mahaweli coconut plantations ltd

Mahaweli Coconut Plantations Ltd

Introductory Document

Listing of Thirty Three Million Eight Hundred and Thirty Two Thousand Two Hundred and Eighty Five (33,832,285) Ordinary Voting Shares on the Diri Savi Board of the

Colombo Stock Exchange through an Introduction

Managers to the Introduction

Corporate Advisory & Capital Markets Division

Level 18, Bank of Ceylon Merchant Tower No 28, St Michael’s Road Colombo 3.

INTRODUCTORY DOCUMENT

This Introductory Document is dated 21st May 2019

This Introductory Document has been prepared by Merchant Bank of Sri Lanka & Finance PLC (MBSL) on behalf of Mahaweli Coconut Plantations Limited (the Company) from the information supplied by the Company, its Directors, its management and such other information which is publicly available. The Company and its Directors having made all reasonable inquiries, confirm that to the best of their knowledge and belief, the information contained herein is true and correct in all material respects and that there are no other material facts, the omission of which would make any statement herein misleading. While MBSL has taken reasonable care to ensure full and fair disclosure, MBSL does not assume responsibility for any investment decision made by the investors based on the information contained herein. In making investment decisions, prospective investors must rely on their own examination and assessments of the Company, including the risks involved.

No person is authorized to give any information or make any representation not contained in this Introductory Document pertaining to the Listing of Shares of the Company and if given or made, any such information or representation must not be relied upon as having been authorized by MBSL or the Company.

The Company’s Auditors/ Reporting Accountants have given their written consent for inclusion of their name and for inclusion of their Reports and Financial Statements in the form and context in which it is included in the Introductory Document.

The Company’s Lawyers, Registrar, Secretaries and Bankers have given their written consent for inclusion of their names in the Introductory Document. The Company’s Valuation Surveyors of Timber Stumpage have given their written consent for inclusion of their name and for inclusion of their Reports in the form and context in which it is included in the Introductory Document.

The Managers to the Introduction have given their written consent for inclusion of their name and for inclusion of their Research Report in the form and context in which it is included in the Introductory Document.

This Introductory Document has not been registered with any authority outside Sri

Lanka. Non-resident investors may be affected by the laws of the jurisdictions 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 their investment.

The Colombo Stock Exchange (CSE) has taken reasonable care to ensure full and fair disclosure of information in this Introductory Document. However, the CSE assumes no responsibility for the accuracy of the statements made, opinions

expressed or reports included in the Introductory Document and does not regulate the pricing of the Share which is decided solely by the Issuer.

The delivery of this Introductory Document shall 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 Introductory Document

If you are in any doubt regarding the contents of this document or if you require any advice in this regard, you should consult your Stock Broker, Bank Manager, Lawyer or any other

Professional Advisor.

Definitions / Abbreviations and Interpretations In this Introductory Document the following Definitions/ Abbreviations and Interpretations apply, unless the subject or context otherwise requires.

Articles of Association Articles of Association of Mahaweli Coconut Plantations Limited

Bn Billion

BOI Board of Investment of Sri Lanka

Company /MCPL Mahaweli Coconut Plantations Ltd

CDS Central Depository System (Pvt) Limited

CSE Colombo Stock Exchange

GOSL Government of the Democratic Socialist Republic of Sri Lanka

Reference Price LKR 13.00 per Ordinary Voting Share of the Company, which is the initial listing price of the Shares to be listed by way of an Introduction

LKR Sri Lankan Rupees

MBSL Merchant Bank of Sri Lanka & Finance PLC

Mn Million

SEC Securities & Exchange Commission of Sri Lanka

Shares Ordinary Voting Shares of the Company

SME Small and Medium Enterprise

Working Day Any day (other than a Saturday, Sunday or any statutory holiday) on which the Banks are open for business in Sri Lanka

TABLE OF CONTENTS

1 Corporate Information 1 2 Information pertaining to the Introduction 3

2.1 Listing of Shares of Mahaweli Coconut Plantations Limited 3 2.2 Reference Price 3

2.2.1 Quantitative factors 4 2.2.2 Qualitative factors 5 2.3 Specific Risks Relating to the Listing 5 2.4 Risk related to the Business of the Company 5 2.5 Cost of the Listing 6 2.6 Inspection of Documents 7 3 Coconut Industry 8

3.1 Global Coconut Industry 8 3.2 Sri Lanka Coconut Industry 9 3.3 Teak Industry in Sri Lanka 11 3.4 Global Perspective of Global Teak Industry 12 4 An Overview of the Company 12

4.1 Historical Background 12 4.2 Achievements during the past 21 years 13 4.3 Stated Capital and Shareholding Structure 15 4.4 Details of Shares issued during the preceding two years 15 4.5 Top Ten shareholders as at 15March 2019 16 4.6 Top ten Public Shareholders as at 15 March 2019 16 4.7 Group Structure 17 4.8 Details of Debentures issued during the preceding two years 17 4.9 Details of Locked-In Shares 17

4.10 Other Shares or Securities 19 4.11 Transferability of Shares 20 4.12 Takeover Offers 20 4.13 Future Strategies 20 4.14 Assumptions Associated with Future Strategies 21 4.15 Litigation, Disputes and Contingent Liabilities 21

4.16 Details of Benefits Paid to Promoters 21 4.17 Details of Commissions/ Brokerage paid 21 4.18 Dividend Policy 22 4.19 Financial Statements and Particulars of Debt and Loan Capital 22 4.20 Degree of Dependence on Key Customers and Suppliers 23 4.20 Material Contracts 23

5 Directors 24 5.1 The Board of Directors of the Company as at date 24 5.2 Directors’ Remuneration 27 5.3 Directors’ Shareholdings in the Company 27 5.4 Directors’ Involvement in Litigation and Offences 28 5.5 Directors’ or Promoters’ Interests in properties 28 6 Human Resource 28

6.1 Employees 28 6.2 Chief Executive Officer 29 6.3 Senior Management 29 6.4 Remuneration of the Senior Management 30 7 Corporate Governance Practices 31 8 Declaration by the Directors 32

Annexure

I UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED

31DECEMBER 2018

II AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018

III AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2017

IV AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016

V FIVE YEAR SUMMARY

VI RESEARCH REPORT BY MANAGERS TO THE INTRODUCTION

VII TEAK PLANTATION VALUATION REPORT

1 Mahaweli Coconut Plantations Limited – Introductory Document

1. Corporate Information

The Company Mahaweli Coconut Plantations Limited

Registered Address &

Contact Nos.

No 1/82, Kimbulapitiya Road Bolawalana, Negombo Tel :031-4924553/031-4936163, Fax:031-2233304, E mail : [email protected]

Company Registration

Number P B 191

Date, Place and Authority

of Incorporation

A Limited Liability Company incorporated in Sri Lanka on 29th October 1996 under the Companies Act No.17 of 1982 and re-registered on 6th February 2008 under the Companies Act No. 7 of 2007

Directors

Mr. Senarath Dias Widhanaralalage Asitha Gunasekera – Chairman, Non-Executive Non-Independent Director Mr. Joseph Felix Fernandopulle – Managing Director, Executive Non-Independent Director Mr.Munaweera Aratchige Chithral Hilarian Munaweera - Non-Executive Independent Director Mr.Nissanka Bandara Weerasekera - Non-Executive Independent Director Prof. Thiththalapitige Sunil GaminiFonseka - Non-Executive Independent Director Mr. Samankumara Dias Senerath Gunesekera, Non-Executive Non-Independent Director Mr. Ashok Jerom Shamendra Jayakody, Non-Executive Non-Independent Director Mr. Gamamedaliyange Joseph Lalith Neomal Perera, Non-Executive Non-Independent Director Mr. Madurawalage Don John Pradeep Nilantha Perera, Non-Executive Non-Independent Director Mr. Sunil Jayalath Watawala, Non-Executive Non-Independent Director


Company Secretary

Mr Kodisinghe Aratchige Lakshman Rupasinghe No 85, Senanayake Avenue, Nawala, Rajagiriya. Tel : 011 – 2815655, Tel/Fax: 011- 2824415

Auditors /Reporting

Accountants

Kreston MNS & Co Chartered Accountants 50/2, Sir James Peiris Mawatha, Colombo 02 Tel : 011- 2323571-3/Fax : 011-2433388

Lawyers

Paul Ratnayeke Associates International Legal Consultants, Solicitors and Attorneys –at-Law No.59, Gregory’s Road, Colombo 07. Tel. (+94) 11 2688844-6 Fax (+94) 11 2688410 E mail [email protected]

Bankers

Commercial Bank of Ceylon PLC Negombo Second Branch, No. 314,Colombo Road, Negombo. Tel : 031-2225280, 031-2228131 Fax: 031-2225281

Managers to the

Introduction

Merchant Bank of Sri Lanka & Finance PLC Corporate Advisory & Capital Markets Division Level 18, Bank of Ceylon Merchant Tower No 28, St Michael’s Road Colombo 3. Tel : 11 4711711 Fax : 11 4711741


2. Information pertaining to the Introduction

2.1 Listing of Shares of Mahaweli Coconut Plantations Limited

This Introductory Document is published for the purpose of obtaining a listing for the Thirty Three Million Eight Hundred and Thirty Two Thousand Two Hundred and Eighty Five (33,832,285) Ordinary Voting Shares of the Company on the Diri Savi Board of the Colombo Stock Exchange.

An application has been made by the Company to the CSE for permission for a listing of the said Thirty Three Million Eight Hundred and Thirty Two Thousand Two Hundred and Eighty Five (33,832,285) Ordinary Voting Shares being the entirety of the Issued and Paid up Ordinary Shares represented in the Stated Capital of the Company by way of an Introduction and in principal approval of the CSE has been received by the Company for the listing of such shares on the “Diri Savi Board” of the CSE.

2.2 Reference Price

The Reference Price of Sri Lanka Rupees Thirteen (LKR 13.00) per Ordinary Voting Share of the Company was determined by the Company in consultation with the Managers to the Introduction, Merchant Bank of Sri Lanka & Finance PLC based on the Research Report dated 15th March2019. Since MCPL has no close CSE listed substitutes and we have taken Renuka Foods PLC (COCO) & Renuka Agri Foods PLC (RAL,) Market PER & PBV for a relative valuation purpose. But these valuation methods exhibit a broad variation.

A summary of the valuation results are given below:

Valuation Method Value as at 31 December

2018 (LKR)

Value per Share as at 31

December 2018 (LKR)

Liquidation Value - Net Asset Based Value 548,050,895 16.20

PBV Approach (MCPL vs. Sector) 224,700,867 6.64

PBV Approach (MCPL vs. ASPI) 646,700,056 19.11

PER Approach (MCPL vs. Sector) 276,748,091 8.18

PER Approach (MCPL vs. ASPI) 469,253,793 13.87

Based on the above valuation methods, value of the Company’s Ordinary Voting Shares is within the likely range of LKR 6.64 to LKR 19.11 per share can be justified. Given the Company’s business fundamentals and the industry dynamics, we believe MCPL Shares would have a fair value of c. LKR 13.00 per share. Hence, the reference price of LKR 13.00 per share can be considered fair and reasonable for trading purposes at the Colombo Stock Exchange.

A copy of the said Research Report is attached to this Introductory Document – Annexure VI

THE INVESTORS SHOULD READ THE FOLLOWING SUMMARY WITH THE RISK FACTORS INCLUDED ON PAGE NO 4-6 AND THE DETAILS ABOUT THE ENTITY AND ITS FINANCIAL STATEMENTS INCLUDED IN THIS INTRODUCTORY DOCUMENT.


2.2.1 Quantitative factors

The quantitative factors that were considered by the Managers to the Introduction, Merchant Bank of Sri Lanka & Finance PLC when arriving at the reference price tabled below. The detail calculations provided in Research Report (Annexure VI) of this Introductory Document.

For the Period Ended Net Assets

value Per Share of MCPL

Earnings Per Share of MCPL

Return on Equity (ROE) of

MCPL

P/E at the Reference Price

(X) 31 March 2016 (Audited) 13.99 0.36 2.58% 36.11 31 March 2017 (Audited) 16.07 2.16 13.47% 6.02 31 March 2018 (Audited) 15.87 3.46 21.80% 3.76 * 31December 2018 (Unaudited) 16.20 1.44 8.87% 9.03 *Q3-31December2018 earnings are annualized for calculation of Earnings Per Share, ROE & P/E assuming company will continue

its current operations on ‘as-is’ basis

PER(X) and PBV(X) of the Sector is as given below using the market information

The comparable ratios of entities which are to some extent similar in business are given below, as per the latest audited financial statements for the year ended 31st March 2018 and using the market data as at 31stMarch 2018;

Company Net Assets value

per Share (NAVPS) **

Earnings Per Share (EPS) ** PBV (X) PER (X)***

Renuka Foods PLC (COCO) 28.76 (0.76) 0.56 n/a Renuka Agri Foods PLC (RAL) 4.73 (0.03) 0.49 n/a Source – CSE and Peer company financial reports ** NAVPS and EPS – derived from the Annual report for the financial year ended 31 March 2018 published on the CSE *** PER(X) – Since both companies recorded a Loss for the year ended 31st March 2018, P/E ratio is not meaning full. PBV (X) & PER (X) are calculated using the closing prices of the respective companies as at 31st March 2018.

The comparable ratios of entities which are to some extent similar in business are given below, as per the latest unaudited financial statements for the period ended 31st December 2018 and using the market data as at 31st December 2018;

Company Net Assets value

per Share (NAVPS) **

Annualized Earnings Per

Share (EPS) ** PBV (X) PER (X)***

Renuka Foods PLC (COCO) 34.29 2.6133 0.41 5.32 Renuka Agri Foods PLC (RAL) 5.00 0.3466 0.42 6.06 Source – CSE and Peer company financial reports ** NAVPS and EPS – derived from the quarterly financials for the period ended31st December2018 published on the CSE *** PER(X) – Earnings are annualized for the calculation assuming company will continue its current operations on ‘as-is’ basis. PBV (X) & PER (X) are calculated using the closing prices of the respective companies as at 31st December 2018.


2.2.2 Qualitative factors

The qualitative factors considered in arriving at the Reference Price are disclosed in Section 4.0 of the Introductory Document.

2.3 Specific Risks Relating to the Listing

There are no specific risks related to the listing except for the risks mentioned below;

Nonexistence of prior market for the Shares: Prior to the listing there has been no public market for the Company’s Shares. There can be no assurance that an active trading market for the Shares will develop or if developed, will be sustained, or that the market price of the Shares shall not decline below the Reference Price. The Reference Price may not be indicative of the market price for the Company’s Shares after completion of the listing.

Price volatility in the secondary market: The price of the Shares may fluctuate due to and not limited to the following: variations in operating results, changes in operating environment, transitions in the regulatory front, strategic alliances or acquisitions, industrial or environmental laws, fluctuations in the market prices for products or raw materials, macroeconomic factors and external events. Price of Shares may follow general investor sentiment prevalent in the market at a given time. In addition, the price of the Shares in the market will fluctuate as a result of share trading volumes.

2.4 Risk related to the Business of the Company

Climate Change

The change in weather pattern would result in loss of revenue since the weather conditions are becoming more and more unpredictable globally due to the effects of climate change. As a result the production of Coconut becomes more vulnerable to the changing weather conditions. This will have a negative impact on the cost of production. Further, extreme weather conditions could result in natural disasters, which would disrupt the production process and cause physical damages to fields.

Production Risks

Production risks relate to the possibility of yield or output levels will be lower than projected. Major sources of production risks arise from adverse weather conditions such as drought, freezes, or excessive rainfall at harvest or planting stage. Production risks may also result from damage due to insect pests and disease despite control measures employed, and from failure of equipment and machinery such as an irrigation pump.

Coconut plantations are affected by different pests and diseases. Some major epidemics have been observed in past years. For example in 2006, a leaf wilt disease (a phytoplasma disease)


spread over the southern part of Sri Lanka (Wijesekara & Fernando, 2013). Nearly 336,000 coconut palms were affected by the disease (Pathiraja et al., 2013) and most of these palms were removed to prevent the spread of the disease to other parts of the country. This adversely affected coconut production in that area.

Land fragmentation Risk

The breakup of coconut plantations into smaller blocks and the use of this land for alternative uses are known as coconut land fragmentation. Increasing population pressure has aggravated the situation so that the comparative profitability of keeping land in coconut production has been reduced. A law to control fragmentation was passed in 2005 in an effort to keep more land in coconut production and to address nut scarcity in the long term (Central Bank of Sri Lanka, 2005; Marawila et al., 2011; Weerawardana et al., 2013). But illegal land fragmentation or changes in the government policy may lead to insufficient available lands for coconut cultivation in future and reduce the output.

The industry is promoting coconut home gardening as a measure to increase output and partially satisfy the domestic culinary demand, as well as more efficient use of culinary nuts or the production of products such as coconut paste, coconut milk and milk powder that can be substituted for fresh nuts. However, the willingness of consumers to make or purchase these products is unclear.

Escalation of Cost of Production

The increase in cost of inputs and difficulties in achieving economies of scale would have a negative impact on the cost of production. The cost of other inputs would include cost relating to wages, fertilizer, energy, pesticides and expenses related to field maintenance. The increases in local energy prices and fertilizer costs could have a significant contribution towards the total cost of production.

2.5 Cost of the Listing

The total costs associated with the listing are estimated to be approximately LKR 1.5 million. These include all direct costs and expenses associated with the listing, inclusive of but not limited to the Initial Listing Fees to the CSE, Management fees payable to the Managers to the Introduction, printing costs of the Introductory Document, etc. The costs will be recovered from the internally generate funds of the Company.


2.6 Inspection of Documents

The Introductory Document, the Articles of Association of the Company will be available on the website of the CSE, www.cse.lk, and website of the managers to the Introduction, www.mbslbank.com, for a period of not less than seven (07) market days prior to the submission of the Deceleration referred to in Appendix 2D of the Listing Rules and not less than fourteen (14) market days from the date of submission of the aforesaid Deceleration as stipulated in Rule 3.4.11(a) (i) of the CSE listing rules. The research report prepared by Managers to the Introduction, Merchant Bank of Sri Lanka & Finance PLC justifying the Reference Price (Annexure VI) will be available on the website of the CSE, www.cse.lk, and website of the managers to the Introduction, www.mbslbank.com, for a period of two (02) months from the date of granting approval in principle for the listing of shars of the Company by the CSE as stipulated in Rule 3.4.11 (a) (ii) of the CSE Listing Rules. The Articles of Association of the Company, the Audited Financial Statements of the Company for the Financial Years ended on 31stMarch 2013, 2014, 2015, 2016, 2017& 2018and Unaudited Financial Statements of the Company for the period ended 31stDecember 2018 and all other documents pertaining to the Company to which references are made in this Introductory Document could be inspected by the public during normal working hours at the Registered Office of the Company for a period of not less than Seven (7) Market Days prior to the submission of the Declaration by the Company to the CSE and for a period not less than Fourteen (14) Market Days from the date of submission of such declaration.

Mahaweli Coconut Plantations Limited

3. Coconut Industry

3.1 Global Coconut Industry

Coconut is a popular plantation and is grown in more than 90 countries worldwide. Though it is quite difficult to establish a coconut plantation but once it is done, it proves to be quite beneficial as coconut is harvested througho55 million tonnes annually. (Source: Coconut Industry in a Nut shell, Report by Dr S. Sudalaimuthu,

P.Senthilkumar and B.Sivakumar)

fruits in the world.

Source - https://www.tridge.com/intelligences/coconut/production Coconut fruit is categorised into two basic varieties according to the type of palm tree bearing the fruit.

1. Tall variety— The tall variety of coconut is slow growing. The tree produces fruits six to 10 years after plantation, which is comparatively late as compared to the other variety. The tree remains productive even at the age of 80 to 120 years and produces good quality copra, oil and other products. The fruits of the palm mature in 12 months.

2. Dwarf variety—The fruits from the dwarf or short variety of palm tree are fast growing, i.e.

the tree starts producing fruits in four to five years time. The dwarf variety of coconpalm has a relatively short productive age. The fruit may be of variable colours such as yellow, red, green and orange.

Today, the top coconut suppliers are struggling to meet the increasing demands of the global economy. Coconut has been a cash crop vegetable oils, it promises to continue to be a profitable venture in the future. Nonetheless, the top global coconut producers must learn from the current situation, and take steps to ensure that their farms are sustainable enough to stand the tests of time and meet future demands.

Mahaweli Coconut Plantations Limited – Introductory Document

Global Coconut Industry

Coconut is a popular plantation and is grown in more than 90 countries worldwide. Though it is quite difficult to establish a coconut plantation but once it is done, it proves to be quite beneficial

harvested throughout the year. The world production of coconut sums up to around (Source: Coconut Industry in a Nut shell, Report by Dr S. Sudalaimuthu,

P.Senthilkumar and B.Sivakumar) Indonesia and Philippines are the major producers of coconut

https://www.tridge.com/intelligences/coconut/production

Coconut fruit is categorised into two basic varieties according to the type of palm tree bearing the

tall variety of coconut is slow growing. The tree produces fruits six to 10 years after plantation, which is comparatively late as compared to the other variety. The tree remains productive even at the age of 80 to 120 years and produces good quality

a, oil and other products. The fruits of the palm mature in 12 months.

The fruits from the dwarf or short variety of palm tree are fast growing, i.e. the tree starts producing fruits in four to five years time. The dwarf variety of coconpalm has a relatively short productive age. The fruit may be of variable colours such as yellow, red, green and orange.

Today, the top coconut suppliers are struggling to meet the increasing demands of the global economy. Coconut has been a cash crop for decades and, even with stiff competition from other vegetable oils, it promises to continue to be a profitable venture in the future. Nonetheless, the top global coconut producers must learn from the current situation, and take steps to ensure that

ir farms are sustainable enough to stand the tests of time and meet future demands.

8

Coconut is a popular plantation and is grown in more than 90 countries worldwide. Though it is quite difficult to establish a coconut plantation but once it is done, it proves to be quite beneficial

ut the year. The world production of coconut sums up to around (Source: Coconut Industry in a Nut shell, Report by Dr S. Sudalaimuthu,

Indonesia and Philippines are the major producers of coconut

Coconut fruit is categorised into two basic varieties according to the type of palm tree bearing the

tall variety of coconut is slow growing. The tree produces fruits six to 10 years after plantation, which is comparatively late as compared to the other variety. The tree remains productive even at the age of 80 to 120 years and produces good quality

a, oil and other products. The fruits of the palm mature in 12 months.

The fruits from the dwarf or short variety of palm tree are fast growing, i.e. the tree starts producing fruits in four to five years time. The dwarf variety of coconut palm has a relatively short productive age. The fruit may be of variable colours such as

Today, the top coconut suppliers are struggling to meet the increasing demands of the global for decades and, even with stiff competition from other

vegetable oils, it promises to continue to be a profitable venture in the future. Nonetheless, the top global coconut producers must learn from the current situation, and take steps to ensure that

ir farms are sustainable enough to stand the tests of time and meet future demands.


‘Fair Trade’ practices in the industry try to ensure that the benefits of the booming sector will trickle all of the way down to small farmers, but they unfortunately keep the production rates rising at a slower rate. Lack of investment in sustaining the coconut-growing land’s productivity, largely due to the high costs associated mean that some farms are producing 75% less fruit than they did 30 years ago. The problem of insufficient supply to meet the increased demand is not helped by the fact that many of the trees producing coconuts today are over 50 years old, 20 years past their prime production years. According to APCC (the Asian and Pacific Coconut Community), many plantations across Asia are experiencing zero growth, and some are even ceasing production as their farmers switch their focus to oil palm production 3.2 Sri Lanka Coconut Industry

The coconut industry is an important source of foreign exchange earning & employment generation for Sri Lanka. A total of 1,088,377 Acres are under coconut cultivation of which 173,974 Acres are under estate sector and 914,403 Acres in under small holdings. An area of 15,658 Acres are used for cultivation of king coconut. The coconut sector employs around 850,000 people in all parts of Sri Lanka. Approximately two third of the coconut production in Sri Lanka is consumed locally and the balance one third is used for coconut based industries and exported to various destinations as value added products. (Source: Coconut Development Authority) Sri Lanka has earned foreign exchange earnings worth of US$ 548 Million by exporting coconut and coconut based products in 2016. Sri Lanka has a comparative advantage in this sector due to its legacy & geographical location, skilled labour, modern and indigenous technologies for processing. Sri Lanka is ranked as the 2nd largest exporter of brooms and brushes, 3rd largest exporter of desiccated coconut and coconut oil and 7th largest exporter of activated carbon according to the world rankings in year 2016.(Source: Industry Capability Report, by Export Development Board (EDB), Sri Lanka, June, 2017) The players in the coconut industry are coconut growers, Desiccated coconut manufactures, Copra manufactures, Coconut oil manufactures, Coconut water, milk and cream manufactures, Fiber millers, and Shell charcoal manufactures, Value added fiber Product manufactures, Activated carbon manufactures, suppliers, traders and Exporters. West and North Western provinces are mainly the coconut intensive areas – otherwise known as the “Coconut Triangle”. Three main districts in coconut production are Kurunegala, Puttlam and Gampaha. Other than coconut triangle there are coconut mini triangle (from down south Kalutara to Tangalle) and second coconut triangle in the Northern Province centred on Jaffna, Mannar and Mulative district. The Coconut Development Authority is a premier government institution involved in the development of this sector in Sri Lanka. They run capacity building and hand holding programs for farmers as well as processors in the areas of Farming practices, new product development and market linkages. They also operate an auction system for coconut enabling the farmers get a better return on their produce.


The Export Development Board (EDB) is the apex state organization responsible for the development and promotion of Sri Lankan exports. The EDB takes a leading role in the development and export promotion of the Sri Lankan coconut industry by implementing various programmes. International trade fair participation, facilitate B2B promotions and organizing inward and outward buyer/seller missions, assistance for exporters own marketing efforts and promoting company brands in overseas by Market Development Assistant Scheme (MDA). EDB is also extending assistance to resolve constrains and issues faced by the Sri Lankan exporters. Sri Lanka is amongst the top sourcing destinations for coconut based products in the world due to the following factors:

o ISO and HACCP certified production facilities for coconut kernel based products such as desiccated coconut, coconut milk powder, coconut milk etc.

o Environment friendly cultivation/ manufacturing practices. o Ethical practices - known to the world as a producer of “No child labour” o Organic certified coconut farms o Technology unique for Sri Lanka for some products o Experience over 3 decades

Total exports of products in selected categories

(Source: Industry Capability Report, by Export Development Board (EDB), Sri Lanka, June, 2017)

2014 (US$ Mn)

2015 (US$ Mn)

2016 (US$ Mn)

Desiccated Coconut 149 100 120Coconut Milk Powder 28 26 29Liquid Coconut Milk 14 18 24Coconut Cream 6 9 9Copra 7 1 2Virgin Coconut Oil 24 42 42Coconut - Fresh 1 2 3

Coconut Fibre(Bristle, Mattress & Mixed) 50 34 30Coconut Husk Chips 7 8 10Coco peat & Fibre Pith 82 84 105Coir Twine & rope 9 7 8Coir Yarn 2 2 1Brooms & Brushes 13 12 12Moulded Coir Products to be used in Horticulture 32 31 40Geotextiles 5 4 4Floor Covering of Coconut Fibre - Mats & rugs 6 5 4

Activated Carbon 84 74 75Shell Charcoal 5 5 3

KERNAL PRODUCTS

FIBRE PRODUCTS

COCONUT SHELL PRODUCTS

Product Label


Teak Plantation Segment of the Company

Company (MCPL) planted Teak on the boundaries on either side of the raised water channel and as a wind belts at various intervals in every field of coconut plantations of an estate over 550 Hectares. These teaks planted within a period of 15-17 years as wind belts at regular intervals in two rows approximately 8ft apart with gravity fed irrigation. As per the company audited financials for the year ended 31st March 2018, company has a teak plantation valued for LKR 103,800,000/- by Sunil Fernando & Associates (Pvt) Ltd, Chartered Valuation Surveyors by using the Discounted Cash flow method.The detail valuation attached as Annexure-VII in this Introductory Document.

During the financial year ended 31 March 2018 Company has made a gain on fair valuation of Teak Plantation of LKR 38.80 Million which is an increase of 155.26% compared to the previous year gain on fair valuation of Teak Plantation of LKR 15.20 Million. Gain on fair valuation of Teak Plantation is approximately 33% of the net profits for the year financial year 31 March 2018. This value is increased mainly due to the increase in volumes of trees with merchantable girths. Company has a plans to sell the teak trees over 40" girth size in the coming financial years and to get an Income to the company.

3.3 Teak Industry in Sri Lanka Teak (Tectona grandis) is a tropical hardwood species and is a large, deciduous tree that occurs in mixed hardwood forests. It is particularly valued for its durability and water resistance, and is native to south and southeast Asia, mainly India, Sri Lanka, Indonesia, Malaysia, Thailand, Myanmar and Bangladesh but is naturalised and cultivated in many countries in Africa and the Caribbean. This was introduced to Sri Lanka by Dutch 17thcentury.

In Sri Lanka a cubic metre of teak logs costs around LKR 30,000. The value of a well grown teak tree of 20 years is around LKR 15,000 - 20,000. Although there is a demand for teak in the world, it can be cultivated only in small areas of equatorial countries such as Burma, Malaysia, India, Sri Lanka and some parts of South America. In Sri Lanka, Dambulla, Anuradhapura, Puttalam, Batticaloa and Polonnaruwa are the most suitable areas for teak plantation. Soil conditions make the trees grow rapidly.

Teak is found in a variety of habitats and climatic conditions from arid areas with only 500 mm of rain per year to very moist forests with up to 5,000 mm of rain per year. Typically, though, the annual rainfall in areas where teak grows averages 1,250-1,650 mm with a 3-5 month dry season. In Sri Lanka Teak in mainly found in dry zone and intermediate zone.

Due to its remarkable qualities, including being resistant to rot, fungus, termites and fire, teak has an established role in the production of many high-end products. It is commonly used as the hardwood of choice to make top-quality outdoor furniture known to last for centuries. Additionally, teak is the preferred wood used in the production of boats, specifically to make the decks. In Sri Lanka market Teak is commonly used in furniture and housing projects.

Please refer Section 7 and Annexure I of the Teak Plantation valuation report for further details of the Teak plantation in Sri Lanka and Teak trees.

(Sources: http://www.sadaharitha.com/products/teak/ & http://www.sundaytimes.lk/000813/plus7.html)


3.4 Global Perspective of Global Teak Industry

Southeast Asia is the original birthplace of teak and naturally where the largest concentrations of native teak forests are located. As a result, this region is considered incredibly valuable and important in the teak industry.

There are only 4 countries in the world that have natural teak forests: Thailand, India, Laos and by far the largest Myanmar (former Burma). All of these countries have recently placed bans on the logging of teak from natural forests, mostly as a reaction to the severe over-logging of natural teak forests that has been occurring in the past several years.

India is by far the most important market for teak and teakwood products. The vast majority of the world’s teak supply ends up within the borders of India. The U.S. Forestry Department 2010 Teak Resource and Market Assessment report, noted that “11 out of 14 reporting countries name India as their number 1 importer, absorbing 70% to 100% of global teak exports.”

This massive importation of teak is despite the fact that India is one of only four countries in the entire world where teak grows naturally. However, due to excessive logging of teak in India, starting during the British rule in the 19th century and continuing until the mid 20th century, a ban was placed on the logging of Indian teak in 1980. Since then, India has become the world’s most significant importer of teak.

Over the past 2 decades, Latin America has emerged as a major player in the production of teak trees. Although traditionally not a major producer of teak, the region has recently experienced a massive increase in the amount of cultivated lands used specifically for teak production. This is due to the ideal growing conditions that are present in Latin America for growing teak.

Panama is an especially important nation for the growing of teak, being the second largest teak producer in Latin America after Brazil, and the largest in Central America. (Source: http://eciaffiliate.com/wp-content/uploads/2017/11/Teak-Resource-Guide.pdf)

4. An Overview of the Company

4.1 Historical Background

Mahaweli Coconut Plantations Limited (MCPL) is a Limited Liability Company domiciled in Sri Lanka incorporated on 29 October 1996 under the Companies Act No.17 of 1982 and was re-registered on 6 February 2008 under the Companies Act No. 7 of 2007. In mid Nineties, a Group of Entrepreneurs who were involved in desiccated coconut processing industry had the foresight to observe that the country could face a severe shortage of coconuts in the future as there was no national level strategy for development of plantations. Such timely thinking brought about some fruitful dialogue with the policy makers who were wise enough to recognize the need of the hour and to set up a company to undertake a mega plantation project (Located in Pimburettewa, Aralaganwilain the Polonnaruwa District, 551.38 Hectares Leasehold land and the Lease terminating in end November 2028) using uncultivated land in Mahaweli zone. Although the original intention was to set up a private-public joint venture, it finally turned out to be a limited liability company incorporated under the blessings of the Government, whose

Mahaweli Coconut Plantations Limited

capital was generated from a fund created by a contribution from a Cess collected from all desiccated coconut exporters. Accordingly, such Cess funds collected at the export released to MCPL, through the Coconut Development Authority with the details of such exporters, which formed the share capital of MCPL and those exporters became shareholders of the Company in proportion to their export volumes. Current Business Activities

Presently MCPL harvesting an annual crop of 04 Million to 05 Million coconuts which are being sold to Sri Lankan companies for manufacture of Desiccated Coconuts, Coconut Cream, Coconut Milk and Coconut Water solely for export purposes.breakers are now growing satisfactorily and expect to harvest within the next five years. The Objects for which the Company is established are:

To take over land and building on lease or on any other mode from the Authority

To take over all rights powers privileges and interest arising out of the properties To cultivate, grow, produce coconut and all types of agricultural produce, plants, trees,

bushes and crops; and to carry out any research or developmenin connection therewith

To rear, breed and farm livestock and any other living organisms. To improve, manage, develop, make use of and in any manner whatsoever exploit land,

other movable property, resources of land, water resou To market, sell, distribute and export the products of the Company

4.2 Achievements during the past 21 years:

Since its incorporation in 1996, MCPL had been successful in developing over 1,300 acres of bare land in to a fullyfledged coconut plantation, making it one of the biggest in its kind (if not the biggest) in Sri Lanka. The Company records a mark of appreciation to its past and present members of the Board of Directors under the guidance of the Past Chairman Mr. Sunil Watawala, for all such achievements. One of the biggest challenges faced by the Company is securing sufficient water to plantation areas, sinthe dry zone where the rainfall is scarce. Considerable sums had to be spent on different irrigation systems to supply sufficient water to the plants. The management of MCPL has made history by successfully facing theby introducing a “drip irrigation system”

Mahaweli Coconut Plantations Limited – Introductory Document

capital was generated from a fund created by a contribution from a Cess collected from all desiccated coconut exporters. Accordingly, such Cess funds collected at the export released to MCPL, through the Coconut Development Authority with the details of such exporters, which formed the share capital of MCPL and those exporters became shareholders of the Company in proportion to their export volumes.

Presently MCPL harvesting an annual crop of 04 Million to 05 Million coconuts which are being sold to Sri Lankan companies for manufacture of Desiccated Coconuts, Coconut Cream, Coconut Milk and Coconut Water solely for export purposes. Teak trees which were planted as wind breakers are now growing satisfactorily and expect to harvest within the next five years.

The Objects for which the Company is established are:-

To take over land and building on lease or on any other mode from the

To take over all rights powers privileges and interest arising out of the properties To cultivate, grow, produce coconut and all types of agricultural produce, plants, trees, bushes and crops; and to carry out any research or developmental projects or operations

To rear, breed and farm livestock and any other living organisms. To improve, manage, develop, make use of and in any manner whatsoever exploit land, other movable property, resources of land, water resources, wind power and solar power.To market, sell, distribute and export the products of the Company

Achievements during the past 21 years:

Since its incorporation in 1996, MCPL had been successful in developing over 1,300 acres of bare land in to a fully-fledged coconut plantation, making it one of the biggest in its kind (if not the biggest) in Sri Lanka. The Company

iation to its past and present members of the Board of Directors under the guidance of the Past Chairman Mr. Sunil Watawala, for all such achievements. One of the biggest challenges faced by the Company is securing sufficient water to plantation areas, since the Mahaweli lands are situated in the dry zone where the rainfall is scarce. Considerable sums had to be spent on different irrigation systems to supply sufficient water to the plants. The management of MCPL has made history by successfully facing the challenge of water scarcity by introducing a “drip irrigation system” consultation with an Israel Company, which already had

13

capital was generated from a fund created by a contribution from a Cess collected from all desiccated coconut exporters. Accordingly, such Cess funds collected at the export point were released to MCPL, through the Coconut Development Authority with the details of such exporters, which formed the share capital of MCPL and those exporters became shareholders of the

Presently MCPL harvesting an annual crop of 04 Million to 05 Million coconuts which are being sold to Sri Lankan companies for manufacture of Desiccated Coconuts, Coconut Cream, Coconut

Teak trees which were planted as wind breakers are now growing satisfactorily and expect to harvest within the next five years.

To take over land and building on lease or on any other mode from the Mahaweli

To take over all rights powers privileges and interest arising out of the properties To cultivate, grow, produce coconut and all types of agricultural produce, plants, trees,

tal projects or operations

To improve, manage, develop, make use of and in any manner whatsoever exploit land, rces, wind power and solar power.

ce the Mahaweli lands are situated in the dry zone where the rainfall is scarce. Considerable sums had to be spent on different

challenge of water scarcity consultation with an Israel Company, which already had


the technology in place, experts visited the project and introduced drip irrigation systems to major part of the plantation, which is the first of its kind in Sri Lanka.(Source: http://archives.dailynews.lk/2011/09/29/bus30.asp) Being a hardship location, retaining quality manpower had also been a challenge to the management. Despite all such hardships MCPL had been successful in reaching its targets. Summary Key Financial & Ratios

Note: During the financial year ended 31 March 2017 company has made an exceptional growth in the Turnover, this is due to the fact that the trees were somewhat matured and the yield from these tress were higher during this period and there were higher rates for coconuts in the local &world market, this increase the sales revenue by 117.5% to LKR 181.67 Million.

31.03.2013 31.03.2014 31.03.2015 31.03.2016 31.03.2017 31.03.2018

Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Turnover 65,393,651 91,663,310 133,032,051 83,533,190 181,675,017 212,930,998 98,642,930

Gross Profit 37,552,016 57,886,136 73,293,507 12,975,993 70,683,137 106,458,551 33,929,778

Operating Profit 29,089,941 51,694,692 53,803,329 11,256,068 70,101,945 140,754,832 30,785,652

Profit / (Loss) before Taxation 24,645,132 48,343,484 51,748,865 11,005,974 72,760,408 153,093,326 36,463,701

Profit / (Loss) for the year 24,311,132 40,600,485 47,244,250 9,715,842 65,727,585 117,390,219 36,463,701

Total comprehensive income for the year 24,311,132 40,600,485 47,244,250 10,954,410 65,645,490 117,074,599 36,463,701

Total Non-Current Assets 377,218,044 402,908,461 398,691,434 386,150,267 373,876,870 413,317,835 392,523,009

Total Current Assets 27,256,796 48,540,779 81,289,758 84,302,043 160,561,348 198,663,705 225,019,255

Total Assets 404,474,841 451,449,239 479,981,192 470,452,310 534,438,218 611,981,540 617,542,264

Shareholders Funds 351,158,927 387,210,578 426,873,437 424,181,343 487,289,384 536,961,407 548,050,895

Total Non-Current Liabilities 33,060,408 39,062,798 33,603,306 28,777,971 26,941,653 52,875,482 53,363,155

Total Current Liabilities 20,255,507 25,175,864 19,504,449 17,492,996 20,207,181 22,144,651 16,128,214

Total Liabilities 53,315,915 64,238,662 53,107,755 46,270,967 47,148,834 75,020,133 69,491,369

Unaudited for Q3

ended 31.12.2018

Audited Financials for the Period ended

31.03.2013 31.03.2014 31.03.2015 31.03.2016 31.03.2017 31.03.2018

Turnover Growth % n/a 40.2% 45.1% -37.2% 117.5% 17.2%

Profit Growth % n/a 67.0% 16.4% -79.4% 576.5% 78.6%

Gross Profit Margin % 57.4% 63.2% 55.1% 15.5% 38.9% 50.0%

Net Profit Margin % 37.2% 44.3% 35.5% 13.1% 36.1% 55.0%

Earnings Per Share (EPS) 0.80 1.34 1.56 0.36 2.16 3.46

Net Asset Value Per Share (NAVPS) 11.58 12.77 14.08 13.99 16.07 15.87

Current Assets Ratio (Times) 0.51 0.76 1.53 1.82 3.41 2.65

Return on Equity (ROE) 6.92% 10.49% 11.07% 2.58% 13.47% 21.80%

Return on Assets (ROA) 6.01% 8.99% 9.84% 2.33% 12.28% 19.13%

Audited Financials for the Period ended


4.3….Stated Capital and Shareholding Structure

As at date of this Introductory Document, the Stated Capital of the Company is Sri Lanka Rupees Three Hundred and Fifty Five Million Six Hundred and Twenty Two Thousand Two Hundred and Thirty (355,622,230) comprising Thirty Three Million Eight Hundred and Thirty Two Thousand Two Hundred and Eighty Five (33,832,285)fully paid up Ordinary Shares.

Each Ordinary Voting Share of the Company shall confer on the holder of such shares, the right to one vote on a poll at a meeting of the Company on any resolution, the right to an equal share in any dividends declared to Ordinary Voting Shareholders of the Company and in the event of liquidation of the Company the right to an equal share in any surplus assets of the Company available for distribution to ordinary shareholders after paying all the creditors of the Company and all other claims and debts in accordance with the provisions contained in the Companies Act No. 7 of 2007 and the Articles of Association of the Company. All these Ordinary Voting Shares are irredeemable.

4.4 Details of Shares issued during the preceding two years

Date Type of Issue No of Shares

Issued Price

Stated Capital

(LKR)

Total Number of

Ordinary Shares

26-Sep-17 Script Dividend 1,705,760 16.00 325,405,876 32,031,323

22-Feb-18 Offer for Subscription 100,000 13.00 326,705,876 32,131,323

15-Mar-18 Script Dividend 1,700,962 17.00 355,622,230 33,832,285

a. The Company has issued 1,705,760 Ordinary Voting Shares to the Shareholders in the

proportion of 1:17.7783293 at a price of LKR 16 per share as script dividend on 26 September 2017.

b. Pursuant to making an Offer for Subscription of 100,000 Ordinary Voting Shares of the Company at a Price of LKR 13 per Share in terms of the Prospectus issued by the Company dated 11 December 2017, the Company has issued 100,000 Ordinary Voting Shares of the Company @ LKR 13 per share on 22 February 2018 to the general public and the money raised through this in company’s current account for future use. The main objective of the Offer for Subscription was to increase the number of shareholders of the Company in order to seek a subsequent listing of the shares of the Company on the Colombo Stock Exchange (CSE) through an Introduction.

c. The Company has issued 1,700,962 Ordinary Voting Shares to the existing shareholders in

the proportion of 1:18.89 at a price of LKR 17 per share as script dividend on 15 March 2018.

31 March

2017

26 September

2017

22 February

2018 15 March 2018

31 March

2018

Stated Capital (LKR) 298,113,716 325,405,876 326,705,876 355,622,230 355,622,230

Number of Ordinary Shares 30,325,563 32,031,323 32,131,323 33,832,285 33,832,285


Name of the Transferor Name of the Transferee No. of shares

Date of transfer

Cyril Bernadene Asoka Jayakody Jayakody Mills (Pvt) Ltd 319,507 05-12-2017 Polity (Pvt) Ltd Hettige Don Lionel Appuhamy 134,559 24-05-2018 Polity (Pvt) Ltd Thimothy Mary Gnanasothi Fernandopulle 67,280 24-05-2018 Polity (Pvt) Ltd Chrishan Anthony Fernandopulle 67,280 24-05-2018 Except the above mentioned transactions, there were no any shares redeemed or transferred or repurchased or any reduction of stated capital in terms of Section 59 of the Companies Act during the preceding two years. 4.5 Top Ten Shareholders as at 15th March2019

Name of Shareholder No of Shares % of Holdings

1 Dunagaha Coconut Producers Co-op Society Ltd 1,577,593 4.66% 2 Silvermill Holdings Ltd 1,490,329 4.41% 3 Sanhinda Mills (Pvt) Ltd 1,443,234 4.27% 4 P.P. Suresh Fernando 1,295,090 3.83% 5 H.D.P.D.Sanjeewa Samaranayaka 941,804 2.78% 6 Beligala Coconut Products (Pvt) Ltd 891,723 2.64% 7 Sunil Jayalath Watawala 852,521 2.52% 8 Shantha Kumara Wickremarachchi 843,283 2.49% 9 S.A.Silva & Sons Lanka (Pvt) Ltd 841,670 2.49%

10 D.M.S. Wickremesinghe Gunawardena 768,729 2.27% Total 10,945,976 32.35%

The above mentioned shareholding structure has remained unchanged upto the date of this Introductory Document. 4.6 Top Ten Public Shareholders as at 15th March2019

Name of Shareholder No of Shares % of Holdings 1 Dunagaha Coconut Producers Co-op Society Ltd 1,577,593 4.66% 2 Silvermill Holdings Ltd 1,490,329 4.40% 3 Sanhinda Mills (Pvt) Ltd 1,443,234 4.26% 4 P.P. Suresh Fernando 1,295,090 3.82% 5 H.D.P.D.Sanjeewa Samaranayaka 941,804 2.78% 6 Shantha Kumara Wickremarachchi 843,283 2.49% 7 S.A.Silva & Sons Lanka (Pvt) Ltd 841,670 2.48% 8 D.M.S. Wickremesinghe Gunawardena 768,729 2.27% 9 J.A.S.N. Jayasinghe 744,928 2.20%

10 Swanee Mills Ltd 733,114 2.16%

Total 10,679,774 31.56% Top 3 Public Shareholders of the company holds 4,511,156 shares which is 13.33% out of Total issued number of shareholding and 15.51% out of Total public shareholding.


4.7 Group Structure

The Company does not have any subsidiary or any associate Companies as at date.

4.8 Details of Debentures issued during the preceding two years

The Company has not issued or agreed to issue any Debentures to any person or entity during the two (02) years proceeding to the issue of this Introductory Document. 4.9 Details of Locked-In Shares

Category of Shareholders (Pre-Listing)

Locked-in Shares

The months after which shares will be available for trading

Number of Shares

Number of shares as a percentage of the total

number of shares in issue Non-Public Share

Holders Locked-in 6 months from the date of Listing 4,168,872 12.3222%

Non-Public Share Holders Locked-in 6 months from the date of Listing

or 12 months from the date of transfer of shares whichever is

longer

319,507 0.9444%

Public Share Holders Locked-in 269,119 0.7955%

Public Share Holders

Not Locked-in - 29,074,787 85.9380%

Total 33,832,285 100.00% The above 33,832,285 Ordinary Voting Shares consist of 209 Shareholders comprising 12 Non-Public shareholders and 197 Public shareholders. Further the Company hereby confirms that the information furnished herewith shall remain unchanged upto the date of listing and during the past one year there was no any share transfers have taken place except the share transfers mentioned below. Details of the share transfers before and after the submitting of Initial Listing Application (ILA)

Name of the Transferor

Name of the Transferee

No. of shares

Date of transfer

Share Transfer Locked-In

Period Before

Submitting ILA

After Submitting

ILA Cyril Bernadene Asoka Jayakody

Jayakody Mills (Pvt) Ltd 319,507 05/12/2017 319,507 nil 6 months

from the date of

listing or 12 months

from the date of

transfer of shares,

whichever is longer

Polity (Pvt) Ltd Hettige Don Lionel Appuhamy 134,559 24/05/2018 nil 134,559

Polity (Pvt) Ltd Thimothy Mary Gnanasothi Fernandopulle

67,280 24/05/2018 nil 67,280

Polity (Pvt) Ltd Chrishan Anthony Fernandopulle 67,280 24/05/2018 nil 67,280

Total 588,626 319,507 269,119


Details of the shareholders as at 15th March 2019 After Share transfers

No of Shareholders No of Shares % Public Shareholders 197 29,074,787 85.9380% Non-Public Shareholders 12 4,757,498 14.0620%

Currently company is not in compliance with the CSE listing rule 2.1.1 (ii) (c), the extent of the minimum number of public shareholders. In this regard company has made a request on letter dated 06th August 2018 with respect to a waiver on 2.1.2.(ii) (c) of the CSE Listing rules and received a waiver from CSE considering the public shareholder percentage which is currently 85.9380%and undertaking given by the company to ensure compliance with the public holding requirement set out in Rule 7.13 (1) (b) of the CSE listing rules on a continuous basis upon the company being listed on the Diri Savi board of the CSE. If the company is non-compliant with the continuous public holding rules (pursuant to listing), that the company shall be bound by the applicable enforcement rules set out in the CSE listing rules. “Non Public Shareholders”, shall mean the following parties who hold, directly or indirectly, shares of the Company;

a) its parent, any subsidiary or associate companies or any subsidiaries or associates of its parent company; b) its Directors who are holding office as directors of the Company and their close family members; c)the Chief Executive Officer of the Company and his/her close family members; d)the Key Management Personnel of the Company and their close family members; e)any party acting in concert with the parties set out in a), b), c) and d) above; f)the Shareholders whose shares are in a locked account with the CDS due to a statutory or regulatory requirement other than those shareholders exempted under (h) below and whose shares have been subject to a voluntary lock-in at the option of the shareholder g)the Employees of the Company, who have been allotted shares of the Company which are directly or indirectly controlled by the management or the majority shareholder of the Company h)any Entity or an individual or individuals jointly or severally holding 5% or more of the shares of the Company, if the Company is a Diri Savi Board Company and 10% or more of the shares of the Company, if the Company is a Main Board Company, except where such shareholder is;

i. a statutory institution managing funds belonging to contributors or investors who are members of the public; or ii. an entity established as a unit trust or any other investment fund approved by the SEC; or iii. not a related party in terms of Sri Lanka Accounting Standards or a party acting in concert in terms of the Company Takeovers and Mergers Code of Sri Lanka.

‘Close Family Member’ shall mean the spouse or a financially dependent child.


‘Key Management Personnel’ shall mean those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company. “Public Shareholders” shall mean any party who hold Shares of the Company other than the parties identified as ‘Non Public Shareholders’ abovementioned.

Details of Non Public Shareholders as at 15th March2019

Name No of Shares % of Holdings J.F. Fernandopulle 733,639 2.1685% Samankumara Dias Senarath Gunasekara 11,122 0.0329% G.J.L. Neomal Perera 751,869 2.2223% M.D.J.P. Nilantha Perera 271,176 0.8015% Sunil Jayalath Watawala 852,521 2.5198% Beligala Coconut Products (Pvt) Ltd 891,723 2.6357% Jayakody Mills (Pvt) Ltd 450,123 1.3305% Senarath Dias Widhanaralalage Asitha Gunasekera 1,052 0.0031% Hewage Tilaka Rohini Gunasekara 1,052 0.0031% Jayanee Nilushika Perera 2,105 0.0062% Ashok Jerom Shamendra Jayakody 45,012 0.1330% Boyagane DC Mills (Pvt) Ltd 476,985 1.4100% Total 4,488,379 13.2666%

All the above Shareholders are Directors, their Close Family members and related companies of the directors. 4.10……Other Shares or Securities

The Company has not issued any convertible debt securities or any other class of shares other than the shares stated above. Further there are no securities of the same or other class subscribed or sold privately in conjunction with this listing by Introduction.

The Company has received a sum of LKR 18,456,506/= from the CESS fund as an advance payment for allotment of shares for Desiccated Coconut Exporters. The company’s original share capital was raised by imposition of additional CESS of LKR 1.00 imposed on every Kg of Desiccated Coconut exported from 01st March 1998 to 28th February 2001 and 01st April 2005 to 31st March 2008. The Shares were allotted to the individuals based on their production (100% of production is exported and is monitored by the Coconut Development Authority - this scheme was passed by the cabinet, passed in parliament and gazetted) and the originally shares were allotted on the basis of LKR 10/= per Share. The balance of LKR 18,456,506/= outstanding is the amount pertaining to certain DC factories based on production. However, upto now the Company has not allotted/ issued any shares for the said amount due to lack of details of such Desiccated


Coconut Exporters/beneficiaries. However the company doesn’t have any impact if they not allot any shares and under no circumstances these amounts will be refunded.

The Company may issue/ allot shares for the said amount upon a request being made by the Coconut Development Authority together with the required information pertaining to such Desiccated Coconut Exporters/beneficiaries. The allotment of shares will be made after the listing of a company in the CSE and in compliance with the applicable listing rules and other applicable regulations. The consideration shall be fair and reasonable to the Company and to all shareholders and may be decided based on the original Share issue price of LKR 10.00 or the Net Asset Value of the company whichever is higher.

4.11……Transferability of Shares

Upon the Ordinary Shares of the Company being listed on the CSE, notwithstanding anything to the contrary contained in the Articles of Association of the Company, the shares listed on the CSE shall be freely transferable and the registration of the transfer of such listed shares shall not be subject to any restriction, save and except to the extent required for compliance with statutory and regulatory requirements. As per the regulations issued under the Foreign Exchange Act No.12 of 2017 of Sri Lanka, Country Funds, Regional Funds, Investment Funds and Mutual Funds established outside Sri Lanka and Corporate Bodies incorporated outside Sri Lanka, Foreign Citizens and Sri Lankan citizens resident outside Sri Lanka may acquire or hold only upto 40% of the stated capital of the Company subject to compliance with the Rules and Regulations applicable thereto. 4.12……Takeover Offers

There have been no takeover offers by third parties in respect of the Company’s shares during the past two years and no takeover offers have been made by the Company in respect of shares of third parties during the past two years. 4.13……Future Strategies

No major changes are expected in the business operations of the Company, the company always looking into opportunities to expand the company’s business and to diversify its operations to plant other cash crops to supplement the Income of the Company when feasible. Further company have plans to improve the Irrigation System in the plantation under new technology by introducing the solar power water system to improve the drip irrigation at a cost around LKR 8.5 million, The elephant disaster will be controlled with the assistance of Wild Life Department and erection of an elephant fence at a cost around LKR 2.5 million. The required investment will be made using internally generated funds. Quotations will be taken from the suppliers of the solar power water system and fence setup companies and work will be carried out based on the cost benefit study. Lease Agreements on land is currently in force only for a period of 30 years commencing from 01 December 1998. Arrangements will be done to extend the lease period to at least 50 years.


4.14……Assumptions Associated with Future Strategies

The above mentioned future plans are based on the following assumptions;

• There will be no significant changes in the economic, political environment and policy decisions.

• The local economy and industrial policies will not undergo any material changes which will have an adverse effect on the Coconut Industry.

• There will not be any unexpected increases in any fertilizer related cost escalations, energy cost hikes, etc.

• There will be no material impact on the Coconut Industry from adverse weather conditions and possibility of a water shortage in case of an extreme drought condition in future and restrictions will not be imposed on the maximum volume of water released from public lakes/ reservoirs.

4.15……Litigation, Disputes and Contingent Liabilities

There were no material legal, arbitration or mediation proceedings pending against the Company as at 15th March 2019 which may have or which had in the recent past any significant effects on the financial position or future operations or profits of the Company. There were no penalties imposed by any Regulatory or Statutory Authority against the Company as at 15th March 2019. As at 15th March 2019, there are no material contingent liabilities that would affect the current and future profits of the Company. There is no Litigation, Disputes and Contingent Liabilities upto the date of this Introductory Document.

4.16……Details of Benefits Paid to Promoters

No amount or benefit has been paid or given by the Company to any promoter within the two (02) preceding years and there are no amounts or benefits intended to be paid or given by the Company to any promoter within the next two (02) years, other than the shares to be issued to the Desiccated Coconut Exporters as set out in Clause 4.10 above. 4.17……Details of Commissions/ Brokerage paid

No amount has been paid by the Company to any person or entity within the two (02) preceding years or payable by the Company to any person or entity as commission or brokerage for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for any shares or Debentures of the Company.


4.18……Dividend Policy

Subject to the provisions of the Companies Act No. 7 of 2007 and the Articles of Association of the Company, the Board of Directors may recommend and declare distributions to shareholders by way of dividends from and out of the profits of the Company. The dividend rate will be determined based on number of factors, including but not limited to the Company’s earnings, capital requirements and overall financial condition particularly the liquidity situation. The dividend paid by the Company during the last five years is set out below:

Financial Year 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

Dividend per share (LKR) 0.15 0.25 0.45 0.20 2.00 * 2.75 **

* In year 2016/17 company declared LKR 60,651,126 as total dividend comprising LKR 30,325,563 by way of Cash Dividend and LKR 30,325,563 by way of Scrip Dividend, both Cash Dividend and Scrip Dividend is LKR 1 per Share.

** In year 2017/18 company declared LKR 64,262,646 as total dividend comprising LKR 32,131,323 by way of Cash Dividend and LKR 32,131,323 by way of Scrip Dividend, both Cash Dividend and Scrip Dividend is LKR 1 per Share. Also company declared further -/75 cents cash dividend as final dividend on 16th August 2018.

4.19……Financial Statements and Particulars of Debt and Loan Capital

The following Financial Information is set out in the Annexure:

• Unaudited Interim Financial Statements for the Period Ended 31st December 2018 – Annexure I

• Audited Financial Statements for the Year Ended 31 March 2018 – Annexure II • Audited Financial Statements for the Year Ended 31 March 2017 – Annexure III • Audited Financial Statements for the Year Ended 31 March 2016 – Annexure IV • Five Year Summary – Annexure V

The details of the loans, liabilities, other borrowings and indebtedness of the Company including leasing, lease purchase and hire purchase commitments, guarantees and other material contingent liabilities of the Company as at 15th March 2019.

Facility As at 15th March 2019 Lease Nil Hire purchase commitments Nil Guarantees Nil Other material contingent liabilities Nil

Other than the detail stated above, there were no term loans, hire purchase commitments, guarantees, other borrowings or indebtedness in the nature of borrowing including bank drafts and liabilities under acceptance or acceptance credit as at 15th March2019. There are no Mortgage and Charges on the assets of the Company as at date.


The Company is paying lease rental for the land in extent of 292.0283 Hectares to Mahaweli Authority of Sri Lanka for 30 years from 01 December 1998 and the lease rent is reviewed every 5 years to reflect the inflation (subject to a maximum of 50% of the lease amount paid during the previous 5 years. From 2018 the increment is 20%). The amount of lease rent payable as at 31st December2018 was LKR 9,879,670/-The lease agreement is due to expire on 30th November 2028 and the company will made arrangements to extend the lease period to at least 50 years.

4.20……Degree of Dependence on Key Customers and Suppliers

There is no material dependency on key customers and suppliers in terms of the overall business operations of the Company as there is a steady increase of demand for coconuts.

4.21……Material Contracts

The Company has not entered into any material contracts during the preceding two (02) years other than those contracts entered into as part of the ordinary course of business carried on or intended to be carried on by the Company.


5. Directors 5.1 The Board of Directors of the Company as at date

No Name Address Age

1

Mr. Senarath Dias Widhanaralalage Asitha Gunasekera Chairman, Non-Executive Non-Independent Director

No. 24, Kirulapona Road, Nugegoda 57

Brief Profile Senarath Dias Widhanaralalage Asitha Gunasekera, currently working as the Chairman Managing Director of Boyagane DC Mills(Pvt) Limited and Boyagane Apparels (Pvt) Limited. He has been employed in the coconut industry since 1984. He is a holder of BSc in Business Administration.

Name Address Age

2

Mr. Joseph Felix Fernandopulle Managing Director, Executive Non-Independent Director

No. 28A, Police Park Avenue, Colombo 05

61

Brief Profile Mr.J.F.Fernandopulle is a fellow member of the Institute of Chartered Accountants of Sri Lanka and Fellow member of Certified Management Accountants of Sri Lanka. He is the present Chairman of Richard Pieris Finance Ltd and a Director of Richard Pieris & Co Ltd. He had also worked in the capacity of Finance Director at Mahweli Coconut Plantations Ltd prior to becoming the Managing Director. He is also the Managing Partner of Kudawewa DC Mills. He has served as a Director of the Coconut Development Authority and Coconut Research Institute and has also served on the Advisory Committee on Coconut at the Ministry of Plantation Industries and Coconut Industries. He has represented Sri Lanka’s Desiccated Coconut Manufacturers Association at the Asian & Pacific Coconut Council.

Name Address Age

3

Mr.Nissanka Bandara Weerasekera, Non-Executive Independent Director

No.146/8C, Dutugemunu Street, Dehiwela

59

Brief Profile Nissanka Weerasekera is an independent Private Equity (PE) Investment Advisor. He was the Regional Managing Partner for Central and South Asia of Aureos Capital, a leading PE fund manager focusing on small and mid-cap enterprises in emerging markets worldwide, from 2003 until the merger of Aureos Capital with the Abraaj Group in 2013. He also functioned as the Group Operations Director of Aureos Capital while serving on the board of the parent company of Aureos in the UK. Nissanka started his PE career in the mid-nineties as the CEO of


the pioneer Sri Lankan venture capital firm PVIC. He is a past-President of the Venture Capital Association of Sri Lanka. He is an FCMA, has an MA in economics from the University of Colombo and a BSc (Hons) in physics from the University of Peradeniya. He is an Independent Non-Executive Director of John Keells Hotels PLC, Sunshine Holdings PLC, Watawala Plantations PLC and Hatton Plantations PLC.

Name Address Age

4

Mr.Munaweera Aratchige Chithral Hilarian Munaweera - Non-Executive Independent Director

18/15, Chitra Lane, Colombo -05

63

Brief Profile Mr.M A C H Munaweera is a holder of Master’s Degree in Business Administration (MBA) from Wayamba University Of Sri Lanka, Faculty of Business studies & Finance and completed B.Sc in Plantation Management Degree from Wayamba University of Sri Lanka, Faculty of Agriculture & Plantation Management, Makandura – Gonawila (NWP). Further he completed Diploma in Agriculture from Aquinas University College, Faculty of Agriculture & National Diploma in Plantation Management, National Institute of Plantation Management At present he is working as a Estate Development Consultant for Public Trustee Department. He was a Chief Executive Officer of Ambewela Diary Complex, Ambewela Livestock Co. Ltd., Pattipola Livestock Co. Ltd., Ambewela Products Co. Ltd. Further he held a position as Chief Executive Officer/Director in Mahaweli Livestock Enterprises Ltd and General Manager in National Livestock Development Board.

Name Address Age

5

Prof. Thiththalapitige Sunil Gamini Fonseka, Non-Executive Independent Director

Ballapana, Divulapitiya Sri Lanka.

71

Brief Profile Prof.T.S.G.Fonseka is a Professor Emeritus in Food Science & Technology, Faculty of Livestock, Fisheries & Nutrition, Wayamba University of Sri Lanka. He holds a B.Sc. from University of Colombo, M.Sc. in Microbiology from University of Kelaniya and Ph.D in Food Microbiology from University of Nottingham. He held many positions including worked as a Fish Technologist in Ministry of Fisheries, research offecier in The National Aquatic Resources Research and Development Agency (NARA), Professor of Food Technology in Rajarata University of Sri Lanka, Officer in Charge Marine Products in Quality Control Division. Served as the Acting Vice Chancellor of the Wayamba University of Sri Lanka form 16 September 2000 for a period of one month, Dean, Faculty of Agricultural Sciences, Wayamba


Campus, Rajarata University of Sri Lanka from 16.02.1999 - 03.03.2000 and Dean, Faculty of Agriculture & Plantation Management, Wayamba University of Sri Lanka, Makandura, Gonawila (NWP) from 03.03.2000 - 01.06.2001 He is a Member of Sri Lanka Association for the Advancement of Science and Founder member, Joint Secretary in the Sri Lanka Association for Fisheries and Aquatic Resources.

Name Address Age

6

Mr. Samankumara Dias Senerath Gunesekera, Non-Executive Non-Independent Director

No. 1280/4, Rajamalwatta Road, Battaramulla

59

Brief Profile Mr. S D S Gunesekera is a holder of Barrister-at-Law (ACT.) He is a Director of Beligala Coconut Products (Pvt) Ltd and Regent International Management Company. He is a former Director General of National Chamber of Exporters of Sri Lanka and former president and secretary of Sri Lanka Desiccated Millers Association.

Name Address Age

7

Mr. Ashok Jerom Shamendra Jayakody, Non-Executive Non-Independent Director

No 18C, Field View, Dankotuwa

42

Brief Profile Mr.Ashok Jerome Shamendra Jayakody, age 45.currently working as the Managing Director of Jayakody Mills (Pvt) Ltd. He has been employed in the coconut industry since 1992 counts over 26 years experience in this field.

Name Address Age

8

Mr. Gamamedaliyange Joseph Lalith Neomal Perera, Non-Executive Non-Independent Director

No 207/5, Dharmapala Mawatha, Colombo 07

53

Brief Profile Mr.Gamamedaliyanage Joseph Lalith Neomal Perera is a Sri Lankan politician, He was a Deputy Minister of External Affairs during the period of November 2010 – January 2015, Deputy Minister of Fisheries & Aquatic Resources during the period of January 2007 – January 2010 and Deputy Minister of Co-operatives & Internal Trade during the period of April 2010 – November 2010. He is a Managing partner in St.Anne’s Salt Daluwa (Pvt) Ltd, St.Anne’s Factory & St.Anne’s Enterprises.


Name Address Age

9

Mr. Madurawalage Don John Pradeep Nilantha Perera, Non-Executive Non-Independent Director

No. 65/14, Gothami Road, Borella.

48

Brief Profile Mr. Madurawalage Don John Pradeep Nilantha Perera is a holder of B.Sc. arts in Economics. He is a Partner at Baththuluoya Mills manufactures of desiccated coconut and kernel products and the Chairman of Sinha Auto Services (pvt) Ltd-Lanka IOC fuel station. He is a Former Director/Chairman at Chilaw Finance PLC.

Name Address Age

10

Mr. Sunil Jayalath Watawala, Non-Executive Non-Independent Director

No. 455/12, Main Street, Negombo

71

Brief Profile Founder Chairman and Managing Director of Mahaweli Coconut Plantations Ltd and held office for 10 years in that capacity. He is the Managing Partner of Siriyangani DC Mills and has been attached to Siriyangani DC Mills for the past 50 years. He has held office as District Governor of Lions Club 306A and was international director of the Lions International for 04 years.

5.2 Directors’ Remuneration In terms of Article 70 of the Articles of Association of the Company “The remuneration of the Directors shall from time to time be determined by the Board of Directors. Such remuneration shall be deemed to accrue from day to day. Directors may also be paid all travelling, hotel and other expenses properly incurred by them in attending and returning from meetings of Directors or any committee of the Directors or general meetings of the Company or in connection with the business of the Company.” The Company did not make any payment to its Directors from the date of incorporation till June 2018 and commenced paying from July 2018. Total remuneration paid for the Year ended 31st March 2019 was LKR 2,425,000/- and estimated total remuneration payable to the Directors for the year ended 31st March 2020 is LKR 4,200,000/-.

5.3 Directors’ Shareholdings in the Company

Name of the Director No of Shares held as at 15th March2019 %

1 Mr. Senarath Dias Widhanaralalage Asitha Gunasekera 1,052 0.0031% 2 Mr. Joseph Felix Fernandopulle 733,639 2.1685% 3 Mr. Samankumara Dias Senerath Gunesekera 11,122 0.0329% 4 Mr. Ashok Jerom Shamendra Jayakody 45,012 0.1330% 5 Mr. Gamamedaliyange Joseph Lalith Neomal Perera 751,869 2.2223% 6 Mr. Madurawalage Don John Pradeep Nilantha Perera 271,176 0.8015% 7 Mr. Sunil Jayalath Watawala 852,521 2.5198%

Total 2,666,391 7.8812%


5.4 Directors’ Involvement in Litigation and Offences

None of the Directors of the Company is or was,

involved in any 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;

Convicted for fraud, misappropriation or breach of trust or any other similar offence.

5.5 Directors’ or Promoters’ Interests in properties

None of the Promoters or Directors of the Company held or hold any interest in any assets acquired, disposed or leased by the Company during the preceding two (02) years and nor they have thus proposed to have any interest in any assets proposed to be acquired, disposed or leased by the Company during the next two (02) years.

6. Human Resource 6.1 Employees

As at 15th March 2019, there are 167 employees in the Company, as categorized below.

Category No. of Staff

Trainees 01 Semi Skills (Workers) 67 Skilled(Watchers, Pump Operators, Daily Paid Drivers) 51 Supervisory-Technical(Filed officers) 19 Admin Staff-Executive (a)Manager 01 (b)Assistant Manager 02 (c)Executive 02 (d)Junior Executive 01 Clerical & Allied (Clerks) 08 Mechanics 02 Monthly Paid Drivers 10 Circuit Keeper 01 Peons 02 Total 167

Trade Unions as at date

Trade Union Name No. of Members

Lanka Jathika Estate Workers Union 07

The Company has not entered into any agreements with the Trade Union as at date.


6.2 Chief Executive Officer Mr Joseph Felix Fernandopulle Managing Director Mr.Fernandopulle is a fellow member of the Institute of Chartered Accountants of Sri Lanka and also a fellow member of the Institute of Certified Management Accountants of Sri Lanka. He had his audit experience at M/s Satchithananda Schokman, Wijeratne & CO, Chartered Accountants. (Presently Price Waterhouse Coopers) and commenced his career at Aitken Spence Group. He is an old boy of St. Jospeh’s College, Colombo. He currently serves as Director of Chilaw Finance Ltd, Managing Director of Mahaweli Coconut Plantations Ltd, Director of Coconut Research Institute and the Managing Partner of Kudawewa DC Mills (Manufacturers of Desiccated Coconut) He is a former Director of Coconut Development Authority, Coconut Research Institute and has served in many Advisory Committees in the Ministry of Coconut Industries, Ministry of Plantation Industries and Export Development Board of Sri Lanka. He also served in the National Council for Economic Development – Coconut Cluster of the Ministry of Finance & Planning. He was a Member of Policy Analysis and Advisory Committee of the coconut sector of the Ministry of Plantation Industries – (2008 – 2009), Member of the Advisory Committee of the Ministry of Coconut Industries on Desiccated Coconut, Coconut Oil and Coconut Growing (2006 – 2007), Member of the National Council for Economic Development Coconut Cluster of the Ministry of Finance & Planning (2007– 2009), and Member of the Export Development Board Advisory Committee on Coconut Products (2006 – 2009) The Managing Director/Chief Executive Officer of the Company is not and was not,

I. Involved in 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.

II. Convicted for fraud, misappropriation or breach of trust or any other similar offence.

6.3 Senior Management

Name Designation Business Experience

Mr. W.K.S.P.WIjesinghe Manager 13 years

Mr. H.M.N.Gunadasa Assistant Manager 10 years

Mr. R.S.B.A.Godamunne Assistant Manager 02 years

Mrs. S.M.L.Pietersz Executive 10 Years

Mrs. Christina J. Joseph Fernando Executive 05 Years


6.4 Remuneration of the Senior Management

The aggregate emoluments, including all bonus and/or profit sharing payments paid to the Senior Management team during the financial year ended on 31 March 2017 was LKR 5.9Mn.

The aggregate emoluments, including any bonus and/or profit sharing payments payable for the Senior Management team is estimated as LKR 6.2Mn for the financial year ending on 31 March 2018.

7. Corporate Governance Practices The Board of Directors is responsible for the governance of the Company and is committed to business integrity and professionalism in all its activities. As part of this commitment, the Board supports the highest standards of corporate governance and development of best practices. Company is having monthly board meetings to discuss the performance of the Company and to take management decisions of the Company. All major contracts and capital expenditure are approved by the Board of Directors, further the Directors take turns in making inspection visits to the Plantation and reporting their observations /comments to the Board once in every two months.

Audit Committee

The Audit Committee undertakes on behalf of the Board responsible for ensuring integrity of the company’s financial reports by having oversight of internal control, the financial reporting process and compliance with regulatory matters. It sets out high standards of corporate disclosure, corporate responsibility, integrity and accountability to the shareholders.

The Audit Committee comprises of below Board members;

Mr.Nissanka Bandara Weerasekera Chairman - Non-Executive Independent Director

Prof. Thiththalapitige Sunil GaminiFonseka Non-Executive Independent Director

Mr. Samankumara Dias Senerath Gunesekera Non-Executive Non-Independent Director

Mr. Gamamedaliyange Joseph Lalith Neomal Perera Non-Executive Non-Independent Director

Mr.Munaweera Aratchige Chithral Hilarian Munaweera Non-Executive Independent Director


Related Party Transactions Review Committee

The Related Party Transactions Review Committee is responsible for ensuring that the interests of the shareholders are taken into account when entering in to Related Party Transactions. It further provides certain measures to prevent Directors, CEOs or substantial shareholders taking advantage of their position.

The Related Party Transactions Review Committee comprises of below Board members;

Prof. Thiththalapitige Sunil GaminiFonseka Chairman - Non-Executive Independent Director

Mr.Nissanka Bandara Weerasekera Non-Executive Independent Director

Mr. Samankumara Dias Senerath Gunesekera Non-Executive Non-Independent Director

Mr. Gamamedaliyange Joseph Lalith Neomal Perera Non-Executive Non-Independent Director

Mr.Munaweera Aratchige Chithral Hilarian Munaweera Non-Executive Independent Director

Remuneration Committee

The Remuneration Committee is responsible to the Board for recommending remuneration of the executive directors including the Chief Executive Officer, members of the executive committee and settling the board parameters of the remuneration for senior executives.

The Remuneration Committee comprises of below Board members;

Mr.Munaweera Aratchige Chithral Hilarian Munaweera Chairman - Non-Executive Independent Director

Mr. Senarath Dias Widhanaralalage Asitha Gunasekera Non-Executive Non-Independent Director

Mr.Nissanka Bandara Weerasekera Non-Executive Independent Director

Prof. Thiththalapitige Sunil Gamini Fonseka Non-Executive Independent Director

Mr. Ashok Jerom Shamendra Jayakody Non-Executive Non-Independent Director


8. Declaration by the Directors

21st May 2019

We, the undersigned being the Directors of Mahaweli Coconut Plantations Limited, hereby declare and confirm that this Introductory Document 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 inquiries 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 this document, such representations have been made after due and careful inquiry of the information available to the Company and making assumptions that are considered to be reasonable at the present point in time and according to our best judgments.

Name of the Director Designation Signature

Mr.Senarath Dias Widhanaralalage Asitha Gunasekera

Chairman, Non-Executive Director Sgd.

Mr.Joseph Felix Fernandopulle Managing Director, Executive Director Sgd.

Mr.Samankumara Dias Senerath Gunesekera Non-Executive Director Sgd.

Mr.Ashok Jerom Shamendra Jayakody Non-Executive Director Sgd.

Mr.Gamamedaliyange Joseph Lalith Neomal Perera

Non-Executive Director Sgd.

Mr.Madurawalage Don John Pradeep Nilantha Perera


Mr.Sunil Jayalath Watawala Non-Executive Director Sgd.

Mr.Nissanka Bandara Weerasekera Non-Executive Director Sgd.

Mr.Munaweera Aratchige Chithral Hilarian Munaweera


Prof. Thiththalapitige Sunil Gamini Fonseka Non-Executive Director Sgd.


ANNEXURE I:

UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2018 ANNEXURE II:

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 ANNEXURE III:

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2017 ANNEXURE IV:

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016 ANNEXURE V:

FIVE YEAR SUMMARY ANNEXURE VI:

RESEARCH REPORT BY MANAGERS TO THE INTRODUCTION ANNEXURE VII:

TEAK PLANTATION VALUATION REPORT

Annexure I - UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD

ENDED 31DECEMBER 2018

Annexure II - AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED

31 MARCH 2018

Annexure III - AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED

31 MARCH 2017

Annexure IV - AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED

31 MARCH 2016