Introductory Document - Colombo Stock Exchange

RAMBODA FALLS LIMITEDIncorporated under the Companies Act No.17 of 1982 and re-registered under Companies Act No. 07 of 2007INTRODUCTORY DOCUMENTFor obtaining the listing of 20,000,000 Ordinary Voting Shareson the Diri Savi Board of the Colombo Stock Exchange.

DECLARATIONThis Introductory Document has been prepared from information supplied by Ramboda FallsLimited (the “Company”) or which is publicly available. The Directors of the Company,collectively and individually, having made all reasonable inquiries, confirm that to the best oftheir knowledge and belief, the information contained herein is true and correct in allmaterial respects and that there are no other material facts, the omission of which, wouldmake any statement herein misleading. While the company has taken reasonable care toensure full and fair disclosure it does not assume any responsibility for any investmentdecision made by investors based on information contained herein. In making an investmentdecision, prospective investors must rely on their own examination and assessments of theCompany including the risks involved.No person is authorized to give any information or to make any representations notcontained in this Introductory Document and if given or made, any such information orrepresentation must not be relied upon as having been authorized by the Company.The Colombo Stock Exchange (CSE) has taken reasonable care to ensure full and fairdisclosure of information in this Introductory Document. However, the CSE assumes noresponsibility for the accuracy of the statements made, opinions expressed or reportsincluded in this Introductory Document.For further inquiries, please contact the Managers to the Introduction.If you are in any doubt regarding the contents of this document you should consult yourstockbroker, bank manager, lawyer or any other professional advisor.The delivery of this Introductory Document shall not under any circumstance constitute arepresentation or create any implication or suggestion, that there has been no materialchange in the affairs of the Company since the date of this Document.2 Ramboda Falls Limited – Introductory Document

ABBREVIATIONS USED IN THIS INTRODUCTORY DOCUMENTRFL or the “Company” - Ramboda Falls LimitedCDS - Central Depository Systems (Pvt) LimitedCSE - Colombo Stock ExchangeOrdinary Share(s) - Ordinary Voting Share(s) of the CompanySEC - Securities & Exchange Commission of Sri Lanka3 Ramboda Falls Limited – Introductory Document

TABLE OF CONTENTS1. CORPORATE INFORMATION .................................................................................... 062. OVERVIEW OF THE COMPANY ................................................................................. 072.1 RAMBODA FALLS LIMITED ........................................................................................... 072.2 DEPENDENCE ON KEY CUSTOMERS AND SUPPLIERS ................................................... 112.3 HUMAN RESOURCES .................................................................................................... 122.4 CORPORATE STRUCTURE ............................................................................................. 122.5 FUTURE PLANS ............................................................................................................. 122.6 MAJOR ASSUMPTIONS ON FUTURE PLANS ................................................................. 132.7 RISKS ASSOCIATED WITH FUTURE PLANS .................................................................... 142.8 COMMITMENT FROM FOREIGN INVESTORS ............................................................... 152.9 OBJECTIVES FOR LISTING AND SUBSEQUENT BENEFITS .............................................. 162.10 LITIGATION, DISPUTES AND CONTINGENT LIABILITIES.............................................. 163. SENIOR MANAGEMENT ........................................................................................... 174. THE BOARD OF DIRECTORS ...................................................................................... 195. CORPORATE GOVERNANCE ..................................................................................... 235.1 INDEPENDENT DIRECTORS ........................................................................................... 235.2 AUDIT COMMITTEE ...................................................................................................... 235.3 REMUNERATION COMMITTEE ..................................................................................... 236. CAPITAL STRUCTURE ............................................................................................... 256.1 STATED CAPITAL ........................................................................................................... 256.2 CONVERTIBLE DEBT SECURITIES .................................................................................. 266.3 SHARES SOLD PRIVATELY IN CONJUNCTION WITH THE LISTING ................................. 266.4 FREE TRANSFERABILITY OF SECURITIES ....................................................................... 266.6 SHAREHOLDERS OF RFL ............................................................................................... 277. FINANCIAL INFORMATION ....................................................................................... 287.1 RATIOS AND SHARE INFORMATION ............................................................................ 288. DECLARATION BY THE DIRECTORS ........................................................................... 29UNAUDITED FINANCIAL STATEMENTS AS AT 31 ST DECEMBER 2011 ..................................... 30AUDITED FINANCIAL STATEMENTS AS AT 31ST MARCH 2011.............................................. 30AUDITED FINANCIAL STATEMENTS AS AT 31ST MARCH 2010.............................................. 57AUDITED FINANCIAL STATEMENTS AS AT 31ST MARCH 2009.............................................. 73ANNEXURE I – MEMBERS AND TRADING MEMBERS OF THE CSE ......................................... 95ANNEXURE II – TRANSFER OF SHARES .............................................................................. 101ANNEXURE III – VALUATION REPORTS ............................................................................. 104ANNEXURE IV – EXTRACTS FROM PROJECT EVALUATION REPORT .................................... 1174 Ramboda Falls Limited – Introductory Document

Information Relevant to the IntroductionIntroduction of Ordinary Voting Shares for ListingThis Introductory Document dated 22 May 2012 is published for the purpose of obtaining a listing onthe Colombo Stock Exchange for the Ordinary Voting Shares of Ramboda Falls Limited.The shares are to be listed on the Diri Savi Board of the Colombo Stock Exchange.Collection PointsCopies of the Introductory Document may be obtained free of charge from the Managers to theIntroduction or any member firm and trading member firm of the Colombo Stock Exchange as set outin Annexure I of this Document.Inspection of DocumentsThe Introductory Document and Articles of Association of Ramboda Falls Limited will be hosted on theCSE website – www.cse.lk and Company website –www.rambodafalls.com for a period of not less thanfourteen (14) days.5 Ramboda Falls Limited – Introductory Document

1. CORPORATE INFORMATIONName of Company : Ramboda Falls LimitedLegal Form : Domiciled in Sri Lanka, the Company was incorporated as aprivate limited liability company on June 18, 1996 under theCompanies Act No. 17 of 1982.The Company was re-registered under the Companies ActNo. 07 of 2007 on 16 th October 2008.The Company was converted to a public limited liabilitycompany of 5 th September 2011, and the name changecertificate was issued under registration no. PV8234PB interms of the Companies Act. No. 07 of 2007.Company Registration No : PV8234PBPlace of Incorporation : Colombo, Sri LankaRegistered Office :76, Rock Fall State, Nuwara Eliya Road, Ramboda.Telephone No. : +94 522259582Fax No. :+94 522259653+94 522259875Board of Directors : Mr. Takashi Igarashi – ChairmanMr. Sasanka Sigera – Managing DirectorMr. Ananda KarunarathneMr. Namal GomesMr. Saman KarunarathnaMr. Ono TeruakiSecretaries to the Company : S.S.P Corporate Service (Pvt) Ltd.101, Inner Flower Road, Colombo 03Auditors to the Company : KPMG Ford Rhodes Thornton & CompanyChartered Accountants32A, Sir Mohamed Macan Marker Mawatha,Colombo 03Bankers of the Company : Hatton National Bank – Pussallawa BranchSampath Bank – Kadawatha BranchSampath Bank – Nuwara Eliya Branch6 Ramboda Falls Limited – Introductory Document

2. OVERVIEW OF THE COMPANY2.1 RAMBODA FALLS LIMITEDRamboda Falls Limited (RFL) was established in 1996, as a privately owned luxury tourist hotel, whichcaters to both local and foreign clientele, by the two major shareholders of the Company. RFL wassubsequently converted to a public limitedliability company on 05 September, 2011.The Executive Directors (who are the twomajor shareholders of RFL), along with theSenior Management carries out themanagement of the hotel. Both the hoteland land is owned by the Company.The hotel was initiated with the intention of providing a ‘rest-stop’ for travelers wanting to grab aquick meal on their way to Nuwara Eliya. The hotel is situated along the Nuwara Eliya-Kandy road,scenically located next to the cascading Ramboda Falls.The founders wishing to create a differentiated experience for visitors determined the location wasideal to build a hotel, capitalizing on the geological positioning en-route to Nuwara Eliya, the abundantnatural resources available, personalized service, and unique view of Ramboda Falls.The operation of the hotel commenced with five (05) bedrooms, a bar and restaurant with a seating capacity of 125pax, catering to local clients.In 1998, the Company obtained the Tourist Board License tooperate as an “A Grade” restaurant. Subsequently, additionalrooms were added gradually over the years to bring the roomcount to twenty (20) deluxe rooms. Expansions andmodifications to the hotel were funded through bank loansand cash infused by the two founders.7 Ramboda Falls Limited – Introductory Document

Further, an additional wing has been added to the restaurant, to increase the available seatingcapacity to 350 pax, in expectations of catering to a greater demand in time to come.The long term goal of the hotel is to create an environment of pampered luxury that surpasses allcompetition throughout the hill country.The Company has entered into contracts with travel agentsto accommodate local and foreign clientele. At present,the Company has contracts with 22 travel agents. Theseinclude leading travel agents such as Aitken SpenceTravels, Jetwing Travels, Walkers Tours and ConnaissanceTravels and Tours to name a few.Contracts with travel agents are revised annually, however in special circumstances it may be revisedbi-annually. The Company has standard fixed rates with all the travel agents. Travel agents have theoption of accepting or rejecting the rates offered for the period. Rates fixed for the period will notvary until it is revised for the next period. The Company quotes rates for both rooms and lunchmenus. Room prices are quoted in US dollars whereas the prices for lunch menu are quoted in SriLankan Rupees. Should there be a breach in the terms of agreement by either party; the Company willcease dealings with the travel agent. The total income generated from travel agent is around 30% ofthe total revenue. Therefore the maximum total detrimental impact to the Company in the eventthere is a breach in the terms of agreement with the travel agents is the loss of revenue generatedfrom travel agents. As at 31 st March 2011 the total revenue generated through travel agents was LKR11.5 million.LocationThe hotel is located in-between four waterfalls and surrounded by a tea plantation, with a lot ofgreenery. The hotel is situated 162km from Colombo, at an altitude of 3200ft, in the Nuwara Eliyadistrict.Nestled amongst Ram-Boda rock folds, the hotel has been built on 04 hectares of wooded parkland,on flat woodland projecting from the valley below. The colour scheme and architecture of the hotelhas been designed to blend with the natural surroundings. The hotel also has two natural swimmingpools formed through the water streams which flow from the waterfalls.8 Ramboda Falls Limited – Introductory Document

A visitor to Ramboda Falls Hotel will need to take a four (04) hour scenic drive from Colombo toRamboda. The hotel sits on the right hand side just passing the Ramboda Tunnel, which is one of thelongest tunnels on a roadway built by the Sri Lankan Government.AccommodationTwenty (20) deluxe rooms set in a five storey building, laid along the slanting hillsideoverlooking the cascading Ramboda Falls.Every room is equipped with two double beds or a queen bed, free satellite TV, pipe music,mini fridge, telephone, hot-cold water, personal amenities with private balcony.Two new chalets were added during the year 2010-11, with two rooms each to cater to upmarketclientele. The chalets, directly face the waterfalls, andcomprise of all modern room facilities and a private balcony.There is a great demand for these rooms especially from touristsand honeymooners.Food and LifestyleA full-service restaurant with a seating capacity of 350 pax.Bar which has indoor and outdoor seating and can hold a seating of 80 pax. The bar isstructured as a beer garden to provide visitors a sense of clustered privacy, and have a directview of the water falls.9 Ramboda Falls Limited – Introductory Document

Local garden and green house, which provides fresh vegetables for the kitchen, whilst givingguests an opportunity to do some gardening.In addition, the hotel provides the following value added services: Sufficient and secure parking Full-service laundry facilities. A 1000kg passenger elevator was added during the year 2011,connecting all five storeys from the top of the hotel to the ground level,providing customers with added convenience to navigate around thehotel.Ramboda Falls Hydro Power PlantRamboda Falls Hydro (Pvt) Limited (RFHPL), was incorporated on 9 July, 2003 under the CompaniesAct No. 17 of 1982 and re-registered on 25 August, 2008 under Companies Act No. 07 of 2007. RFHPLwas granted the permit for a mini hydro power plant project, adjoining the hotel premises for acapacity of 1.2MV by the Sustainable Energy Authority on 25 March, 2010 under the permit numberEP-303801.RFHPL was sold to Karunarathna & Sons (Pvt) Limited on 16 September, 2010. The new investor hascommenced operations on the project based on the mutual understanding between both parties. Thisinvolves the construction of the water reservoir and the fitting of machines for the power plant. Thisprocess will take between 6 months to 1 year, depending on the duration of the construction period,which may be prolonged due to adverse weather conditions. Commercial operations of the project,i.e supplying power to the national grid, will commence in 2013.RFHPL was owned by Mr. Sasanka Sigera and Mr. AnandaKarunarathna and sold to Karunarathna & Sons (Pvt)Limited. Although the two former owners of RFHPL are alsoDirectors of RFL, the two entities were managed as twoseparate entities and thus RFL was not involved in the saleor operations of the mini hydro power plant project.However, at the time of sale RFL, entered into a lease10 Ramboda Falls Limited – Introductory Document

agreement with the new owners of Ramboda Falls Hydro (Pvt) Limited for the use of land for theplant. In terms of the lease agreement RFL is entitled to 5% of the profits of RFHPL, as considerationfor the same.Peacock SolitudeRFL has another hotel – Peacock Solitude situated in Higurakgoda, Minneriya. Peacock Solitude islocated in the cultural triangle of Sri Lanka, only 196 km from Colombo, 20 mins to Minneriya Wildlifepark and Polonnaruwa ancient city, and 5 mins to Kadulla National Park, Giritale tank and MinneriyaTank.Peacock Solitude has a total land extent of two acres and twenty one perches, which is owned byRamboda Falls Limited. The hotel has ten rooms with air conditioning, hot water and televisionfacilities. The hotel is ideal for adventure seekers, as it lies in close proximity to the wildlife parks. Thehotel has also developed new activities to cater to the growing interest in adventure and eco-tourism.Other facilities include:• Ample parking space• Restaurant• BarRFL has leased out thehotel to a third party – Mr. E G D S Desapriya with effect from 20 November, 2011 and currently theonly income generated by RFL from Peacock Solitude is a lease rental. RFL is no longer involved in theoperations of the hotel as it is solely managed by the party which has leased the hotel, as such allprofits and losses are accrued to the lessee. The initial capital for Peacock Solitude was infused by RFL,as it was owned and managed by RFL, but any additional capital infused to the hotel will be funded bythe lessee.2.2 DEPENDENCE ON KEY CUSTOMERS AND SUPPLIERSThe Company is not dependent on any single customer in deriving its income as it has a diversifiedcustomer base. The Company has contracts with 22 travel agents, which contribute around 30% of itstotal revenue. Further, RFL is not solely dependent on any particular travel agent; therefore, no singlecustomer would have a material impact on its revenue. Further, the Company is not dependent ontheir suppliers.11 Ramboda Falls Limited – Introductory Document

2.3 HUMAN RESOURCESAs of 01 st January 2012, the staff strength of RFL was 56. The Company has not entered into anycollective agreements with their employees as the employees of the Company are not members ofany trade unions.2.4 CORPORATE STRUCTUREBoard of DirectorsManaging DirectorGeneral ManagerExecutive ChefKitchenSupervisorRestaurantManagerSenior CaptainHouse KeeperRoom boysAccountantAccounts AssistantMaintainanceSupervisorSenior SecurityReceptionSupervisorReceptionistSenior CooksJunior CaptainsTrainee Room BoysDriver/ SecurityAssistant CooksStewardsGarden LabourersKitchen HelpersTrainee StewardsPantry BoyThe Company is a solitary entity and does not have a parent Company, nor subsidiaries.2.5 FUTURE PLANSThe following future plans have been identified by the management in order to enhance and sustaingrowth in the Company. At present all of the plans stated below are still at the discussion stage, andconstruction work for the same has not been initiated as yet. 20 additional luxury rooms – The Company intends to build an extension to the existingbuilding to add more rooms thereby increasing the total capacity to 40 rooms. The estimatedcost for the additional rooms is LKR 50 million (i.e LKR 2.5 million per room). The cost will befunded 70% through equity raised through a further issue of shares to shareholders at a latterperiod of time and balance through debt. The estimated time period with which to completethe additional rooms is 3-4 years; but this may vary depending on the demand for the rooms. Construction of a gym and snooker room – The total estimated cost for the gym is LKR 6million and LKR 1.5 million for the snooker room. These will be funded through 70% equityand 30% debt. The estimated time period for completion for both is between 3-4 years.12 Ramboda Falls Limited – Introductory Document

Construction of a hot water swimming pool – The estimated cost for the construction of theswimming pool is LKR 7 million. The cost will be funded 70% through equity and balancethrough debt and will be completed within 2-3 years. The cost of construction will be higherthan normal due to the location of the hotel.Planting tea in the remaining 6 acres of the hotel.Expansion of market share through online marketing and broker/ tour guide basedpromotions.Develop outdoor excursion activities such as visits to the hydro power plant, cycling, hikingand tracking.Promote the use of the dining room floor area for formal and informal gatherings such aswedding receptions, club meetings, parties and family re-unions and gatherings.Resume marketing campaigns through print media as well as other promotional activities toreach the targeted 70% occupancy rate throughout the year.Given the strong performance in the tourism sector in the country since the end of the war,the Company expects its business to achieve significant growth in the future and expect toattract different segment of clients.Projected cashflows for the three of the major projects, i.e. construction of 20 additional luxuryrooms, construction of a gym and snooker room and a hot water swimming pool aforementioned,have been presented in Annexure IV. These have been extracted from a project evaluation reportcarried out by a group of undergraduate students, at the request of the Directors of RFL.2.6 MAJOR ASSUMPTIONS ON FUTURE PLANSOverall economic conditions and anticipated economic revival would materialize, giving rise togreater purchasing power and customer spending of both local and foreign visitors.Increased promotion of the local tourism sector, with Sri Lanka portrayed as an ideal touristdestination.Increase in inflow of tourist arrivals to the country.Improvements in the transportation and infrastructure in the island, which will enhance thefacilities available to tourists.13 Ramboda Falls Limited – Introductory Document

2.7 RISKS ASSOCIATED WITH FUTURE PLANSTogether with other small hotel operators in the industry, RFL faces the following risks, which mayhave an adverse impact on the profitability of the business.Macroeconomic risk – A significant downturn in the global economy, and in particular, in theeconomies of countries which account for the top segment of tourist arrivals to Sri Lanka,could have a material impact on the performance of hotel operators. The Company has atwofold strategy to mitigate macroeconomic risks. In the short term the Company willencourage group tour package promotions, off season credit card promotions targetedtowards local clientele and providing special rates for local companies and travel agents.In the long term, the Company intends to market the hotel as a unique location for weddingsand for honeymoon couples. In addition, promote the use of the hotel for corporate meetingsand outdoor activities. Develop close ties with travel agents and tour operators, and marketthe hotel to the local clientele as well as foreigners.Currency risk – The Company faces a limited Sri Lankan Rupee exposure, due to revenuegenerate from foreign tourist arrivals. A sharp appreciation of the LKR vs. the USD will have animpact on the profitability of RFL. However, this risk is limited as the Company has adiversified customer base of both local and foreign guests.Overcrowding in hotel segment in Sri Lanka – Subsequent to the end of the three decadewar, there has been a surge in the tourism sector, with new hotel projects being lined upacross the island. This may result in a lower repeat customer base, where by customers aredrawn to other locations. However, this risk is partially mitigated by income generated from‘rest-stop’ visitors.Infrastructure Development – The Company is dependent on ‘rest-stop’ visitors who break ontheir journey; development in infrastructure may result in travelers opting to go direct to theirdestination without stopping over. However, the Company is mitigating this risk by targetingother avenues such as hosting weddings and parities, by taking advantage of its uniquelocation and scenery.14 Ramboda Falls Limited – Introductory Document

Employee Risk – The business performance of RFL is dependent on the performance of its keyemployees. Should any of these key employees leave the service of the Company or retire, itsperformance may be affected in the short run.Construction risk – The proposed construction projects may have unforeseen and unplannedconstruction delays due to could impact the startup timeline of the hotel. Furthermore, theCompany may also experience cost overruns on the construction of new properties andupgrades to existing properties due to unexpected rises in the prices of raw materials and/orlabour costs.2.8 COMMITMENT FROM FOREIGN INVESTORSThe Company intends to initiate a cable car system within the Company premises in collaboration withJapanese investors. At present, the Japanese investors have invested in the shares of the Companywith the understanding of developing the cable car system for RFL. In addition, they have requestedthat the Company appoint two Japanese Directors onto the Board of RFL to represent their interests,and enhance the transparency and corporate governance of the Company.The initial survey and planning have been finalized. The estimated cost of the project will be betweenLKR 400 – 600 million depending on the height of the hill. Based on initial discussions, a separateentity will be established to develop and manage the new cable car project. Should the project beimplemented, it will be fully funded by the Japanese investors. RFL will be entitled to a stake in thisnew entity in return for the use of RFL’s property. The stake may vary between 5-10%, depending onthe total investment into the cable car system, however the details have not been finalized as yet. Atpresent, there is no commitment by the Company to issue additional shares of RFL to the foreigninvestors for additional investments in the cable car system. Any additional funding by the foreigninvestors will be diverted to the new entity established to develop and manage the cable car system.A formal agreement has not been finalized yet, as it is a prerequisite that the Company is listed priorto entering into a formal agreement.15 Ramboda Falls Limited – Introductory Document

2.9 OBJECTIVES FOR LISTING AND SUBSEQUENT BENEFITSOne of the primary objectives of listing to fulfill one of the prerequisites of the Japanese investors indeveloping and setting up the cable car system within the hotel premises. Listing will also enable theCompany to enhance its corporate image, through greater transparency and better corporategovernance practices.The added expertise brought on by the new directors will help the Company develop and expand inline with the current growth in the hospitality sector.Further, listing will enable the Company to broaden the public ownership of the Company andincrease the visibility and brand image of the Company.2.10 LITIGATION, DISPUTES AND CONTINGENT LIABILITIESThere are no legal, arbitration or mediation proceedings, which may have or have had, in the recentpast, a material impact on RFL’s profitability and financial position.There are no contingent liabilities that would affect current or future profits of the Company. Thereare no penalties imposed by regulatory or state authorities on the Company.16 Ramboda Falls Limited – Introductory Document

3. SENIOR MANAGEMENTThe senior management of RFL comprises of the following individuals:• Mr. Sasanka Sigera - Managing DirectorNo. 233/E 2, Dalupitiya Road,Enderamulla, WattalaThe Chief Executive Officer nor any person nominated to become the Chief Executive Officer is orwas involved in the following events:petition under bankruptcy laws filed against such person or any partnership in which hewas 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 whichthe CSE considers a disqualification.• Mr. Sasanka Sigera – Managing DirectorRefer profile under Section 4 – Board of Directors• Mr. Dhammika Dassanayake – General ManagerMr. Dhammika Dassanayake, 40 years of age, started his carrier as a Steward at Hotel Janaki in Kandyin 1992, and has worked at Hotel Riverdel in Kandy, Hotel Oceanic Garden in Negombo, HotelTamarind Tree in Katunayake, and Camelot Beach Hotel in Negombo during his career. Upondeveloping his career at these hotels, he was promoted to the rank of an Executive, and worked as theRestaurant and Bar Manager at Camelot Beach Hotel, where he was later promoted as a Food andBeverage Manager. With his knowledge and experience in the field, he got an opportunity to takeappointment as the Resident Manager of Alphine Hotel in Nuwara Eliya, and later on as the GeneralManager at Ramboda Falls Hotel where he has been with, for the last three and half years, and isresponsible for all operations, sales and marketing of the Hotel.• Mr. Sumith Jayathissa – Executive ChefMr. Sumith Jayathissa, 36 years of age, started his professional career as a cook in Hotel Topaz, Kandyin 2000 and later worked at Ceylon Inter Continental Colombo, Siddhalepa hotel and Spa as a Commis.Having gained experience in Culinary Arts at all these hotels, he was granted the opportunity of takingup an appointment as a pastry chef in Thudufushi island resort, Ari Atoll in republic of Maldives fromDecember 2002 to January 2004. He was then promoted to a as a sous chef in COCO’S (A) CaliforniaRestaurant from February 2004 to November 2008 (Dubai-U.A.E). With his foreign exposure, he joinedas a pastry chef at Hotel Tree of Life Nature Resort, Kandy in the year 2009. He joined Ramboda Falls17 Ramboda Falls Limited – Introductory Document

Hotel as Chef de partie in 2010 and subsequently in 2011 he was promoted as Executive chef. Hefollowed three years training course at NAITA (National Apprentice and Industrial Training Authority)and an international cookery course at Super International hotel school.• Mr. A G D M K Madhuranga – AccountantMr. Madhuranga, 25 years of age, started working as an Audit Trainee at Gomes & Company in 2008.After one year he was promoted as an audit Senior, before being promoted as audit supervisor, duringwhich time he was able to gain knowledge of preparing complete set of financial statements,preparing regulatory payments, preparation of Income tax for both companies and individuals,internal auditing areas including operational Marketing and HRM, Management accounting functionssuch as Job costing and wastage management, company secretarial works, preparing cash and annualbudgets, measuring key performance indicators (KPI) in different industries . He has worked at CeylonCold Stores PLC, Dialog Axiata PLC, Bank of Ceylon, Brandix Textile, Sierra constructions, Bharthi Airtel,Virtusa, during this tenor. He holds a Special Degree in Accountancy & Business finance, from theUniversity of Waymba and reading for final exam of Institute of Chartered Accountants of Sri Lanka.• Mr. D G W Bandara – Restaurant and Bar ManagerMr. D. G. W. Bandara, 30 years of age, started his career as a Steward at Ramboda Falls Hotel in 2001and was later promoted to the rank of Barman and was able to work as a Restaurant Captain andgradually rose to the position of Restaurant Supervisor. With his ability to handle the administration ofthe Restaurant and Bar, he was transferred to Peacock Solitude Hotel to take over the position ofAssistant Manager of the hotel which is a branch of RFL. In 2007, he joined the Grand Hotel in NuwaraEliya as a Restaurant Captain. He then rejoined Ramboda Falls Hotel in 2008 as the Restaurant and BarManager. He has over nine years of experience in the Food and Beverage field, both in an operationaland supervisory capacity, where he was responsible of administrating the restaurant, bar, thebanquette department and the kitchen stewarding department.• Mr. J M A C K Jayasooriya – House KeeperMr. J. M. A. C. K. Jayasooriya, 37 years of age, commenced his career as a Trainee Room Boy atCasamara Hotel in Kandy in 1995 under the Training received from NAB (National ApprenticeshipBoard), for one year, he had the opportunity of being trained in House Keeping and Bell Deskoperations in Front Office under this programme. With the training he received from there, he wasable to start working as a Room Boy at Hotel Mermaid in Kaluthara and Dear Park Hotel in Girithale.Knowing the operations of the House Keeping Department, he was able to join Ramboda Falls Hotel asa House Keeping Supervisor where he undertook the responsibilities as the House Keeper.18 Ramboda Falls Limited – Introductory Document

4. THE BOARD OF DIRECTORSThe Board of Directors of RFL is responsible for providing strategic leadership to ensure that thebusiness is efficiently managed in order to optimize shareholder value.The Board consists of four (04) Non-Executive Directors, all of whom are Independent, and two (02)Executive Directors.Name Age AddressMr. Takashi Igarashi 57 No. 32, 7/1, Renaissance Siripa Road, Thimbirigasyaya, Colombo 05Mr. Sasanka Sigera 50 No. 233/E 2, Dalupitiya Road, Enderamulla, WattalaMr. Ananda Karunarathne 51 No. 80/3, St. Jude Mawatha, Dalugama, KelaniyaMr. Namal Gomes 41 No. 280/140, Garden City, Galle Road, Katubedda, MoratuwaMr. Saman Karunarathna 41 No. 100/1, Old Kandy Road, Dalugama, KelaniyaMr. Ono Teruaki 52 Apt. 10 C, Landmark Building, 385, Galle Road, Colombo 034.1 STATEMENT – BOARD OF DIRECTORSThe Chairman nor any Director of the Company has been or is involved in any of the following events:a petition under any bankruptcy laws filed against such person or any partnership in which hewas 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 whichthe CSE considers a disqualification.19 Ramboda Falls Limited – Introductory Document

Mr. Takashi Igarashi – ChairmanMr. Takashi Igarashi, 57 years of age, commenced his business life in 1983, after taking control of thetrading firm that had been managed by his grandfather. His main industry was trading business forexporting vehicles and heavy machineries to New Zealand, Australia. He developed an accountadministration system for collecting bills and also started a service providing business in New Zealandfor looking after Japanese exporters. To make this bills collection system stronger, he employed threelawyers in New Zealand and formed the Legal Service institution named ANZUK Legal Service. As aresult this institution would be recognized by many exporters and succeeded to make the contractwith the Japan Used Motor Vehicle Exporters Association (JUMVEA) as the genuine legal consultant.Now, this is the only legal service provider for vehicle exporters in Japan.In 1996, Mr. Igarashi started the test plantation in Watawara and later started OpenArc SystemsManagement Pvt. Ltd with some Sri Lankan business partners. He is the founder of both OpenArcCollege of Business and Technology Pvt. Ltd. and StockLine Lanka Pvt. Ltd.Mr. Igarashi is also the Chairman of New World Securities Pvt. Ltd., a trading member firm of theColombo Stock Exchange. Companies in which Mr. Igarashi holds other directorships include NWSHoldings (Pvt) Ltd., NWS Financial Services (Pvt) Ltd., NWS Capital Management (Pvt) Ltd., Far EasternAsia Wealth Management (Pvt) Ltd., Stock Line Lanka (Pvt) Ltd. and OCBT (Pvt) Ltd.Mr. Sasanka Sigera – Managing DirectorMr. L. Sasanka Sigera, 50 years of age, after completing his education, began his career at LankaOberoi in Colombo (presently known as Cinnamon Grand Hotel owned by John Keells Holdings) in theaccounts Division and later on worked at Ramada Renaissance Hotel in Colombo (presently namedCinnamon Lake also owned by John Keells Holdings) for thirteen years as an Executive in the Accountsfield. He achieved an opportunity to be a Joint Managing Director for Ramboda Falls Hydro (Pvt) Ltd.He was also a Partner of Sikano International. In 1996, with his experience of the Hotel Industry andthe knowledge he had gained in the building construction field, he started Ramboda Falls Hotel. Withhis all hard work and enthusiasm, he now holds the position of Joint Managing Director having beenfor 27 years in the Hotel profession. He is an active member of the Lions Club of Enderamulla and wasa previous President of the club in 2004/5.Mr. Sigera does not hold Directorships in any other Company.20 Ramboda Falls Limited – Introductory Document

Mr. Ananda Karunarathne – Executive DirectorMr. I. J. Ananda Karunarathne, 51 years of age, became an Accounts Executive in Starline Shipping andTrading Company, he then joined Tharindu Enterprises as the Manager. Later on he became aManaging partner of Ajanee Enterprises. He was then employed as the Managing Director of MarcoInternational (Pvt) Ltd, which was manufacturing garments for the export market, before becoming aJoint Managing Director for Ramboda Falls Hydro (Pvt) Ltd. He was a Partner of Sikano Internationaland was able to initially start Ramboda Falls Hotel in 1996, so that presently he holds the position ofExecutive Director of Ramboda Falls Limited. He is an active member of the Lions Club of Enderamulla.Mr. Karunarathne does not hold Directorships in any other Company.Mr. Namal Gomes – Independent Non-Executive DirectorMr. N. Gomes, 41 years of age, after graduating from the University of Sri Jayawardenepura with aBachelor’s Degree in Accountancy, he then went on to become an Associate Member of both theInstitute of Chartered Accountants of Sri Lanka and the Society of Certified Management Accountantsof Sri Lanka.Mr Gomes is the Founder and President Partner of Gomes & Company (Chartered Accountants). Hiswealth of experience covers the areas of Internal Auditing, Statutory Auditing, Tax Planning, CorporatePlanning, Financial Management, Company Secretarial Practice and General Administration indifferent industries.Mr. Gomes is an Independent Non-Executive Director of Citizens Development Business Finance PLC,and an Executive Director of Accounting Alliances (Pvt) Limited and N&N Associates (Pvt) Limited.Mr. Saman Karunarathna – Independent Non-Executive DirectorMr. Saman Karunarathna, 41 years of age, started his career as an Audit Assistant and then worked asa Manager of Sakara Enterprises, in the field of importing and marketing household utensils. In 1999,joined as a Trainee Fund Manager at Employees’ Provident Fund, Central Bank of Sri Lanka, and waslater then promoted to Fund Manager of the largest retirement Fund in the country, in 2000. Hemanaged the EPF fund till 2007. He simultaneously managed the Contributory Pension Fund, forgovernment sector employees from 2003 to 2007. Later, he joined National Savings Bank as a Grade IIofficer, in the field of Fund Management and Investment Analysis. Later he joined Capital AllianceSecurities (Pvt) Ltd, as a Senior Manager in Fund Management.21 Ramboda Falls Limited – Introductory Document

He graduated from the University of Sri Jayawardenepura with a Bachelor’s Degree in Accountancy,and obtained his Master’s degree from University of Kelaniya by specialising in Fund Management. Hewas a visiting lecture for an MBA programme of the University of Sunderland UK, conducted by ICBTand also a resource person of the Centre for Banking studies of the Central Bank of Sri Lanka, in thefield of securitisation and financial management. He provided his service to the University of Colomboas a visiting lecturer in the field of Advance Accounting theory, Portfolio Management and FinancialManagement. In addition, he worked as a visiting lecturer of Advanced Technical College and BankersInstitute. He has done a comprehensive research in various filed especially in Integration of SouthAsian Equity Market and Retirement benefit schemes in the country. He has over 12 years ofexperience in the field of fund management and investment analysis.Mr. Karunarathna is the Managing Director of Seed Capital Investments Private Limited.Mr. Ono Teruaki – Independent Non-Executive DirectorMr. Ono Teruaki, 52 years of age, obtained his first degree for Electrical Communication at theUniversity of Japan, in 1985. Subsequently, he started his business life after forming a Company inroad construction. In 1990, he started another company named “Coyo communications Company” fortelecommunications in order to cater to the huge demand in this field and acts in the capacity ofChairman. He has extensive knowledge in education, hotel construction, and condominium business inmost Asian countries.Companies in which Mr. Teruaki holds other directorships include New World Securities Pvt. Ltd, atrading member firm of the Colombo Stock Exchange, NWS Holdings (Pvt) Ltd., NWS Financial Services(Pvt) Ltd. and NWS Capital Management (Pvt) Ltd.22 Ramboda Falls Limited – Introductory Document

5. CORPORATE GOVERNANCE5.1 INDEPENDENT DIRECTORSThe Independent Directors, Non-Executive Directors of RFL comprise of the following Directors:Mr. Takashi IgarashiMr. Namal GomesMr. Saman KarunarathnaMr. Ono TeruakiIn accordance with best practices, the Board has established two Board Committees that report to theBoard.5.2 AUDIT COMMITTEEThe Audit Committee comprises of the following Directors, and is chaired by Mr. Namal Gomes:Mr. Namal Gomes – Independent Non-Executive DirectorMr. Saman Karunarathna – Independent Non-Executive DirectorThe Chairman of the Audit Committee is an Associate Member of the Institute of CharteredAccountants of Sri Lanka and an Associate Member of the Society of Certified ManagementAccountants of Sri Lanka.5.3 REMUNERATION COMMITTEEThe Remuneration Committee comprises of the following Directors, and is chaired by Mr. SamanKarunarathna:• Mr. Saman Karunarathna – Independent Non-Executive Director• Mr. Ono Teruaki – Independent Non-Executive DirectorThe primary responsibility of the Committee is to propose to the Board of Directors a competitiveremuneration policy designed to attract, motivate and retain the employees of RFL. The remunerationpolicy thus determined takes into consideration the corporate objectives of RFL, the performance ofemployees and the market rates offered by others in the industry.23 Ramboda Falls Limited – Introductory Document

The aggregate remuneration paid to the executive directors of RFL was LKR 2,447,808 for the yearended 31 st March 2011. The aggregate remuneration paid to the non-executive directors is nil, as theywere appointed after May 2011. The estimated total remuneration payable to the Directors and NonexecutiveDirectors for the year 2012-13 is LKR 2,447,808.24 Ramboda Falls Limited – Introductory Document

6. CAPITAL STRUCTURE6.1 STATED CAPITALThe Stated Capital of the Company Rs. 100,000,020 which comprises of Twenty Million (20,000,000)issued and fully paid Ordinary Voting Shares, as at 30 th April 2012.The Company issued two shares at a value of LKR 50 Million each to existing shareholders bycapitalizing the revaluation reserve on 28 March, 2011 for which the Company has received approvalfrom the SEC. The value of the reserve as at this date was LKR 107 Million. Prior to the capitalizationthe Company had only two shareholders holding one share each. Accordingly, the Directorsdetermined that the value of LKR 50 million per share is fair and reasonable. The shares were allottedon 28 March, 2011.In line with the SEC requirement, the valuation report of RFL has been attached in Annexure III of thisdocument.Subsequently, the four (04) shares were subdivided into twenty million (20,000,000) shares in theproportion of five million (5,000,000) Ordinary Voting Shares for every share held, on 28 March, 2011.This resulted in the increase of the four (04) Ordinary Voting Shares to Twenty Million (20,000,000)Ordinary Voting Shares.The changes in the capital structure have been summarised below:Total No. ofsharesStated Capital(LKR)Prior to the capitalization of revaluation reserve on 28-3-2011 2 20Subsequent to the capitalization 4 100,000,020Prior to the subdivision of shares on 28-3-2011 4 100,000,020Subsequent to subdivision of Shares 20,000,000 100,000,020As at the date of the Introductory Document 20,000,000 100,000,020The holders of the Ordinary Voting Shares of the Company confer their right to receive dividends asdeclared from time to time and are entitled to one vote per share at the meetings.As at the date of this Introductory Document, the Stated Capital of the Company comprises of TwentyMillion (20,000,000) issued and fully paid Ordinary Voting Shares.25 Ramboda Falls Limited – Introductory Document

The Company has not issued any shares other than the aforementioned, during the last two yearspreceding the date of this Introductory Document.Further, it should be noted that have been no redemption, repurchase or reduction in the StatedCapital within the last two years preceding the date of this Introductory Document.6.2 CONVERTIBLE DEBT SECURITIESRFL does not have any outstanding convertible debt securities as at the date of this IntroductoryDocument.6.3 SHARES SOLD PRIVATELY IN CONJUNCTION WITH THE LISTINGSecurities of the same class or another class have not been subscribed or sold privately in conjunctionwith the listing of Shares on the Colombo Stock Exchange.6.4 FREE TRANSFERABILITY OF SECURITIESThere are no statutory restrictions on the free transferability of shares to be listed on the CSE. Itshould also be noted that there are no restrictions applicable to non-resident shareholders of theCompany.6.5 LOCKED – IN SHARESThe ordinary shares held by the following directors will be locked-in for a period of nine months fromthe date of listing of the shares on the Colombo Stock Exchange.Name of ShareholderNo. of SharesMr. L S Sigera 7,080,700Mr. I J A Karunarathna 7,080,700Mr. W M S Karunarathna 200,000Mr. Teruaki Ono 100,000Mr. Takashi Igarashi 100,000Mr. P N C Gomes 25,00026 Ramboda Falls Limited – Introductory Document

6.6 SHAREHOLDERS OF RFLThe major shareholders of the Company as at 22 nd May 2012 are as follows:Name of ShareholderNo. of SharesShareholding(%)L S Sigera 7,080,700 35.40I J A Karunarathna 7,080,700 35.40S H Karunarathna 1,900,000 9.50P D Panagoda 1,800,000 9.00P K Amaradasa 500,000 2.50G C H Gamage 300,000 1.50W M S Karunarathna 200,000 1.00W A J P Kumara 100,000 0.50Ono Teruaki 100,000 0.50Takashi Igarashi 100,000 0.50Others 838,600 4.19Total 20,000,000 100.00As at the date of this Introductory Document, the public shareholding of the Company is 27.07%. Thepublic float comprises of 5,413,600 shares, all of which are freely tradable, and held by 125 ‘public’shareholders. The Shares were transferred by the two major shareholders of the Company at aconsideration of LKR 10.00 per share during the last preceding year before the date of theIntroductory Document. Details of the shareholders to whom the shares were transferred aretabulated in Annexure II of this Introductory Document.27 Ramboda Falls Limited – Introductory Document

7. FINANCIAL INFORMATION7.1 RATIOS AND SHARE INFORMATIONYear Ended31.03.2011(audited)31.03.2010(audited)Revenue Growth (%) 193.03 (13.69)EBITDA / Revenue (%) 18.44 25.60Profit after tax / Revenue (%) 10.22 13.74Effective Tax Rate (%) 15.86 16.61Profit after tax / Average Equity (%) 4.00 (17.39)Return on Average Assets (%) 2.58 11.83Current Ratio (%) 20.79 9.52Average Receivables Collection Period (days) 32.28 23.84Average Inventory Turnover (days) 22.35 80.43Debt / Equity ratio (x) 0.21 -Equity / Assets (%) 0.72 -Book Value per Share (Rs.) 10.37 -Earnings per Share (Rs.)* 0.20 0.09Price/Earnings Ratio (x)50xPrice to Book Value 0.96*The EPS figure calculated herewith reflects the subdivision of shares7.2 REFERENCE PRICEThe reference price of the voting share of RFL is LKR 10.00, being the last transacted price, where bythe shares of RFL were transferred from Mr. L S Sigera and Mr. I J A Karunarathna to the othershareholders of RFL to meet the 10% public shareholding. Further, the reference price is in line withthe book value per share of the Company.28 Ramboda Falls Limited – Introductory Document

8. DECLARATION BY THE DIRECTORSWe, the undersigned, who are named in the Introductory Document as Directors of Ramboda FallsLimited, hereby declare and confirm that we have read the provisions of the Companies Act No. 07 of2007 and the Colombo Stock Exchange Listing Rules and any amendments to it relating to the issue ofthis Introductory Document and that those provisions have been complied with.This Introductory Document has been seen and approved by us and we collectively and individuallyaccept full responsibility for the accuracy of the information given and confirm that provisions of theCSE Listing Rules and of the Companies Act No. 7 of 2007 and any amendments to it from time to timehave been complied with after making all reasonable enquiries and to the best of our knowledge andbelief, there are no other facts, the omission of which would make any statement herein misleading orinaccurate.Name of DirectorTakashi IgarashiLiyanage Sasanka SigeraImiyage Jagath Ananda KarunarathnaPattiyage Namal Chrishantha GomesWickramasinghe Mudiyansalage Saman KarunarathnaOno TeruakiSignedSignedSignedSignedSignedSigned29 Ramboda Falls Limited – Introductory Document

UNAUDITED FINANCIAL STATEMENTS AS AT 31 ST DECEMBER 2011RAMBODA FALLS LIMITEDBALANCE SHEET Unaudited Unaudited Audited31st Dec 2011 31st Dec 2010 31st March 2011Rs. Rs. Rs.ASSETSNon-Current AssetsProperty, Plant & Equipment 283,964,239 25,794,049 280,298,770Total Non Current Assets 283,964,239 25,794,049 280,298,770Current AssetsInventories 874,469 1,458,795 858,148Trade and Other Receivables 5,335,276 1,469,720 6,156,175Cash and Cash Equivalents 1,945,218 1,086,536 819,514Total Current Assets 8,154,964 4,015,052 7,833,837TOTAL ASSETS 292,119,203 29,809,101 288,132,607EQUITY &LIABILITIESStated Capital 100,000,020 1,000,020 100,000,020Revaluation Reserve 113,997,972 - 113,997,977Revenue Reserve (6,396,548) (6,509,125) (6,555,557)Total Equity 207,601,444 (5,509,105) 207,442,440Non - Current LiabilitiesInterest Bearings Borrowings 24,028,088 16,697,675 12,528,675Retirement Benefit Obligations 491,850 - 491,850Provision for Differed Tax 29,987,710 - 29,987,710Total Non - Current Liabilities 54,507,648 16,697,675 43,008,235Current LiabilitiesTrade and Other Payables 6,554,418 2,444,395 4,535,900Short Term Interest Bearings Borrowings 8,897,869 2,703,818 7,244,995Related Party Payables 12,581,038 13,472,318 23,968,108Income Tax Payable 1,312,566 - 625,045Bank Overdrafts 664,220 - 1,307,884Total Current Liabilities 30,010,111 18,620,531 37,681,932TOTAL EQUITY & LIABILITIES 292,119,203 29,809,101 288,132,607The above figures are provisional & subject to auditFigures in brackets indicate deductions.It is certified that the Financial Statements have been prepared in compliance with therequirements of Companies Act No. 7 of 2007.AccountantThe Board of Directors is responsible for the preparation and presentation of FinancialStatements. Signed for and behalf of Board by;L.S. SigeraDirectorI.J.A KarunarathneDirector30 Ramboda Falls Limited – Introductory Document

Unaudited Unaudited Unaudited UnauditedRAMBODA FALLS LIMITED09 Months Ended 09 Months Ended 03 Months Ended 03 Months EndedINCOME STATEMENT 31st Dec 2011 31st Dec 2010 31st Dec 2011 31st Dec 2010Rs. Rs. Rs. Rs.Revenue 45,518,377 22,531,608 19,504,955 11,676,920Cost of Sales 19,408,555 10,701,478 7,656,419 4,633,366Gross Profit 26,109,821 11,830,130 11,848,536 7,043,554Other Income 182,589 - 52,200 -26,292,411 11,830,130 11,900,736 7,043,554Less : ExpensesDistribution Expenses 1,081,264 383,022 483,441 91,773Administrative Expenses 18,327,654 6,279,455 5,602,081 2,463,674Other Operating Expenses 1,640,691 128,956 963,618 45,114Finance Expenses 3,779,683 1,050,512 1,812,173 328,317Total Expenses 24,829,293 7,841,945 8,861,313 2,928,878Profit /(Loss) before Tax 1,463,118 3,988,185 3,039,423 4,114,676Tax Expense (1,304,110) - (735,133) -Profit /(Loss) after Taxation 159,008 3,988,185 2,304,290 4,114,676Earnings Per Share 0.01 0.20 0.12 0.21No. of shares 20,000,000 20,000,000 20,000,000 20,000,000Figures in brackets indicate deductions.31 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS LIMITEDSTATEMENT OF CHANGES IN EQUITY(All amounts in Sri Lanka Rupees) Rs. Rs. Rs. Rs.Stated Capital Revaluation Retained Earnings Total EquityReserveAs at 31 March 2010 1,000,020 (11,564,632) (10,564,612)Profit for the Nine Months 3,988,185 3,988,185As at 31st December 2010 1,000,020 (7,576,447) (6,576,427)As at 31 March 2011 100,000,020 113,997,972 (6,555,556) 207,442,436Profit for the Nine Months - - 159,008 159,008As at31st December 2011 100,000,020 113,997,972 (6,396,548) 207,601,44432 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS LIMITED Unaudited UnauditedCASH FLOW STATEMENT09 Months Ended 09 Months Ended31st Dec 2011 31st Dec 2010Rs.Rs.Cash flow From Operating ActivitiesNet Profit Before Taxation 1,463,118 3,988,185Adjustment for:Depreciation 6,614,598 722,729Provision for Gratuity - -Operating Profit before Working Capital Changes 8,077,716 4,710,914(Increase)/Decrease in Inventories (16,321) (232,921)(Increase)/Decrease in Trade Receivables 820,899 (804,054)Increase/(Decrease) in Accounts Payables and Accrued Expenses 2,018,518 618,3432,823,095 (418,632)Income Tax Paid (616,589) -10,284,222 4,292,282Net Cash flow From Operating Activities 10,284,222 4,292,282Investing ActivitiesAddition to Property, Plant and Equipment (10,280,067) (16,416,747)Net Cash flow from investing activities (10,280,067) (16,416,747)Financing ActivitiesProceeds/Settlement on Interest Bearing Borrowings 13,152,287 13,375,502Increase/Decrease in Directors Current Account (11,387,070) 1,560,993Net Cash (used in) / From financing activities 1,765,217 14,936,495Net Increase in Cash & Cash Equivalent 1,769,372 2,812,029Cash and Cash Equivalents at the beginning of the Period (488,370) (1,725,493)Cash and Cash Equivalents at the end of the period 1,280,998 1,086,537Analysis of Cash and Cash EquivalentsCash in Hand 349,933 492,324Cash at Bank 1,595,285 594,213Bank Overdraft (664,220)1,280,998 1,086,53733 Ramboda Falls Limited – Introductory Document

1RAMBODA FALLS LIMITEDNOTES TO THE FINANCIAL STATEMENTSThe Interim Financial Statements of the Company have been prepared on the same basis as the most recentaudited financial statements for the year ended 31st March 2011 and are in compliance with Sri LankaAccounting Standard 35 - Interim Financial Reporting.2The accounting policies have been consistently applied by the Company and unaudited figures have beenre-stated wherever necessary to confirm the current presenattion.3There have been no material events which have taken place since 31st December 2011, that require thedisclosure in the Financial Statements.4There has not been a significant change in the nature of the contingent liabilities which were disclosed inthe Audited Financial Statements as at 31st March 2011.5 Above figures are subject to the audit.6 Shareholdings of DirectorsThe number of shares held by the Board of Directors are as follows:Name of Director Position 31.12.2011Mr Takashi Igarashi Chairman 100,000Mr L S Sigera Managing Director 7,080,700Mr I J A Karunarathna Director 7,080,700Mr P N C Gomes Director 25,000Mr W M S Karunarathna Director 200,000Mr Ono Teruaki Director 100,0007 Substantial ShareholdingName of the Share HolderL S SigeraI J A KarunarathnaShare Holding %7,080,700 35.407,080,700 35.40Sakura Karunarathna1,900,000 9.50P D Panagoda1,800,000 9.00P K Amaradasa500,000 2.50G C H Gamage300,000 1.50Mr W M S Karunarathna 200,000 1.00Others1,138,600 5.6920,000,000 100.0034 Ramboda Falls Limited – Introductory Document

AUDITED FINANCIAL STATEMENTS AS AT 31ST MARCH 201135 Ramboda Falls Limited – Introductory Document

36 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDINCOME STATEMENTFOR THE YEAR ENDED 31 MARCH, 2011 2010Note Rs. Rs.Revenue 4 38,566,640 13,161,371Cost of Sales (17,017,827) (5,782,541)Gross Profit 21,548,813 7,378,830Other Income 5 1,414,136 -22,962,949 7,378,830Sales & Marketing Expenses (1,320,688) (370,922)General & Administrative Expenses (13,324,502) (3,621,067)Other Expenses (1,205,585) (17,962)Results from Operating Activities 6 7,112,174 3,368,879Finance Income 5,185 -Finance Costs (1,744,392) (1,259,811)Net Finance Costs 7 (1,739,207) (1,259,811)Profit before Income Tax Expense 5,372,967 2,109,068Income Tax Expense 8 (1,431,213) (300,378)Profit for the year 3,941,754 1,808,690Basic Earnings Per Share (Rs.) 9 1,954,810 896,973Figures in brackets indicate deductions.Notes from page No 07 to 22 form an integral part of these financial statements.Independent Auditor's Report is provided on page 01 to 02.337 Ramboda Falls Limited – Introductory Document

38 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDSTATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 MARCH 2011STATED REVALUATION ACCUMULATED TOTALCAPITALRs.RESERVELOSSRs. Rs. Rs.Balance as at 01 April 2010 20 - (12,306,001) (12,305,981)Profit for the Year - - 1,808,690 1,808,690Balance as at 31 March 2010 20 - (10,497,311) (10,497,291)Balance at 01 April 2010 20 - (10,497,311) (10,497,291)Profit for the Year - - 3,941,754 3,941,754Revaluation of Property, Plant & Equipment (Note 10) - 243,179,519 - 243,179,519Deferred Tax on RevaluationScript issue- (29,181,542)100,000,000 (100,000,000)- (29,181,542)- -Balance as at 31 March 2011 100,000,020 113,997,977 (6,555,557) 207,442,440Figures in brackets indicate deductions.Notes from page No 07 to 22 form an integral part of these financial statements.Independent Auditor's Report is provided on page 01 to 02.539 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDCASH FLOW STATEMENTFOR THE YEAR ENDED 31 MARCH, 2011 2010RsRs.Cash flows from operating activitiesProfit before income tax expense 5,372,967 2,109,068Adjustments for:Depreciation 2,161,830 868,737Provision for Retirement Benefit Obligation 491,850 -Profit on disposal of Property, Plant & Equipment (800,000) -Interest expense 1,627,002 1,197,493Operating profit before Working Capital Changes 8,853,649 4,175,298Change in inventories 367,726 96,774Change in trade and other receivables (5,490,505) 388,049Change in trade & other payables 3,333,379 (224,451)Change in related party payables 12,056,783 (2,610,326)Total Working Capital Changes 10,267,383 (2,349,954)Cash used in Operations 19,121,032 1,825,344Interest paid (1,627,002) (1,197,493)Income tax paid (623,531) -Net cash used operating activities 16,870,499 627,851Cash flows from investing activities1,300,000 -Sales proceeds from disposal from Property, Plant & EquipmentAcquisition of property, plant & equipment (29,681,054) -Net cash used in investing activities (28,381,054) -Cash flows from financing activities18,768,572 -Loans obtained during the yearRefund of share application money (1,000,000)Repayment of interest bearing borrowings (5,020,893) (925,544)Net cash flows from financing activities 12,747,679 (925,544)Net change in cash & cash equivalents 1,237,127 (297,693)Cash & cash equivalents at the beginning of the year (1,725,497) (1,427,801)Cash & cash equivalents at the end of the year (Note A) (488,370) (1,725,494)Note ACash & Cash EquivalentsCash at Bank 334,904 92,649Cash in hand 484,610 193,257819,514 285,906Bank Overdraft (1,307,884) (2,011,400)Cash & cash equivalents as at 31st March, (Note19) (488,370) (1,725,494)Figures in bracket indicate deductions.Notes from page No 07 to 22 form an integral part of these financial statements.Independent Auditor's Report is provided on page 01 to 02.640 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH, 20111. REPORTING ENTITYRamboda Falls (Private) Limited (the Company), is a private limited liability company incorporated anddomiciled in Sri Lanka since 18 June 1996, and incorporated under the Companies Act No. 07 of 2007.The registered office of the Company is situated at Gampaha and the place of the business is situated atNo. 76, Rock Fall Estate, Nuwaraeliya Road, Ramboda.The principal activity of the company is operating tourist hotels.There were no significant changes in the nature of principal activities of the Company during thefinancial year under review.2 BASIS OF PREPARATION2.1 Statement of complianceThe financial statements have been prepared in accordance with Sri Lanka Accounting Standardsadopted by the Institute of Chartered Accountants of Sri Lanka (ICASL), the requirements of theCompany’s Act No. 07 of 2007 and Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995.2.2 Basis of MeasurementThe financial statements have been prepared on historical cost basis. Assets and liabilities are groupedby nature and listed in an order that reflects their relative liquidity.2.3 Functional and Presentation CurrencyThe financial statements of the company are presented in Sri Lankan Rupees, which is the Company’sfunctional currency. All financial information presented in Sri Lankan Rupee has been rounded to thenearest rupees.2.4 Use of estimates & judgmentsThe preparation of financial statements in conformity with Sri Lanka Accounting Standards, requiresmanagement to make judgments, estimates and assumptions that affect the application of accountingpolicies and the reported amounts of assets, liabilities, income and expenses. Judgments and estimatesare based on historical experience and other factors, including expectations that are believed to bereasonable under the circumstances. Hence, actual results may differ from these judgments andestimates.Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognized in the period in which the estimate is revised if the revision affects only thatperiod or in the period of the revision and future periods if revision affects both current and futureperiods.Information about significant areas of estimation and uncertainty that have the most significant effecton the amounts recognized in the financial statements are described in following notes.41 Ramboda Falls Limited – Introductory Document7

2.4 Use of estimates & judgments (Cont’d)Note 10 – Property, plant and equipmentNote 16 – Retirement benefit obligations3. SIGNIFICANT ACCOUNTING POLICIES3.1 Foreign currency transactionsRAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH, 2011Transactions in foreign currencies are translated to Sri Lankan Rupees at the foreign exchange rateprevailing at the date of the transaction. Monetary assets and liabilities denominated in foreigncurrencies are translated to Sri Lankan Rupees at the foreign exchange rate ruling as at the balancesheet date.Non-monetary assets and liabilities denominated in foreign currencies that are stated at historical cost atthe balance sheet date are translated to Sri Lankan Rupees at the foreign exchange rate ruling at the dateof initial transaction.Non-monetary assets & liabilities that are stated at fair value, denominated in foreign currencies aretranslated to Sri Lanka Rupees at the exchange rate ruling at the dates that the value were determined.Foreign exchange differences arising on translation are recognized in the income statement.3.2 Assets and bases of their valuationAssets classified as current assets in the Balance Sheet are cash and bank balances and those which areexpected to be realized in cash during the normal operating cycle, or within one year from the BalanceSheet date, whichever is shorter.3.2.1 Property, plant and equipmentProperty, plant and equipment are tangible items that are held for servicing or for administrativepurposes and are expected to be used during more than one period.a. RecognitionProperty, plant and equipment are recognized if it is probable that future economic benefits associatedwith the assets will flow to the Company and cost of the assets can be reliably measured.b. MeasurementItems of property, plant and equipment are stated at cost or valuation less accumulated depreciation(See Accounting Policy 3.2.1(f)) and impairment losses (See Accounting Policy 3.2.5).Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of selfconstructedassets includes the cost of materials and direct labour, any other cost directly attributable tobringing the asset to a working condition for its intended use, and the cost of dismantling and removingthe items and restoring the site on which they are located.842 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH, 20113.2.1 Property, Plant and Equipment (Cont’d)b. MeasurementGains and losses on disposal of an item of Property, Plant & Equipment are determined by comparingthe proceeds from disposal with the carrying amount of Property, Plant & Equipment and arerecognized net within “Other Income” in Profit & loss. When revalued assets are sold, the amountsincluded in the revaluation surplus reserve are transferred to retained earnings.When parts of an item of property, plant & equipment have different useful lives, they are accounted oras separate items of property, plant & equipment.Expenditure on repairs or maintenance of property, plant and equipment made to restore or maintainfuture economic benefits expected from the assets has been recognized as an expense when incurred.c. Subsequent ExpenditureExpenditure incurred to replace a component of an item of property, plant and equipment that isaccounted for separately, including major inspection and overhaul expenditure, is capitalized. The costof replacing part of an item of Property, Plant & Equipment is recognized in the carrying amount of theitem, if it is probable that the future economic benefits embodied within the part will flow to thecompany and its cost can be measured reliably. The carrying amount of the replaced part isderecognized. The cost of the day-to-day servicing of property, plant and equipment are recognized inprofit or loss as incurred.d. Leased assetsLeases in terms of which the Company assumes substantially all the risks and rewards of ownership areclassified as finance leases. Upon initial recognition the asset under finance leases are measured at anamount equal to the lower of its fair value and the present value of the minimum lease payments at theinception less accumulated depreciation and the resulting lease obligations are included in the creditorsless finance charges. Lease payments consist of capital and interest elements and the interest is chargedto the Income Statement. Assets held under finance leases are amortized over the estimated useful livesunless ownership is not transferred at the end of the lease period. In such cases the assets are amortizedover the shorter of lease terms and their useful lives. Subsequent to initial recognition, the asset isaccounted for in accordance with the accounting policy applicable to that asset.943 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH, 2011e. RevaluationThe Company’s land, buildings, motor vehicles, kitchen & catering equipments, furniture & fittings,office equipments, computer equipments and machinery & equipments are revalued when there is asubstantial distinction between the fair value (market value) and the carrying value of the asset or inevery 05 years. As a result of revaluation if the carrying amount is increased, the increased amount iscredited to equity under the heading of Capital Reserve on Revaluation of Property, Plant andEquipment. When an asset’s carrying amount is decreased as a result of a revaluation, the decrease isrecognized as an expense unless it reverses a previous increment relating to that asset, in which case itis charged against any related revaluation surplus in respect of that same asset. Any balance remainingin the revaluation surplus in respect of as asset, is transferred directly to accumulated profits onretirement or disposal of the asset.f. DepreciationDepreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives ofeach part of an item of property, plant and equipment. Leased assets are depreciated over the shorter ofthe lease terms and other useful lives unless it is reasonably certain that the Company will obtainownership by the end of the lease period. Land is not depreciated. The estimated useful lives for thecurrent and comparative periods are as follows.BuildingsFurniture and FittingsPlant & MachineriesMotor VehiclesOffice equipment20 years10 years08 years08 years08 yearsDepreciation of an asset begins when it is available for use, i.e. when it is in the location and conditionnecessary for it to be capable of operating in the manner intended by management. Depreciation of anasset ceases at the earlier of the date that the asset is classified as held for sale (or included in a disposalgroup that is classified as held for sale) and the date that the asset is derecognized.g. Capital work in progressCapital expenses incurred during the year which are not completed as at the Balance Sheet date areshown as Capital work in progress, whilst the capital assets which have been completed during the yearand put to use have been transferred to Property, Plant and Equipment.3.2.2 InventoriesInventories are stated at the lower of cost and net realizable value. Net realizable value is the estimatedselling price in the ordinary course of business less the estimated costs of completion and the estimatedcosts necessary to make the sale.1044 Ramboda Falls Limited – Introductory Document

3.2.2 Inventories (Cont’d)RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH, 2011The cost of inventories includes expenditure incurred in acquiring the inventories and other costsincurred in bringing them to their existing location and condition. Accordingly, the costs of inventoriesare accounted as follows:FoodBeverage & bar stockCutlery & linenAt actual cost on a weighted average basisAt actual costAt actual cost on a weighted average basis3.2.3 Trade & Other ReceivablesTrade and other receivables are stated at their cost less impairment losses. (See Accounting Policy3.2.5)3.2.4 Cash & cash equivalentsCash & cash equivalents are defined as cash in hand, demand deposits and short-term highly liquidinvestments readily convertible to known amounts of cash and subject to insignificant risks of change invalue. For the purpose of cash flow statement, cash and cash equivalent comprise of cash in hand anddeposits at banks net of outstanding bank overdrafts.3.2.5 Impairmenta. RecognitionThe carrying value of the company’s assets other than inventories (refer accounting policy 3.2.2), arereviewed at each balance sheet date to determine whether there is any indication of impairment.If any such indication exists, the asset’s recoverable amount is estimated (see below). An impairmentloss is recognized whenever the carrying amount of asset or its cash-generating unit exceeds itsrecoverable amount. Impairment losses are recognized in the income statement.For the assets that have indefinite useful life and intangible assets that are not yet available for use, therecoverable amount is estimated at each balance sheet date.b. Calculation of recoverable amountThe recoverable amount is the greater of their net selling and value in use. In assessing value in use, theestimated future cash flows are discounted to their present value using discount rate that reflects thecurrent market assessment of their time value of money and the risk specific to the asset. For an assetthat does not generate largely independent cash inflows, the recoverable amount is determined for thecash-generating unit to which the asset belongs.1145 Ramboda Falls Limited – Introductory Document

c. Reversal of ImpairmentRAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH, 2011An impairment loss is reversed if there has been a change in the estimates used to determine therecoverable amount.An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed thecarrying amount that would have been determined, net of depreciation or amortization, if no impairmentloss had been recognized.3.3 Liabilities and ProvisionsLiabilities classified as current liabilities on the balance sheet are those, which fall due for payment ondemand or within one year from the balance sheet date.Non-current liabilities are those balances that fall due for payment after one year from the balance sheetdate.3.3.1 ProvisionsA provision is recognized in the balance sheet when the company has a legal or constructive obligationas a result of a past event and it is probable that an outflow of economic benefits will be required tosettle the obligation.3.3.2 Employee benefitsa. Defined Contribution PlansA defined contribution plan is a post-employment plan under which an entity pays fixed contributioninto a separate entity and will have no legal or constructive obligation to pay a further amount.Obligations for contributions to defined contribution plans are recognized as expense in the IncomeStatement as and when they are due.Employees Provident FundThe company and employees contribute 12% & 8% respectively on the salary of each employee to theapproved Provident Fund.Employees Trust FundThe company contributes 3% of the salary of each employee to the Employees’ Trust Fundcontributions to defined contribution plans are recognized as an expense in the income statement asincurred.b. Defined benefit plansRetiring GratuityA defined benefit plan is a post-employment benefit plan other than a defined contribution plan.1246 Ramboda Falls Limited – Introductory Document

d. Defined benefit plans (Cont’d)Retiring GratuityRAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH, 2011In accordance with revised Sri Lanka Accounting Standard 16 (Revised 2006)- Employee Benefits(“SLAS 16”) which became effective from the financial year commencing after 01 July 2007, theCompany has adopted to measure the post-employment benefit obligation by multiplying half month’ssalary by the number of years of service, in respect of all employees from the commencement ofemployment. However, under the payment of Gratuity Act No.12 of 1983, the liability to an employeearises only on completion of 5 years of continues service.The liability is not externally funded nor is it actuarially valued.3.3.2 Trade & Other PayablesTrade & Other Payables are stated at cost.3.3.3 Capital Commitments & ContingenciesContingent liabilities are possible obligations whose existence will be confirmed only by uncertainfuture events or present obligations where the transfer of economic benefits is not probable or cannot bereliably measured.Capital commitment and contingent liabilities of the Group are disclosed in the respective notes to thefinancial statements.3.3.4 Events occurring after the balance sheet dateThe materiality of the events occurring after the balance sheet date has been considered and appropriateadjustments and provisions have been made in the financial statements wherever necessary.3.4 INCOME STATEMENTS3.4.1 Revenue RecognitionGoods sold and services renderedRevenue is measured at the fair value of the consideration received or receivable, net of trade discountsand revenue related taxes.Accommodation income is recognized on rooms occupied on a daily basis. In relation to the revenuefrom food, beverage, other outlet sales and services rendered the revenue has been recognized byreference to the time of sales.Gains or losses of a revenue nature on the disposal of Property, Plant & Equipment have beenaccounted for in Income Statement.1347 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH, 20113.4.2 ExpenditureAll expenditure incurred in running of the business and in maintaining the property, plant & equipmentin a state of efficiency has been charged to revenue in arriving at the profit for the year. For the purposeof presentation of Income Statement, the Directors are of the opinion that function of expense methodpresent fairly the elements of the enterprise’s performance, hence such presentation method is adopted.Expenditure incurred for the purpose of acquiring, expanding or improving assets of a permanent natureby means of which to carry on the business or for the purpose of increasing the earning capacity of thebusiness has been treated as capital expenditure.Repairs and renewals are charged to revenue in the year in which the expenditure is incurred.Minimum lease payments made under finance leases are apportioned between the finance expense andthe reduction of the outstanding liability. The finance expense is allocated to each period during thelease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.The profit earned by the company before taxation as shown in the Income Statement is after makingprovision for all known liabilities and for the depreciation of property, plant & equipments.3.4.3 Borrowing CostBorrowing costs are recognized as an expense in the year in which they are incurred, except to theextent where borrowing costs are directly attributable to the acquisition, construction or production of aqualifying asset that take a substantial period of time to get ready for its intended use or sale, iscapitalized as part of that asset.3.4.4 Net Finance expenseFinance expense comprises interest payable on borrowings and foreign exchange losses.Finance income comprises interest received on funds invested and foreign exchange gains.The interest component of finance lease payment is recognized in the Financial Statements usingeffective rate method.3.4.5 Income Tax expensesIncome tax expenses comprises current and deferred tax. Income tax expense is recognized directly inthe income Statement except to the extent that it relates to items recognized directly in equity, in whichcase it is recognized in equity.1448 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH, 2011a. Current TaxCurrent tax is the expected tax payable on the taxable income for the year, using tax rates enacted orsubstantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previousyears.b. Deferred TaxDeferred tax is provided using the balance sheet liability method, providing for the tax effect oftemporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the tax base of assets and liabilities, which is the amount attributed to those assets andliabilities for tax purposes. The amount of deferred tax provided is based on the expected manner ofrealization or settlement of the carrying amount of assets and liabilities, using tax rates enacted by thereporting date.Deferred tax is not recognized for the following temporary differences: the initial recognition ofgoodwill, the initial recognition of assets or liabilities in a transaction that is not a business combinationand that affected neither accounting nor taxable profit, and differences relating to investments insubsidiaries and jointly controlled entities to the extent that they probably will not reverse in theforeseeable future.Deferred tax is measured at the tax rate that are expected to be applied to the temporary differenceswhen they reverse based on the laws that have been enacted or substantively enacted by the balancesheet date.A deferred tax asset is recognized to the extent that it is probable that future taxable profits will beavailable against which the temporary differences can be utilized. Deferred tax assets are reviewed ateach balance sheet date and are reduced to the extent it is no longer probable that the related tax benefitwill be realized.3.5 Basic Earnings Per Share (Basic EPS)The Company presents basic earning per share (EPS) data for its ordinary shareholders. The basic EPSis calculated by dividing the profit or loss attributable to ordinary share holders of the company by theweighted average number of ordinary shares outstanding during the period.3.6 Cash flow statementThe cash flow statements have been prepared using the “indirect method”.Interest paid are classified as operating cash flows, interest and dividends received are classified asinvesting cash flows while dividends paid are classified as financing cash flows for the purpose ofpresenting of cash flow statement.1549 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH, 20113.7 New Accounting Standard issued, but not effective as at the balance sheet dateThe Institute of Chartered Accountants of Sri Lanka (ICASL) has issued a new volume of Sri LankaAccounting Standards - 2011, applicable for financial periods beginning on or after 1 January 2012.Accordingly, these standards have not been applied in preparing these financial statements as they werenot effective for the year ended 31 March 2011.These Sri Lanka Accounting Standards comprise Accounting Standards prefixed both SLFR(corresponding to IFRS) and LKAS (corresponding to IAS). Application of Sri Lanka AccountingStandards prefixed SLFRS and LKAS for the first time shall be deemed to be an adoption of SLFRSs.The Company is currently in the process of evaluating the potential effect of these standards on itsfinancial statements and the impacts on the adoption of these standards have not been quantified as atthe balance sheet date.1650 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTFOR THE YEAR ENDED 31 MARCH, 2011 2010Rs.Rs.4. REVENUEFood revenue 25,842,034 7,188,884Beverage revenue 7,000,223 1,695,430Accommodation income 10,014,095 2,295,767Hiring and other income - 1,821,149Other sales income 302,040 1,245,476Less: VAT (4,591,752) (1,085,335)38,566,640 13,161,3715. OTHER INCOMERent ncome 569,136 -Shop rent 45,000 -Profit from disposal of property, plant & equipment 800,000 -1,414,136 -6. RESULTS FROM OPERATING ACTIVITIESResults from operating activities has been obtained1,920,000 459,000after deducting following expenses:Directors' emolumentsAuditors' remuneration 150,000 40,000Depreciation 2,161,830 868,737Staff cost (Note 6.1) 5,284,054 1,453,9356.1 Staff CostSalaries & wages 4,290,939 1,204,421Employee Provident Fund 341,036 199,611Employee Trust Fund 85,229 49,903Staff welfare 75,000 -Gratuity 491,850 -5,284,054 1,453,935Average number of employees 63 467. NET FINANCE COSTS7.1 Finance incomeExchange gain 5,185 -5,185 -7.2 Finance costs(645,636) (901,625)Interest on leaseInterest on term loan (920,668) (281,973)Interest on overdraft (60,698) (13,894)Commission on credit cards (117,390) (62,319)(1,744,392) (1,259,811)Net finance costs (1,739,207) (1,259,811)51 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTFOR THE YEAR ENDED 31 MARCH, 2011 2010Rs.Rs.8. INCOME TAX EXPENSEOn current year profits (Note 8.1) (625,045) (300,378)Recognition of temporary differences (Note 16) (806,168) -(1,431,213) (300,378)8.1 Tax Reconciliation Statement5,372,967 2,109,068Profit/(Loss) before income tax expenseDisallowable expenses 2,799,386 2,052,337Allowable expenses (1,998,165) (974,300)Adjusted tax Profit/(Loss) from business 6,174,188 3,187,105Loss utilized during the year (2,068,802) (1,214,177)Taxable income 4,105,386 1,972,928Taxation @ 15% (615,808) (295,939)SRL @ 1.5% (9,237) (4,439)(625,045) (300,378)9. BASIC EARNINGS PER SHAREBasic Earnings Per Share is calculated based on the Profit for the year attributable to the ordinary shareholdersand the weighted average number of ordinary shares outstanding during the year and is detailed below.FOR THE YEAR ENDED 31 MARCH, 2011 2010Profit attributable to Ordinary share holdersRs.Rs.3,941,754 1,808,690Weighted Average Number of Ordinary Shares 2.02 2.02Basic Earnings Per Share (Rs.) 1,954,810 896,9731852 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS ( PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENT AS AT 31 MARCH, 201110. PROPERTY, PLANT AND EQUIPMENTLand Buildings Leased Hold Furniture & Office Plant & Total TotalVehicles Fittings Equipment Machineries 2011 2010Rs Rs Rs Rs Rs Rs Rs Rs.COST/VALUATIONAs at 01 April aspreviously reported 2,166,880 14,996,116 2,606,960 3,264,765 1,285,691 1,936,174 26,256,586 26,256,586Correction of error (Note 10.2) - - 4,893,040 - - - 4,893,040 -Restated as at 01 April 2,166,880 14,996,116 7,500,000 3,264,765 1,285,691 1,936,174 31,149,626Additions - 13,416,842 - 2,122,043 198,240 1,928,026 17,665,151 -Disposal - - (1,000,000) - - - (1,000,000) -On Revaluation 119,233,120 93,488,487 4,550,000 2,637,727 742,804 4,708,992 225,361,130 -As at 31 March 121,400,000 121,901,445 11,050,000 8,024,535 2,226,735 8,573,192 273,175,907 26,256,586DEPRECIATIONAs at 01 April - 7,415,068 2,606,960 3,264,764 933,590 1,936,173 16,156,555 15,287,818Charge for the year - 1,033,596 855,540 93,123 179,571 - 2,161,830 868,737On Disposal - - (500,000) - - - (500,000) -On Revaluation - (8,448,664) (2,962,500) (3,357,887) (1,113,161) (1,936,173) (17,818,385) -As at 31 March - - - - - - - 16,156,555Net carrying amountAs at 31 March, 2011 121,400,000 121,901,445 11,050,000 8,024,535 2,226,735 8,573,192 273,175,907 -As at 31 March, 2010 2,166,880 7,581,048 - 1 352,101 1 - 10,100,031Capital Work In Progress (Note 10.1) 7,122,863 -280,298,770 10,100,03110.1 Capital work in progressIncurred during the year 7,122,863 -As at 31 March, 7,122,863 -10.2 Additions to Motor VehiclesMotor vehicles which were not recorded in previous periods were restated and due effect is given to Directors' Current account.10.3 All property, plant and equipment were revalued on 21 March 2011 by Mr. Basil Hettiarachchi, an independent professional valuer to reflect the fair value and net surplus of Rs. 243,179,510/- was transferr ed toRevaluation Reserve. Fair values has been determined directly by reference to observable prices in active market.10.4 The carrying value of revalued p r o p e r t y , plant & equipment given above, had the said pr op er ty, plant & equipment been included at cost, would amount to:Land Buildings Leased Hold Furniture & Office Plant & TotalVehicles Fittings Equipment Machineries 2011Rs Rs Rs Rs Rs Rs RsCost 2,166,880 28,412,958 6,500,000 5,386,808 1,483,931 3,864,200 47,814,777Accumulated Depreciation - (8,448,664) (2,962,500) (3,357,887) (1,113,161) (1,936,173) (17,818,385)WDV 2,166,880 19,964,294 3,537,500 2,028,921 370,770 1,928,027 9,996,39210.5 Details of the land owned by the company is as follows:Location Extent Cost - Rs. On Revaluation Total Value - Rs.Ramboda 09- 1R-32P 766,880 112,633,120 113,400,000Minneriya 02A-0R-0.21P 1,400,000 6,600,000 8,000,0001953 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTAS AT 31 MARCH, 2011 2010Rs.Rs.11. INVENTORIESFood 530,495 306,469Cutlery 24,335 269,692Linen 56,145 502,608Bar Stock 247,173 147,105858,148 1,225,87412. TRADE & OTHER RECEIVABLESTrade Receivables 4,221,489 589,256Value Added Tax Recoverables - 15,625Advances1,909,000-Income Tax Paid in Advance-40,000Withholding Tax Recoverables 25,686 20,7856,156,175 665,66613. CASH & CASH EQUIVALENTSCash at bank334,904 92,649Cash in Hand 484,610 193,257819,514 285,906Bank Overdraft (1,307,884) (2,011,400)Cash & cash equivalents for the purpose of cashflow statement (488,370) (1,725,494)14. STATED CAPITALIssued and Fully paid up Capital 100,000,020 20100,000,020 2015. INTEREST BEARING BORROWINGSAs at 01 April 6,025,991 11,147,288Obtained during the year 18,768,572 -Repayments (4,574,530) (5,121,297)20,220,033 6,025,991Interest in Suspense (446,363) -As at 31 March 19,773,670 6,025,99115.1 Sources of Finance- Non CurrentHatton National Bank Loan (Note 15.3) 11,351,510 -Hatton National Bank Lease (Note 15.4) 1,177,165 3,800,73112,528,675 3,800,73115.2 Sources of Finance- CurrentHatton National Bank Loan (Note 15.3) 2,984,492 602,817Sampath Bank Loan (Note 15.5) 2,918,275 -Hatton National Bank Lease (Note 15.4) 1,342,228 1,622,4437,244,995 2,225,2602054 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENT15. INTEREST BEARING BORROWINGS (CONTD.)15.3 Hatton National Bank Loan (Note 15.3)(a) The company has obtained a development loan amounting to Rs. 4.6Mn at the interest rate of AWPLR +2.5% p.a. (tobe reviewed in Quarterly ) in 06/12/2010 The facility has been secured on Landbelongings to Mr. L.S. Sigera (the director of the company) situated at Endremulla, Wattala.The Loan repayable in 60 equal monthly instalments commencing on January 2010 and there is no grace period(b)(c)The company has obtained a development loan amounting to Rs. 5 Mn at the interest rate of AWPLR+2.5% p.a. (tobe reviewed in quarterly) in 06/05/2010 The loan has been secured on Land situated at Puranagam, Minneriya. TheLoan repayable in 60 equal monthly instalments commencing J u n e 2010 and there is no grace period.The company has obtained development loan amounting to Rs. 5.8 Mn at the interest rate of AWPLR+2.5% p.a.(to be reviewed in quarterly) in 02/11/2010 and The loan has been secured on Land situated at Puranagam, Minneriya. Itshould be repaid within 60 equal monthly instalments commencing May 2011 and has grace period of 06 months.15.4 Hatton National Bank Lease (Note 15.4)The company has obtained lease facilities from Hatton National Bank amounting to Rs. 1.75Mnand Rs. 4.05 for purchase of Motor Vehicle. The facility should be repaid in 60 and 48 instalments respectively.15.5 Sampath Bank Loan (Note 15.5)The company has obtained loan amounting to Rs. 2,918,275/- Mn at the interest rate of AWDR+ 5% p.a.(to be reviewed in quarterly) in 23 February 2011 . The loan is repayable over the period of 60 months commencingwith March 2011. The facility has been secured on Land situated at Ramboda, Kotmale.AS AT 31 MARCH, 2011 2010Rs.Rs.16. RETIREMENT BENEFIT OBLIGATIONProvision for the year 491,850 -As at 31 March, 491,850 -17. PROVISION FOR DEFERRED TAXOn temporary differences 806,168 -On revaluations 29,181,542As at 31 March 29,987,710 -18. TRADE & OTHER PAYABLESTrade Payables 2,258,555 885,254Other Payables including accrued Expenses 1,610,283 170,823Welfare Fund 95,120 95,120VAT Payable 571,942 51,3244,535,900 1,202,52119. RELATED PARTY PAYABLESAS AT 31 MARCH, 2011 2010Rs.Rs.RestatedL.S. Sigera - Director 14,387,678 8,421,301I.J.A. Karunarathna - Director 9,580,430 8,383,06423,968,108 16,804,365AS AT 31 MARCH, 2011 2010Rs.Rs.20. CURRENT TAX PAYABLESAs at 01 April, 623,531 349,548On current year profits (Note 8) 625,045 300,378Payments Made (623,531) (26,395)As at 31 March, 625,045 623,5312155 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENT21. RELATED PARTIES`21.1 Transactions with Key management personnelKey management personnel compensationKey management personnel comprise of board of directors and the emolumentsmade on behalf of them has been disclosed in the note no 6.21.2 Other transactions with key management personnelThe board of directors of the Company hold 100% of voting shares of the Company.Name of the Director Nature of transaction Value (Rs.) Bal. as at31 March 2011L.S. SigeraOpening balance5,974,781Advances Given8,130,15814,387,678Advances takenAccounting adjustments(4,321,609)4,604,348I.J.A. KarunarathnaOpening balanceAccounting adjustments5,936,5443,643,8869,580,43022. CONTINGENT LIABILITIESThere are no material contingent liabilities outstanding as at the balance sheet date.23. CAPITAL COMMITMENTSThere were no material capital expenditure commitment w h i c h require disclosureas at the balance sheet date.24. EVENTS OCCURING AFTER THE BALANCE SHEET DATENo circumstances have arisen since the balance sheet date which would requiredisclosure in or adjustments to the financial statements.25. COMPARATIVE INFORMATIONComparative figures have been rearranged and reclassified to facilitate comparisonwith current year classification, where it is necessary.26. DIRECTORS’ RESPONSIBILITYThe directors are responsible for preparation and presentation of thesefinancial statements.27. RE-ISSUE OF FINANCIAL STATEMENTSInformation in accordance with SLAS 18, Property, plant & equipment were incorporatedand reissued the financial statements2256 Ramboda Falls Limited – Introductory Document

AUDITED FINANCIAL STATEMENTS AS AT 31ST MARCH 201057 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTD.INCOME STATEMENT 31-Mar-10 31-Mar-09For the year ended 31 March 2010 Note Rs. Rs.Revenue 8 13,161,371.06 15,249,805.89Cost of Sales 9 5,782,540.94 5,423,249.00Gross Profit 7,378,830.12 9,826,556.89Other Income - -7,378,830.12 9,826,556.89Distribution Expenses 10 370,922.45 431,702.00Administrative Expenses 11 2,729,466.28 2,477,035.26Other Operating Expenses 12 17,961.00 25,890.00Finanace Expenses 13 1,282,674.77 2,592,984.00Total Expenses 4,401,024.50 5,527,611.26Profit for the year before Depreciation 2,977,805.62 4,298,945.63Depreciation for the year 868,736.80 2,917,503.78Profit after Depreciation 2,109,068.82 1,381,441.85Tax Expense 300,378.16 349,548.00Profit after Taxation 1,808,690.66 1,031,893.85Basic Earnings/ (Deficit) Per Share (Rs.) 14 904,345.33 515,946.93Figures in brackets indicate deductions.58 Ramboda Falls Limited – Introductory Document

59 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTD.STATEMENT OF CHANGES IN EQUITYStated CapitalGeneralReserveRetainedEarnings Total EquityAs at 31 March 2010 Rs. Rs. Rs. Rs.Balance as 1 April 2008 1,000,020.00 - (13,337,895.00) (12,337,875.00)Profit for the year - 1,031,893.85 1,031,893.85As at 31 March 2009 1,000,020.00 - (12,306,001.15) (11,305,981.15)Profit for the Year - 1,808,690.66 1,808,690.66As at 31 March 2010 1,000,020.00 - (10,497,310.49) (9,497,290.49)Figures in brackets indicate deductions.60 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTD.CASH FLOW STATEMENTYear Ended 31 March 2010 31-Mar-10 31-Mar-09Rs.Rs.Cash flow From Operating ActivitiesNet Profit Before Taxation 2,109,068.82 1,381,441.85Adjustment for:Depreciation 868,736.80 2,812,621.41Interest Expense 1,197,492.92 2,559,801.00Operating Profit before Working Capital Changes 4,175,298.54 6,753,864.26(Increase) in Inventories 96,773.85 (191,207.00)Decrease in Trade Receivables 388,048.56 177,334.91Increase in Accounts Payables and Accrued Expenses (224,450.71) (2,862.00)260,371.70 (16,734.09)Net Cash flow From Operating Activities Before Interest Exp. 4,435,670.24 6,737,130.17Interest Expenses (1,197,492.92) (2,559,801.00)Net Cash flow From Operating Activities 3,238,177.32 4,177,329.17Investing ActivitiesAddition to Property, Plant and Equipment - (3,265,409.00)Net Cash flow from investing activities 3,238,177.32 911,920.17Financing ActivitiesProceeds/Settlement on Interest Bearing Borrowings (925,543.68) (3,400,251.92)Increase/Decrease in Directors Current Account (2,610,325.64) 829,663.84Net Cash (used in) / From financing activities (3,535,869.32) (2,570,588.08)Net Increase in Cash & Cash Equivalent (297,692.00) (1,658,667.91)Cash and Cash Equivalents as at 1 April (1,427,801.91) 230,866.00Cash and Cash Equivalents as at 31 March (1,725,493.91) (1,427,801.91)Analysis of Cash and Cash EquivalentsCash in Hand 193,256.35 18,500.00Cash at Bank 92,649.15 47,147.00Bank Overdraft HNB No. 25241017 - -Cash at Bank - Sampath - No. 841000076 - -Bank Overdraft (2,011,399.41) (1,493,448.91)(1,725,493.91) (1,427,801.91)Figures in brackets indicate deductions.61 Ramboda Falls Limited – Introductory Document

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65 Ramboda Falls Limited – Introductory Document

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68 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTDNotes to the Financial Statement.Year Ended 31 March 20108 Revenue 31-Mar-10 31-Mar-09Note Rs. Rs.Restaurant Sales 7,188,884.71 8,515,818.00Bar Sales 1,695,430.07 1,857,313.00Other Sales Income 1,245,475.52 105,202.0010,129,790.29 10,478,333.00Less: VAT 1,085,334.67 1,220,690.00Sales Revenue Net of VAT 9,044,455.62 9,257,643.00Accommodation Income 8.1 2,295,766.59 1,981,073.00Add: Vegetable Income - 2,154,969.74Add: Hiring Income 907,572.17Tea Crope 913,576.68 1,856,120.1513,161,371.06 15,249,805.898.1 Accommodation Income 31-Mar-10 31-Mar-09Rs.Rs.Room Renting Charges 3,234,328.61 2,944,808.00Less: VAT 346,535.21 384,105.00Sales Revenue Net of VAT 2,887,793.40 2,560,703.00Less: ExpensesSalaries & Wages 301,105.32 219,750.00Employees Provident Fund 36,132.64 26,370.00Employees Trust Fund 9,033.16 5,429.00Room Up keeping Charges 45,577.00 33,611.00Laundry Charges 41,666.17 104,434.00Linen Charges 28,832.00 27,196.00Electricity 129,680.52 162,840.00592,026.81 579,630.00Net Accommodation Income 2,295,766.59 1,981,073.0069 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTDNotes to the Financial Statement.Year Ended 31 March 20109 Cost of Sales 31-Mar-10 31-Mar-09Rs.Rs.Direct Material ExpensesOpening Stock 1,322,648.00 1,131,441.00Add: Purchased during the year 4,818,494.00 4,747,080.006,141,142.00 5,878,521.00Less: Closing Stock 1,225,874.15 1,322,648.00Cost of Sales 4,915,267.85 4,555,873.00Other Overhead ExpensesGas & Energy 238,065.67 320,280.00Hotel Maintenance Expenses 67,258.50 58,577.00Electricity Charges 561,948.92 488,519.00867,273.09 867,376.00Total Cost 5,782,540.94 5,423,249.0010 Distribution Expenses 31-Mar-10 31-Mar-09Rs.Rs.Vehicle Maintenance 45,437.91 52,148.00Fuel Expenses 162,430.11 196,590.00Vehicle Insurance 163,054.43 182,964.00370,922.45 431,702.0011 Administrative Expenses 31-Mar-10 31-Mar-09Rs.Rs.Directors' Remuneration 459,000.00 450,000.00Staff Salaries 1,204,421.28 879,001.00Employees Provident Fund 199,610.55 172,665.00Employees Trust Fund 49,902.64 39,674.75Electricity 172,907.36 162,840.00Telephone Charges 173,573.38 188,481.00Water - 1,565.00Printing & Stationery 18,841.29 19,984.00Internet Charges 6,762.33 8,255.00Audit Fee 40,000.00 25,000.00Fire, General and Strike Terrorism Ins. - 99,867.00Building Insurance 28,432.60 68,549.00Security Charges - 79,600.00Postages 9,711.00 11,560.00Pradeshiya Sabah Council Tax - 3,725.00Tourist Board Levy 119,322.02 85,824.51Name Board Tax 1,500.00 1,500.00Liquor License Fee 155,000.00 14,000.00Lodging House License 3,320.00 1,000.00Inspection License Fee 21,918.40 15,893.00Tourist Board Guest License Fee 15,000.00 15,000.00Other Insurance 2,896.68 -Provincial Tax 31,914.55 13,837.00Vehicle License 6,200.00 9,240.00Staff Welfare - 105,949.00Dialog TV Connection 9,232.20 4,025.002,729,466.28 2,477,035.2670 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTDNotes to the Financial Statement.Year Ended 31 March 201012 Other Operating Expenses 31-Mar-10 31-Mar-09Rs.Rs.Other Expenses 17,961.00 25,890.0017,961.00 25,890.0013 Finance Expenses 31-Mar-09 31-Mar-09Rs.Rs.Bank Charges 22,862.49 7,840.00Interest on Lease 901,625.41 606,395.00Interest on Term Loan 281,973.35 1,474,012.00Interest on Overdraft 13,894.16 479,394.00Commission on Credit Cards 62,319.36 25,343.001,282,674.77 2,592,984.0014 Earnings Per Ordinary Share 31-Mar-10 31-Mar-09For the year ended 31 March Rs. Rs.Profit after Taxation 1,808,690.66 1,031,894.00Less: Minority Share holdersNet Profit attributable Ordinary Share holders asNumerator 1,808,690.66 1,031,894.00Number of Ordinary Share holders (as Denominator) 2 2Earnings Per Ordinary Share (Rs.) 904,345.33 515,947.00The calculation of Company's Earnings Per Share of Rs. 904,345 is based on profit to the yearattributable to the Ordinary Share Holders and weighted average number of ordinary sharesoutstanding during the year.the above reflects the income and share data used for the computation of Earnings Per OrdinaryShare.71 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTD.Notes the financial statementsFor Year ended 31st March 2010Note. 15 Property ,Plant and EquipmentFree HoldLand BuildingsMotorVehicleKitchen &CateringEquipmentFurniture& FittingsOfficeEquipmentComputerHardwareMachinery&Equipment Total 2009Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.Cost or ValuationBalance as at 1 April 2009 2,166,880.00 14,996,116.00 1,260,574.00 3,264,764.80 629,615.99 190,000.00 675,600.00 23,183,550.79Addition - -Disposals -Balance as at 31st March 2010 2,166,880.00 14,996,116.00 - 1,260,574.00 3,264,764.80 629,615.99 190,000.00 675,600.00 23,183,550.79Lease Hold AssetsBalance as at 1 April 2009 - - 2,606,959.64 - - 466,075.00 3,073,034.64Addition -Disposals -Balance as at 31st March 2010 - - 2,606,959.64 - - - 466,075.00 - 3,073,034.64Balance as at 31st March 2010 2,166,880.00 14,996,116.00 2,606,959.64 1,260,574.00 3,264,764.80 629,615.99 656,075.00 675,600.00 26,256,585.43Accumulated DepreciationBalance as at 1 April 2009 - 6,665,262.10 - 1,244,095.00 3,264,763.80 317,563.00 47,500.00 675,599.00 12,214,782.90Provided During the Year - 749,805.80 - 16,479.00 - 78,702.00 23,750.00 - 868,736.80Balance as at 31st March 2010 - 7,415,067.90 1,260,574.00 3,264,763.80 396,265.00 71,250.00 675,599.00 13,083,519.70Lease Hold AssetsBalance as at 1 April 2009 - - 2,606,959.64 - - 466,075.25 3,073,034.89Provided During the Year - - - - - -Balance as at 31st March 2010 - - 2,606,959.64 - - - 466,075.25 - 3,073,034.89Balance as at 31st March 2010 - 7,415,067.90 2,606,959.64 1,260,574.00 3,264,763.80 396,265.00 537,325.25 675,599.00 16,156,554.59Carrying ValueNet book Value as at 31st March 2010 2,166,880.00 7,581,048.10 - - 1.00 233,350.99 118,749.75 1.00 10,100,030.84Net book Value as at 31st March 2009 2,166,880.00 8,330,853.90 - 16,479.00 1.00 312,052.99 142,499.75 1.00 10,968,767.6472 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTDNotes to the Financial Statement.Year Ended 31 March 201016 Inventories 31-Mar-10 31-Mar-09Rs.Rs.Food & Beverage 306,468.54 337,000.00Cutlery 269,692.31 289,178.00Linen 502,608.40 543,471.00Bar Stock 147,104.90 152,999.001,225,874.15 1,322,648.0017 Trade and Other Receivables 31-Mar-10 31-Mar-09Rs.Rs.Trade Receivables 589,256.00 511,655.00Value Added Tax Receivables 15,625.00 -Receivables incurred on Hydro Power Pro. - 533,617.00Income Tax Paid in Advance 40,000.00 -Withholding Tax 20,785.44 8,443.00665,666.44 1,053,715.0018 Cash & Cash Equivalents 31-Mar-10 31-Mar-09Rs.Rs.Bank Overdraft HNB No. 25241017 - -Cash at Bank - Sampath - No. 841000076 92,649.15 47,147.00Cash in Hand 193,256.35 18,500.00285,905.50 65,647.0019 Stated Capital 31-Mar-10 31-Mar-09Rs.Rs.Issued and Fully Paid up Capital 20.00 20.00-Advance Against Share Capital 1,000,000.00 1,000,000.001,000,020.00 1,000,020.00The Authorized capital and par value concept in relation to share capital were abolishedby the Companies Act No. 07 of 2007. therefore comparative figures has been reclassifiedaccordingly. The total amount received by the Company in respect of issue of sharesare referred to as stated capital.73 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTDNotes to the Financial Statement.Year Ended 31 March 201020 Interest Bearings Borrowings 31-Mar-10 31-Mar-09Rs.Rs.508,999.72 3,985,376.0020.1 Bank Borrowings - MovementAt the beginning of the year 3,985,376.00 6,142,750.00Repayments 3,476,376.28 2,157,734.00At the end of the year 508,999.72 3,985,376.00Repayable with in one year 508,999.72 1,133,383.00Repayable after one year 2,851,993.00508,999.72 3,985,376.0020.2 Finance Lease Obligation 5,516,990.60 2,966,158.00MovementAt the beginning of the year 7,161,911.70 4,209,036.00New Lease Obtained - -- -Repayment 1,644,921.10 1,242,878.00At the end of the year 5,516,990.60 2,966,158.00Repayable with in one year 1,542,712.00 1,314,555.00Repayable after one year 3,974,278.60 1,651,603.005,516,990.60 2,966,158.0021 Trade and Other Payables 31-Mar-10 31-Mar-09Rs.Rs.Trade Payables 885,254.14 942,640.00Other Payables including accrued Expenses 21.1 794,354.75 710,307.85Welfare Fund 95,120.00 82,820.00VAT Payable 51,323.56 14,357.001,826,052.45 1,750,124.8521.1 Other Payables including accrued Expenses 31-Mar-10 31-Mar-09Rs.Rs.Electricity 74,925.00 186,257.00Telephone Charges 10,855.88 18,193.00Internet Charges 1,153.45 1,130.00Salaries - 90,417.00Employees Provident Fund 37,995.00 31,815.00Employees Trust Fund 5,894.27 7,948.00Audit Fee 40,000.00 25,000.00Income Tax 623,531.15 349,547.85794,354.75 710,307.8574 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTDNotes to the Financial Statement.Year Ended 31 March 201022 Directors' Current Account 31-Mar-10 31-Mar-09Rs.Rs.L.S. Sigera 5,974,781.01 7,279,943.66I.J.A. Karunarathna 5,936,544.18 7,241,707.1711,911,325.19 14,521,650.8423 Bank Balance 31-Mar-10 31-Mar-09Rs.Rs.Bank Overdraft HNB No. 25241017 2,011,399.50 1,493,449.002,011,399.50 1,493,449.0075 Ramboda Falls Limited – Introductory Document

AUDITED FINANCIAL STATEMENTS AS AT 31ST MARCH 200976 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTD.INCOME STATEMENT 31-Mar-09 31-Mar-08For the year ended 31 March 2009 Note Rs. Rs.Revenue 8 13,407,016 8,040,840Cost of Sales 9 6,529,817 6,529,735Gross Profit 6,877,199 1,511,105Other Income - -6,877,199 1,511,105Distribution Expenses 10 431,702 674,478Administrative Expenses 11 2,445,181 1,733,853Other Operating Expenses 12 25,890 19,850Finanace Expenses 13 2,592,984 1,255,684Total Expenses 5,495,757 3,683,865Profit Before Tax 1,381,442 (2,172,760)Tax Expense 349,548 23,316Profit for the Year 1,031,894 (2,196,076)Basic Earnings/ (Deficit) Per Share (Rs.) 14 515,947 (1,098,038)Figures in brackets indicate deductions.77 Ramboda Falls Limited – Introductory Document

78 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTD.STATEMENT OF CHANGES IN EQUITYStated GeneralCapital ReserveRetainedEarnings Total EquityAs at 31 March 2009 Rs. Rs. Rs. Rs.Balance as 1 April 2007 1,000,020 - (11,141,819) (10,141,799)Profit for the year - (2,196,076) (2,196,076)As at 31 March 2008 1,000,020 - (13,337,895) (12,337,875)Profit for the Year - 1,031,894 1,031,894As at 31 March 2009 1,000,020 - (12,306,001) (11,305,981)Figures in brackets indicate deductions.79 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTD.CASH FLOW STATEMENTYear Ended 31 March 2009 31-Mar-09 31-Mar-08Rs. Rs.Cash flow From Operating ActivitiesNet Profit Before Taxation 1,381,442 (2,172,760)Adjustment for:Depreciation 2,812,621 2,018,571Interest Expense 2,559,801 1,228,271Operating Profit before Working Capital Changes 6,753,864 1,074,082(Increase) in Inventories (191,207) (336,995)Decrease in Trade Receivables 177,335 743,397Increase in Accounts Payables and Accrued Expenses (2,862) 55,232(16,734) 461,634Net Cash flow From Operating Activities Before Interest Exp. 6,737,130 1,535,716Interest Expenses (2,559,801) (1,228,271)Net Cash flow From Operating Activities 4,177,329 307,445Investing ActivitiesAddition to Property, Plant and Equipment (3,265,409) (202,385)Net Cash flow from investing activities 911,920 105,060Financing ActivitiesProceeds/Settlement on Interest Bearing Borrowings (3,400,252) 3,581,549Increase/Decrease in Directors Current Account 829,664 (3,499,903)Net Cash (used in) / From financing activities (2,570,588) 81,646Net Increase in Cash & Cash Equivalent (1,658,668) 186,706Cash and Cash Equivalents as at 1 April 230,866 44,160Cash and Cash Equivalents as at 31 March (1,427,802) 230,866Analysis of Cash and Cash EquivalentsCash in Hand 18,500 15,660Cash at Bank 47,147 215,206Bank Overdraft (1,493,449) -(1,427,802) 230,866Figures in brackets indicate deductions. - -80 Ramboda Falls Limited – Introductory Document

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82 Ramboda Falls Limited – Introductory Document

83 Ramboda Falls Limited – Introductory Document

84 Ramboda Falls Limited – Introductory Document

85 Ramboda Falls Limited – Introductory Document

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88 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTDNotes to the Financial Statement.Year Ended 31 March 20098 Revenue 31-Mar-09 31-Mar-08Note Rs. Rs.Food & Beverages 8,515,818 4,570,164Liquor Sales 1,857,313 1,009,403Other Sales Income 105,202 50,43310,478,333 5,630,000Less: VAT 1,220,690 844,500Sales Revenue Net of VAT 9,257,643 4,785,500Accommodation Income 8.1 138,284 695,440Add: Vegetable Income 4,011,090 2,559,90013,407,016 8,040,8408.1 Accommodation Income 31-Mar-09 31-Mar-08Rs. Rs.Room Renting Charges 2,944,808 1,888,617Less: VAT 384,105 283,292Sales Revenue Net of VAT 2,560,703 1,605,325Less: ExpensesSalaries & Wages 219,750 217,928Employees Provident Fund 26,370 26,151Employees Trust Fund 5,429 4,793Room Up keeping Charges 33,611 32,952Laundry Charges 104,434 102,386Linen Charges 27,196 26,662Depreciation 1,842,789 306,535Electricity 162,840 192,4782,422,419 909,885Accommodation Net Income 138,284 695,4409 Cost of Sales 31-Mar-09 31-Mar-08Rs. Rs.Direct Material ExpensesOpening Stock 1,131,441 794,447Add: Purchased during the year 4,747,080 4,566,9525,878,521 5,361,399Less: Closing Stock 1,322,648 1,131,44189 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTDNotes to the Financial Statement.Year Ended 31 March 2009Cost of Sales 4,555,873 4,229,958Direct Staff CostSalaries & Wages 659,251 653,783Employees Provident Fund 79,110 78,454Employees Trust Fund 16,286 19,613754,647 751,850Other Overhead ExpensesGas & Energy 320,280 256,224Hotel Maintenance Expenses 58,577 52,796Electricity Charges 488,519 577,434Depreciation 351,921 661,4731,219,297 1,547,927Total Cost 6,529,817 6,529,73510 Distribution Expenses 31-Mar-09 31-Mar-08Rs. Rs.Advertising - 19,832Vehicle Maintenance 52,148 49,665Fuel Expenses 196,590 187,229Vehicle Insurance 182,964 166,322Depreciation - 251,430431,702 674,47811 Administrative Expenses 31-Mar-09 31-Mar-08Rs. Rs.Directors' Remuneration 450,000 397,500Staff Salaries 219,750 217,928Employees Provident Fund 93,555 26,151Employees Trust Fund 23,389 6,512Electricity 162,840 192,478Telephone Charges 188,481 240,687Water 1,565 1,325Printing & Stationery 19,984 15,988Internet Charges 8,255 13,488Audit Fee 25,000 22,500Depreciation 722,793 239,133Fire, General and Strike Terrorism Ins. 99,867 3,149Building Insurance 68,549 68,664Security Charges 79,600 75,600Postages 11,560 11,850Pradeshiya Sabah Council Tax 3,725 2,466Tourist Board Levy 85,825 -Name Board Tax 1,500 1,500Liquor License Fee 14,000 14,000Lodging House License 1,000 1,020Inspection License Fee 15,893 15,893Tourist Board Guest License Fee 15,000 15,000Provincial Tax 13,837 17,577Vehicle License 9,240 8,820Staff Welfare 105,949 124,624Dialog TV Connection 4,025 -2,445,181 1,733,85390 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTDNotes to the Financial Statement.Year Ended 31 March 200912 Other Operating Expenses 31-Mar-09 31-Mar-08Rs. Rs.Other Expenses 25,890 19,85025,890 19,85013 Finance Expenses 31-Mar-09 31-Mar-08Rs. Rs.Bank Charges 7,840 4,829Interest on Lease 606,395 766,567Interest on Term Loan 1,474,012 34,191Interest on Overdraft 479,394 427,469Commission on Credit Cards 25,343 22,6282,592,984 1,255,68414 Earnings Per Ordinary Share 31-Mar-09 31-Mar-08For the year ended 31 March Rs. Rs.Profit after Taxation 1,031,894 (2,196,076)Less: Minority Share holders -Net Profit attributable Ordinary Share holders asNumerator 1,031,894 (2,196,076)Number of Ordinary Share holders (as Denominator) 2 2Earnings Per Ordinary Share (Rs.) 515,947 (1,098,038)The calculation of Company's Earnings Per Share of Rs. 515,947 is based on profit to the yearattributable to the Ordinary Share Holders and weighted average number of ordinary sharesoutstanding during the year.the above reflects the income and share data used for the computation of Earnings Per OrdinaryShare.16 Inventories 31-Mar-09 31-Mar-08Rs. Rs.Food & Beverage 337,000 300,460Cutlery 289,178 300,460Linen 543,471 530,521Bar Stock 152,999 -1,322,648 1,131,44191 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTDNotes to the Financial Statement.Year Ended 31 March 200917 Trade and Other Receivables 31-Mar-09 31-Mar-08Rs. Rs.Trade Receivables 511,655 686,892Value Added Tax Receivables - -Receivables incurred on Hydro Power Pro. 533,617 533,617Withholding Tax 8,443 10,5411,053,715 1,231,05018 Cash & Cash Equivalents 31-Mar-09 31-Mar-08Rs. Rs.Cash at Bank - Sampath - No. 841000076 47,147 191,639Cash at Bank - HNB - No. 25241017 - 23,567Cash in Hand 18,500 15,66065,647 230,86619 Stated Capital 31-Mar-09 31-Mar-08Rs. Rs.Issued and Fully Paid up Capital 20 20Advance Against Share Capital 1,000,000 1,000,0001,000,020 1,000,020The Authorized capital and par value concept in relation to share capital were abolishedby the Companies Act No. 07 of 2007. therefore comparative figures has been reclassifiedaccordingly. The total amount received by the Company in respect of issue of sharesare referred to as stated capital.20 Interest Bearings Borrowings 31-Mar-09 31-Mar-08Rs. Rs.3,985,376 6,142,75020.1 Bank Borrowings - MovementAt the beginning of the year 6,142,750 -Repayments 2,157,374 -At the end of the year 3,985,376 6,142,750Repayable with in one year 1,133,383 4,718,150Repayable after one year 2,851,993 1,424,6003,985,376 6,142,75020.2 Finance Lease Obligation 2,966,158 4,209,036MovementAt the beginning of the year 4,209,036 -New Lease Obtained - --Repayment 1,242,878At the end of the year 2,966,158 -Repayable with in one year 1,314,555 1,316,219Repayable after one year 1,651,603 2,892,8172,966,158 4,209,03692 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTDNotes to the Financial Statement.Year Ended 31 March 200931-Mar-09 31-Mar-08Rs. Rs.Finance Lease Details Rental Int. in Suspense Net3702 / 029 / 005/ R4 -Motor Car 204,712 21,205 183,507 382,0443705 / 029 / 011/ R5 -Motor Car 1,657,532 302,424 1,355,108 1,878,8263707 / 029 / 016/ R4 1,193,423 228,505 964,918 1,302,7813710 / 029 / 022/ R4 497,157 34,532 462,625 645,3853,552,824 586,666 2,966,158 4,209,03621 Trade and Other Payables 31-Mar-09 31-Mar-08Rs. Rs.Trade Payables 942,640 886,227Other Payables including accrued Expenses 21.1 710,308 420,035Welfare Fund 82,820 82,820VAT Payable 14,357 14,3571,750,125 1,403,43921.1 Other Payables including accrued Expenses 31-Mar-09 31-Mar-08Rs. Rs.Electricity 186,257 165,798Telephone Charges 18,193 81,995Internet Charges 1,130 1,150Salaries 90,417 80,300Employees Provident Fund 31,815 18,760Employees Trust Fund 7,948 3,918Audit Fee 25,000 22,500Advertising Charges - 19,832Provincial Tax - 2,466Income Tax 349,548 23,316710,308 420,03522 Directors' Current Account 31-Mar-09 31-Mar-08Rs. Rs.L.S. Sigera 7,279,944 6,973,227I.J.A. Karunarathna 7,241,707 6,718,76014,521,651 13,691,98723 Bank Balance 31-Mar-09 31-Mar-08Rs. Rs.Bank Overdraft HNB No. 25241017 1,493,449 -1,493,449 -93 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTD.Notes the financial statementsFor Year ended 31st March 2009Note. 15 Property ,Plant and EquipmentFree HoldLandBuildingsMotorVehicleKitchen &CateringEquipmentFurniture& FittingsOfficeEquipmentComputerHardwareMachinery&EquipmentTotal 2009Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.Cost or ValuationBalance as at 1 April 2008 2,166,880 11,730,707 1,260,574 3,264,765 629,616 190,000 675,600 19,918,142Addition - 3,265,409 - - - - - - 3,265,409Disposals -Balance as at 31st March 2009 2,166,880 14,996,116 - 1,260,574 3,264,765 629,616 190,000 675,600 23,183,551Lease Hold AssetsBalance as at 1 April 2008 - - 2,606,960 - - 466,075 3,073,035Addition -Disposals -Balance as at 31st March 2009 - - 2,606,960 - - - 466,075 - 3,073,035Balance as at 31st March 2009 2,166,880 14,996,116 2,606,960 1,260,574 3,264,765 629,616 656,075 675,600 26,256,585Accumulated DepreciationBalance as at 1 April 2008 - 5,492,191 - 613,808 2,743,118 160,159 - 509,404 9,518,680Provided During the Year - 1,173,071 - 630,287 521,646 157,404 47,500 166,195 2,696,103Balance as at 31st March 2009 - 6,665,262 1,244,095 3,264,764 317,563 47,500 675,599 12,214,783Lease Hold AssetsBalance as at 1 April 2008 - - 2,606,960 - - 349,557 2,956,516Provided During the Year - - - - 116,519 116,519Balance as at 31st March 2009 - - 2,606,960 - - - 466,075 - 3,073,035Balance as at 31st March 2009 - 6,665,262 2,606,960 1,244,095 3,264,764 317,563 513,575 675,599 15,287,818Carrying ValueNet book Value as at 31st March 2009 2,166,880 8,330,854 - 16,479 1 312,053 142,500 1 10,968,768Net book Value as at 31st March 2008 2,166,880 6,238,516 - 646,766 521,647 469,457 306,519 166,196 10,515,98094 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTD.Statement of IncomeYar of Assessment 2008/2009TIN 114173339 0000Rs. Rs.Income from Business 5,799,838Add: Other Sources of Income -Total Statutory Income 5,799,838Less: Deduction from Statutory Income Income -Interest on Term Loan 1,474,012 1,474,0124,325,826Assessable Loss B/F From the Y/A 2007/2008 5,312,922Deducted against Total Statutory Income 2,029,943 2,029,943Assessable Loss C/F to the Y/A 2009/2010 3,282,979Taxable income 2,295,882Income Tax Payable @ 15% 2,295,882 344,382Less: Income Tax has already been paidWithholding Tax Deducted 8,443Tax Paid on Self Assessment Scheme 5,00013,443Balance Income Tax Payable 330,939Social Responsibility Levy @ 1.5% 344,382 5,166WICKRAMASINGHE & COMPANYChartered AccountantsSeptember 23, 2009Colombo.95 Ramboda Falls Limited – Introductory Document

RAMBODA FALLS (PVT) LTDAdjusted Statement of AccountsYear of Assessment 2008/2009TIN 114173339 0000 Rs. Rs.Net Profit as per Accounts 1,381,442Add: Disallowable ExpensesDepreciation 2,812,621Interest on Term Loan 1,474,012Interest on Lease 606,3954,893,028 4,893,0286,274,470Less: Allowable ExpensesCapital AllowancesAddition for the Y/A 96/97 206,770Addition for the Y/A 01/02 82,213Addition for the Y/A 02/03 96,494Addition for the Y/A 05/06 89,155474,633 474,6335,799,83896 Ramboda Falls Limited – Introductory Document

Capital allowances For the Addition During Y/A 1996/1997Class of assets Form of assets Cost Rate Bal. B/F Depn. Allow. Bal. C/F2008/2009Building Constructed Building 3,100,000 6.67% 620,000 206,770 413,230-3,100,000 620,000 206,770 413,230Capital allowances For the Addition During Y/A 2001/2002Class of assets Form of assets Cost Rate Bal. B/F Depn. Allow. Bal. C/F2008/2009Building Constructed Building 1,232,585 6.67% 657,379 82,213 575,1661,232,585 657,379 82,213 575,166Capital allowances For the Addition During Y/A 2002/2003Depn. Allow.Class of Assets Form of assets Cost Rate Bal. B/F 2008/2009 Bal. C/FBuilding Improvements 1,447,415 6.67% 868,449 96,494 771,9551,447,415 868,449 96,494 771,955Capital allowances For the Addition During Y/A 2005/2006Depn. Allow.Class of Assets Form of assets Cost Rate Bal. B/F 2008/2009 Bal. C/FFurniture & Fittings 91,164 20% 36,466 18,233 18,233Kitchen & Catering Equipment 165,536 20% 66,214 33,107 33,107Office Equipment 10,000 20% 4,000 2,000 2,000Computer Equipment 90,000 25% 22,500 22,500 -Machinery 106,523 12.5% 66,577 13,315 53,262463,223 195,757 89,155 106,60297 Ramboda Falls Limited – Introductory Document

ANNEXURE I – MEMBERS AND TRADING MEMBERS OF THE CSEMembers and Trading Members of the CSEMembers of the CSEAcuity Stockbrokers (Pvt) LimitedLevel 6, Acuity House,53, Dharmapala Mawatha,Colombo 03Telephone: +9411 2206206Fax: +9411 2206298/9E-mail: sales@acuitystockbrokers.comAsia Securities (Pvt) LimitedLevel 21, West Tower,World Trade Center,Echelon Square, Colombo 01Telephone: +9411 2423905/5320000Fax: +9411 2336018E-mail: enquiry@asiacapital.lkBartleet Religare Securities (Pvt) Ltd.Level "G", Bartleet House,65, Braybrooke Place,Colombo 02Telephone: +9411 5220200Fax: +9411 2434985E-mail: info@bartleetstock.comNation Lanka Equities (Pvt) Limited44, Guildford Crescent,Colombo 07Telephone: +9411 4714300/ 4714388/ 4714389Fax: +9411 2387228E-mail: info@ecsbl.comD N H Financial (Pvt) LimitedLevel 16, West Tower,World Trade Centre,Colombo 01Telephone: +9411 5700777Fax: +9411 5736264E-mail: info@dnhfinancial.comAsha Phillip Securities LimitedPrince Alfred Towers2 nd Floor, Alfred House GardenColombo 03Telephone: +9411 2429100Fax: +9411 2429199E-mail: apsl@ashaphillip.netAssetline Securities (Pvt) Limited282, Kaduwela Road,BattaramullaTelephone: +9411 4700111/2307366Fax: +9411 4700112E-mail: dpgsl@sltnet.lkCapital Trust Securities (Pvt) Limited42, Sir Mohamed Macan Marker Mawatha,Colombo 03Telephone: +9411 5335225Fax: +9411 5365725E-mail: inquiries@capitaltrust.lkCT Smith Stockbrokers (Pvt) Limited4-14, Majestic City,10, Station Road,Colombo 04Telephone: +9411 2552290-4Fax: +9411 2552289E-mail: ctssales@sltnet.lkJ B Securities (Pvt) Limited150, St. Joseph Street,Colombo 14Telephone: +9411 2490900/772490900Fax: +9411 2430070/2446085/2447875E-mail: jbs@jb.lk98 Ramboda Falls Limited – Introductory Document

Members and Trading Members of the CSEJohn Keells Stockbrokers (Pvt) Limited130, Glennie Street,Colombo 02Telephone:+9411 2306250/2342066-7/2446694-5Fax: +9411 2342068/2326863E-mail: jkstock@keells.comNDB Stockbrokers (Pvt) Limited5 th Floor, NDB Building,40, Navam Mawatha,Colombo 02Telephone: +9411 2314170-8Fax: +9411 2314180E-mail: mail@ndbs.lkLanka Securities (Pvt) Limited228/2, Galle RoadColombo 04Telephone: +9411 4706757/2554942Fax: +9411 4706767E-mail: lankasec@sltnet.lkSC Securities (Pvt) Limited2 nd Floor,55, D.R. Wijewardena Mawatha,Colombo 10Telephone: +9411 4711000Fax: +9411 2394405E-mail: cscres@sltnet.lkSomerville Stockbrokers (Pvt) Limited137, Vauxhall Street,Colombo 02Telephone: +9411 2329201-5/2332827/2338292-3Fax: +9411 2338921E-mail: ssb@web-lk.comMembers and Trading Members of the CSETrading Members of the CSEArrenga Capital (Pvt) LimitedLevel 23, East Tower,World Trade Centre,Colombo 01Tel: +9411 7277000 to 98Fax: +9411 7277099E-mail: dihand@arrengacapital.comClaridge Stockbrokers (Pvt) Limited10, Gnanartha Pradeepa Mawatha,Colombo 08Tel: +9411 2697974Fax: +9411 2677576E-mail: fonseka@mackwoods.comCapital Alliance Securities (Pvt) LimitedLevel 5, "Millennium House",46/58 Navam Mawatha,Colombo 02Tel: +9411 2317777Fax: +9411 2317788E-mail: info@capitalalliance.lkFirst Guardian Equities (Pvt) Limited32 nd Floor, East Tower,World Trade Centre, Colombo 01Tel: +9411 5884400Fax: +9411 5884401E-mail: info@firstguardianequities.com99 Ramboda Falls Limited – Introductory Document

Heraymila Securities LimitedLevel 8, South Wing,‘Millennium House’46/58, Navam Mawatha,Colombo 02Tel: +9411 2359100Fax: +9411 2305522E-mail: info-hsl@heraymila.comLOLC Securities LtdLevel 18, West Tower,World Trade Centre, Echelon Square,Colombo 01Tel: +9411 5880880Fax: +9411 5880607Richard Pieris Securities (Pvt) Limited69, Hyde Park Corner,Colombo 02Tel: +9411 7448900Fax: +9411 2675064E-mail : jayantha@rpsecurities.comSMB Securities (Pvt) Limited47, Dharmapala Mawatha,Colombo 03Tel: +9411 5232091Fax: +9411 2339292E-mail: admin@smbsecurities.lkTKS Securities (Pvt) Limited19-01, East Tower,World Trade Centre,Colombo 01Tel: +9411 7857799Fax: +9411 7857857E-mail: ralph@tks.lkIIFL Securities Ceylon (Pvt) Limited27 th Floor, East Tower,World Trade Centre,Colombo 01Tel: +9411 2333000Fax: +9411 2333383E-mail: info.ceylon@iiflcap.comNew World Securities (Pvt) Ltd2nd Floor, 45/2, Braybrooke Street,Colombo 02Tel: +9411 2358700-20Fax: +9411 2358701E-mail: info@nws.lkSKM Lanka Holdings (Pvt) LimitedNo. 35/1, Alwis Place,Colombo 03Tel: +9411 2344444Fax: +9411 2434198E-mail: info@skmlankaholdings.comTaprobane Securities (Pvt) Limited2 nd Floor, 10, Gothami Road,Colombo 08Tel: +9411 5328200Fax: +9411 5328277E-mail: info@taprobane.lkFirst Capital Markets Limited(Trading Member - Debt)No.75, Arnold Ratnayake Mawatha,Colombo 10.Tel: +94 11 2639898, +94 11 2681888Fax: +94 11 2639899, +94 11 2681460E-Mail: info@firstcapital.lk100 Ramboda Falls Limited – Introductory Document

ANNEXURE II – TRANSFER OF SHARESName of Transferor Name of Transferee No. of SharesTransferred101 Ramboda Falls Limited – Introductory DocumentConsiderationper Share01 L S Sigera Sakura Hansamali Karunarathna 1,900,000 10.00 27.12.1102 L S Sigera Pulasthi Dinuka Panagoda 1,019,300 10.00 27.12.11I J A Karunarathna Pulasthi Dinuka Panagoda 780,700 10.00 27.12.1103 I J A Karunarathna Pathirannehalage Kamala Amaradasa 500,000 10.00 27.12.1104 I J A Karunarathna Gamage Crisanthi Harshini Gamage 300,000 10.00 27.12.1105 I J A Karunarathna Wickramasinghe Mudiyanselage Saman Karunarathna 200,000 10.00 27.12.1106 I J A Karunarathna W A Jagath Pushpa Kumara 100,000 10.00 27.12.1107 I J A Karunarathna Teruaki Ono 100,000 10.00 27.12.1108 I J A Karunarathna Takashi Igarashi 100,000 10.00 27.12.1109 I J A Karunarathna Wickramasinghe Mudiyanselage Dinushika Chaturanganee Ekanayaka 75,000 10.00 27.12.1110 I J A Karunarathna Wickramasinghe Mudiyanselage Chirath Dinumal Senavirathna 50,000 10.00 27.12.1111 I J A Karunarathna Handapanagoda Mudalige Marie Ilonka 40,000 10.00 27.12.1112 I J A Karunarathna Hettiarachchige Jayantha Christopher Perera 25,000 10.00 27.12.1113 I J A Karunarathna Akila Milanka Induruwage 25,000 10.00 27.12.1114 I J A Karunarathna Susewge Greata Jenet Fernando 25,000 10.00 27.12.1115 I J A Karunarathna Pattiyage Nimali Sudarshini Thirimanne 25,000 10.00 27.12.1116 I J A Karunarathna Dona Hettige Dayawathi Thrimanne 25,000 10.00 27.12.1117 I J A Karunarathna Pattiyage Namal Chrishantha Gomes 25,000 10.00 27.12.1118 I J A Karunarathna Mathotuwana Vithanage Yasara Abeyanayake 25,000 10.00 27.12.1119 I J A Karunarathna Kazunao Sato 25,000 10.00 27.12.1120 I J A Karunarathna Jayasenthu Hewage Pushpa Ranjani 20,000 10.00 27.12.1121 I J A Karunarathna Sathkularathna Nanayakkara Hendawitharana Chanaka Dilhan 20,000 10.00 27.12.1122 I J A Karunarathna Walipita Gamage Dhanapala 20,000 10.00 27.12.1123 I J A Karunarathna Pathirannehalage Sarathchandra 20,000 10.00 27.12.1124 I J A Karunarathna W N D Wickramasinghe 20,000 10.00 27.12.1125 I J A Karunarathna Vengadasalam Balagobi 15,000 10.00 27.12.1126 I J A Karunarathna Reshan Niranjan Rodrigo Kurukulasooriya 10,000 10.00 27.12.1127 I J A Karunarathna Raveendra Mallawarachchi 10,000 10.00 27.12.1128 I J A Karunarathna Yapa Mudiyanselage Vajira Padmal Ekanayake 10,000 10.00 27.12.1129 I J A Karunarathna Wijemuni Lakshika Kumari De Soyza 10,000 10.00 27.12.1130 I J A Karunarathna Karunakalage Dilruk Arun Fernando 10,000 10.00 27.12.1131 I J A Karunarathna Loku Yaddehige Buddhika Krishani Dharmasena 10,000 10.00 27.12.1132 I J A Karunarathna Arosha Srimal Rodrigo 10,000 10.00 27.12.1133 I J A Karunarathna Malarkolunthu Sivakumaran 10,000 10.00 27.12.1134 I J A Karunarathna Priyanka Rukmali Premawardene 10,000 10.00 27.12.1135 I J A Karunarathna Deyalamudalige Don Sunil 10,000 10.00 27.12.1136 I J A Karunarathna Trisanga Mohan Kumarasinghe 10,000 10.00 27.12.1137 I J A Karunarathna Kango International (Pvt) Ltd 10,000 10.00 27.12.1138 I J A Karunarathna Kanewalage Padmakumara 10,000 10.00 27.12.1139 I J A Karunarathna Hirimuthugodage Aruna Thilak Wijesundara 10,000 10.00 27.12.1140 I J A Karunarathna Ilandari Deva Kasun Dhananjaya 10,000 10.00 27.12.1141 I J A Karunarathna Mudugamuwe Hewawasam Thusitha Karunarathna 10,000 10.00 27.12.1142 I J A Karunarathna Gunananda Dharmasri Karunarathne 5,100 10.00 27.12.1143 I J A Karunarathna Delano Gerad Oswald Dias 5,000 10.00 27.12.1144 I J A Karunarathna Dissanayaka Wijesuriyage Chaminda Mangala Jayasekara 5,000 10.00 27.12.1145 I J A Karunarathna Senanayake Kumarapeli Arachchige Somarathna Senanayake 5,000 10.00 27.12.1146 I J A Karunarathna Hewa Algiriyage Indika Dhasantha Rathnapala 5,000 10.00 27.12.1147 I J A Karunarathna Rajeevan Kumaravel 5,000 10.00 27.12.1148 I J A Karunarathna Mahagamage Pauline Bernedeth Fernando 5,000 10.00 27.12.1149 I J A Karunarathna Kapilanath Kalapuge 5,000 10.00 27.12.1150 I J A Karunarathna Wagoda Pathirsge Amith Senaratne Perea 5,000 10.00 27.12.1151 I J A Karunarathna Wengappulli Arachchige Susantha 5,000 10.00 27.12.1152 I J A Karunarathna Wellawatte Arachchige Dumindu Chaturanga Silva 5,000 10.00 27.12.1153 I J A Karunarathna Predeep Nisantha Dias Kaluarachchi 5,000 10.00 27.12.1154 I J A Karunarathna Mohomad Roshan Hisham Mansoor 5,000 10.00 27.12.11Date

Name of Transferor Name of Transferee No. of Shares Consideration DateTransferred per Share55 I J A Karunarathna Lasantha Micheal Christian Wijerathunga 3,000 10.00 27.12.1156 I J A Karunarathna Ukwatta Liyanage Ajantha Premasiri 2,500 10.00 27.12.1157 I J A Karunarathna Dadallage Dinesh De Silva 2,000 10.00 27.12.1158 I J A Karunarathna Chaminda Lakmal Vidanagamachchige 2,000 10.00 27.12.1159 I J A Karunarathna Sundararaja Prabhu 2,000 10.00 27.12.1160 I J A Karunarathna Jayasooriya Arachchige Manoj Indrajith 2,000 10.00 27.12.1161 I J A Karunarathna Aluth Gedara Shaminda Nilantha Rupasinghe 1,000 10.00 27.12.1162 I J A Karunarathna Balasooriya Mudiyanselage Saman Asoka Balasooriya 1,000 10.00 27.12.1163 I J A Karunarathna Thehani Yohana Weerasinghe 1,000 10.00 27.12.1164 I J A Karunarathna Nenuka Devini Perera Jayathunga 1,000 10.00 27.12.1165 I J A Karunarathna Mahantha Acharige Don Sajeewa Indika Weerathna 1,000 10.00 27.12.1166 I J A Karunarathna Mohamad Hashim Mansoor 1,000 10.00 27.12.1167 I J A Karunarathna Sudam Hasantha Hewawellalage 1,000 10.00 27.12.1168 I J A Karunarathna Aannakkarage Surani Udeshika Peiris 1,000 10.00 27.12.1169 I J A Karunarathna Sadagiri Pathirathnehelage Wasantha Kumari Sadagiri 1,000 10.00 27.12.1170 I J A Karunarathna Wehihena Gamage Charith Vishmila 1,000 10.00 27.12.1171 I J A Karunarathna Gayan Chathura Perera 1,000 10.00 27.12.1172 I J A Karunarathna Mandawala Guruge Nalaka Niroshana 1,000 10.00 27.12.1173 I J A Karunarathna Nishan Maduranga Fernando 500 10.00 27.12.1174 I J A Karunarathna Yapa Mudiyanselage Wageesha Buddika Ekanayake 100 10.00 27.12.1175 I J A Karunarathna Panik Mudinselage Dinelka Sewwandi Bandara 100 10.00 27.12.1176 I J A Karunarathna Dissnayake Mudiyanselage Sahan Lakshitha Bandara 100 10.00 27.12.1177 I J A Karunarathna Ahamed Dilshard Dawood 100 10.00 27.12.1178 I J A Karunarathna Mohomed Fathima Mifthiya Hasim 100 10.00 27.12.1179 I J A Karunarathna Seyed Rafi Hassam Moulana 100 10.00 27.12.1180 I J A Karunarathna Modara Patabendige Chathuranga Sameera Perera 100 10.00 27.12.1181 I J A Karunarathna S K Hubert 11,300 10.00 05.08.1182 I J A Karunarathna R R Rammandala 11,100 10.00 05.08.1183 I J A Karunarathna S.Jayakanthan 3,800 10.00 05.08.1184 I J A Karunarathna Bandara D G W 4,800 10.00 05.08.1185 I J A Karunarathna J M A C K Jayasooriya 10,200 10.00 05.08.1186 I J A Karunarathna I T G C Saman Kumara 5,600 10.00 05.08.1187 I J A Karunarathna U G N Kelum Jayamanna 5,500 10.00 05.08.1188 I J A Karunarathna D M D W Dasanayaka 7,500 10.00 05.08.1189 I J A Karunarathna S Hettimudalige 3,900 10.00 05.08.1190 I J A Karunarathna K Ashok Kumar 4,500 10.00 05.08.1191 I J A Karunarathna S Krishna Kumar 4,000 10.00 05.08.1192 I J A Karunarathna Balapuwaduge Randilu Anshula Mendis 5,000 10.00 05.08.1193 I J A Karunarathna G P Sivanathan 900 10.00 05.08.1194 I J A Karunarathna S Wijayakumar 2,400 10.00 05.08.1195 I J A Karunarathna G G Kalubanda 1,200 10.00 05.08.1196 I J A Karunarathna U G S Rajapaksha 1,100 10.00 05.08.1197 I J A Karunarathna K M Seetha Kumarihami 1,200 10.00 05.08.1198 I J A Karunarathna A G D M K Madhuranga 1,200 10.00 05.08.1199 I J A Karunarathna B D N D Witharana 1,200 10.00 05.08.11100 I J A Karunarathna M N Mathuranage 1,200 10.00 05.08.11101 I J A Karunarathna Gunananda Dharmasri Karunarathne 700 10.00 05.08.11102 I J A Karunarathna Cristian Kiloson 800 10.00 05.08.11103 I J A Karunarathna A Jhon Kennady 900 10.00 05.08.11104 I J A Karunarathna A Padmanathan 700 10.00 05.08.11105 I J A Karunarathna B Sathees Kumar 3,900 10.00 05.08.11106 I J A Karunarathna Dilhani Aluthgama 300 10.00 05.08.11107 I J A Karunarathna V Pragaladen 600 10.00 05.08.11108 I J A Karunarathna K Srikanth 500 10.00 05.08.11109 I J A Karunarathna L Sivaraj 400 10.00 05.08.11110 I J A Karunarathna Latha Menike 400 10.00 05.08.11111 I J A Karunarathna G Mahendran 300 10.00 05.08.11102 Ramboda Falls Limited – Introductory Document

Name of Transferor Name of Transferee No. of Shares Consideration DateTransferred per Share112 I J A Karunarathna A Periyasami 400 10.00 05.08.11113 I J A Karunarathna Sumith Jayatissa 700 10.00 05.08.11114 I J A Karunarathna D G S Malani Podimanike 1,100 10.00 05.08.11115 I J A Karunarathna D M Indika Kumara 600 10.00 05.08.11116 I J A Karunarathna Augastian Fernando 400 10.00 05.08.11117 I J A Karunarathna R Radhakrishnan 800 10.00 05.08.11118 I J A Karunarathna M Chandrasegar 200 10.00 05.08.11119 I J A Karunarathna H D A R Priyadharshna 200 10.00 05.08.11120 I J A Karunarathna V Arumugam 2,800 10.00 05.08.11121 I J A Karunarathna E G Gunapala 200 10.00 05.08.11122 I J A Karunarathna M G Yasawathi 800 10.00 05.08.11123 I J A Karunarathna A Puwanendran 100 10.00 05.08.11124 I J A Karunarathna M Shirantha Sameera 100 10.00 05.08.11125 I J A Karunarathna O G.S.B.Dissanayaka 100 10.00 05.08.11126 I J A Karunarathna M F M Fause 300 10.00 05.08.11127 I J A Karunarathna K Somarathna 400 10.00 05.08.11128 I J A Karunarathna U Hemapala 400 10.00 05.08.11129 I J A Karunarathna Yapa Mudiyanselage Suranga Lalanthi Ekanayake 100 10.00 05.08.115,838,600103 Ramboda Falls Limited – Introductory Document

ANNEXURE III – VALUATION REPORTSV A L U A T I O NR E P O R TOFRamboda Falls Hotel, Ramboda Falls (Pvt) Ltd.No.76, Rock FallsEstate, Nuwara Eliya Road, Ramboda.By: Basil Hettiarchchi,Charted Valuer104 Ramboda Falls Limited – Introductory Document

PreambleIt is with great pleasure that I submit this valuation report of Ramboda Falls Hotels (Pvt) Ltd.It is a comprehensive estimate of the open market value of the Hotel which could be used forper purpose sale, determining valuation of assets and issue of share capital.In this exercise, on my inspection I was assisted by three other valuers, namely Carl Moses,K.D. Sirisena & S.D.A.L. Marshall, in taking measurement of buildings, drawings, sketches tocompile the floor areas & taking photographs of the hotel as well as the scenic beauty of thesurrounding Ramboda Falls as well as the beautiful scenery around the hotel.My sincere thanks are also to Miss. H.C. Kosgallana for her invaluable service rendered intyping & setting photographs in the report.Basil HettiarchchiCharted Valuer105 Ramboda Falls Limited – Introductory Document

TERMS OF REFFERENCEThis report is prepared at the request of the Joint Managers Mr.L.S.Sigera &Mr.I.J.A.Karunaratne of Ramboda Falls (Pvt) Ltd. - N (PVS) 17333, a Company dulyincorporated under the Law of Sri Lanka and having its office at No.641/5D, Koswatta,Eldeniya, Kadawatha.DATE OF INSPECTION AND VALUATION 28 th January 2011.PARTIES PRESENT AT THE TIME OF INSPECTIONMr. L. S. Sigera & Mr. I. J. A. KarunaratneSITUATION AND ACCESSThe property is situated at Ramboda, in Ramboda Korale of Kotmale, Nuwara Eliya District, CentralProvince. It can be reached by proceeding from Peradeniya Junction on Colombo-Kandy Highwayalong Nuwara Eliya Road for a distance of a little past the 44 th k.m.post and just past the RambodaTunnel, turning right on to the road which leads to the property. This is a rather steep meanderingroad which ends at the hotel.IDENTIFICATION OF PROPERTYThe land is identified as Lot Nos.1, 2, 3, 4 & 5 in survey Plan No.145 drawn by K.W.R.L.S. PremakumaraRanasinghe. The main land is Lot No.1 on which the hotel is located. It is known as Rock Falls Estatealias Gorandiwatta.EXTENT AND BOUNDARIES3.8242 hectares or 9A-1R-32.0P according to Plan No. 145 dated 15 th May 2010 drawn by K.W.R.L.S.Premakumara Ranasinghe, Licensed Surveyor, Leveller and Court Commissioner. The property isbounded as follows.North by: Dewaturu Oya and road reservationEast by: Road reservation and ElaSouth by: Wedamulla Oya ( Ramboda Oya )West by: Dewaturu OyaThe boundaries are in accordance with given survey plan.106 Ramboda Falls Limited – Introductory Document

LEGAL TITLE OF THE PROPERTY:Title to the property is claimed by Ramboda Falls (Pvt) Ltd. by virtue of Deed of Transfer No. 2259dated 01 st July 1996 attested by Bernard Hettiarachchi, Attorney-at-Law and Notary Public. Theinstrument is registered in volume Q136 Folio 210 and Q 134 Folio 267 at the Nuwara Eliya LandRegistry.DESRIPTION OF PROPERTY:Ramboda Falls Hotel is located overlooking the beautifulscenery towards the Northern and Southernboundaries, where Ramboda Falls and Wedamulla Oya(Ramboda Oya) is clearly visible. The land is in differentlevels and the hotel buildings too, are so designed atvarious levels to provide a panoramic view of thesurroundings. The upcountry hill area is beautifullyvisible from this hotel.The buildings are of recent construction and good class material has been used. So is theworkmanship. There are no visible flaws in the construction.DETAILS OF BUILDINGS:At the entrance, there is a guard room and below that there is a 3 storeyed building, the ground floor,first floor are used as workers’ living quarters and rest rooms and the second floor comprises 2 shops.The roof is of asbestos sheets and ceiled below, plastered and colour washed. The ground and firstfloors are cement rendered whilst the second floor is tiled paved. Access to the upper floors is bymeans of flights of steps.The main building has an entrance portico, office room, reception area, banquet hall called “ForestLodge”, pantry, visitors latrines (2 Nos.) ladies’ and gents’ toilets.These areas constitute the ground floor, which has an Amano sheet roof and Amano gutters. It hasexposed rafters with wooden ceiling. The entrance porch has one masonry pillar and ceramic tiledfloor. Walls are brick masonry and have been plastered and colour washed.The office room is ceramic tile paved and has a glazed front on Aluminium frame. It’s walls are ofcement blocks. The entrance to the reception area has a fixed glazed front and a glazed door. It hasglazed and framed windows overlooking the water fall and scenic beauty of the country side. Thereception section has concealed lights. The floor is of granite. A sliding fixed glass door separates theentrance from the reception area to the banquet hall.107 Ramboda Falls Limited – Introductory Document

The banquet hall is located towards the East of the reception area overlooking the beautifulRamboda Falls. Two sides are open. Side walls have round iron balustrades and hand rails. The roof issupported by 12 RCC pillars. There are 9 numbers ceilingfans. The outer compound has 2 garden benches.Adjoining the banquet hall, there are 2 visitors’ latrineswhich are equipped with necessary modern fittings. Thepantry adjoining the banquet hall has a ceramic tiledwash area fitted with taps, ceramic tiled top cupboards.Walls are ceramic tiled. There is a glazed window. Theladies’ and gents’ toilets are adjoining each other andare located adjoining the reception area. The ladies’toilet has a granite floor. There is a wash area, with granite top washbasin and 2 toilets. The wash areahas a large wall mirror above. The toilets have commodes and hand washes. The gents’ toilet has asimilar wash area with 2 wash basins and cupboards below. The toilets have commodes and handwashes. There are 3 urinals and two automatic hand driers. It has a glazed fanlight. Walls are ceramictiled lined and the floor is ceramic tiled paved. Both ladies’ and gents’ toilets have plastic doors withautomatic closures.A flight of ceramic tiled steps from near the toilets lead to the lower first floor. The flight of stepshave chromium plated steel balustrades and hand rails. The side walls of the stairwell has greencoloured fixed glass. On the lower floor, there is a covered corridor, the floor of which is carpetedfrom which access is provided to a suite of 6 bed rooms. Each bed room has a balcony, overlooking thescenic beauty towards South. These bed roomshave plastered soffits and cement block walls thatare plastered and colour washed. The floors arecarpeted. All bed rooms have doors and windowswhich are glazed and of the sliding type. Each bedroom is equipped with a ceiling fan, telephone, wallcupboard, fire place, mini refrigerator, televisionand a wall mirror. They have attached bathrooms &toilets with glazed and framed doors. These have granite top wash basins with wall mirrors above andcupboards below. They have fully tile lined sides and tiled paved floors. The bathing areas have glazedand framed sliding doors and are equipped with hand showers and taps. They have wash areas withwash basins, commodes, hand washes, towel racks and toilet paper holders. The corner most room islarger in size. It has a bed room, sitting room, and open balcony. It’s bathroom and toilets are similarto the others and it has fans.108 Ramboda Falls Limited – Introductory Document

From the lower floor another flight of RCC stairs similar to that described above leads to the 2 nd lowerfloor which has also a corridor and bed rooms. Bed rooms are similar to the floor described earlier, buthave no fire places. The corner most room is larger and has a sitting lobby in addition to the bed room.This room is named as “Rock View”. From this floor asimilar flight of RCC stairs and stair well leads to the 3 rdlower level. This floor also has a suite of bed rooms withaccess from the common open verandah, overlooking thescenic beauty Southwards. This verandah has an asbestossheet roof with sawn timber frame work. Bed rooms aresimilar to those of the other levels and have similarbathrooms and toilets. The rear most room is a familyroom which is called “Rock Falls”Four steps lead to another building which has a suite of 5 bed rooms. The roof is of corrugatedasbestos sheets, ceiled below with flat asbestos sheets. Walls are of cement blocks, plastered andcolour washed. S-lon gutters and down pipes are provided. Valance boards have decorative railing ofcast iron. Doors are of plywood and windows are glazed and have fixed glass above. There is an openverandah with 7 pillars. All bed rooms have fans, toilets, ceramic tiled floors and equipped withmodern fittings. The last 2 rooms have been converted into one family room. It has 2 toilets.There is a common passage which leads to the ladies’ toilets and staff meal room. It has acorrugated asbestos sheet roof and tile paved floor.The ladies’ toilet and staff meal room have RCC floors.From this common passage a flight of steps that are ceramic tiled, leads to the upper floor which is theoffice room and guides’ meal room. The flight of steps has a short wall and a pipe hand rail. The officehas an asbestos ceiling, glazed door and glazed windows. The guides’ meal room has a wooden ceiling,glazed window and door. It has also a television and mini refrigerator.The main kitchen has an asbestos roof, tiledwalls and a tiled floor. It has a ceramic tile washarea, RCC shelves, and executive Chef’s officeroom. It has a glazed and framed door withlower wooden panel. There is a side storeroom, which has a RCC roof and tiled floor andplastered masonry walls. It has a wooden door.109 Ramboda Falls Limited – Introductory Document

A flight of steps leads to the cool room. This room has an asbestos roof. Another flight of steps leadsto the lower restaurant, bar and pantry to therestaurant. This has an asbestos roof ceiled belowwith grooved wood. The main restaurant hasglazed sides and an open verandah. Pendant lightsand fans are provided. The pantry has woodenceiling, Walls are partly tiled and fitted with pantrycupboards. Windows are glazed. It has valanceboards fitted with decorative cast iron railings. Therestaurant overlooks the natural water fall.On a lower elevation than the restaurant and bar,there is a children’s play corner with a swing andseesaw. A little above this there are two chaletswith 4 apartments. Each apartment has a front and rear verandah, large bed room and attached bathroom. They are of recent construction. The roof has corrugated asbestos sheets and ceiled below withwooden ceiling having exposed rafters, plastered and colour washed the floor is RCC, carpeted andtiled. It has garden umbrellas. There is a sink at the rear verandah. The restaurant has tiled toppedwooden bar counter.The side restaurant has exposed wooden ceiling with 4 queen post roof trusses. It has short parapetswith pipe uppers. The floor is tiled paved. It has wall lamps and fans.There are two numbers ladies’ toilets equipped with commodes wash stands, taps, wall mirrors etc.All restaurants can accommodate 385 persons.110 Ramboda Falls Limited – Introductory Document

Basement liquor store, laundry & miscellaneous store :This has a RCC roof and tiled floor. Doors are wooden and windows are glazed and framed. Themiscellaneous store has a concrete floor.It has a Hoover (U.S.A.) washing machine and Maytag machine (U.S.A.). There is also an Indisit washingmachine and a Speed Queen Double Drier. (Australia) the rear garden has garden umbrellas, tablesand chairs.Below the above there are 3 executive’s rooms of recent construction. It has a concrete soffit cementblock sides and is tiled paved.There are 3 attached bathroom & toilets equipped with modern fittings, such as wash stands bidets,hand washers, hot water and cold water systems.One restaurant has an extension. This has a RCC roof, glazed sides with 7 numbers RCC pillars andconcreted floor which are tiled paved. It has also 5 Nos. fans.111 Ramboda Falls Limited – Introductory Document

Floor Area Details:1) 3 Storeyed building at entrance to the hotel :G.F. 978 sq.ft.F.F. 512 sq.ft.S.F. 320 sq.ft.2) Reception & office, entrance portico, banquet hall, pantry & staff latrines4089 sq.ft.3) Lower First Floor2617 sq.ft.4) Lower Second Floor2550.5 sq.ft.5) Lower 3 rd Floor2300 sq.ft.6) Suite of 5 bed rooms1827 sq.ft.7) Main Kitchen, store room, office room & toilets1868.5 sq.ft.8) Cool Room132 sq.ft.9) Office & guides’ meal room646 sq.ft.10) Restaurant, bar, kitchen & pantry3215 sq.ft.11) Side “Restaurant & toilets”1636 sq.ft.12) Laundry, liquor stores, miscellaneous stores (basement)1288 ft.13) Two Chalets and four units :1700 sq.ft.112 Ramboda Falls Limited – Introductory Document

SITE CHARACTERISTICS, LOCALITY, AREA & CONVENIENCES:Ramboda Falls Hotel is situated about 12 k.m from Nuwara Eliya which is a Municipal Council area. It isan agricultural cum residential area. Besides, the hotel has advantages that are unmatched. This hotelhas a lovely scenic beauty overlooking RambodaFalls, the beautiful hill country of Nuwara Eliyasurroundings to the hillside and the lower elevationtowards the South overlooking “Wedamulla Oya”(Ramboda Oya) and also towards the Western“Dewaturu Oya”.The locality is a beautiful and sought rafter area byany entrepreneur. It is served by 3 phase electricity,well and natural flow water, telephone and localauthority amenities.There is a regular and good bus service operating between Colombo & Nuwara Eliya as well as Kandy& Nuwara Eliya. Thus, this property has a good demand in the open market.BASIS OF VALUATION:The valuation of this property has to be considered on two bases according to valuation principles.1. Income Basis2. Contractor’s Principle.(a) The Income BasisThis method is adopted for income generating assets which are capable of long term running. Themain criteria is the nett profit generated from the concern. The subject hotel is situated en-route toNuwara Eliya which is a renowned holiday resort in the island. Tourists and holiday makers very oftenstop over at Ramboda Falls Hotel to avail themselves of viewing the beautiful Ramboda falls, thescenic beauty of the surrounding countryside and often stay over as food and lodging facilities aregood as well as economic compared to most hotels in Nuwara Eliya.(b) The Contractor’s PrincipleThis method, popularly called the ‘Check method’ is used where the value of land, buildings and otherassets are valued separately and the total value taken to arrive at the asset value. In an incomegenerating asset which could enhance the present income, the Investment Method is the mostappropriate method to be adopted in valuing a concern for the issue of shares. Depreciation is a factorthat has to be taken cognition of, in the Contractor’s Principle.113 Ramboda Falls Limited – Introductory Document

Depreciation is defined as “The measure of wearing out, consumption or loss of value of an assetwhether arising from use, effluxion of time, or obsolescence.” An asset’s historical cost is anunchanging gross value, whereas its current replacement cost alters. The currently emergingaccountancy procedures require a company to show in its accounts, realistic current values for itsassets. Thus, a valuer is required, in the estimation of the useful life of an asset, to estimate both totaland residual life expectancies. I have considered this in estimating the value of all assets.VALUATION:Land, buildings & other assets:01. Land: 09-1R-32.P or 1512P @ Rs.75,000/- p.p. Rs. 113,400,000.0002. Buildings: (in-situ value)a) 3 storeyed building at entrance (workers rest room & shops)1810 sq.ft. @ Rs.3000/-p.s.f. Rs. 5,430,000.00b) Main building, reception area, banquet hall and rooms4 floors 11556 sq.ft. @ Rs. 4000/- p.s.f. Rs. 46,224,000.00c) Suite of five bed rooms 1827 sq.ft. @ Rs. 3000/- p.s.f. Rs. 5,481,000.00d) Ladies’ toilets & staff meal room 646 sq.ft. @ Rs. 2500/- p.s.f. Rs. 1,615,000.00e) Office & guides’ meal room 646 sq.ft. @ Rs. 2000/- p.s.f. Rs. 1,292,000.00f) Cool room 132 sq.ft. @ Rs. 1000/- p.s.f. Rs. 132,000.00g) Lower restaurant, bar & pantry 3215 sq.ft. @ Rs. 3000/- p.s.f. Rs. 9,645,000.00h) Extension G.F.& F.F. 3060 sq.ft. @ Rs. 4500/- p.s.f. Rs. 13,770,000.00i) Side restaurant & toilets 1636 sq.ft. @ Rs.2000/- p.s.f. Rs. 3,272,000.00j) Basement liquor store, laundry, miscellaneous stores1288sq.ft. @ Rs. 1000/- Rs. 1,288,000.00k) New addition of 3 executives’ rooms and attached toilets435 sq.ft. @ Rs. 4000/- p.s.f. Rs. 1,740,000.00l) 2 chalets – each 850 sq.ft.- 1700 sq.ft.@ Rs.6000/- p.s.f. Rs. 10,200,000.00Total value of Land &Buildings Rs. 213,489,000.0003. Infrastructure facilities such as landscaping, tarred road ways,children’s play area, name board, etc. Rs. 1,000,000.00114 Ramboda Falls Limited – Introductory Document

04. Assets:As per inventory taken (attached)a) Office Rs. 2,099,400.00b) Accounts Office Rs. 170,000.00c) Front Office Rs. 168,250.00d) Restaurant down/upper Rs. 1,929,750.00e) Cutlery Rs. 794,607.00f) Items in rooms Rs. 3,343,950.00g) Kitchen Down/upper including cutlery Rs. 1,056,625.00h) Stores Rs. 1,505,000.00i) New 2 chalets with 4 apartments (inventory completed) Rs. 1,092,557.00j) New additional items T.V. systems to existing rooms Rs. 290,000.00k) New additional tables & chairs Rs. 530,000.00l) Laundry items Rs. 900,000.00m) Furniture for restaurant & bar Rs. 2,222,000.00n) Furniture for 2 Nos. chalets Rs. 712,000.00o) Bulk supply for 160 KW transformer Rs. 5,542,000.00p) Installation of new lift for 5 floors with new pathway,carpeted floor with cladding Rs. 7,200,500.00q) New generator for 75 KW Rs. 2,446,000.00r) Solar power hot water system Rs. 200,000.00s) Electrical installation & light fitting fabricating Rs. 1,000,000.00t) Linen stock Rs. 416,265.00u) Photocopy machine Rs. 45,000.00v) Printer (Cannon) Rs. 25,000.00w) CEB add. cost Rs. 152,095.00x) Vehicles Rs. 11,050,000.00y) Total for infrastructure & assets Rs. 45,890,499.00Total Rs. 259,379,499.00Income basis valuationTotal nett annual income for the years 2009/2010 & 2010/2011 Rs. 27,294,893.71Average Nett annual income Rs. 13,647,446.86Years purchase 20Market value of propertyRs.272,948,937.20Value of the property (say) Rs. 265,000,000.00Considering both methods, the value of the property is estimated in a sum of Rs.265,000,000.00.Rupees Two Hundred and Sixty Five Million.115 Ramboda Falls Limited – Introductory Document

116 Ramboda Falls Limited – Introductory Document

ANNEXURE IV – EXTRACTS FROM PROJECT EVALUATION REPORTThe following are extracts from the project evaluation report appraising the feasibility of the followingprojects - construction of 20 additional luxury rooms, construction of a gym and snooker room and ahot water swimming pool.Major Assumptions of Project AppraisalIn order to evaluate the project the following conservative assumptions were taken into accounts. Room occupancy rate – 40% Current room rate per day – LKR 8,000 Sales include both room revenue as well as food and beverage income. Room rates will increase by 7% per annum Cost of sales will increase by 7% per annum The present applicable staff cost apply to the new project too Salary increment 10% per annum Operational cost will be increased by 10% per annum WACC and borrowing cost of funds has been taken as 15% without ignoring the short terminterest rate fluctuations. Cost of sales is 40% The current capital allowance rate applies for the project and assume it will not change. The existing applicable corporate tax rate will not be changed. The cost of construction of snooker room will be around Rs. 1.5mn and it needs to start aftercompleting all other projects. Therefore, this has not been considered for the project evaluation Construction of the project will be granted to an outside construction Company. The Company will pay approximately 30% cash advance to the construction Company at Y0 andwill pay the balance in Y1 and final payment in Y2. Year (Y0) refers to the starting date of construction of the project. The gym will be constructed last – after the completion of the 20 additional rooms. After the 5 th year, equal cash inflow will be generated from the project and NPV of this cashflowestimated by using perpetual value/growth model by discounting WACC.117 Ramboda Falls Limited – Introductory Document

Outcome of Project AppraisalThe project appraisal was done by using conservative assumptions while evaluating the presentmacroeconomic variables of the country. Accordingly, these three projects will give a negative netcash flow. The detailed project evaluation is shown in following tables. According to the projectappraisal it will give Rs. 3.7mn negative NPV from the project while taken the WACC of 15%.Ramboda Falls LimitedAppraisal of Project - Adding new 20 rooms/ Hot Water Pool & GymYear Y0 Y1 Y2 Y3 Y4 Y5 Y6Investment Capital (20,000,000) (30,000,000) (13,000,000) - - - -Cash Inflows - (1,770,856) 2,753,694 8,809,468 9,911,500 11,054,750 12,020,960Net Cash Inflow (20,000,000) (31,770,856) (10,246,306) 8,809,468 9,911,500 11,054,750 12,020,960DF 15%NPV at the end of 6th year 80,139,732PV (20,000,000) (27,626,832) (7,747,680) 5,792,368 5,666,932 5,496,164 34,646,617NPV (3,772,429)Projected cash FlowsY1 Y2 Y3 Y4 Y5 Y6Sales 0 12,800,000 24,995,200 26,744,864 28,617,004 30,620,195Additional income of gym 1,200,000 1,284,000 1,373,880 1,470,052and swimming poolCost Of Sales 0 5,120,000 9,998,080 10,697,946 11,446,802 12,248,078Staff Cost 120,000 984,000 1,082,400 1,190,640 1,309,704 1,440,674Other operationalcost 500,000 640,000 672,000 705,600 740,880 777,924Administrationcost 0 1,920,000 3,749,280 4,011,730 4,292,551 4,593,029Interest Cost 2,575,125 2,008,125 1,441,125 874,125 307,125 -Tax (1,424,269) (625,819) 442,847 637,324 839,073 1,009,581Net Cash Flows (1,770,856) 2,753,694 8,809,468 9,911,500 11,054,750 12,020,960118 Ramboda Falls Limited – Introductory Document

Tax ComputationY1 Y2 Y3 Y4 Y5 Y6Pre-tax Cash flow (620,000) 4,136,000 10,693,440 11,422,949 12,200,948 13,030,541Loan interest 2,575,125 2,008,125 1,441,125 874,125 307,125 -Capital Allowance 6,300,000 6,300,000 6,300,000 6,300,000 6,300,000 6,300,000Taxable Income (9,495,125) (4,172,125) 2,952,315 4,248,824 5,593,823 6,730,541Tax Saving/ Loss (1,424,269) (625,819) 442,847 637,324 839,073 1,009,581119 Ramboda Falls Limited – Introductory Document