties imposed by Regulatory and State Authorities on the Company.

3.19 DETAILS OF MATERIAL CONTRACTS OF THE COMPANY The Company has not entered into any material contracts as at date other than contracts entered into in the ordinary course of business.

3.20 DEGREE OF DEPENDENCE ON KEY CUSTOMERS AND SUPPLIERS

The Company is not significantly dependent on any single customer or supplier for its requirements.

3.21 DETAILS OF COMMISSIONS PAID

During FY 2010/11 and 2011/12, the Company paid a commission of LKR 920,960/= and LKR 6,534,528/= respectively as placement fees to the managers to the issue of the respective debentures issued during the said period. The debentures were issued via private placement.

Except above, no commission has been paid in the two (02) years preceding the Issue or payable for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions, for any shares in or debentures of the Company.

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3.22 MANAGEMENT AGREEMENTS

There are no management agreements presently in force or currently being considered.

3.23 TRANSACTIONS RELATING TO THE PROPERTY

There is no transaction relating to the property completed within the two (2) preceding years in which any vendor of the property to the Company or any person who is or was at the time of the transaction, a promoter or a director or proposed director of the Company who had any interest, direct or indirect.

3.24 DETAILS OF BENEFITS PAID TO PROMOTERS

No benefit has been paid or given by the Company within the two years preceding the Issue and there are no benefits intended to be paid or given to any promoter.

3.25 DIVIDEND POLICY The Board of Directors has adopted a policy of paying out dividends to the shareholders based on factors including but not limited to the Company’s earnings, capital requirements and the overall macro financial conditions. Details of dividend payments during the preceding financial years have been stated under Section 7.1 - Accountants’ Report of this Prospectus.

3.26 TAXATION

The Company is not enjoying any tax concession or any tax exemptions as at 31st March 2013.

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4.0 BOARD OF DIRECTORS

4.1 DETAILS OF THE DIRECTORS

Name, Designation and Residential Address of Directors

Other Directorships

Mr. Jayampathi Divale Bandaranayake Non –Executive Chairman

No. 196/2, Lake Drive, Colombo 8

Ceylon Tobacco Company PLC - Chairman Finlays Colombo PLC - Director Ivy Resort Residence(Pvt)Limited - Director Anniewatte Resort and Residence (Pvt) Limited- Director

Mr. Eranjith Harendra Wijenaike Managing Director No. 6, Sukhastan Gardens, Colombo 7

Tea Smallholder Factories PLC - Director Trans Asia Hotels PLC - Director Central Industries PLC- Director Dehigama Hotels Company Limited- Director Capital Suisse Asia Limited- Director Kandy Private Hospitals Limited- Director Equity One PLC- Director Equity Two PLC- Director Zyrex Power Company Limited- Director Hi-tech Power Systems(Pvt)Limited- Director

Mr. Gerad Shamil Niranjan Peiris Executive Director No. 17, Primrose Road, Kandy

Central Industries PLC - Director Central Developments Ltd - Director Dehigama Hotels Company Ltd - Director Expanded Plastic Products Ltd - Director Central Mineral Industries (Pvt) Ltd - Director Central Transport & Travels Ltd - Director Central Construction & Development (Pvt) Ltd - Director CF Growth Fund Ltd - Director Kandy Private Hospitals Ltd - Director CF Insurance Brokers (Pvt) Ltd - Director Central Homes (Pvt) Ltd - Director Hedges Court Residencies (Pvt) Ltd - Director Polymer Technologies(Pvt)Limited- Director CF Venture Management Co. Limited- Director Rotary Kandy Community Development Foundation (Pvt) Limited- Director

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Name, Designation and Residential Address of Directors

Other Directorships

Mr. Ravindra Erle Rambukwelle Executive Director No. 66B, 1/1, Vajira Road, Colombo 5

Tea Smallholder Factories PLC - Director Central Industries PLC - Director Central Developments Limited- Director CF Insurance Brokers(Pvt)Limited- Director Hedges Court Residencies(Pvt)Limited- Director Mark Marine Services(Pvt)Limited- Director Central Construction & Development(Pvt)Limited- Director Central Mineral Industries(Pvt)Limited- Director Central Transport & Travels Limited- Director Expanded Plastic Products Limited- Director CF Growth Fund Ltd. - Director CF Venture Management Company Ltd. - Director

Mr. Arjuna Kapila Gunaratne Executive Director No. 90/1, Galle Road, Mount Lavinia

Nations Trust Bank PLC - Chairman Central Industries PLC - Director Mark Marine Services(Pvt)Limited- Director Capital Suisse Asia Limited- Director CF Insurance Brokers(Pvt)Limited- Director Zyrex Power Company Limited- Director Hitech Power Systems (Pvt) Limited- Director CF Venture Management Company Limited- Director Waldock Mckenzie Limited- Director Allied Properties Limited- Director

Mr. Dhammika Prasanna de Silva Executive Director

No. 63/1A , Edirisinghe Road, Nugegoda

Nations Trust Bank PLC - Director Telecommunication Regulatory Commission of Sri Lanka – Member Hedges Court Residencies(Pvt)Limited- Director CF Insurance Brokers(Pvt)Limited- Director Mark Marine Services(Pvt)Limited- Director CF Growth Fund Ltd. - Director Leasing Association of Sri Lanka- Director

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Name, Designation and Residential Address of Directors

Other Directorships

Mr. Chandima Lalith Kumara Perera Jayasuriya Non - Executive Director Residence E, Finlay House, No. 186, Vauxhall Street, Colombo 2

Finlays Colombo PLC - Executive Chairman and Managing Director The Mercantile Services Provident Society - Chairman The Employees Trust Fund Board - Director The Board of the Chartered Institute of Management Accountants (Sri Lanka Division) - Member The Sri Lanka Accounting and Auditing Standards Monitoring Board ) - Member The Committee of the Ceylon Chamber of Commerce – Member Hapugastenna Plantations PLC- Director Udupussellawa Plantations PLC- Director Texlan (Lanka) Limited- Director Residence Pelawatte (Pvt)Limited- Director Acme Printing & Packaging PLC- Director Lanka Aluminium Industries PLC- Director Texlan Centre (Pvt)Limited- Director S.F.J.Holdings(Pvt) Limited- Director Finlays Linehaul Express(Pvt)Limited- Chairman Finlays Maldives Private Limited- Chairman Finetex(Pvt)Limited – Director

Mr. Sunil Chandra Sillapana Wickramasinghe Independent Non - Executive Director No. 75 2/1, Ward Place, Colombo 7

Milco (Pvt) Limited - Chairman

Mr. Faiz Mohideen Independent Non - Executive Director No. 5/2, Liberty Plaza Apartment, Colombo 3

Carsons Cumberbatch PLC – Director Kelani Valley Plantations PLC – Director Dipped Products PLC- Director

Mr. Anthony Nirmal Fernando Independent Non - Executive Director No. 10/2 , Gower Street, Colombo 5

Watawala Plantations PLC – Director

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4.2 PROFILES OF THE DIRECTORS Mr. Jayampathi Divale Bandaranayake Chairman/ Non –Executive Director Mr. Bandaranayake is a Graduate in Law, a Fellow of the Institute of Personnel Management, Sri Lanka (FIPM), the Institute of Chartered Secretaries and Administrators of Sri Lanka and a Fellow of the Institute of Certified Chartered Professional Managers (CPM). He has served as a Chairman of the Ceylon Chamber of Commerce and the Employers’ Federation of Ceylon and also functioned as the Chairman/Director General of the Board of Investment (BOI) of Sri Lanka. Mr. Eranjith Harendra Wijenaike Managing Director Mr. Wijenaike holds a Bachelor’s Degree in Commerce and a Postgraduate Diploma in Finance and Management. He is a Member of the Chartered Institute of Management (UK). He served as a Founder Director of Nations Trust Bank PLC for a period of 12 years and retired in December 2011. He has over 30 years of experience. Mr. Gerad Shamil Niranjan Peiris Executive Director Mr. Peiris is a Fellow of the Institute of Chartered Accountants of Sri Lanka, Institute of Credit Management & Society of Certified Management Accountants – Sri Lanka, Chartered Institute of Management Accountants, British Institute of Management and Association of Corporate Treasurers – UK. He is also a Chartered Global Management Accountant. He possesses over 34 years of post-qualification management experience. Mr. Ravindra Erle Rambukwelle Executive Director Mr. Rambukwelle holds a Bachelor’s Degree in Economics and Political Science from the University of Peradeniya, a Diploma in Marketing from the Chartered Institute of Marketing - UK and a Diploma in Commerce from the Institute of Commerce- UK. He has over 33 years of management experience, both locally and internationally.

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Mr. Arjuna Kapila Gunaratne Executive Director Mr. Gunaratne is a Fellow of the Institute of Chartered Accountants of Sri Lanka and the Chartered Institute of Management Accountants of UK. He is also a Chartered Global Management Accountant. Mr. Dhammika Prasanna de Silva Executive Director Mr. Silva is an Associate Member of the Chartered Institute of Management Accountants (UK) and has also completed all examinations of Chartered Financial Analyst (CFA) programme. He is also a Chartered Global Management Accountant. He served as the Chairman of the Leasing Association of Sri Lanka from 2007 to 2009. Mr. Chandima Lalith Kumara Perera Jayasuriya Non - Executive Director Mr. Jayasuriya is a Fellow Member of the Chartered Institute of Management Accountants, UK (FCMA) and the Association of Chartered Certified Accountants, UK (FCCA), and also a Chartered Global Management Accountant. He is also the immediate past Chairman of the Employers’ Federation of Ceylon. Mr. Sunil Chandra Sillapana Wickramasinghe Independent Non - Executive Director Mr. Wickramasinghe possesses 29 years of experience at Nestlé, holding various positions in the fields of Technical, Sales, Marketing and General Management in Sri Lanka and abroad. He served as an Executive Director at Nestlé Sri Lanka, prior to leaving for Australia in 2005 to take up appointment as Sales Director for Nestlé Pacific Islands and later on General Manager – Nestlé Papua New Guinea. He has wide exposure to sales and marketing especially in emerging markets such as India, Sri Lanka, Maldives and Malaysia. Mr. Faiz Mohideen Independent Non - Executive Director Mr. Mohideen holds a M.Sc. in Econometrics from the London School of Economics and a B.Sc. in Mathematics from the University of London. He was a former Deputy Secretary to the Treasury and Director General, External Resources Department, Ministry of Finance and Planning. He served on the Boards of Bank of Ceylon, Securities and Exchange Commission of Sri Lanka and Pelwatte Sugar Company PLC.

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Mr. Anthony Nirmal Fernando Independent Non-executive Director Mr. Fernando is a Fellow of the Institute of Chartered Accountants of Sri Lanka and holds an MBA in Finance, and Industrial and Corporate Strategy from IMD Business School, Lausanne, Switzerland. He was in public practice with KPMG Sri Lanka for 28 years since 1975 where he was the Senior Partner from 2008 to 2012 managing a large portfolio of clients both local and multinational in various industries. He was a Council Member of the Employers’ Federation of Ceylon and Fair Trading Commission. He has served as the Chairman of Finance Steering Committee of the Central Cultural Fund.

4.3 DIRECTORS’ STATEMENT No Director or a person nominated to become a Director of the Company is or was involved in any of the following events:

A petition under any bankruptcy laws filed against such person or any partnership in which he was

a partner or any corporation of which he was an executive officer; and Conviction for fraud, misappropriation or breach of trust or any other similar offence which the CSE

considers a disqualification

4.4 DIRECTORS’ INTEREST IN SHARES OF THE COMPANY Directors’ shareholding as at 31st March 2013:

Name of Directors Number of Ordinary

Voting Shares Held Shareholding

Percentage (%)

Mr. J. D. Bandaranayake Nil Nil Mr. E. H. Wijenaike 16,164,123 15.41% Mr. G. S. N. Peiris 1,828,168 1.74% Mr. R. E. Rambukwelle 984,906 0.94% Mr. A. K. Gunaratne 835,274 0.80% Mr. A. N. Fernando Nil Nil Mr. D. P. de Silva 103,850 0.10% Mr. C. L .K. P. Jayasuriya Nil Nil Mr. S. C. S. Wickramasinghe Nil Nil Mr. F. Mohideen Nil Nil

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4.5 DIRECTORS’ INTEREST IN ASSETS

Name of Directors Company Relationship Nature of

Transaction Rentals Received

Balance Outstanding as at

01.04.12 to

31.12.12 LKR ‘000

01.04.11 to

31.03.12 LKR ‘000

31.12.12

LKR ‘000

31.03.12

LKR ‘000

Mr. J.D.Bandaranayake Mr. C.L.K.P.Jayasuriya

Finlays Colombo PLC

Director

Hire of vehicles

2,245

2,994

(11)

-

Chairman

Mr. C.L.K.P. Jayasuriya

Hapugastenna Plantations PLC

Director

Hire of vehicles 12,123 16,069 25 11

James Finlay Plantations Holdings(Pvt) Ltd.

Chairman

Hire of vehicles - 359 - -

Udupussellawa Plantations PLC

Director

Hire of vehicles 4,305 4,036 - -

Ceylon Chamber of Commerce

Committee Member

Hire of vehicles 982 2,204 7 130

Lanka Aluminium Industries PLC

Director

Hire of vehicles 1,459 - 40 -

Finlays Rentokil Ceylon (Pvt)Ltd.

Chairman

Finance lease

facility 504 735 451 955

Acme Printing & Packaging PLC

Director

Finance lease

facility 587 754 169 756

Apart from the information set out above, the Directors of Central Finance Company PLC hold no interest in acquisition, disposal, or lease of any asset of Central Finance Company PLC during the past two years preceding the Issue and have not proposed to acquire, dispose or lease any asset of Central Finance Company PLC, during the two years succeeding the Issue.

4.6 DIRECTORS’ INTEREST IN CONTRACTS OR ARRANGEMENTS

There are no contracts or arrangements in force in which a Director of CFIN is materially interested in relation to the business of the Company as at the date of the Prospectus.

4.7 DIRECTORS’ EMOLUMENTS

The aggregate emoluments including bonus and/or profit sharing payments made to Directors during the last completed financial year (FY 2011/12) was LKR 92.08 Million.

The aggregate emoluments including bonus and/or profit sharing payable to the Directors for the financial year ending 31st March 2013 is estimated at LKR 101.68 Million.

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5.0 CORPORATE MANAGEMENT

5.1 CHIEF EXECUTIVE OFFICE/ MANAGING DIRECTOR Mr. Eranjith Harendra Wijenaike – Chief Executive Office/ Managing Director

Please find the profile of Mr. Wijenaike in the Section 4.2

The Chief Executive Officer/Managing Director or a person nominated to become the Chief Executive Officer/ Managing Director of the Company is or was not involved in the following events: A petition under any bankruptcy laws filed against such person or any partnership in which he was a

partner or any corporation of which he was an executive officer; Conviction for fraud, misappropriation or breach of trust or any other similar offence which the CSE

considers a disqualification.

5.2 PROFILES OF THE CORPORATE MANAGEMENT

(a) Mr. G.S. N. Peiris – Director (Finance) FCA, FCMA (UK), FCMA, FBIM (UK), FCT (UK), FICM, FCPM, CGMA

Please find the profile of Mr. Peiris in the Section 4.2 (b) Mr. R. E. Rambukwella – Director (Marketing and Operations)

BSc, Dip in Mkt (UK), FCIM, Dip. in Com.

Please find profile of Mr. Rambukwella under the Section 4.2 (c) Mr. A. K. Gunaratne– Director (Group Co-ordination)

FCA, FCMA (UK), CGMA

Please find the profile of Mr. Gunaratne in the Section 4.2 (d) Mr. D. P. de. Silva – Director (Credit)

ACMA (UK). CGMA, Completed all examinations of CFA

Please find the profile of Mr. Silva in the Section 4.2 (e) Mr. U. B. Elangasinha - General Manager (Finance)

FCA

Mr. Elangasinha is a Fellow of the Institute of Chartered Accountants of Sri Lanka. He possesses over 33 years of experience in finance and accounting.

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(f) Mr. I. M. J. B. Illangakoon – General Manager (Branches) AICM (SL)

Mr. Illangakoon is an Associate Member of Institute of Credit Management of Sri Lanka. He possesses over 39 years of experience in administration and branch operations.

(g) Mrs. H. S. Fernando - General Manager (Internal Audit) MBA (University of Colombo), FCMA (UK), CGMA, ACCA

Mrs. Fernando is a Fellow of Chartered Institute of Management Accountants of UK and holds an MBA from the University of Colombo. She possesses over 23 years of experience in finance and auditing.

(h) Mr. M. K. Fernando - General Manager (Human Resources and Development)

BA (Econ), MA (International Relations)

Mr. Fernando holds a BA in Economics and a MA in International Relations. He possesses over 25 years of experience in human resources management.

(i) Mr. C. K. Hettiarachchi - Deputy General Manager (Credit & Product Development)

MBA (University of Wales), ACMA (UK), CGMA

Mr. Hettiarachchi is an Associate Member of Chartered Institute of Management Accountants of UK and holds an MBA from the University of Wales. He possesses over 14 years of experience in banking and finance. 

(j) Mr. B. A. C. K. Jayawardena - Deputy General Manager (Recoveries)

Mr. Jayawardena possesses over 22 years of experience in banking and financial services.

(k) Mr. A. F. Goonetillake – Senior Assistant General Manager (Marketing Services) Dip. in Marketing (UK), MCIM (UK), Dip in IDPM(UK)

Mr. Goonetillake possesses over 31 years of experience in marketing and sales.

(l) Mr. S. Ekanayake - Senior Assistant General Manager (Fleet Management)

Mr. Ekanayake possesses over 38 year of experience.

(m) Mr. S. Tennekoon - Senior Assistant General Manager (Sales)

Mr. Tennekoon possesses over 39 years of experience in marketing and sales. (n) Mr. A. P. B. Rajanayake – Senior Assistant General Manager (Deposits)

Mr. Rajanayake possesses over 32 years of experience in finance, audit and deposit operations.

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(o) Mr. G. A. R. De Zoysa - Senior Assistant General Manager (IT) BSc (Hons) University of Manchester Metropolitan (UK), Dip. in Computer System Design – NIBM, MBA - University of Sri Jayewardenepura

Mr. Zoysa holds a BSc (Hons) from the University of Manchester Metropolitan (UK) and an MBA from the University of Sri Jayewardenepura. He possesses over 25 years of experience in information technology and information system management.

(p) Mr. G. A. Bandaranayake - Senior Assistant General Manager (Credit)

Mr. Bandaranayake possesses over 30 years of experience in credit evaluation and appraisal. (q) Mr. C. S. Hettiarachchi – Senior Assistant General Manager (Recoveries & Acquired Asset

Management) MBA (University of Sri Jayewardenepura), LLB (University of Colombo), Attorney-at-Law

Mr. Hettiarachchi is an Attorney-at-Law and holds a LLB from the University of Colombo. He also holds an MBA from the University of Sri Jayewardenepura. He possesses over 12 years of experience in banking and financial services

(r) Mr. H. K. Amarasinghe - Assistant General Manager (Audit)

MCIA (UK), MIBK (UK), MAAT (UK), ASCA (UK), MBIM

Mr. Amarasinghe possesses over 40 years of experience in accounting and auditing.

(s) Mr. C. A. Goonawardene - Senior Regional Manager (Region 1) BSc (University of Peradeniya), AICM (SL) BMS (Open University of Sri Lanka)

Mr. Goonawardene holds a BSc from the University of Peradeniya and a BMS from the Open University of Sri Lanka. He possesses over 28 years of experience in regional branch operations.

(t) Mr. H. G. Wijeratne – Senior Regional Manager (Region 4)

Mr. Wijeratne possesses over 30 years of experience in branch operations. (u) Mr. D. M. Warnakulasuriya - Assistant General Manager (Recoveries)

Mr. Warnakulasuriya possesses over 25 years of experience

(v) Mr. M. A. M. Farook - Assistant General Manager (IT) BSc (Hons) University of London Guildhall (UK), Dip. in Computer System Design NIBM

Mr. Farook holds a BSc (Hons) Degree from the University of London Guildhall (UK). He possesses over 20 years of experience in information technology and information system management.

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(w) Mr. K. Kandeepan - Assistant General Manager (Finance) ACA, ACMA (UK), CGMA

Mr. Kandeepan is an Associate Member of the Institute of Chartered Accountants of Sri Lanka and an Associate Member of the Chartered Institute of Management Accountants of UK. He possesses over 10 years of experience in finance and treasury operations.

5.3 EMOLUMENTS OF THE CORPORATE MANAGEMENT

The aggregate emoluments including bonus and/or profit sharing payments made to the Corporate Management for the financial year ended 31st March 2012 was LKR 108.00 Million.

The aggregate emoluments including bonus and/or profit sharing payable to the Corporate Management for the financial year ending 31st March 2013 is estimated at LKR 123.43 Million.

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6.0 STATUTORY DECLARATIONS

6.1 STATUTORY DECLARATION BY THE DIRECTORS

We, the undersigned who are named herein as Directors of Central Finance Company PLC hereby declare and confirm that we have read the provisions of CSE Listing Rules and of the Companies Act No. 7 of 2007 and any amendments thereto relating to the issue of the Prospectus and those provisions have been complied with. This Prospectus has been seen and approved by us and we collectively and individually accept full responsibility for the accuracy of the information given and confirm that after making all reasonable enquiries and to the best of our knowledge and belief, there are no other facts the omission of which would make any statement herein misleading or inaccurate. Where representations regarding the future performance of the Company have been given in the Prospectus, such representations have been made after due and careful enquiry of the information available to the Company and making assumptions that are considered to be reasonable at the present point in time in our best judgment.

Name of Directors Designation Date Place Signature

Mr. J. D. Bandaranayake (Alternate Director - Mr. F. Mohideen)

Chairman/Non-Executive Director

29th May 2013 Colombo Sgd.

Mr. E. H. Wijenaike Executive Director 29th May 2013 Colombo Sgd.

Mr. G. S. N. Peiris Executive Director 29th May 2013 Colombo Sgd.

Mr. R. E. Rambukwelle Executive Director 29th May 2013 Colombo Sgd.

Mr. A. K. Gunaratne Executive Director 29th May 2013 Colombo Sgd.

Mr. D. P. de Silva Executive Director 29th May 2013 Colombo Sgd.

Mr. C. L. K. P. Jayasuriya Non-Executive Director 29th May 2013 Colombo Sgd.

Mr. F. Mohideen

Independent Non-Executive Director 29th May 2013 Colombo Sgd.

Mr. S.C.S. Wickramasinghe Independent Non-Executive Director 29th May 2013 Colombo Sgd.

Mr. A. N. Fernando Independent Non-Executive Director

29th May 2013 Colombo Sgd.

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6.2 STATUTORY DECLARATION BY FINANCIAL ADVISORS AND MANAGERS TO THE ISSUE We, NDB Investment Bank Limited, of No. 40, Navam Mawatha, Colombo 02 being the Financial Advisors and Managers to the Issue of Central Finance Company PLC, hereby declare and confirm that to the best of our knowledge and belief based on the information provided to us by the Company, the Prospectus constitutes full and true disclosure of all material facts about the Issue and Central Finance Company PLC. The Common Seal of, NDB Investment Bank Limited affixed on the 29th day of May 2013 at Colombo in the presence of two Directors. Sgd. Sgd. Director Director

6.3 STATUTORY DECLARATION BY THE COMPANY An application has been made to the CSE for permission to deal in and for a listing for Debentures issued by the Company and those Debentures which are the subject of this Issue. Such permission will be granted when Debentures are listed on the CSE. The CSE assumes no responsibility for the correctness of any of the statements made or opinions expressed or reports included in this Prospectus. Listing on the CSE is not to be taken as an indication of the merits of the Company or of the Debentures issued. The Common Seal of Central Finance Company PLC affixed on this 29th day of May 2013 at Colombo in the presence of two Directors. Sgd. Sgd. Director Director

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7.0 FINANCIAL INFORMATION

7.1 ACCOUNTANT’S REPORT AND FIVE YEAR SUMMARY OF FINANCIAL STATEMENTS

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