Notes to the Financial Statements Contd.... - Colombo Stock Exchange

Company Profile
K E G A L L E P L A N T A T I O N S P L C 2 0 0 9
The Government of Sri Lanka as part of its restructuring
plan for the Plantation Industry decided to privatize
this sector and in June 1992 incorporated 22 Regional Plantation
Companies. Then the Government assigned these Companies,
Estates that had been previously vested with the Government and
managed by JEDB/SLPC on a 53 year lease. Separate Managing
Agents were also selected to manage each of these Companies.
Kegalle Plantations PLC (KPL) was one such Company and it
was allotted 21 Estates which in total have a land base of 10,000 Ha
in and around Kegalle District and in the Badulla District. Of this
land base around 4,900 Ha are under Rubber, 1,400 Ha are under
Tea and another 500 Ha under Coconut. The Company produces
around 5.1 Mn Kilos of Rubber and 2.5 Mn Kilos of Tea inclusive
of bought crop. It has an employee strength of 7,766.
The Managing Agent appointed by the Government was
RPK Management Services (Pvt.) Ltd (RPK), which was a 50:50
joint venture Company between Richard Pieris & Company PLC
and John Keells Holdings PLC. The ownership of the Company
changed during the latter part of 1995 when the Government sold
20% of the shares it held to the public and the majority stake of
51% to RPK Management Services (Private) Limited. It also gifted
10% or 2 Mn shares to over 8,000 eligible employees. In May 1997
the Government sold further 19% shares it held through the CSE,
to the public and thereby, totally exited from the ownership of
Kegalle Plantations PLC. However, the Government holds through
the Secretary to the Treasury one share which is called Golden
2
Share and it gives the Government the title “Golden Shareholder”
of the Company.
The Golden Shareholder has certain special rights than that is
enjoyed by a normal shareholder and these rights are incorporated
in the Articles of Association of the Company. The Prospectus
offered to the public also contained these clauses. Some of the
important clauses are given in this Annual Report under “Investor
Information”.
At the time it acquired the 51% stake RPK also invested Rs
50 Mn in convertible debentures of KPL. In February 1998, these
Debentures were converted to 5 million Ordinary Shares of
Rs. 10/- each and assigned to RPK, increasing the Share Capital
of the Company to Rs. 250 Mn. In March 2004, Richard Pieris
& Company PLC purchased the balance 50% stake in RPK from
Jhon Keells Holdings PLC, thereby making RPK, a fully owned
subsidiary. Consequent to the change in the ownership, RPK was
renamed as RPC Management Services (Pvt.) Limited. During
the year 2008 the ownership of the Company was transferred
from RPC Management Services (Pvt.) Limited to RPC Plantation
Management Services (Pvt.) Limited. Currently RPC Plantation
Management Services (Pvt.) Limited holds 68% stake in KPL.
Kegalle Plantations PLC is the largest rubber producing
Company among the Regional Plantation Companies accounting
for 5.1 Mn kgs of average production per annum.