Introductory Document - Colombo Stock Exchange

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