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Listing Rules

(Includes amendments up to 1st March 2012)

1st March 2012

CONTENTS

Definitions

Introduction

Section 1

General

Section 2

Initial Listing of Securities

Section 3

Contents of Prospectus/Introductory Document

Section 4

Funds

Section 5

Further Issue of Securities

Section 6

Articles of Association or other Corresponding Documents

Section 7

Continuing Listing Requirements

Section 8

Corporate Disclosure

Section 9

Enforcement

Section 10

Fees

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DEFINITIONS CDS : means the Central Depository Systems (Pvt.) Ltd., a wholly owned subsidiary of the Colombo Stock Exchange and includes its successors and assigns means the Companies Act No. 7 of 2007 and any amendment thereto means a) a public company incorporated under the Companies Act or any other previous Companies Acts b) a company incorporated outside Sri Lanka c) a corporate body incorporated under a statute means the Colombo Stock Exchange means spouse and children under 18 years of age. means any fund, which is managed by a Managing Company licensed by the SEC in accordance with the provisions of the SEC Act, the provisions of Unit Trust Code 2004 (as amended) and the directives issued by the SEC from time to time, the units of which are listed/sought to be listed on the Exchange. means the last quoted Average Weighted Prime Lending Rate (AWPLR) published by the Central Bank of Sri Lanka plus 5%. means an Entity which has its shares or Debt Securities listed on the Exchange. means any company licensed by the SEC for the purpose of managing a Fund. means any day on which the Exchange is open for trading. means shares of a Listed Entity held by any person other than those directly or indirectly held by; a) its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; and, its directors who are holding office as directors of the Entity, their spouses and children under 18 years of age; and,

Companies Act

Entity

Exchange Family Fund

: : :

Interest

Listed Entity

Managing Company Market Day

Public Holding(s)

b)

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c)

Chief Executive Officer, his/her spouse and children under 18 years of age; and, any single shareholder who holds 10% or more of the shares.

d)

SEC

means Securities and Exchange Commission of Sri Lanka established under the SEC Act. means the Securities and Exchange Commission of Sri Lanka Act No. 36 of 1987 (as amended). mean debentures, stocks, shares, funds, bonds or notes issued or proposed to be issued by any Government or of any body, whether corporate or unincorporated, including any rights, options or interests (whether described as units or otherwise) therein or in respect thereof or any other instruments commonly known as securities, but does not include bills of exchange or promissory notes or certificate of deposits issued by a bank; reference to sharesmeans shares issued by an Entity which are fully paid, free from all lien, freely transferable and confer on the holder; (a) the right to one vote on a poll at a meeting of the company on any resolution; (b) the right to an equal share in dividends paid by the company; (c) the right to an equal share in the distribution of the surplus assets of the company on liquidation. reference to Other Class of Shares means shares issued by an Entity which are fully paid, free from all lien, freely transferable and issued in terms of Section 49 (3) of the Companies Act. means 10% or above. means a unit trust which after the initial offer period does not, unless otherwise approved by the SEC, issue new units or redeem units in issue until the liquidation of such fund. means these Listing Rules and CDS Rule/s.

SEC Act

Securities

shares

Other Class of Shares

Substantial Closed-End Unit Trust

: :

Rule/s

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INTRODUCTION The Colombo Stock Exchange (Exchange) offers a market for trading in Securities. An Entity is referred to as a Listed Entity upon its shares and/or Debt Securities being listed on the Exchange. These Rules govern the listing of Securities on the Exchange and continuing listing requirements in order to ensure the creation and maintenance of a market in which Securities can be issued and traded in an orderly and fair manner and which secures efficiency and confidence of all stakeholders in the operation and conduct of the market. It is the duty of the Board of Directors of an Entity to ensure that all the listing requirements are met on a continuing basis so long as its Securities remain listed on the Exchange. It is the duty of the Board of Directors of a Managing Company of a Fund to ensure that all the listing requirements are met on a continuing basis so long as units of such Fund are listed on the Exchange. By virtue of Rule 3 of the SEC Rules, 2001 published in the Extraordinary Gazette No. 1215/2 dated December 18, 2001, a violation of these Rules would be considered as a violation of the SEC Rules. WAIVER The Exchange may, at its discretion and subject to any approvals that may be required from the SEC, waive the application of any Rule specified under Sections 2, 3, 4 and 5and notify the SEC in writing, immediately thereafter, stating the basis on which the Waiver was granted.

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SECTION 1 GENERAL 1.1 INITIAL LISTING (a) An applicant for a listing of Securities must comply with these Rules. An applicant is required to forward to the Exchange a listing undertaking as set out in Appendix 1A, which shall constitute a binding contract between the applicant and the Exchange. The Listing Rules create obligations, which are additional and complementary to statutory obligations. An applicant Entity should in the first instance, list its shares, prior to applying for a listing of Other Class of Shares.

(b)

1.2

APPLICABILITY OF THE RULES (a) All Entities whose Securities are listed on the Exchange, inclusive of Entities listed prior to these Rules coming into operation, and Managing Companies of Funds shall be bound by these Rules, and any addition, alteration or amendment to these Rules as may be made from time to time. All Entities whose Securities are listed are required to forward to the Exchange within three (03) months of coming into operation of these Rules, a listing undertaking as set out in Appendix 1A along with the Certificate of Registration issued by the Registrar General of Companies, in terms of Section 485 (6) of the Companies Act. The Securities that may be eligible to be listed shall be decided by the Exchange from time to time. The Exchange has the absolute discretion to accept or reject any listing application and in the administration of these Rules. The Exchange may also require or impose additional requirements or conditions on applicants for listing or on Entities whose Securities are listed. If an Entity or a Managing Company does not comply with the Rules, the Exchange may take action in terms of Section 09 of the Rules.

(b)

(c)

(d)

(e)

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1.3

METHODS BY WHICH THE SECURITIES MAY BE LISTED

1.3.1SECURITIES (SHARES AND DEBT) (a) OFFER FOR SUBSCRIPTION An Offer for Subscription is an invitation to the public by or on behalf of an Entity to subscribe for its Securities. OFFER FOR SALE An Offer for Sale is an invitation to the public by, or on behalf of holder(s) or allottee(s) to subscribe for its Securities already in issue. INTRODUCTION An Introduction is the listing of the Securities of an Entity on the Exchange without the requirement of an initial public offering. Pursuant to the SEC Directive dated 2nd March 2012 (SEC/LEG/12/03/07) listing of equity by way of an Introduction will not be permitted for applications submitted to the CSE after 31st March 2012.

(b)

(c)

Note:

1.3.2

FUNDS Units of a Fund may be listed on the Exchange through an Offer for Subscription to the Public or through an Introduction in terms of these Rules. Rules for listing units of Funds are set out in Section 4 of these Rules.

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APPENDIX 1A LISTING UNDERTAKING BY [enter name of Entity]... To: The Colombo Stock Exchange # 04-01, West Block, WorldTradeCenter Echelon Square Colombo 1 We (name of Entity) being a Listed Entity and duly incorporated/established and having our registered office/ principal place of business at .. hereby undertake and agree: (i) to be bound by the applicable Rules and Circulars of the Colombo Stock Exchange (Exchange) and the Central Depository Systems (Pvt.) Limited as amended or replaced from time to time, and to be listed for such period as may be determined by the Exchange and at the sole discretion of the Exchange.

(ii)

We submit herewith a certified copy of the Certificate of Registration issued by the Registrar General of Companies, in terms of Section 485 (6) of the Companies Act (as applicable). Given under the Common Seal of the Entity this . day of in the presence of .. (Name) Director .. (Name) Director/Secretary Or, Signed by the duly authorized signatories of the Entity on this .. day of . (Name) Authorised Signatory

Note: please attach a copy of the Board Resolutions/Power of Attorney in proof of such authority.

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SECTION 2 LISTING OF SHARES AND DEBENTURES 2.1 2.1.1 LISTING OF SHARES GENERAL REQUIREMENTS (a) Shares may be listed on the Exchange provided that the listing is for all shares issued and to be issued by the Entity. (b) In the event of Offer for Subscription or Offer for Sale shares shall be issued for cash only. (c) In the event shares are to be listed by way of an Introduction, such shares should have been allotted at least six (06) months prior to the date of application to the Exchange, unless such shares have been offered in terms of a Prospectus as required by the Companies Act.
2.1.2 ELIGIBILITY TO BE LISTED ON THE MAIN BOARD

(a) Stated Capital of not less than Rupees Five Hundred Million (Rs.500, 000,000/-) at the time of listing, (b) Net profit after tax for three (3) consecutive years immediately preceding the date of application, (c) Positive Net Assets as per the consolidated audited financial statements for the last two (2) financial years immediately preceding the date of application, and, (d) A minimum Public Holding of 25% of the total number of shares for which the listing is sought which shall be in the hands of a minimum number of 1,000 public shareholders holding not less than 100 shares each. The Exchange may accept a percentage lower than 25% of the total number of listed shares if the Exchange is satisfied that such lower percentage is sufficient for a liquid market in such shares.
2.1.3 ELIGIBILITY TO BE LISTED ON THE DIRISAVI BOARD

a. Stated Capital of not less than Rupees Hundred Million(Rs.100, 000,000/-) at the time of listing, b. Positive Net Assets as per the consolidated audited financial statements for the financial year immediately preceding the date of application, c. A minimum Public Holding of 10% of the total number of shares for which the listing is sought which shall be in the hands of a minimum number of 100 public shareholders holding not less than 100 shares each, and, d. An operating history of at least one (1) year immediately preceding the

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date of application. For the purposes of Rules 2.1.2c and 2.1.3b Net Assets shall mean total assets after deducting total liabilities, preference share capital and advance against share capital. 2.1.4 INITIAL LISTING APPLICATION OF SHARES An application for an initial listing shall include the following documents: a. An Initial Listing Application which conforms to Appendix 2A of these Rules. The Certificate of Incorporation or a document equivalent thereto where the Entity is incorporated/established/situated outside Sri Lankaor is a Statutory Corporation, certified by the Secretary of the Entity to be a true copy. The Articles of Association or any document equivalent thereto where the Entity is incorporated / established/ situated outside Sri Lanka or is a Statutory Corporation certified by the Company Secretary to be a true copy. The Articles or equivalent document must have incorporated the additional clauses as set out in Section 6 of these Rules, which clauses shall take precedence if there are any conflicting articles. An extract of the Board Resolution certified by the Company Secretary, that in the opinion of the Board the consideration for which the shares are to be issued is fair and reasonable to the Entity and to the shareholders as required by the Companies Act. A Board Resolution authorising the Initial Listing Application certified by the Company Secretary to be a true copy. The Listing Undertaking duly perfected in conformity with Appendix 2B. A certified copy of every letter, report, balance sheet, valuation, contract or other document referred to in the Prospectus / Introductory Document. In the case of an Offer for Subscription or an Offer for Sale a draft Prospectus prepared in compliance with Rule 3.1 of Section 3 of the Rules; In the case of an Introduction a draft Introductory Document prepared in compliance with the requirements of Rule 3.3 of Section 3 of the Rules. Fees as may be prescribed by Section 10 of the Rules.

b.

c.

d.

e.

f. g.

h.

i.

j.

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2.2 2.2.1

LISTING DEBT GENERAL REQUIREMENTS a. Debt Securities to be eligible to be listed on the Exchange shall be; (i) fully paid (ii) freely transferable (iii) issued only for cash (in the event of Offer for Subscription or Offerfor Sale) In the event a Debt Security is to be listed by way of an Introduction, such Debt Security should have been allotted at least six (6) months prior to the listing application, unless such Debt Security has been offered in terms of a Prospectus as required by the Companies Act. ELIGIBILITY TO BE LISTED ON THE MAIN BOARD (i) The applicant Entity shall provide a guarantee for the repayment of capital and interest from; a bank licensed by the Central Bank of Sri Lanka and having an A rating or a rating equivalent or better thereto obtained from a rating agency registered with the SEC or an international multilateral or bilateral or other agency acceptable to the Exchange or (ii) The Debt Security shall have an investment grade rating for the Securities to be listed obtained from a rating agency registered with the SEC.

b.

c.

d.

ELIGIBILITY TO BE LISTED ON THE SECOND BOARD The applicant Entity shall have been in business for a minimum period of three (3) years, immediately preceding the date of application and shall obtain a rating for the Securities to be listed from a rating agency registered with the SEC.

e.

APPOINTMENT OF A TRUSTEE (i) The applicant Entity shall appoint a Trustee for the benefit of the holders of Debt Securities, which are to be listed. The Trustee shall be incorporated and is required to have a minimum stated capital of Rs. 25 million or the equivalent thereof in any other currency in the event the company is incorporated outside Sri Lanka.

(ii)

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(iii)

The Trustee company shall have employees having the requisite educational and professional experience as set out below: Employees of the Trustee company who are carrying out trustee functions shall possess educational/professional qualifications and experience as set out in (A) or (B) below: (A) A minimum of one (1) employee shall be a Member of a recognized accounting body/holder of a degree in Accountancy, Economics or Finance from a recognized university and having two (2) years experience in handling trustee functions, and, A minimum of one (1) employee shall be an Attorneyat-Law/holder of a degree in Law from a recognized university, and having two (2) years experience in handling trustee functions, or, (B) a minimum of two (2) employees shall have at least seven (7) years experience in handling trustee functions.

(iv)

The directors and employees of the Trustee company so appointed shall meet the Fit & Proper criteria approved by the SEC in the context of Market Intermediaries, as reproduced below. The directors and employees of the Trustee company carrying out trustee functions shall not have been: (a) convicted by any Court of Law in Sri Lanka or abroad for the commission of any offence which involves fraud, deceit or dishonesty; and/or (b) found to have committed or been connected with the commission of any act which involves fraud, deceit or dishonesty by any body with regulatory or supervisory authority; (I) (II) or established by law in Sri Lanka or abroad, constituted under law as a commission of inquiry, tribunal or other similar body,

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(III) by any professional association which in the opinion of the SEC is of an established and credible stature. (v) Any conflict of interests which may arise between the Trustee/its directors and the applicant Entity shall be disclosed in the Prospectus/Introductory document.

f.

CERTIFICATION OF TRANSFERABILITY: Debt certificates shall bear the following certification: These Debt Securities shall be freely transferable and registration of such transfer shall not be subject to any restrictions save and except to the extent required for compliance with statutory requirements.

g.

Debt Securities with a right of conversion to another class of Securities by an Entity Listed/Unlisted Where an Entity proposes to issue Debt Securities (referred to herein for purposes of clarity as Primary Securities) with a right of conversion to another class of Securities (referred to herein for purposes of clarity as Secondary Securities) for which a listing would be sought, the Entity shall obtain a listing in principle for the Secondary Securities arising from such conversion at the time of listing the Primary Securities. The Listed Entity shall obtain shareholder approval by way of a Special Resolution for the issue of the Primary Securities at a General Meeting/Class Meeting of the holders of such classes of shares. Please refer Rule 5.9 for the procedure applicable in respect of listing of the Securities arising from the conversion.

2.2.2

INITIAL LISTING APPLICATION-DEBT An application for a listing shall constitute the following: a. An Initial Listing Application which conforms with Appendix 2A to these Rules. The Certificate of Incorporation or a document equivalent thereto where the Entity is incorporated / established outside Sri Lankaor is a Statutory Corporation, certified by the Secretary of the Entity to be a true copy The Articles of Association or any document equivalent thereto where the Entity is incorporated / established /situated outside Sri Lanka or is a Statutory Corporation certified by the Secretary of the Entity to be a true copy. The Articles or equivalent document must have incorporated the additional clauses as set out in Section 6 of these Rules, which clauses shall take precedence if there are any conflicting articles.

b.

c.

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d.

A Board Resolution authorising the Initial Listing Application certified by the Secretary of the Entity to be a true copy The Listing Undertaking duly perfected in conformity with Appendix 2B. A certified copy of every letter, report, balance sheet, valuation, contract or other document referred to in the Prospectus / Introductory Document. A copy of the Trust Deed prepared in compliance with Appendix 3B to these Rules, Guarantee Agreement and Debenture Certificate each in draft form. A Declaration by the Entity confirming that the Entity has complied with the requirements of the Companies Act and the requirements set out in Rule 2.2.1 (e) (ii), (iii) & (iv) with regard to the Appointment of a Trustee. In the case of an Offer for Subscription or an Offer for Sale a draft prospectus prepared in compliance with Rule 3.2 of Section 3 of these Rules In an Introduction a draft Introductory Document prepared in compliance with Rule 3.3 of Section 3 of the Rules. The relevant Fees payable to the Exchange for the listing as prescribed by Section 10 of the Rules.

e. f.

g.

h.

i.

j.

k. 2.3

APPROVAL FROM THE EXCHANGE The application may be approved pending and subject to due compliance of the requirements as set out in these Rules and of such other additional requirements as may be specified by the Exchange. In granting such approval the Exchange may call upon the Entity to add to, clarify, amend or delete any information that is contained in the prospectus or in any document by which the Securities of the Entity are offered to the public for sale in the course of an Initial Public Offering.

2.4

PROCEDURE FOR AN INITIAL PUBLIC OFFERING (OFFER FOR SUBSCRIPTION / OFFER FOR SALE) a. The directors of the Entity shall be collectively and individually responsible for the accuracy and completeness of the information given in the prospectus. The Entity shall ensure that no offer is made to the public of its Securities or any intimation given thereof to the public until approval for the listing of Securities is obtained from the Exchange. The Entity shall ensure that there is no contradiction or misstatement

b.

c.

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between the prospectus and the content of any advertisement published in connection with the Initial Public Offering (IPO). The advertisements shall be submitted to the Exchange for approval prior to publication. d. e. The subscription list should open within twenty (20) Market Days from the date of receiving approval from the Exchange. Copies of the prospectus and application forms relating to the offer shall be made available to the member firms and trading members of the Exchange and public at least seven (7) Market Days before the date of opening of the subscription list. It shall be the responsibility of the Entity to arrange for adequate supply of prospectus and application forms. The offer period shall comprise of not more than fourteen (14) Market Days computed from and including the date of opening. The Entity shall open a separate bank account for the purpose of depositing payments received on applications. Cheques received by the Entity in response to the offer shall not be banked until the day after the closure of the subscription list unless the applicant Entity undertakes to pay Interest (as defined) on payments received from the date of realization of the cheque up to the date of allotment of the Securities. Allotment of shares or Debt shall be made in a fair manner. When the issue is oversubscribed prior to the date scheduled as the closing date of the period for subscription the Entity shall inform the Exchange in writing immediately of such fact and the subscription list shall be closed on the same day at 16:30 hours with the notification to the Exchange. The Entity shall arrange for the refund payments due on applications rejected either in full or in part as expeditiously as possible but not exceeding ten (10) Market Days from the date of closing the issue (excluding the date of closure of the issue). Applicants for shares and Debt shall be entitled to Interest (as defined) on any refunds not made within this period. If the applicant has provided accurate and complete details of his bank account in the application, the Entity shall make such refund payments to the bank account specified by the applicant, through Sri Lanka Inter Bank Payment System (SLIPS) and a payment advice shall be issued to the applicant. If the applicant has not provided details of his bank account in the application, the Entity shall make such refund payments to the applicant by way of a cheque. The Entity shall credit the investors CDS accounts with the Securities allotted within a period of eighteen (18) Market Days from the date of closure of the subscription list and shall dispatch the share/debenture certificates within a period of twenty five (25) Market Days from the date of closure of the subscription list.

f.

g.

h.

i. j.

k.

l.

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m.

Upon the completion of crediting of Securities into the investors CDS Accounts, the Entity shall send a written confirmation to the investors within two (02) Market Days of crediting the CDS Accounts. The Entity shall submit to the Exchange a Declaration as set out in Appendix 2C of the Rules, on the Market Day immediately following the day on which the investors CDS accounts are credited with the Securities. The Securities shall be listed on or before the third (03) Market Day upon receipt of the Declaration by the Exchange.

n.

o.

2.5

PROCEDURE FOR AN INTRODUCTION a. The directors of the Entity shall be collectively and individually responsible for the accuracy and completeness of the information given in the Introductory Document. The Exchange may call upon the Entity to add to, clarify, amend or delete any information that is contained in the Introductory Document prior to granting approval. The Entity shall be responsible to ensure that there is no contradiction or misstatement between the Introductory Document and the content of any advertisement proposed to be published in connection in any manner whatsoever to the Introduction. The content of such advertisement shall be submitted to the Exchange for approval prior to publication. Copies of the Introductory Document shall be made available to the member firms and trading members of the Exchange within twenty (20) Market Days of receiving approval from the Exchange. The Entity shall submit to the Exchange a Declaration as set out in Appendix 2D of the Rules on the Market Day immediately following the day on which the Introductory Document was made available to the member firms and trading members of the Exchange. The Entity shall be listed on the Exchange on or before the third (03) Market Day from the date of receipt of the Declaration by the Exchange.

b.

c.

d.

e.

f.

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APPENDIX 2A INITIAL LISTING APPLICATION Name of Entity/ : Managing Company Address Date Colombo Stock Exchange # 04-01, West Block, WorldTradeCenter Echelon Square Colombo 1 Dear Sir/Madam, We hereby apply for a listing on the Colombo Stock Exchange (Exchange) and a listing for the under-mentioned Securities issued/to be issued by us on the basis of our undertaking that the Rules and Circulars of the Exchange and the Central Depository Systems (Pvt.) Limited as may be amended or replaced from time to time shall be complied with. The particulars of Securities/units to be listed are as follows: Type of Securities (eg. shares, debt etc): Number of Securities to be listed: Number of Securities to be offered to the public: Details of allotments effected during the last 12 months: Whether the offer is by an Offer for Subscription, Offer for Sale, Introduction: We confirm that the particulars supporting the application are true and correct. We further confirm that the Board of the Entity has resolved that in its opinion the consideration for which the shares issued/to be issued is fair and reasonable to the Entity and to all existing shareholders, as required by the Companies Act (applicable only for listing of shares). : :.

Yours faithfully, .............................. Limited Given under the Common Seal of the Entity/Managing Company this . day of in the presence of

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.. (Name) Director .. (Name) Director/Secretary Or, Signed by the duly authorized signatories of the Entity/ Managing Company on this .. day of (Name ) Authorised Signatory

Note:

Please attach a copy of the Board Resolutions/Power of Attorney in proof of such authority.

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APPENDIX 2B LISTING UNDERTAKING BY [enter name of applicant]... To: The Colombo Stock Exchange # 04-01, West Block, WorldTradeCenter Echelon Square Colombo 1 In consideration of being listed on the Colombo Stock Exchange (Exchange), by virtue of .. . Securities (shares/Debt etc) being listed, we (name of applicant Entity/Managing Company) being duly incorporated and having our registered office/ principal place of business at .. hereby undertake and agree: (i) to be bound by the applicable Rules and Circulars of the Exchange and the Central Depository Systems (Pvt.) Limited as amended or replaced from time to time. to be Listed at the sole discretion of the Exchange, and for such period as may be determined by the Exchange. within ten (10) working days of the Entity obtaining a listing, to give public notice of the change of name, and to forward a copy of such notice to the Registrar, and upon obtaining a fresh Certificate of Incorporation from the Registrar, to forward same to the Colombo Stock Exchange within three (03) months of obtaining the listing.

(ii) (iii)

Given under the Common Seal of the Entity this . day of in the presence of .. (Name) Director .. (Name) Director/Secretary Or, Signed by the duly authorized signatories of the Entity on this .. day of . (Name) Authorised Signatory

Note: please attach a copy of the Board Resolutions/Power of Attorney in proof of such authority.

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APPENDIX 2C DECLARATION (Offer for Sale/ Offer for Subscription) To: Colombo Stock Exchange # 04-01, West Block, WorldTradeCenter Echelon Square Colombo 1

(Name of Entity/Managing Company) (hereinafter called The Entity) hereby declares: That .........(quantity)..........shares/debt/units at a price of Rs. .. each have been subscribed/purchased for cash and duly allotted/transferred to the subscribers/purchasers. (Which subscription is not less than the minimum subscription as stipulated in the prospectus) That the Stated Capital of the Entity is Rs. . That the direct uploads to the Central Depository System have been completed on the . (date) and that the share certificate/debenture certificates will be posted on or before .. (date) That the proceeds of the issue will be duly utilized for the objectives for which such proceeds were raised in terms of the Prospectus. That there is no other fact bearing on the Entitys application for listing which, should be disclosed to Colombo Stock Exchange. Given under the Common Seal of the Entity this . day of in the presence of

.. (Name) Director .. (Name) Director/Secretary Or, Signed by the duly authorized signatories of the Entity on this .. day of (Name ) Authorised Signatory

Note: please attach a copy of the Board Resolutions/Power of Attorney in proof of such authority.

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APPENDIX 2D DECLARATION (Introduction) To: Colombo Stock Exchange # 04-01, West Block, WorldTradeCenter Echelon Square Colombo 1

(Name of Entity/Managing Company) (hereinafter called The Entity) hereby declares: that copies of the Introductory Document have been forwarded to Colombo Stock Exchange and distributed among the members / trading members on the (date). that the Entity has complied with all the requirements for a Listing of Securities/units in the Colombo Stock Exchange by way of an Introduction. that there is no other fact bearing on the Entitys application for Listing which, should be disclosed to Colombo Stock Exchange. Given under the Common Seal of the Entity this . day of in the presence of .. (Name) Director .. (Name) Director/Secretary Or, Signed by the duly authorized signatories of the Entity on this .. day of (Name) Authorised Signatory

Note: Please attach a copy of the Board Resolutions/Power of Attorney in proof of such authority.

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SECTION 3 CONTENTS OF PROSPECTUS / INTRODUCTORY DOCUMENT GENERAL This Section sets out the basic requirements for the contents of a prospectus, which should be complied with in addition to the requirements of the Companies Act and any other applicable law. The requirements of this Section are not exhaustive. Additional information that are not required by the Rules may be included at the discretion of the Entity according to the particular nature of the business of the issuer and of the Securities for which Listing is sought. The Exchange reserves the absolute right to require disclosure of any additional information as it considers appropriate in any particular case. If the Exchange requires such information, it shall inform the applicant in writing of the additional information required. CONTENTS OF PROSPECTUS 3.1 3.1.1 SHARES CORPORATE INFORMATION a. b. c. Name and registered address Date, place and authority of incorporation Name and address of bankers, auditors (if any) of the Entity, bankers to the issue, lawyers, registrars, secretaries, auditors, managers to the issue.

3.1.2 OBJECTIVES OF THE ISSUE a. Details of the intended application of the proceeds of the issue and in the event the proceeds are being applied for multiple purposes, the breakdown of the proceeds to be utilized for each purpose. If the funding required to achieve the objects of the issue exceeds the amount expected to be mobilised through the issue, the means of funding the full cost of the objects of the issue. If the funds are utilized to acquire assets, a description of each asset, basis of determination of the price of the assets, any amount payable, if any, for goodwill, any relationship of the Entity with the seller and any other material information regarding the acquisition.

b.

c.

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d.

If the proceeds may or will be used to finance acquisitions of any other businesses, a brief description of such businesses and its future prospects. The Entity should also provide the opinion of experts on the valuation of the acquisition where applicable. If any material part of the proceeds is to be used to discharge, reduce or retire debt, details of such debt.

e.

3.1.3

PARTICULARS OF SHARES FOR WHICH APPLICATION IS BEING MADE Nature and classification of the shares for which admission is sought and a description of the rights of holders of such shares, in particular the voting rights, entitlement to share in the profits and, in the event of liquidation, in any surplus and any other special rights. Where there is or is to be more than one class of Securities of the Entity in issue, like particulars shall be given for each additional class.

3.1.4

CONSIDERATION A statement that the consideration for which the shares are to be issued is fair and reasonable to the Entity and to all existing shareholders as required by the Companies Act.

3.1.5

BASIS OF ALLOTMENT (a) Subject to Rule 3.1.5 (b) the number and/or percentage of shares to be allotted to the public, employees, financial institutions etc. by category and the manner in which the allotment is to be carried out. Where there is or is to be more than one class of shares (Other Class of Shares) in issue, like particulars shall be given for each additional class in accordance with these rules and subject to Rule 3.1.5 (b). (i) A minimum of 40% of the offered shares of a particular share class, in an initial public offering to be initially made available for allotment to retail individual investors (Retail Individual Investor Category) Retail Individual Investor shall mean an individual investor who subscribes for a maximum of 3,000 shares or a value of not more than Rs. 100,000/- in a particular share class, whichever is higher. (ii) A minimum of 10% of the offered shares of a particular share class, in an initial public offering to be initially made available for allotment to Growth or Balanced Unit Trust operated by Managing Companies licensed by the SEC to operate such unit trust, where such unit trust comprises of not less than 500 unit holders resident in Sri Lanka who together hold at

(b)

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least 50% of that fund (Unit Trust Investor Category). (iii) In the event of an under-subscription in the Unit Trust Investor Category, the Retail Individual Investor Category shall be given first priority in allotment of the under-subscribed shares. In the event of an under-subscription in the Retail Individual Investor Category, the Unit Trust Investor Category shall be given first priority in the allotment of the under-subscribed shares.

(iv)

3.1.6

COST OF THE ISSUE An estimate of the total cost of the issue and the anticipated source of funds to finance such cost.

3.1.7

PROFILE OF THE ENTITY a. A description of the business carried out by the Entity. In situations where the Entity carries on two or more activities which are material in respect of turnover and/or profit of the Entity information as to the relative importance of each such activity has to be stated. The names of the ten largest holders of shares, the number of shares and the percentage of shares they hold as at the date of submission of the listing application to the Exchange. If the Entity is a holding company, details of the group structure preferably in the form of a chart. If the Entity is a subsidiary/associate, the name and number of shares held by the holding Entity. Number of employees in the Entity or group and the details of labour unions and details of any significant agreements entered into between the labour unions and the Entity. Degree of dependence on key customers and suppliers Future strategies, assumptions on which future strategies are based and risks associated with such future strategies.

b.

c.

d.

e. f.

3.1.8 DIRECTORS a. Name, address, and business experience of directors and details of other directorships held. (i) The directors shareholdings (in respect of all classes of shares) in the Entity at the date of submission of the listing application to the Exchange. Sales and purchases of shares made by the directors during the year immediately preceding the date of the issue of the

b.

(ii)

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Prospectus with the prices of such purchases and sales. c. (i) The aggregate emoluments including bonus and/or profit sharing payments made to directors during the last completed financial year. An estimate of the aggregate emoluments including bonus and/or profit sharing payments payable to directors for the current financial year.

(ii)

d.

Directors interest in any assets acquired, disposed or leased by the Entity during the past two years preceding the issue; and proposed to be acquired, disposed or leased during the two years succeeding the issue including the consideration thereon or an appropriate negative statement. Full particulars of any contract or arrangement in force at the date of the application in which a director of the Entity is materially interested in relation to the business of the Entity or an appropriate negative statement. Whether any director or a person nominated to become a director is or was involved in the following events:(i) a petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer. (ii) such person was convicted for fraud, misappropriation or breach of trust or any other similar offence which the Exchange considers a disqualification. (iii) or an appropriate negative statement.

e.

f.

3.1.9 STATED CAPITAL a. Details of all classes of shares issued for the two (02) years preceding the date of the prospectus, such as dates of allotment, consideration received per share, number of shares issued. Details immediately preceding two years of the date of the prospectus of the number of shares, price, date of the shares redeemed, re-purchased in terms of Sections 63, 64, 66, 67, 68, 69, 93 and 100 of the Companies Act and of any reduction of stated capital in terms of Section 59 of the Companies Act. Amount of any outstanding convertible Debt Securities and details regarding its conversion to equity. If shares/ Other Class of Shares are subscribed or sold privately, in conjunction with the public issue of shares, the details should be given of the number, price and features of the shares/Other Class of Shares privately placed.

b.

c.

d.

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e. Any statutory restrictions on the free transferability of shares. 3.1.10 MANAGEMENT a. b. Name and address of the Chief Executive Officer. Brief account of the business experience of the Chief Executive Officer including the principal business of any enterprise in which such occupation or employment was carried out. Whether the Chief Executive Officer or a person nominated to become the Chief Executive Officer is or was involved in the following events:(i) petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer. such person was convicted for fraud, misappropriation or breach of trust or any other similar offence which the Exchange considers a disqualification. or an appropriate negative statement.

c.

(ii)

(iii) d.

The name and business experience of the senior management. Where the management of the Entity has been outsourced to a third party, details of such third party including their business experience and competencies and the duties outsourced. (i) The aggregate emoluments including bonus and/or profit sharing payments made to the Chief Executive Officer and the senior management team during the last completed financial year. An estimate of the aggregate emoluments including bonus and/or profit sharing payments payable to the Chief Executive Officer and the senior management team for the current financial year.

e.

(ii)

3.1.11

MANAGEMENT AGREEMENTS Details ofany management agreement presently in force or currently being considered including particulars of any consideration passing to or from the Entity.

3.1.12

FINANCIAL INFORMATION a. The following financial statements should be included in the Prospectus: (i) Audited financial statements made up to a date not more than 12 months from the date of submission of the listing application. Interim financial statements which shall conform to the Sri

(ii)

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Lanka Accounting Standards (SLAS) 35 and include group and company results separately in the case of a Holding Company and made up to a date not more than 3 months from the date of submission of the listing application. (iii) Summarised profit and loss account and balance sheet for the five years preceding the date of the Application stating the Accounting Policies adopted by the Entity certified by the Auditors. Qualifications carried in any of the Auditors Reports covering the period in question and any material changes in Accounting Policies in the relevant period should be disclosed.

(The Entity may illustrate its financial information by way of graphs). If the review of the listing application takes longer than usual due to any reason whatsoever, the Exchange reserves the right to require such financial statements to be made up to a more recent date. b. Dividend policy of the Entity - Classes of Securities and rights attached to the respective classes of Securities regarding dividends, rates of the dividends, if any, paid by the Entity in respect of each class of shares for three financial years immediately preceding the issue of the prospectus. Start-up Entities and New Entities (i) A statement showing the forecast profit and loss account and balance sheet for a three (03) year period together with the assumptions and risk factors on which such statements are based,

c.

or (ii) A sector study including the details of how the Entity intends positioning itself in the market stating assumptions and risk factors.

d.

Any other complete and accurate information that would have a material impact in the understanding of the financial information provided in this Section. Particulars of Debt and Loan Capital (i) (ii) Particulars of loan capital outstanding as at the date of application or an appropriate negative statement. Particulars of term loans, other borrowings or indebtedness in the nature of borrowings, including bank overdrafts and liabilities under acceptance (Other than normal trading bills) or acceptance credits or an appropriate negative statement. Leasing, lease purchase and hire purchase commitments,

e.

(iii)

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(iv) (v)

or an appropriate negative statement. Guarantees and other material contingent liabilities or an appropriate negative statement. A statement of mortgages and charges on the assets of the Entity, as at the date of application or an appropriate negative statement.

3.1.13 TAXATION (IF APPLICABLE) Any tax concessions or tax exemptions applicable to the Entity 3.1.14 TAKE-OVER OFFERS a. Information of take over offers by third parties in respect of the Entitys shares during the past two years. Give details of price and other consideration of such offers. Take-over offers made by the Entity in respect of shares of a third party. Give details of price and other consideration of such offers.

b.

3.1.15

LITIGATION, DISPUTES AND CONTINGENT LIABILITIES a. Details on any legal, arbitration or mediation proceedings which may have or have had in the recent past significant effects on the Entitys financial position or profitability. Details of penalties imposed by regulatory and state authorities. A statement of contingent liabilities that would affect current and future profits of the Entity.

b. c.

3.1.16

CORPORATE GOVERNANCE PRACTICES a. DIRECTORS Names of directors who are independent and in the event a director does not qualify as independent, but if the board, taking into account all the circumstances, is of the opinion that the director is nevertheless independent, the board shall specify the basis for its determination. The criteria for defining independence is set out in Rule 7.10.4 of the Rules. b.REMUNERATION COMMITTEE Names of directors on the remuneration committee, a statement of the remuneration policy and the aggregate remuneration paid to the executive and non-executive directors. The term remuneration means cash and all non-cash benefits whatsoever received in consideration of employment with the Listed Entity (excluding statutory entitlements such as Employees Provident Fund and Employees Trust Fund).

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c.

AUDIT COMMITTEE Names of directors on the audit committee.

3.1.17 REPORTS BY EXPERTS In the case of a statement or report attributed to an expert, a statement that he has not withdrawn his written consent to the issue of the prospectus with the statement or report included in the form and context in which it is included. 3.1.18 UNDERWRITING/MINIMUM SUBSCRIPTION a. b. Name, and details of the Underwriter. In the event the issue is not underwritten the minimum subscription that must be raised in the opinion of the directors in order to provide the sums as set out in the fourth schedule of Companies Act. In the event that the issue is under subscribed the prospectus shall specify consequences of such under subscription and what action the issuer will take in this connection.

3.1.19 INSPECTION OF DOCUMENTS a. A reasonable time (being not less than fourteen days) during which and a place in Colombo at which the following documents (or copies thereof) where applicable may be inspected: (i) (ii) Articles of Association Material contracts and management agreements or in the case of contracts not reduced into writing a Memorandum giving full particulars thereof. Reports, letters, valuations and statements by any expert any part of which is extracted or referred to in the prospectus. The audited accounts of the Entity for five (05) financial years immediately preceding the publication of the prospectus, as applicable.

(iii) (iv)

b.

The prospectus and the Articles of Association of the Entity shall be hosted in the Entitys web site and/or the Colombo Stock Exchanges web site for a period of not less than fourteen (14) days.

3.1.20 OTHER REQUIREMENTS a. The business which the subscribers or promoters intend that the company should carry out during the period of five years from the date of commencement of business by the company (as applicable). The time of opening and closing of the subscription lists.

b.

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c.

Short particulars of any transaction relating to the property completed within the two preceding years in which any vendor of the property to the company or any person who is or was at the time of the transaction, a promoter or a director or proposed director of the company had any interest, direct or indirect. The amount, if any paid within the two preceding years or payable as commission (but not including commission to sub-underwriters) for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions, for any shares in or debentures of the company, or the rate of any such commission. Any amount or benefit paid or given within the two preceding years or intended to be paid or given to any promoter and the consideration for the payment or the giving of the benefit (as applicable). The dates or parties to and general nature of every material contract, not being a contract entered into in the ordinary course of the business carried on or intended to be carried on by the company or a contract entered into more than two years before the date of issue of the prospectus. In the case of a company which has been carrying on business or a business which has been carried on for less than three years, the length of time during which the business of the company or the business to be acquired, as the case may be, has been carried on.

d.

e.

f.

g.

3.1.21 DECLARATIONS a. Declaration by the directors Declaration by the directors of the Entity in the following form:"This Prospectus has been seen and approved by the directors of the Entity and they collectively and individually accept full responsibility for the accuracy of the information given and confirm that provisions of the CSE Listing Rules and of the Companies Act No. 07 of 2007 and any amendments to it from time to time have been complied with and after making all reasonable enquiries and to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading or inaccurate. Where representations regarding the future performance of the Entity have been given in the Prospectus, such representations have been made after due and careful enquiry of the information available to the Entity and making assumptions that are considered to be reasonable at the present point in time in the best judgement of the directors."

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b.

Declaration by the Managers to the Issue A statement by the Entity managing the issue that to the best of its knowledge and belief the Prospectus constitutes full and true disclosure of all material facts about the issue and issuer; and where appropriate, it has satisfied itself that profit forecasts have been stated by the directors after due and careful enquiry.

c.

Declaration by the Entity A statement shall be made as follows:"An application has been made to the Colombo Stock Exchange for permission to deal in and for a listing for all securities in a particular class issued by the Entity and those Securities of the same class which are the subject of this issue. Such permission will be granted when the shares are listed on the Colombo Stock Exchange. The Colombo Stock Exchange assumes no responsibility for the correctness of any of the statements made or opinions expressed or reports included in this prospectus. Listing on the Colombo Stock Exchange is not to be taken as an indication of the merits of the Entity or of the Securities issued

3.2

DEBT CONTENTS Prospectus should be prepared in accordance with the provisions of law. Name and address of the Trustees to the Issue shall be mentioned and the Trust Deed and the Guarantee Agreements shall be included in the Prospectus. Prospectus may be organised in the manner prescribed in Appendix 3 of the Rules.

3.2.1

OFFER AT A GLANCE Offer at a Glance shall include: a. b. c. d. e. f. g. h. i. j. k. Type/s of Debt Security Interest Rate/s Tenor Yield Issue Price Issue Date Maturity Date Dates of Payment of Interest Methods of Payment of Principal and Interest (Eg. Cheque, bank draft, RTGS, SLIPS) Details of the rating/guarantee (name of the company/bank, type of rating /guarantee) minimum subscription amount

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3.2.2. CORPORATE INFORMATION a. b. c. Name and registered address Date, place and authority of incorporation Name and address of bankers, auditors (if any) of the Entity, bankers to the issue, lawyers, registrars, secretaries, auditors, managers to the issue.

3.2.3

NATURE OF THE DEBT SECURITIES TO BE OFFERED Rights and obligations of Debt Securities holders and risks and benefits attached to such Debt Securities.

3.2.4 OBJECTIVES OF THE ISSUE a. Details of the intended application of the proceeds of the issue and in the event the proceeds are being applied for multiple purposes, the breakdown of the proceeds to be utilized for each purpose. If the funding required to achieve the objects of the issue exceeds the amount expected to be mobilised through the issue, the means of funding the full cost of the objects of the issue. If the funds are utilized to acquire assets, a description of each asset, basis of determination of the price of the assets, any amount payable, if any, for goodwill, any relationship of the Entity with the seller and any other material information regarding the acquisition. If the proceeds may or will be used to finance acquisitions of any other businesses, a brief description of such businesses and its future prospects. The Entity should also provide the opinion of experts on the valuation of the acquisition where applicable. If any material part of the proceeds is to be used to discharge, reduce or retire debt, details of such debt (quantum and interest rate).

b.

c.

d.

e.

3.2.5

OTHER DEBT SECURITIES Nature and classification of the other debt securities in issue as at the date of this prospectus and a description of the rights of holders of such debt securities, in particular entitlement in the profits and, in the event of liquidation, in any surplus and any other special rights. Amount of any outstanding convertible Debt Securities and the details regarding its conversion to equity.

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3.2.6

BASIS OF ALLOTMENT (IF APPLICABLE) Number and/or percentage of Debt Securities to be allotted to the public, employees, financial institutions etc. by category and the manner in which the allotment is to be carried out. COST OF THE ISSUE An estimate of the total cost of the issue and the anticipated source of funds to finance such cost.

3.2.7

3.2.8

PROFILE OF THE ENTITY a. A description of the business carried out by the Entity. In situations where the Entity carries on two or more activities which are material in respect of turnover and/or profit of the Entity information as to the relative importance of each such activity has to be stated. The names of the ten largest holders of shares, the number of shares and the percentage of shares they hold as at the date of submission of the listing application to the Exchange. If the Entity is a holding company, details of the group structure, preferably in the form of a chart. If the Entity is a subsidiary / associate, the name and number of shares held by the holding Entity. Number of employees in the Entity or group and the details of labour unions and details of any significant agreements entered into between the labour unions and the Entity. Degree of dependence on key customers and suppliers. Future strategies, assumptions on which future strategies are based and risks associated with such future strategies.

b.

c.

d.

e. f.

3.2.9 DIRECTORS a. Name, address, and business experience of directors and details of other directorships held. (i) The aggregate emoluments including bonus and/or profit sharing payments made to directors during the last completed financial year. An estimate of the aggregate emoluments including bonus and/or profit sharing payments payable to directors for the current financial year.

b.

(ii)

c.

Directors interest in any assets acquired, disposed or leased by the Entity during the past two years preceding the issue; and proposed to be acquired, disposed or leased during the two years succeeding the issue including the consideration thereon or an appropriate negative statement.

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d.

Full particulars of any contract or arrangement in force at the date of the application in which a director of the Entity is materially interested in relation to the business of the Entity or an appropriate negative statement. Whether any director or a person nominated to become a director is or was involved in the following events:(i) a petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer. such person was convicted for fraud, misappropriation or breach of trust or any other similar offence which the Exchange considers a disqualification. or an appropriate negative statement.

e.

(ii)

(iii) 3.2.10 MANAGEMENT a. b.

Name of the Chief Executive Officer. Brief account of the business experience of the Chief Executive Officer including the principal business of any enterprise in which such occupation or employment was carried out. Whether the Chief Executive Officer or a person nominated to become the Chief Executive Officer is or was involved in the following events:(i) petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer. such person was convicted for fraud, misappropriation or breach of trust or any other similar offence which the Exchange considers a disqualification. or an appropriate negative statement.

c.

(ii)

(iii) d.

The name and business experience of the senior management. Where the management of the Entity has been outsourced to a third party, details of such third party including their business experience and competencies and the duties outsourced. (i) The aggregate emoluments including bonus and/or profit sharing payments made to the Chief Executive Officer and the senior management team during the last completed financial year. An estimate of the aggregate emoluments including bonus and/or profit sharing payments payable to the Chief Executive Officer and the senior management team for the current financial year.

e.

(ii)

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3.2.11

TRUSTEES Any conflict of interests which may arise between the Trustee/its directors and the applicant Entity shall be disclosed in the Prospectus.

3.2.12

FINANCIAL INFORMATION a. The following financial statements should be included in the Prospectus: (i) Audited financial statements made up to a date not more than 12 months from the date of submission of the listing application. Interim financial statements which shall conform to the Sri Lanka Accounting Standards (SLAS) 35 and include group and company results separately in the case of a Holding Company and made up to a date not more than 3 months from the date of submission of the listing application. Summarised profit and loss account and balance sheet for the five years preceding the date of the application stating the Accounting Policies adopted by the Entity certified by the Auditors. Qualifications carried in any of the Auditors Reports covering the period in question and any material changes in Accounting Policies in the relevant period should be disclosed.

(ii)

(iii)

(The Entity may illustrate its financial information by way of graphs). If the review of the listing application takes longer than usual due to any reason whatsoever, the Exchange reserves the right to require the financial statements to be made up to a more recent date. b. Dividend policy of the Entity - Classes of securities and rights attached to the respective classes of securities regarding dividends, rates of the dividends, if any, paid by the Entity in respect of each class of shares for three financial years immediately preceding the issue of the Prospectus. - Interest coverage Ratio - Net Debt/EBITDA (EBITDA Earnings before Amortisation)

c.

Interest Tax

Depreciation

and

3.2.13

TAXATION (IF APPLICABLE) Any tax concessions or tax exemptions applicable to the Entity. LITIGATION, DISPUTES AND CONTINGENT LIABILITIES a. Details on any legal, arbitration or mediation proceedings which may have or have had in the recent past significant effects on the Entitys financial position or profitability.

3.2.14

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b. c.

Details of penalties imposed by regulatory and state authorities A statement of contingent liabilities that would affect current and future profits of the Entity.

3.2.15 UNDERWRITING / MINIMUM SUBSCRIPTION a. b. Name, and details of the Underwriter. In the event the issue is not underwritten and the issue is under subscribed, the prospectus shall specify consequences of such under subscription and what action the issuer will take in this connection.

3.2.16

INSPECTION OF DOCUMENTS a. A reasonable time (being not less than fourteen days) during which and a place in Colombo at which the following documents (or copies thereof) where applicable may be inspected: (i) (ii) (iii) Articles of Association. Trust Deed. Material contracts and management agreementsor in the case of contracts not reduced into writing a Memorandum giving full particulars thereof. Reports, letters, valuations and statements by any expert any part of which is extracted or referred to in the prospectus. The audited accounts of the Entity for each of the five (05) financial years immediately preceding the publication of the prospectus, as applicable.

(iv) (v)

b.

The prospectus and the Articles of Association of the Entity shall be hosted in the Entitys web site and/or the Colombo Stock Exchanges web site for a period of not less than fourteen (14) days.

3.2.17

OTHER REQUIREMENTS a. The business which the subscribers or promoters intend that the company should carry out during the period of five years from the date of commencement of business by the company (as applicable). b. The time of opening and closing of the subscription lists. c. Short particulars of any transaction relating to the property completed within the two preceding years in which any vendor of the property to the company or any person who is or was at the time of the transaction, a promoter or a director or proposed director of the company had any interest, direct or indirect. d. The amount, if any paid within the two preceding years or payable as commission (but not including commission to sub-underwriters) for subscribing or agreeing to subscribe or procuring or agreeing to

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procure subscriptions, for any shares in or debentures of the company, or the rate of any such commission. e. Any amount or benefit paid or given within the two preceding years or intended to be paid or given to any promoter and the consideration for the payment or the giving of the benefit (as applicable). f. The dates or parties to and general nature of every material contract, not being a contract entered into in the ordinary course of the business carried on or intended to be carried on by the company or a contract entered into more than two years before the date of issue of the Prospectus.

g. In the case of a company which has been carrying on business or a business which has been carried on for less than three years, the length of time during which the business of the company or the business to be acquired, as the case may be, has been carried on. 3.2.18 DECLARATIONS a. Declaration by the directors Declaration by the directors of the Entity in the following form:"This Prospectus has been seen and approved by the directors of the Entity and they collectively and individually accept full responsibility for the accuracy of the information given and confirm that provisions of the CSE Listing Rules and of the Companies Act No. 07 of 2007 and any amendments to it from time to time have been complied with and after making all reasonable enquiries and to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading or inaccurate. Where representations regarding the future performance of the Entity have been given in the Prospectus, such representations have been made after due and careful enquiry of the information available to the Entity and making assumptions that are considered to be reasonable at the present point in time in the best judgement of the directors." b. Declaration by the Managers to the Issue A statement by the Entity managing the issue that to the best of its knowledge and belief the Prospectus constitutes full and true disclosure of all material facts about the issue and issuer; and where appropriate, it has satisfied itself that profit forecasts have been stated by the directors after due and careful enquiry.

c.

Declaration by the Entity

A statement shall be made as follows:-

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"An application has been made to the Colombo Stock Exchange for permission to deal in and for a listing for all securities in a particular class issued by the Entity and those Securities of the same class which are the subject of this issue. Such permission will be granted when the Securities are listed on the Colombo Stock Exchange. The Colombo Stock Exchange assumes no responsibility for the correctness of any of the statements made or opinions expressed or reports included in this Prospectus. Listing on the Colombo Stock Exchange is not to be taken as an indication of the merits of the Entity or of the Securities issued. 3.3 3.3.1 CONTENTS OF AN INTRODUCTORY DOCUMENT DETAILS OF THE ENTITY a. b. c. d. 3.3.2 Name and address of the Entity Date and place of incorporation Name of the Company Secretary Name and address of the auditors

DETAILS OF THE BOARD OF DIRECTORS a. b. c. d. Name Qualifications Experience Directorships on other Boards

3.3.3CAPITAL STRUCTURE a. Details of all classes of shares issued for the two years preceding the date of the Introductory Document such as dates of allotment, consideration received per share and the number of shares issued. Details immediately preceding two years of the date of the Introductory Document of the number of shares, price, date of the shares redeemed, re-purchased in terms of Sections 63, 64, 66, 67, 68, 69, 93 and 100 of the Companies Act and of any reduction of stated capital in terms of Section 59 of the Companies Act. Amount of any outstanding convertible Debt Securities and details regarding its conversion to equity. If Securities of the same or another class are subscribed or sold privately, in conjunction with the public issue of Securities, details should be given of the number, price and features of the Securities privately placed. Any statutory restrictions on the free transferability of Securities.

b.

c.

d.

e.

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3.3.4. PROFILE OF THE ENTITY a. A description of the business carried out by the Entity. In situations where the Entity carries on two or more activities which are material in respect of turnover and/or profit of the Entity information as to the relative importance of each such activity has to be stated. The names of the ten largest holders of shares, the number of shares and the percentage of shares they hold as at the date of submission of the listing application to the Exchange. Degree of dependence on key customers and suppliers. If the Entity is a holding company details of the group structure. If the Entity is a subsidiary/associate, the name and number of shares held by the holding Entity. Number of employees in the Entity or group and the details of labour unions and details of any significant agreements entered into between the labour unions and the Entity. Future plans, assumptions on which future plans are based and risks associated with such plans.

b.

c. d.

e.

f.

3.3.5

MANAGEMENT a. b. Name and address of the Chief Executive Officer. Brief account of the business experience of the Chief Executive Officer including the principal business of any enterprise in which such occupation or employment was carried out. Whether the Chief Executive Officer or a person nominated to become the Chief Executive Officer is or was involved in the following events:(i) petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer. such person was convicted for fraud, misappropriation or breach of trust or any other similar offence which the Exchange considers a disqualification. or an appropriate negative statement.

c.

(ii)

(iii) d.

The name and business experience of the senior management. Where the management of the Entity has been outsourced to a third party, details of such third party including their business experience and competencies and the duties outsourced.

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3.3.6

LITIGATION, DISPUTES AND CONTINGENT LIABILITIES a. Details on any legal, arbitration or mediation proceedings, which may have or have had in the recent past significant effects on the Entitys financial position or profitability. Details of penalties imposed by Regulatory and State authorities. A statement of contingent liabilities that would affect current and future profits of the Entity.

b. c.

3.3.7

FINANCIAL INFORMATION The following financial statements should be included in the Introductory Document: a. b. Audited financial statements made up to past 3 years from the date of submission of the listing application. Interim financial statements which shall conform to the Sri Lanka Accounting Standards (SLAS) 35 and include group and company results separately in the case of a Holding Company and made up to a date not more than 3 months from the date of submission of the listing application.

If the review of the listing application takes longer than usual, due to any reason whatsoever, the Exchange reserves the right to require such accounts to be made up to a more recent date.

3.3.8

DECLARATION BY THE DIRECTORS This Introductory Document has been seen and approved by the directors of the Entity and they collectively and individually accept full responsibility for the accuracy of the information given and confirm that after making all reasonable enquiries and to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading or inaccurate.

3.3.9

CORPORATE GOVERNANCE PRACTISES a. DIRECTORS Names of directors who are independent and in the event a director does not qualify as independent, but if the board, taking into account all the circumstances, is of the opinion that the director is nevertheless independent, the board shall specify the basis for its determination. The criteria for defining independence is set out in Rule 7.10.4 of the Rules.

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b.

REMUNERATION COMMITTEE Names of directors on the remuneration committee, a statement of the remuneration policy and the aggregate remuneration paid to the executive and non-executive directors. The term remuneration means cash and all non-cash benefits whatsoever received in consideration of employment with the Listed Entity (excluding statutory entitlements such as Employees Provident Fund and Employees Trust Fund).

c.

AUDIT COMMITTEE Names of directors on the audit committee.

3.3.10 ANY OTHER REQUIREMENTS The Introductory Document and the Articles of Association of the Entity shall be hosted in the Entitys web site and/or the Colombo Stock Exchanges web site for a period of not less than fourteen (14) days. 3.3.11 LISTING DEBT - TRUSTEES In the event of issue of Debt Securities, any conflict of interests which may arise between the Trustee/its directors and the applicant Entity shall be disclosed in the Introductory Document. APPENDIX 3A ORGANIZATION OF THE PROSPECTUS - DEBT Table of Contents Offer at a Glance Details of the Offer Key Terms of the Debentures Risks, Benefits Use of the Proceeds Company the Business, corporate structure, future strategies, Graphs Directors, Senior Managers, and their remuneration Financial Information Taxation Debenture Trust Deed Additional Information - Important Contracts, Dividend Policy, Major Shareholders, Material litigation Statutory Requirements Glossary of Terms Appendix - Notes to Financial Statements Application Form Application process Corporate Information

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APPENDIX 3B MINIMUM CONTENT OF A TRUST DEED The following shall be included in the Debenture Trust Deed: Description of Debentures - The key features of the Debentures constituted by the Trust Deed including the Debenture types, issue price, face value, rate of interest, maturity date or redemption schedule, and the interest payment date. - Whether Debentures are secured or unsecured and if secured, the nature of the security. - The ranking of the Debenture holders amongst all other Debenture holders and as against all other obligations of the Applicant Entity. - Other features embedded to the Debentures [i.e. Any Options (Put/Call) attached to the Debentures]. Covenants by the Applicant Entity to comply with Trust Deed and Debentures - The Trust Deed shall provide for a covenant by the Applicant Entity to comply with the provisions of the Trust Deed and terms and conditions of the Debentures. Covenants by the Applicant Entity to repay principal and interest - The Trust Deed shall provide for a covenant by the Applicant Entity to pay interest and redeem in full all outstanding Debentures in accordance with the terms and conditions of the Debentures. - Where the Applicant Entity has an option to redeem the Debentures before the maturity date of such Debentures, the Trust Deed shall provide a clause setting out the conditions and the procedures by which such an option can be exercised. - Where the Debenture holders have an option to call for redemption of the Debentures before the maturity date of such Debentures, the Trust Deed shall provide a clause setting out the conditions and the procedures by which such an option can be exercised. Reporting covenants by the Applicant Entity - The Trust Deed shall provide covenants to ensure that the Applicant Entity shall immediately notify the Trustee in the event that the Applicant Entity becomes aware of the happening of any of the following event/s that has caused or could cause: (i) Any amount secured or payable under the Debenture to become immediately payable. (ii) Any event, in the opinion of the Applicant Entity that may lead to the acceleration of either the payment of interest or redemption. (iii) Any other right or remedy under the terms and conditions of the Debentures or the provisions or covenants of the Trust Deed to become immediately enforceable. The Trust Deed shall provide for a covenant by the Applicant Entity to submit to the Trustee the interim financial statements (unaudited) and the audited financial statements within a stipulated timeframe and all

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published financial and other information, which is normally provided to ordinary shareholders at the time that it is sent to the shareholders. The Trust Deed shall provide for a covenant by the Applicant Entity to submit to the Trustee a certificate in writing that the interest and the principal amount has been paid to the Debenture holders in accordance with the terms or conditions of the Debentures and provisions of the Trust Deed, immediately upon such payments become due. The Trust Deed shall provide for a covenant by the Applicant Entity to submit to the Trustee within one month after the end of every quarter, a certificate that the Entity has complied with each and all of the covenants with the details required below. Where the Guarantor (where applicable) is a bank licensed by the Central Bank of Sri Lanka and having a rating as specified in Rule 2.2.1(c) (i) of these Listing Rules, the Trust Deed shall provide for a covenant by such Guarantor, to submit to the Trustee within one month after the end of every quarter, a confirmation to the effect that the Guarantor is maintaining the rating obtained at the time of issuing the debentures. Such Guarantor may submit such confirmation to the Trustee instead of the certificate. The certificate shall include details of: (i) Whether or not any limitation of liabilities or borrowing as prescribed by the Articles of Association of the Applicant Entity has been exceeded; (ii) Whether or not the Applicant Entity and the Guarantor (where applicable) have observed and performed all the covenants and obligations binding upon them respectively pursuant to the Trust Deed; (iii) Whether or not any event has happened which has caused or could cause the security created by the Trust Deed to become enforceable (for secured Debentures); (iv) Whether or not any material trading or capital loss has been sustained by the Applicant Entity or the Guarantor (where applicable); (v) Whether or not any circumstances materially affecting the Applicant Entity or the Guarantor (where applicable) have occurred which adversely affect the Debentures; (vi) Whether any contingent liabilities have been incurred by the Applicant Entity or the Guarantor (where applicable). If so, to state the amount incurred, and whether or not any contingent liability has matured or is likely to mature within the next twelve months, which will materially affect the ability of the Applicant Entity or the Guarantor to repay the Debentures; (vii) Whether the Applicant Entity or the Guarantor (where applicable) has assumed a liability of a related body corporate during the quarter, the certificate shall also include details of the extent of the liability assumed during the quarter and the extent of the liability at the end of the quarter;

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(viii)

(ix)

(x)

(xi)

Whether or not there has been any change in any accounting method or method of valuation of assets or liabilities of the Applicant Entity;. Whether or not any circumstances have arisen which render adherence to the existing method of valuation of assets or liabilities of the Applicant Entity misleading or inappropriate; Any substantial change in the nature of the Applicant Entity's or the Guarantor's business (where applicable) since the issue of the Debentures; Whether or not any action has been taken by the Board of Directors of the Applicant Entity in terms sections 219 and 220 of the Companies No. 7 of 2007 during the quarter.

The certificate shall be made in accordance with a resolution of the directors and specify the date on which the certificate was made; and, Where an Applicant Entity or a Guarantor fails to deliver the certificate to the Trustee, the Trustee shall inform the Debenture holders of that fact. The Trust Deed shall provide for a covenant to ensure that, in the event the Applicant Entity creates a charge, the Entity shall submit to the Trustee the written details of the charge within 21 days after it is created. Where the amount to be advanced on the security of the charge is indeterminate, the Entity shall submit to the Trustee the written details of the amount of each claim, within 5 market days from the date the claim is made.

Appointment, Removal and Resignation of a Trustee - The Trust Deed shall provide the conditions for the appointment, resignation and removal of the Trustee by the Applicant Entity and the Debenture holders. - The Trust Deed shall provide that the Applicant Entity shall be notified of any removal of a Trustee and subsequent appointment of a Replacement Trustee by the Debenture holders. - The Trust Deed shall provide that any removal of a Trustee and the subsequent appointment of a Replacement Trustee by the Applicant Entity shall be with the consent of an agreed majority of Debenture holders. - The Trust Deed shall provide for a covenant by the Applicant Entity to take reasonable steps to replace the Trustee as soon as practicable after becoming aware that: (i) The Trustee has ceased to exist. (ii) The Trustee is in the situation of conflict of interests. (iii) The Trustee has ceased to perform its function as a Trustee. (iv) The Trustee is in the situation of unsuitability and does not eliminate such situation within 90 days, after them ascertaining or of them been informed that the Trustee has such situation. - The existing Trustee shall continue to act as a Trustee until a new Trustee is appointed. Other Covenants by the Applicant Entity - The Applicant Entity shall at all times carry on and conduct its affairs in a proper and appropriate manner.

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The Applicant Entity shall immediately provide a copy of the Trust Deed to the Debenture holders, on request. The Applicant Entity shall at all times maintain records all of its published information and make them available for inspection by the Trustee and the Debenture holders. The Applicant Entity shall: (i) at all times maintain a correct Register of Debenture holders including the names and addresses of all Debenture holders, the number and value of Debentures held by each Debenture holder, the date of issue of Debentures, the date on which each Debenture holder became registered as the holder and the date on which he ceased to be so registered. (ii) permit the Trustee and the Debenture holders at all reasonable times to inspect the Register of Debenture Holders and to take any copies thereof, upon the payment of a reasonable copying and administration fee as may be determined by the company. The Applicant Entity shall submit to the Trustee any information which the Trustee may require in order to discharge its duties and obligations as Trustee under the Trust Deed relating to the Applicant Entitys affairs to the extent permitted by law and the Listing Rules.

Events constituting default and remedy of such default A list of all events constituting a default by the Applicant Entity including the following: - where the Applicant Entity makes default in the payment of any interest due on the whole or any part of the Debentures after the date such interest is payable or in the payment of any principal monies payable under the Trust Deed in respect of any Debenture. - where any liquidation, bankruptcy, insolvency, receivership or similar action or proceeding is commenced against the Applicant Entity. - where a winding up order has been made against or an effective resolution has been passed for the winding up of the Applicant Entity. - where there is a breach by the Applicant Entity of any terms or conditions in the Debentures or provisions of the Trust Deed or any other documents relating to the issue, offer or invitation in respect of the Debentures. - where the Applicant Entity stops or threatens to stop payment of its debts or ceases to carry on its business. - where any other indebtedness of the Applicant Entity becomes due and payable prior to its stated maturity or where security created for any other indebtedness becomes enforceable. - where there is a revocation, withholding or modification of a license, authorization or approval that impairs or prejudices the Applicant Entitys ability to comply with the terms and conditions of the Debentures or the provisions of the Trust Deed or any other document relating to the issue, offer or invitation in respect of the Debentures. - Where any mortgage, charge, pledge, lien or other encumbrance, present or future is created or assumed by the Applicant Entity contrary to the terms or conditions of the Debentures and the provisions of the Trust Deed.

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In any of the events above, the Trustee at its discretion may, and if so requested in writing by the Debenture holders of at least one fifth in nominal value of the Debenture outstanding or if so directed by a Special Resolution of the holders, shall give notice to the Applicant Entity that Debentures become immediately due and payable at their principal amount, together with accrued interest as provided in the Trust Deed. Enforcement of obligations - The manner of enforcing obligations shall be described in the Trust Deed. Application of monies received by the Trustee Where there are any monies received by the Trustee from the Applicant Entity under the Trust Deed, the Trust Deed shall provide for the manner and order of priority in which these amounts are applied or payable. Remuneration of the Trustee Fees to be paid to the Trustee for the performance of its duties as Trustee and any additional services it may provide. Expenses of the Trustee The Trust Deed shall provide for a covenant by the Applicant Entity to immediately reimburse all expenses borne by the Trustee in the administration of the Trust and state the modalities of reimbursement. Powers and Duties of Trustee - The Trust Deed shall set out provisions relating to the powers and duties of the Trustee. - The Trust Deed shall contain the following statements by the Trustee: (i) that it is duly qualified to act as Trustee. (ii) that it shall exercise reasonable diligence to ascertain whether the guarantee (where applicable) provided for the Debentures will be sufficient to cover the conditions under which the guarantee was issued. (iii) that it shall ensure that all documents required to be submitted by the Applicant Entity and the Guarantor in terms of the covenants set out in the Trust Deed are forwarded in a timely manner. (iv) that it shall exercise reasonable diligence to ascertain whether the Applicant Entity or any Guarantor has committed any breach of the terms and conditions of the Debentures or provisions of the Trust Deed or whether an event of default has occurred or is continuing to occur, on perusal of the documents submitted in terms of the covenants set out in the Trust Deed. - The Trust Deed shall contain the following covenants: (i) Trustee may rely upon any certificate or report given or statement made by the auditors or an officer of the Applicant entity or the Guarantor, if it has reasonable grounds for believing that the auditor or officer was competent to give or make the certificate, report or statement. (ii) Trustee shall give notice in writing to the Debenture holders as soon as practicable if the Applicant Entity or Guarantor (where applicable)

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fails to remedy any breach of terms and conditions of the Debentures or the provisions/covenants of the Trust Deed. (iii) where an event of default has occurred and is continuing to occur, the Trustee shall exercise such rights and powers vested in it by the Trust Deed and use a reasonable degree of skill and diligence in exercising such powers. (iv) Trustee shall, in the event the Applicant Entity or the Guarantor (where applicable) fails to remedy any breach of terms and conditions of the Debentures or the provisions/covenants of the Trust Deed: call a meeting of the Debenture holders with notice to the Applicant Entity; inform the Debenture holders of the failure at the meeting; and submit proposals for the protection of the Debenture holders interests or call for proposals from the Debenture holders at the meeting as the Trustee considers necessary or appropriate and obtain their directions. (v) Trustee shall give notice in writing to the Applicant Entity as soon as practicable if the Trustee discovers that it is not eligible to be appointed or to act as Trustee. (vi) The matters which are within the powers of the Trustee, the Trustee may decide without reference to the Debenture holders. (vii)Where there is a breach by the Applicant Entity of the terms and conditions of the Debentures and the provisions of the Trust Deed, the Trustee may authorize or waive such breach where the Trustee is authorized to do so by resolution of a stipulated majority of the Debenture holders. (viii)The Trustee may appoint a person to chair the meeting of Debenture holders. If the Trustee does not exercise this power, the Debenture holders present at the meeting may appoint a person to chair the meeting. Exemptions and indemnifications of Trustee from liability - Terms and conditions of Debentures and provisions in the Trust Deed or a term of a contract with the Debenture holders secured by the Trust Deed, shall be void in so far as the term or provision would have the effect of: (i) exempting a Trustee from liability for: the failure to carry out its duties as the Trustee; or the failure to exercise the degree of care and diligence required of it as the Trustee. (ii) indemnifying the Trustee against that liability, unless the term or provision: releases the Trustee from liability for something done or omitted to be done before the release is given; or enables a meeting of debenture holders to approve the release of the Trustee from liability for something done or omitted to be done before the release is given. Such release will be effective when approved by Debenture holders if the Debenture holders who vote for the resolution represent 75% of the nominal value of the Debentures.

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A Trustee is not liable for anything done or omitted to be done in accordance with a direction given to the Trustee by the Debenture holders at any meeting called.

Meeting - The Trust Deed shall contain provisions for setting out the notice period for the meeting of Debenture holders - The Trust Deed shall contain provisions which states that the meetings may be convened at the request of the Applicant Entity, Trustee or Debenture holders of at least one fifth in nominal value of the Debentures outstanding or an agreed percentage of Debenture holders to consider any matter affecting their interest. - There shall be a quorum requirement for the transaction of business at the meetings. The quorum for the passing of special resolutions shall be explicitly stated. Modifications of the Trust Deed - The Trust Deed shall contain the conditions under which the provisions of the Trust Deed or the terms and conditions of the Debentures may be modified. Others - The Applicant Entity to be responsible for paying any stamp duty and other similar duties or taxes on or in connection with the Trust Deed or Debentures (if applicable)

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SECTION 4 FUNDS CLOSED- END FUNDS Listing of units of closed-end Funds (Funds) are dealt with under the following main headings: 4.1 4.2 4.3 4.4 General Requirements for a listing Listing Application procedure Continuing Listing Requirements Applicable procedure for the liquidation of a closed-end Fund

4.1

GENERAL REQUIREMENTS FOR A LISTING To be eligible for listing units of a Fund, the Fund shall meet the following requirements: a. be a closed-end Fund, the management of which should be carried out by a Managing Company licensed by the SEC. the listing should be for all that class of units in respect of which the listing is sought. the units shall be; (i) fully paid; (ii) free from all lien; and, (iii) freely transferable. should have a minimum fund size of at least Rs. Twenty Five Million (25 Mn.). should have a registrar to attend to registration. The Trust Deed shall include the provisions set out in Section 6 of the Listing Rules of the Exchange (as applicable).

b.

c.

d.

e. f.

4.2

LISTING APPLICATION PROCEDURE An application for listing shall be made by the Managing Company licensed by the SEC. Each application must contain the following: a. An Initial Listing Application which conforms with Appendix 2A & supporting documents as set out below:

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(i)

Certified copy of the license issued by the SEC to the Managing Company to set up/manage the Fund for which application is made. A Declaration by the Managing Company that they are independent of the Trustees. A copy of the Trust Deed approved by the SEC with any amendments made thereto. A confirmation from the Managing Company to the effect that all the amendments to the Explanatory Memorandum and the Trust Deed have been approved by the SEC. Where the Application is to list units of a Fund through an Offer for Subscription: a) a certified copy of the Explanatory Memorandum approved by the SEC with any amendments made thereto and a certified copy of such letter of approval issued by SEC. b) a certified copy of the resolution of the Board of Directors of the Managing Company and a letter of approval of the Trustees authorizing the application for a listing. Where the application for a listing is through an Introduction: a) a letter from the Trustee confirming that it has taken reasonable care to ensure that the Unit Trust has been managed in accordance with the provisions of the SEC Act, Unit Trust Rules, the Trust Deed, the last published Explanatory Memorandum and the directions issued by the SEC from time to time along with a certified copy of the Explanatory Memorandum approved by the SEC with any amendments made thereto and a certified copy of such letter of approval. b) a certified copy of a Resolution of the Board of Directors of the Managing Company and a letter of approval of the Trustees authorizing the application for a listing. A listing Undertaking duly perfected in conformity with Appendix 2B of the Rules.

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

b.

The Managing Company shall submit to the Exchange a Declaration as set out in Appendix 2C or 2D, as applicable, of the Rules, on the Market Day immediately following the day on which the investors CDS accounts are credited with the units.

4.3

CONTINUING LISTING REQUIREMENTS Upon the units of a Fund are listed, the Managing Company will be required

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to observe the following continuing listing requirements: a. The Managing Company shall notify the Exchange monthly, the Net Asset Value of a unit, to be disseminated to the market. The Managing Company shall immediately notify the Exchange, of the following information relating to the operation of the Fund: (i) Any amendment made to the Explanatory Memorandum or the Trust Deed with a confirmation from the Managing Company that such amendment/s have been approved by the SEC. Any change to the information submitted to the SEC, as required under Part IV of the SEC Act, for the purposes of grant of the license to the Managing Company to operate the Fund and the renewal of such license. Any approval or rejection carried out by the SEC in relation to a material change to the Fund. Appointment of an alternate Managing Company. Any regulatory action taken by the relevant authorities. Any dividend to be paid when determined. The announcement should include details of the units, payment date for the dividend, dividend per unit and applicable financial year

b.

(ii)

(iii)

(iv) (v) (vi)

The XD date shall be the 8th Market Day prior to the date of dispatch of the dividend payment. c. In addition to the matters set out in Rule 27 of Unit Trust Code 2004, include the following in the Funds annual report and accounts: (i) A detailed statement of investment objectives and policies and the manner in which those policies have been carried into effect (where applicable); The management fees or any other direct or indirect fees and reimbursements paid to the Managing Company to be shown separately under gross expenses of the closed-end Fund; Analysis of realized and unrealized surpluses separately stating the profits and losses as between listed and unlisted investments; A statement that the Board of the Managing Company has complied with and is in compliance with all the requirements imposed by the constituent documents of the Trust, the SEC

(ii)

(iii)

(iv)

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Act, the Explanatory Memorandum, the Unit Trusts Code and any directive issued by the SEC from time to time; (v) Names of persons who during the financial year were members of the Board of the Managing Company; The following financial and securities information (if any): 1. 2. 3. Dividend per unit Net asset value per unit Market value per unit highest and lowest values recorded during the financial year value as at the end of financial year

(vi)

The Managing Company shall forward the annual report to the Exchange simultaneous to the distribution of such annual report to all the unit holders as required under Rule 27(2) of the Unit Trust Code 2004. The Entity shall give to the Exchange thirty five (35) copies of the annual report in printed form and one (1) copy in a CDROM. (vii) The Managing Company shall pay Fees as set out in Section 10 of these Rules.

4.4

APPLICABLE PROCEDURE FOR THE LIQUIDATION OF A CLOSED-END FUND A Closed-end Fund shall be dissolved pursuant to the Trust Deed and in accordance with the Rules of the Unit Trust Code 2004. Upon payments being made, the Managing Company shall file with the Exchange a declaration signed by the Managing Company and the Trustee of the Fund confirming that they have complied with the Rules of the Unit Trust Code 2004 and the Trust Deed in performing its obligations to the holders of units with regard to the distribution of the proceeds of the realization of the Fund, and request the Exchange to cancel the units listed in the Exchange and the entries in the CDS. The Exchange shall thereupon make such announcement in the market.

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SECTION 5 FURTHER ISSUE OF SECURITIES OF A LISTED ENTITY 5.1 5.1.1 APPLICATION FOR A FURTHER ISSUE AND LISTING OF SHARES GENERAL REQUIREMENTS a. Where shares of a particular class have been listed on the Exchange further shares of that class may not be issued by a listed Entity until the issue and listing of such shares is approved by the Exchange. Listing for a class of shares not already listed on the Exchange shall be in terms of this Section. where the application is for Other Class of Shares, the total value of all the Other Classes of Shares issued at any given time (as set out in the latest balance sheet of the Entity), whether listed or unlisted (including the Other Class of Shares for which the application is made), shall not exceed fifteen percent (15%) of the Entitys Shareholders Funds. (For the purposes of this Rule Shareholder Funds shall mean stated capital and the reserves of the Entity). In the event of a Rights Issue or issue of shares through Public Subscription shares shall be issued for cash only. The Exchange retains the discretion to accept or reject applications for additional listings and to determine the requirements to be fulfilled in connection with such listings. The requirements set out in this Section are not exhaustive. The Exchange reserves the right to impose further requirements as it may think relevant in the particular circumstances in which the additional listing is sought.

b.

c.

d.

e.

(For the purpose of Rules 5.1.2 5.9 of Section 5, reference to shares shall include both shares and Other Class of Shares). 5.1.2 TYPES OF FURTHER ISSUE OF SHARES a. Rights Issue of shares; b. issue of shares credited as fully paid up by way of capitalization of reserves; c. issue of shares through a private placement; d. issue of shares through public subscription; e. Employee Share Option Schemes (ESOS)/ Employee Share Purchase Schemes (ESPS); f. share swaps;

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g.

scrip dividends (applicable Rules are set out in Section 7 of the Rules)

5.2

RIGHTS ISSUE OF SHARES a. The Entity shall obtain shareholder approval for the Rights Issue of shares at a General Meeting. ANNOUNCEMENT TO THE EXCHANGE The applicant Entity is required in the first instance to make an announcement to the Exchange of the decision of the Board of Directors to issue shares by way of rights immediately upon such decision being made. The announcement shall include:(i) (ii) (iii) (iv) (v) (vi) The number of shares to be issued; The proportion in which shares are to be issued; The consideration for which the shares are be issued; The current stated capital of the Entity; The purpose for which the proceeds of the issue are to be utilized; The following statement; the Rights Issue is subject to the Exchange approving in principle the issue and listing of shares and obtaining shareholder approval at a General Meeting.

b.

c.

ADDITIONAL LISTING APPLICATION RIGHTS ISSUE The Entity shall submit the following documents to the Exchange within seven (7) Market Days, from and excluding the date of announcement. (i) (ii) (iii) (iv) The listing application in conformity with Appendix 5A of the Rules. A Circular to Shareholders in conformity with Appendix 5B of the Rules. The Notice of General Meeting. The following documents; 1. The provisional letter of allotment 2. The letter of acceptance and registration 3. The form of renunciation to the CDS 4. The form of application for additional shares. A copy of the Board Resolution certified by the Company Secretary recommending the issue and the listing of the shares arising from such Rights Issue and confirmation by the Board that in its opinion the consideration for which the shares are to be issued is fair and reasonable to the Entity and to all existing shareholders. The relevant fee payable to the Exchange for the listing as

(v)

(vi)

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d.

prescribed by Section 10 of the Rules. DATES FOR THE RIGHTS ISSUE (i) The Entity shall not announce the dates for the Rights Issue until the issue and listing of shares is approved, in principle, by the Exchange. Upon the Exchange granting approval in principle the Entity shall notify the following dates to the Exchange: 1. The date of the General Meeting and Provisional Allotment - The Entity shall convene a General Meeting to obtain the approval of the shareholders for the Rights Issue and such Meeting shall be held within twenty five (25) Market Days of obtaining approval, in principle from the Exchange. The date of provisional allotment shall be the same date as the date of the General Meeting. The date of entitlement for Rights shall be the same date as the date of provisional allotment. 2. Date of dispatch of Provisional Letter of Allotment - The date of dispatch of provisional letter of allotment shall not exceed five (5) Market Days from and excluding the date of provisional allotment. 3. The last date of acceptance and payment for rights- The last date of acceptance and payment for rights shares shall be the tenth (10) Market Day from and excluding the date of dispatch of provisional letter of allotment.

(ii)

EX- RIGHTS (XR) PERIOD The Entitys shares shall trade ex-rights (XR) from the Market Day after the date of provisional allotment until the last date of acceptance and payment for Rights.

f.

THE PERIOD OF RENUNCIATION TO CDS The rights shares may be renounced to the CDS only. Such period shall not exceed nine (09) Market Days from and excluding the date of dispatch of Provisional Letters of Allotment.

g.

ALLOTMENT OF ADDITIONAL SHARES The allotment of shares relating to applications for additional shares shall be carried out by the Entity in accordance with a specific scheme which has been approved by the shareholders.

h.

TRADING OF RIGHTS Trading of rights shall commence on the fourth (4th) Market Day from and excluding the date of dispatch of Letters of Provisional Allotment. Such trading shall continue throughout the period of renunciation to

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the CDS. i. BANKING OF CHEQUES (i) (ii) Cheques received in respect of the rights may be banked on receipt. Cheques in respect of applications for additional rights shall be banked only after the last date of acceptance and payment.

j.

REFUND CHEQUES ON REJECTED APPLICATIONS Refunds in respect of rejected/partly rejected applications for shares shall be dispatched to the shareholders as expeditiously as possible but not exceeding ten (10) Market Days from the last date of acceptance and payment. Applicants will be entitled to Interest (as defined) on refunds not made within this period. If the applicant has provided accurate and complete details of his bank account in the application, the Entity shall make such refund payments to the bank account specified by the applicant, through Sri Lanka Inter Bank Payment System (SLIPS) and a payment advice shall be issued to the applicant. If the applicant has not provided details of his bank account in the application, the Entity shall make such refund payments to the applicant by way of a cheque.

k.

DIRECT DEPOSIT OF NEW SHARES INTO SHAREHOLDERS CDS ACCOUNTS AND DISPATCH OF SHARE CERTIFICATES The Entity shall complete the direct deposit of shares to the respective shareholders CDS Accounts and dispatch the share certificates to the respective shareholders within twelve (12) Market Days from the last date of acceptance and payment. The relevant shareholders should be notified of such direct deposits within two (2) Market Days of the direct deposit.

l.

DECLARATION TO EXCHANGE The Entity shall submit to the Exchange a Declaration as set out in Appendix 5C of the Rules on the Market Day immediately following the day on which the direct deposit of shares is completed.

m.

MATERIAL CHANGE IN THE USE OF FUNDS In the event the Board of Directors of an Entity does not utilize the funds raised through a Rights Issue for the objective/s approved by the shareholders and decides to utilize the funds for another objective/s, the Entity shall make an announcement to the Exchange of this decision and shall obtain shareholder approval at a General Meeting.

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5.3

AN ISSUE OF SHARES CREDITED AS FULLY PAID UP BY WAY OF OF RESERVES a.

CAPITALIZATION

The Board of a Listed Entity may authorize a distribution by the issue of shares credited as fully paid up by way of Capitalization of Reserves at such time and in such amounts as it considers appropriate. The Entity shall immediately upon authorizing the issue make an announcement to the Exchange as set out below. ANNOUNCEMENT TO THE EXCHANGE The announcement to the Exchange shall include:(i) (ii) (iii) (iv) (v) (vi) The number of shares to be issued. The proportion in which the shares are to be issued. The consideration for which the shares are to be issued. The current stated capital of the Entity. The value of reserve/s to be capitalized for the issue of shares and specify the reserve/s to be capitalized. a resolution passed by the board of directors of the Entity stating that the Board has reasonable grounds for believing that the Entity would satisfy the Solvency Test immediately after the capitalization of reserves. a certified copy of the certificate signed by the board of directors of the Entity to the effect that the Entity is able to satisfy the Solvency Test immediately after the capitalization of reserves, with an undertaking that the Entity shall forward to the Exchange a certified copy of the certificate of solvency issued by a firm of auditors. The following statement; The issue of shares credited as fully paid up by way of Capitalization of Reserves is subject to the Exchange approving in principle the issue and listing of shares and obtaining shareholder approval (if required in terms of Articles of Association of the Entity).

b.

c.

(vii)

(viii)

d.

ADDITIONAL LISTING APPLICATION The Entity shall submit the following documents to the Exchange within seven (07) Market Days, from and excluding the date of announcement. (i) (ii) Listing Application in conformity with Appendix 5A of the Listing Rules. A Circular to Shareholders, if approval of the shareholders is required to capitalize Reserves in terms of the Articles of Association of the Entity. The Notice of General Meeting, if approval of the shareholders is required to capitalize Reserves in terms of the Articles of

(iii)

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(iv)

(v)

(vi)

Association of the Entity. a copy of the Board Resolution certified by the Company Secretary recommending the issue and the listing of the shares arising from such capitalization and confirmation by the Board that in its opinion the consideration for which the shares are to be issued is fair and reasonable to the Entity and to all existing shareholders. Where the distribution requires the approval of the shareholders of the Entity, an extract of such Article certified to be a true copy by the Company Secretary. The relevant fee payable to the Exchange as set out in Section 10 of the Listing Rules.

e.

DATES FOR THE ISSUE OF SHARES BY CAPITALIZING RESERVES The Entity shall not announce the dates for the issue of shares resulting from the capitalization of reserves until the issue and listing of shares is approved by the Exchange, in principle. Upon the Exchange granting approval in principle, the Entity shall notify the Exchange the date of entitlement and the date of allotment. The date of entitlement and the date of allotment shall be the same date as the date of the General Meeting, if such meeting is required to be held. Where the Articles of the Entity require shareholder approval, the Entity shall convene a General Meeting to obtain the approval of the shareholders for the capitalization and issue of shares credited as fully paid, and such Meeting shall be held within thirty (30) Market Days of obtaining approval, in principle from the Exchange. Where the Entity is not required to obtain prior approval of the shareholders, the date of Entitlement and the date of Allotment shall be within fifteen (15) Market Days from obtaining approval in principle of the Exchange. The date of entitlement and the date of allotment shall be the same date.

f.

XC PERIOD The Entitys shares shall trade XC from the Market Day after the date of allotment until the date of completion of direct upload of shares to the respective shareholders CDS Accounts.

g.

DIRECT DEPOSIT OF NEW SHARES INTO SHAREHOLDERS CDS ACCOUNTS AND DISPATCH OF SHARE CERTIFICATES The Entity shall complete the direct deposit of shares to the respective shareholders CDS Accounts within five (05) Market Days from and excluding the date of allotment and dispatch the share certificates to the respective shareholders within seven (07) Market Days from and excluding the date of allotment.

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The relevant shareholders should be notified of such direct deposits within two (2) Market Days of the direct deposit. h. SOLVENCY CERTIFICATE The Entity shall forward to the Exchange a certified copy of the certificate of solvency issued by a firm of auditors as soon as the same is issued and in any event prior to submitting the Declaration to the Exchange as specified in (i) below. i. DECLARATION TO THE EXCHANGE The Entity shall submit to the Exchange a Declaration as set out in Appendix 5C of the Rules on the Market Day immediately following the day on which the direct deposit of shares is completed.

5.4

ISSUE OF SHARES BY PRIVATE PLACEMENT a. A Private Placement is an issue of shares to an identified investor/s or category of investors other than by way of a Rights Issue offered pro-rata to existing shareholders or a general offer to the public for subscription. The percentage of shares to be issued by a Listed Entity through a private placement shall not exceed 20% of the shares in issue, immediately subsequent to such issue of shares through the private placement. The application of this rule may be waived by the SEC under exceptional circumstances. c. The entity shall not issue shares through a private placement during the 24 month period immediately following such issue of shares. The application of this rule may be waived by the SEC under exceptional circumstances. d. The Entity shall obtain shareholder approval by way of a Special Resolution for the issue of shares through a Private Placement at a General Meeting. ANNOUNCEMENT TO THE EXCHANGE The applicant Entity is required in the first instance to make an announcement to the Exchange of the decision of the Board of Directors to issue shares by way of a Private Placement immediately upon such decision being made. Such announcement shall include:

b.

e.

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(i) (ii) (iii) (iv) (v) (vi)

maximum number of shares to be issued name/s of the party/parties to whom the shares are to be allotted (if known) Price or the minimum price for which the shares are to be issued current stated capital of the Entity the purpose for which proceeds of the issue are to be utilized, and; the following statement: The issue of shares by way of the Private Placement is subject to the Exchange approving in principle the issue and listing of shares and obtaining shareholder approval at a General Meeting.

f.

ADDITIONAL LISTING APPLICATION The Entity shall submit the additional listing application to the Exchange within seven (07) Market Days from and excluding the date of announcement. The application shall contain the following: (i) (ii) (iii) The Board Resolution authorizing the issue and listing of the shares, certified by the Company Secretary. An application in conformity with Appendix 5A of the Rules An extract of the Article which specifically permits the Entity to issue new shares or sets out the method by which the Entity is authorized to issue the new shares without such shares being offered pro-rata to the holders of the shares already in issue as required in terms of Section 53(1) of the Companies Act certified by the Company Secretary to be a true copy. An extract of the Board Resolution certified by the Company Secretary that, in the opinion of the Board, the consideration for which the shares are to be issued is fair and reasonable to the Entity and to all existing shareholders as required by the Companies Act. A circular to shareholders stating, inter alia; the purpose for which the proceeds of the issue are to be utilized details of the target persons to whom the shares are to be issued (if known) benefits of the Private Placement to the existing shareholders and to the Entity the maximum number of shares to be issued and, the price or the minimum price at which such issue will take place. The circular shall state that the directors have resolved that the price for which the shares are issued is fair and reasonable to the Entity and to all existing

(iv)

(v)

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shareholders as required by the Companies Act. (vi) Fee payable to the Exchange for the listing as prescribed by Section 10 of the Rules.

g.

DECLARATION TO THE EXCHANGE The Entity shall submit to the Exchange a Declaration as set out in Appendix 5C of the Rules within two (02) Market Days from and excluding the date of allotment.

5.5

ISSUE OF SHARES FOR PUBLIC SUBSCRIPTION a. A Listed Entity issuing shares to the Public for subscription without such shares being first issued to the existing shareholders pro-rata to their shareholding should make an application in terms of this Section. The Entity shall obtain shareholder approval by way of a Special Resolution for the issue of shares through a Public Subscription at a General Meeting. ANNOUNCEMENT TO THE EXCHANGE The applicant Entity is required in the first instance to make an announcement to the Exchange of the decision of the Board of Directors to issue of shares for public subscription immediately upon such decision being made. The announcement shall include:(i) (ii) (iii) (iv) (v) The number of shares to be issued; The consideration for which the shares are be issued; The current stated capital of the Entity; The purpose for which the proceeds of the issue are to be utilized; The following statement; the issue of shares is subject to the Exchange approving in principle the issue and listing of shares and obtaining shareholder approval at a General Meeting. d. ADDITIONAL LISTING APPLICATION The Entity shall submit the additional listing application to the Exchange within seven (07) Market Days, from and excluding the date of announcement.

b.

c.

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The application shall contain the following: (i) The Board Resolution authorizing the issue and listing of the shares, certified by the Company Secretary. An application in conformity with Appendix 5A of the Rules. An extract of the Article which specifically permits the Entity to issue new shares or sets out the method by which the Entity is authorised to issue the new shares without such shares being offered pro-rata to the holders of the shares already in issue as required in terms of Section 53(1) of the Companies Act certified by the Company Secretary to be a true copy. An extract of the Board Resolution certified by the Company Secretary, that in the opinion of the Board the consideration for which the shares are to be issued is fair and reasonable to the Entity and to all existing shareholders as required by the Companies Act. A draft Prospectus prepared in conformity with requirements set out in Rule 3.1 of Section 3 of the Rules. the

(ii) (iii)

(iv)

(v)

(vi)

A certified copy of every letter, report, balance sheet, valuation, contract or other document referred to in the Prospectus.

The Listed Entity shall follow the procedure set out in Rule 2.4 of Section 2 of the Rules, pertaining to an Initial Public Offering.

5.6

EMPLOYEE SHARE OPTION SCHEMES (ESOS) /EMPLOYEE SHARE PURCHASE SCHEMES (ESPS)

DEFINITIONS Employee shall mean: a. b. c. d. an employee of the Listed Entity; a director of the Listed Entity; an employee or a director of a subsidiary of the Listed Entity; the executors and administrators of a deceased employee as defined in (a), (b) or (c) above or where the administration of the estate of the deceased is in law not compulsory, the heirs of the deceased employee.

Employee Share Option Scheme shall mean a scheme under which a Listed Entity grants its Employees share options, which gives such Employees the right to purchase or subscribe at a future date, the shares offered by the Listed Entity at a predetermined price.

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Employee Share Purchase Scheme shall mean a scheme under which the Employees of a listed company acquire the shares of the company. Grant shall mean issue of options to Employees under the ESOS. Grant date shall mean the date on which options are granted to the Employee. Vesting shall mean the process by which the Employee is given the right to apply for shares of the Listed Entity against the options granted to such Employee under the ESOS. Vesting period shall mean the period during which the options granted to the Employee under the ESOS are vested in such Employee, which commences on the grant date and ends on the day immediately prior to the commencement of the exercise period. Exercise shall mean the submission of an application by the Employee to the Listed Entity for issue of shares against the options vested in such Employee under the ESOS. Exercise period shall mean the period commencing immediately after the Vesting Period during which the Employee has the right to exercise the option vested in such Employee to purchase shares at the exercise price. Exercise price shall mean the price payable by the Employee for the purchase of shares by exercising the options granted to such Employee under the ESOS.

5.6.1

APPLICABLE LIMITATIONS The total number of shares underlying the options that can be granted under ESOSs and the total number of shares that can be issuedunder ESPSs shall be limited as follows: (a) Limitation applicable to the scheme The number of shares underlying the options that are granted but not exercised by the Employees, including the shares underlying the options which have been granted previously under all such ESOSs (excluding the shares underlying the options which have expired), and, the number of shares allotted, but where the ownership of shares has not absolutely transferred to the Employees, including those which have been allotted previously under all such ESPSs, shall not exceed five percentum (5%) of the total number of shares issued by such Listed Entity at any given time.

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(b)

Limitation applicable to an Employee An Employee of a Listed Entity shall not be entitled to acquire through an ESOS/ESPS more than one percentum (01%) of the total number of shares issued by such Listed Entity at any given time. Provided however, upon obtaining shareholder approval by way of a Special Resolution at a General Meeting, the Listed Entity may permit an Employee to acquire more than one percentum (01%) of the total number of shares issued by such Entity in exceptional circumstances.

5.6.2

DURATION A Listed Entity shall ensure that the shares underlying all the options granted under an ESOS and all the shares allotted under an ESPS shall be absolutely transferred to the Employees within a period of ten (10) years from the date of obtaining shareholder approval for such ESOS/ESPS.

5.6.3

SHAREHOLDER APPROVAL (a) The Listed Entity shall obtain shareholder approval by way of a Special Resolution at a General Meeting for the ESOS/ESPS. The Employees holding shares issued under an ESOS/ESPS which was funded by the Entity or any of its subsidiaries and an employee share trust shall not vote on such resolution at the General Meeting.

(b)

5.6.4

VARIATION OF TERMS Subject to Rule 5.6.6(a)(ii) of these Rules, the Entity shall not vary the terms of an ESOS/ESPS, which is approved by the Exchange.

5.6.5

FUNDING OF THE ESOS/ESPS The Listed Entity or any of its subsidiaries shall not, directly or indirectly, provide funds for the ESOS/ESPS.

5.6.6

REQUIREMENTS APPLICABLE TO ESOS (a) Exercise Price i) The exercise price of the option shall be the Volume Weighted Average Price taking into consideration all share transactions of the relevant Security during the thirty (30) Market Days immediately preceding the grant date.

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ii)

The Listed Entity shall make provision in the scheme for the adjustment of the exercise price/the number of shares underlying the options that have not been exercised (as applicable) in the event of: an increase in the total number of shares of the Entity (e.g. rights issues, issue of shares credited as fully paid up by way of capitalization of reserves and subdivision of shares); or a decrease in the total number of shares of the Entity (e.g. consolidation of shares and repurchase of shares)

iii)

The Entity shall immediately disclose the adjusted exercise price/the number of shares underlying the options that have not been exercised (as applicable) to the Exchange. The adjustment of the exercise price/the number of shares underlying the options that have not been exercised shall be made in such a way that an Employee will not receive a benefit that a shareholder of the Listed Entity does not receive.

iv)

(b)

Announcement to the Exchange The Listed Entity is required in the first instance to make an announcement to the Exchange of the decision of the Board of Directors to establish an ESOS immediately upon such decision being made. Such announcement shall include: i) ii) iii) the total number of options to be granted and the related percentage of shares to be issued. the current stated capital of the Listed Entity and number of shares representing the stated capital. the following statement: The granting of options under the proposed Employee Share Option Scheme is in compliance with the Listing Rules of the Colombo Stock Exchange and is subject to the Exchange approving, in principle, the issue and listing of shares issued pursuant to such scheme and obtaining shareholder approval, by way of a Special resolution at a General Meeting.

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(c)

Exchange Approval The Exchange requires the following documentation for the approval, in principle, for the issue and listing of shares arising out of the ESOS within seven (7) Market Days from the Initial Announcement: i) The Board resolution authorizing the issue and listing of the shares arising out of the ESOS, certified by the Company Secretary. An extract of the Article which specifically permits the Entity to issue new shares or sets out the method by which the Entity is authorised to issue the new shares without such shares being offered pro-rata to the holders of the shares already in issue as required in terms of Section 53 (1) of the Companies Act, certified by the Company Secretary to be a true copy. A circular to the shareholders, which shall contain, inter alia; The total number of options to be granted and the related percentage of shares to be issued. The basis (categories of eligible Employees, performance/ other criteria, if any, relating to the Listed Entity and/or Employee) for determining the eligibility of Employees to participate in the ESOS. The period over which the options are to be granted including the earliest and latest grant dates. The vesting period The exercise period The pricing formula The circumstances under which the options that are vested but not exercised by the Employees may be cancelled. A statement by the directors of the Entity confirming that the Entity or any of its subsidiaries will not, directly or indirectly, provide funds for the ESOS.

ii)

iii)

iv)

Fee payable to the Exchange for the listing as set out in Section 10 of these Rules.

5.6.7

REQUIREMENTS APPLICABLE TO ESPS

(a)

Pricing The maximum discount under the ESPS must not exceed 20% of the Volume Weighted Average Price taking into

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consideration all share transactions of the relevant Security during the thirty (30) market days immediately preceding the grant date. If the ESPS is part of an initial public offering, the maximum discount must not exceed 20% of the initial public offering price. The discount must be approved by shareholders at an Extraordinary General Meeting. (b) Lock-in Shares Shares issued under an ESPS shall be locked in for a minimum period of one year from the date of allotment. If the ESPS is part of an initial public offering, Shares issued under an ESPS shall be locked in for a minimum period of one year from the date of listing. However, if the ESPS is part of an initial public offering and the shares are issued to employees at the same price or higher as in the initial public offering; the shares issued to employees pursuant to ESPS shall not be subject to any lock-in.
(c) Announcement to the Exchange The Listed Entity is required in the first instance to make an announcement to the Exchange of the decision of the Board of Directors to establish an ESPS immediately upon such decision being made. Such announcement shall include: i) ii) iii) iv) the total number of shares to be issued. the price at which the shares are to be issued. the current stated capital of the Listed Entity and the number of shares representing the stated capital. the following statement: The issue of shares under the proposed Employee Share Purchase Scheme is in compliance with the Listing Rules of the Colombo Stock Exchange and is subject to the Exchange approving, in principle, the issue and listing of shares issued pursuant to such scheme and obtaining shareholder approval, by way of a Special resolution at a General Meeting.

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(d)

Exchange Approval The Exchange requires the following documentation for the approval, in principle, for the issue and listing of shares arising out of the ESPS within seven (7) Market Days from the Initial Announcement: i) ii) The Board resolution authorizing the issue and listing of the shares under the ESPS, certified by the Company Secretary. An extract of the Article which specifically permits the Entity to issue new shares or sets out the method by which the Entity is authorised to issue the new shares without such shares being offered pro-rata to the holders of the shares already in issue as required in terms of Section 53 (1) of the Companies Act, certified by the Company Secretary to be a true copy. An extract of a Board Resolution, certified by the Company Secretary, that in the opinion of the Board the price for which the shares are to be issued throughout the period of the ESPS is fair and reasonable to the Entity and to all existing shareholders as required by the Companies Act. A circular to the shareholders, which shall contain, inter alia; The total number of shares to be issued under the ESPS. The price at which the shares are to be issued. The basis (categories of eligible Employees, performance/other criteria, if any, relating to the Listed Entity and/or Employee) for determining the eligibility of Employees to participate in the ESPS. The circumstances under which the shares offered may be cancelled prior to issue to the Employees. A statement that the directors have resolved that the price for which the shares are to be issued throughout the period of the ESPS is fair and reasonable to the Entity and to all the shareholders as required by the Companies Act. A statement by the directors of the Entity confirming that the Entity or any of its subsidiaries will not, directly or indirectly, provide funds for the ESPS.

iii)

iv)

v)

Fee payable to the Exchange for the listing as set out in Section 10 of the Rules.

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5.6.8

SUBSEQUENT LISTING REQUIREMENTS In the event of listing of shares arising from an ESOS/ESPS already approved, in principle, by the Exchange, the Listed Entity shall forward; (a) A Declaration in conformity with Appendix 5C of these Rules to the Exchange, within three (3) Market Days from the date of allotment. An extract of the Board Resolution certified by the Company Secretary that in the opinion of the Board the exercise price for which the shares are to be issued under the ESOS is fair and reasonable to the Entity and to all existing shareholders as required by the Companies Act.

(b)

5.6.9

OTHER REQUIREMENTS
Certificate from Auditors - The Board of Directors shall at each Annual General Meeting place before the shareholders a certificate from the auditors of the Entity that the scheme has been implemented in accordance with these rules and in accordance with the Special Resolution passed at the General Meeting.

5.6.10 TRANSITIONAL PROVISIONS APPLICABLE TO ALL EMPLOYEE SHARE SCHEMES ESTABLISHED PRIOR TO THE IMPLEMENTATION OF THESE RULES For the purposes of this Rule an Employee Share Scheme shall mean an ESOS, ESPS or any other scheme, plan or arrangement whereby the shares of a Listed Entity are, directly or indirectly, offered to the Employees of such Entity or a related Entity. (a) In the event the shares issued under an Employee Share Scheme have not been allotted to the Employees and continue to remain in a trust for the benefit of the Employees, the Listed Entity shall absolutely transfer such shares to the Employees of the Entity within a period of three (03) years from the date of implementation of these Rules. Where the basis of allotment of shares under an Employee Share Scheme has not been determined, the Listed Entity shall immediately determine the basis of allotment and simultaneously notify same to the Exchange and the Employees eligible to participate in such Employee Share Scheme. In the event a Listed Entity fails to comply with Rules 5.6.10 (a) and (b) above, such Entity shall dispose the un-allotted shares remaining in the trust through the Exchange, immediately upon the expiry of the period of three (03) years from the date of implementation of these Rules.

(b)

(c)

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(d)

With effect from the date of implementation of these Rules, a Listed Entity shall not purchase shares through the Exchange into an existing trust created under an Employee Share Scheme.

5.7

SHARE SWAP The Entity shall obtain shareholder approval by way of a Special Resolution at a General Meeting for the share swap. a. ANNOUNCEMENT TO THE EXCHANGE The Entity is required in the first instance to make an announcement to the Exchange of the decision of the Board of Directors to acquire shares of another company in the form of a share swap, immediately upon such decision being made. Such announcement shall include: (i) (ii) (iii) (iv) the proportion in which the share swap will be effected number of shares to be issued current stated capital of the Entity the following statement: The issue of shares under the share swap is subject to the Exchange approving in principle the issue and listing of shares and obtaining shareholder approval at a General Meeting.

b.

ADDITIONAL LISTING APPLICATION The Entity shall submit the Additional Listing Application to the Exchange within seven (07) Market Days from and excluding the date of announcement. The application shall contain the following: (i) The Board Resolution authorizing the share swap, the issue and listing of the shares, certified by the Company Secretary. An application in conformity with Appendix 5A of the Rules. An extract of the Article which specifically permits the Entity to issue new shares or sets out the method by which the Entity is authorised to issue the new shares without such shares being offered pro-rata to the holders of the shares already in issue as required in terms of Section 53(1) of the Companies Act certified by the Company Secretary to be a true copy. An extract of the Board Resolution certified by the Company Secretary that in the opinion of the Board the consideration for which the shares are to be issued is fair and reasonable to the Entity and to all existing shareholders as required by the Companies Act.

(ii) (iii)

(iv)

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(v)

A circular to shareholders stating, inter alia; the proportion in which the share swap will be effected number of shares to be issued benefits of the acquisition to the existing shareholders and to the Entity The circular shall state that the directors have resolved that the consideration for which the shares are issued is fair and reasonable to the Entity and to all existing shareholders as required by the Companies Act. Fee payable to the Exchange for the listing as prescribed by Section 10 of the Listing Rules. CDS

(vi)

C.

DIRECT DEPOSIT OF NEW SHARES INTO SHAREHOLDERS ACCOUNTS AND DISPATCH OF SHARE CERTIFICATES

The Entity shall complete the direct deposit of shares to the respective shareholders CDS Accounts within five (05) Market Days from and excluding the date of allotment and dispatch the share certificates to the respective shareholders within twelve (12) Market Days from and excluding the date of allotment. The relevant shareholders should be notified of such direct deposits within two (2) Market Days of the direct deposit. d. DECLARATION TO THE EXCHANGE The Entity shall submit to the Exchange a Declaration as set out in Appendix 5C of the Rules on the Market Day immediately following the day on which the direct deposit of shares is completed.

5.8

SCRIP DIVIDEND Applicable rules are set out in Section 7 of the Rules.

5.9

APPLICATION FOR LISTING OF SECURITIES PURSUANT TO CONVERSION OF DEBT SECURITIES a. Where a Listed Entity proposes to issue Debt Securities (referred to herein for purposes of clarity as Primary Securities) with a right of conversion to another class of Securities (referred to herein for purposes of clarity as Secondary Securities) for which a listing would be sought, the Entity shall submit an Additional Listing Application to the Exchange for the listing of Secondary Securities at the time of listing the Primary Securities and the application shall contain the following: (i) the Board Resolution authorizing the issue of the Primary Securities and the listing of the Secondary Securities, certified by the Company Secretary.

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(ii) (iii)

an application in conformity with Appendix 5A of the Rules. fee payable to the Exchange for the listing as set out in Section 10 of the Rules.

b.

DECLARATION TO THE EXCHANGE The Entity shall submit to the Exchange a Declaration as set out in Appendix 5C of the Rules at the time of listing the Secondary Securities.

5.10

ISSUE AND LISTING OF WARRANTS A Warrant is a Security that gives the holder the right to buy a given quantity of the underlying asset at a pre-determined price (exercise price), on or before the expiry date.

5.10.1 GENERAL REQUIREMENTS (i) Warrants may be listed only if the applicant Entitys shares are listed on the Exchange. The Entity must maintain, at the time the Board of Directors decides to issue Warrants, a Public Holding of 25% for shares listed on the Main Board and 10% for shares listed on the DiriSavi Board. The number of shares to be listed by exercising the Warrants to be issued (together with the Warrants already issued which have not been exercised) shall not exceed 15% of the Entitys total number of voting shares in issue, at the time of the submission of the listing application for the Warrants. The tenure of the Warrants for which the application is made shall not exceed two (2) years from the date of issue. The Entity shall obtain shareholder approval by way of a Special Resolution for the issue of Warrants. Warrants listed on the Exchange shall be freely transferable and shall not be subject to any restriction, save and except to the extent required for compliance with statutory requirements.

(ii)

(iii)

(iv)

(v)

(vi)

5.10.2 ANNOUNCEMENT TO THE EXCHANGE The Entity is required to make an announcement to the Exchangeimmediately upon the Board of Directors decidingto issue Warrants. The announcement shall include:(i) the number of Warrants to be offered;

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(ii) (iii) (iv) (v) (vi)

the consideration for which the Warrants are to be issued; the proportion in which the Warrants are to be issued; the purpose for which the proceeds of the issue are to be utilized; the public holding percentage of the Entity The following statement: the issue of Warrants is subject to the Exchange approving in principle the issue and listing of such Warrants and obtaining shareholder approval at a General Meeting.

5.10.3 LISTING APPLICATION The Entity shall submit the following documents to the Exchange within seven (7) Market Days, from and excluding the date of announcement. (i) (ii) (iii) The listing application in conformity with Appendix 5A of the Rules. A circular to shareholders in conformity with Rule 5.10.4 below. An extract of the Article which specifically permits the Entity to issue new shares or sets out the method by which the Entity is authorised to issue the new shares (upon conversion of the Warrants), without such shares being offered pro-rata to the holders of the shares already in issue as required in terms of Section 53(1) of the Companies Act certified by the Company Secretary to be a true copy. A copy of the Board Resolution certified by the Company Secretary recommending the issue and the listing of the Warrants. The relevant fee payable to the Exchange for the listing as prescribed by Section 10 of the Rules.

(iv) (v)

5.10.4 (i) (ii)

The circular referred to in Rule 5.10.3 (ii) above shall include The number of Warrants to be issued and the price at which such issue will take place The amount payable on the exercise of the Warrants (exercise price) The maximum number of shares which would be issued on exercise of the Warrants. The purpose for which the proceeds of the issue are to be utilized including the use of future proceeds arising from the exercise of the Warrants Benefits to the shareholders and to the Entity arising from the issue A statement that the exercise price of the Warrants is fair and reasonable to the Entity and to all existing shareholders as required by the Companies Act.

(iii) (iv)

(v) (vi)

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(vii)

Any adjustments to the exercise price, and, where appropriate, the number of Warrants, in the event of Rights Issues, issue of shares by way of capitalization of reserves etc. The expiry of the Warrants and notice of expiry to be sent to all holders of the Warrants at least one (1) month before the expiration date The period during which the Warrants may be exercised The rights (if any) of the Warrant holders to participate in any distributions and/or offers of further Securities made by the Entity. The rights of the Warrant holders on the liquidation of the Entity

(viii)

(ix) (x) (xi)

5.10.5

DECLARATION TO THE EXCHANGE The Entity shall submit to the Exchange a Declaration as set out in Appendix 5C of the Rules on the Market Day immediately following the day on which the direct deposit of Warrants is completed.

5.10.6

APPROVAL, IN PRINCIPLE, OF THE EXCHANGE FOR THE SHARES ARISING FROM CONVERSION OF WARRANTS (i) Where an Entity proposes to issue Warrants with a right of conversion to shares for which a listing would be sought, the Entity shall obtain a listing in principle for the shares arising from such conversion at the time of listing the Warrants and the application shall contain the following: (1) the Board Resolution authorizing the issue of the Warrants and the listing of the shares arising from conversion, certified by the Company Secretary an application in conformity with Appendix 5A of the Rules fee payable to the Exchange for the listing of shares as set out in Section 10 of the Rules.

(2) (3)

(ii) DECLARATION TO THE EXCHANGE The Entity shall submit to the Exchange a Declaration as set out in Appendix 5C of the Rules at the time of listing the shares arising from conversion.

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APPENDIX 5A (Letter head of the Entity) ADDITIONAL LISTING APPLICATION To: The Colombo Stock Exchange # 04-01, West Block, WorldTradeCenter Echelon Square Colombo 1

Dear Sir: ADDITIONAL LISTING APPLICATION FOR A LISTING OF SECURITIES (Name of Entity) Limited hereby apply for a listing for the under mentioned Securities issued by this Listed Entity and agree and undertake, in the event the application is accepted to conform to the Rules of the Colombo Stock Exchange and any amendments or replacements that may be made thereto from time to time. THE PARTICULARS OF SECURITIES TO BE LISTED ARE AS FOLLOWS: Type of Securities to be listed: Number of Securities to be listed: State type of offering (e.g. rights, public subscription, private placements, ESOPs etc.) THE PARTICULARS OF CAPITAL: Stated capital: (excluding that for which the present application is made) The Securities proposed to be issued will be identical in all respects with existing Securities (if not identical give details) The particulars contained herein are correct. Given under the Common Seal of the Entity this . day of in the presence of .. (Name) Director .. (Name) Director/Secretary or, Signed by the duly authorized signatories of the Entity on this .. day of

Note: please attach a copy of the Board Resolutions/Power of Attorney in proof of such authority.

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APPENDIX 5B THE CIRCULAR TO SHAREHOLDERS SHALL CONTAIN INTER-ALIA :1. A statement that the Board has resolved that in its opinion the consideration for which the Securities are to be issued is fair and reasonable to the Entity and to all existing shareholders, as required by the Companies Act. The objective/s for which the proceeds of the issue will be utilized. the high, low and last traded price of the Security during the preceding three months Name and details of the Underwriter and in the event the issue is not underwritten and the issue is under subscribed, specify the action the Entity intends to take in order to fulfill the purpose of the Rights Issue. Declarations: a) If you are in any doubt as to the action you should take, you should consult your stockbroker or other professional adviser immediately. Approval, in principle, has been obtained from the Colombo Stock Exchange to issue and list the new Securities. Trading of the Rights shall commence on the fourth (4th) Market Day from and excluding the date of dispatch of letters of provisional allotment. Such trading shall continue throughout the period of renunciation to the CDS. The listing of the Securities by the Colombo Stock Exchange will in no way be reflective of the merits of the issue. The Colombo Stock Exchange assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports included. The Directors of the Entity collectively and individually accept full responsibility for the accuracy of the information given and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief that there are no other facts the omission of which would render any statement in the Circular misleading.

2. 3.

4.

5.

b) c)

d)

e)

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APPENDIX 5C (Letter head of the Entity) DECLARATION To: Colombo Stock Exchange # 04-01, West Block, WorldTradeCenter Echelon Square Colombo 1

(Name of Entity) .Limited (hereinafter called The Entity) hereby declare that: 1. All documents required in terms of the Companies Act to be filed with the Registrar General of Companies in respect of the issue of .(Type of Securities issued) have been duly filed by the Listed Entity and that all other legal requirements in connection with the issue of its Securities have been complied with. The resolution pertaining to the issue was approved by the shareholders at the EGM (if applicable). (no. of Securities)..........Securities at Rs ............. each have been subscribed for and allotted for cash / allotted for a consideration other than for cash as set out in the Companies Act / shareholders (and/ or to their Renouncee/s) out of which Securities have been allotted to Non-Resident Shareholders. Securities for which a listing is to be granted are in all respects identical with those of the same class already listed. The direct uploads to the Central Depository System have been completed and that the share/Security certificates have been/will be posted on .. (date). The proceeds of the issue will be duly utilized for the objectives for which such proceeds were raised in terms of the circular to shareholders in respect of this issue. There is no other fact bearing on the Listed Entity's application for listing which should be disclosed to Colombo Stock Exchange.

2.

3.

4.

5.

6.

7.

We agree and undertake to comply with the Rules of the Exchange and any amendments that may be made thereto from time to time. Given under the Common Seal of the Entity this . day of in the presence of .. (Name) Director .. (Name) Director/Secretary

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or, Signed by the duly authorized signatories of the Entity on this .. day of

Note: please attach a copy of the Board Resolutions/Power of Attorney in proof of such authority.

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SECTION 6 ARTICLES OF ASSOCIATION OR OTHER CORRESPONDING DOCUMENTS / TRUST DEED

A. ARTICLES OF ASSOCIATION OR OTHER CORRESPONDING DOCUMENTS The Articles of Association or other corresponding documents shall contain the following provisions:1. TRANSFER AND REGISTRATION OF SHARES Notwithstanding any provision in these Articles suggesting the contrary, shares listed on the Colombo Stock Exchange shall be freely transferable and registration of the transfer of such listed shares shall not be subject to any restriction, save and except to the extent required for compliance with statutory requirements. 2. NOTICES a. Where notice is given by an advertisement, such advertisement, shall be published in Sinhala, Tamil and English national daily newspapers. Any member whose registered address is not within Sri Lanka may name an address within Sri Lanka which for the purpose of notice, shall be considered as his registered address.

b.

3.

JOINT SHAREHOLDING The Company shall not register more than three persons as Joint holders (including the principal holder) of any shares (except in the case of executors, administrators or heirs of a deceased member).

4.

COMPLIANCEWITH RULES Notwithstanding anything to the contrary contained in the Articles of Association of the Company, so long as the Company is listed on the Colombo Stock Exchange, the Company shall comply with the Rules of the Colombo Stock Exchange and the Central Depository System, which shall be in force from time to time.

B.

TRUST DEED

The Trust Deed pertaining to a Fund, the units of which are listed / sought to be listed on the Exchange shall contain the following provision:-

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TRANSFER AND REGISTRATION OF UNITS Notwithstanding any provision in this Trust Deed suggesting the contrary, units of a Fund listed on the Colombo Stock Exchange shall be freely transferable and registration of the transfer of such units shall not be subject to any restriction, save and except to the extent required for compliance with statutory requirements.

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SECTION 7 CONTINUING LISTING REQUIREMENTS All Entities whose Securities are listed on the Exchange shall comply with these Rules and such additional Rules as may be introduced from time to time at the discretion of the Exchange. All Entities whose securities are listed on the Exchange, whether or not such listing has taken place prior to these Rules shall, where applicable, be bound by these Rules and such additions, variations etc. made from time to time. It is the duty of the board of directors of every Entity whose Securities are listed to ensure that all the Rules of the Exchange are met on a continuing basis so long as the Securities of such Entity remain on the Exchange. 7.1 DIVIDEND PAYMENT ANNOUNCEMENT TO THE EXCHANGE a. The Entity shall, immediately upon authorizing a dividend distribution, make an announcement to the Exchange. The announcement to the Exchange shall include:(i) (ii) (iii) (iv) (v) (vi) dividend per share whether the dividend distribution is subject to the shareholder approval or not date of dispatch of dividend payment book closure date (if applicable) financial year applicable for the dividend in the event of a scrip dividend: - The number of shares to be issued - The proportion in which shares are to be issued - The consideration for which the shares are to be issued - The current stated capital of the Entity - The value of reserve/s to be capitalized for the issue of shares -The following statement: The scrip dividend is subject to the Exchange approving in principle the issue and listing of shares and obtaining shareholder approval (if required in terms of the Articles of Association of the Entity). a resolution passed by the board of directors of the Entity stating that the Board has reasonable grounds for believing that the Entity would satisfy the Solvency Test immediately after the dividend distribution

(vii)

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(viii)

a certified copy of the certificate signed by the board of directors of the Entity to the effect that the Entity is able to satisfy the Solvency Test immediately after the dividend distribution, with an undertaking that the Entity shall forward to the Exchange a certified copy of the certificate of solvency issued by a firm of auditors.

b.

Unless the Entitys Articles of Association provides otherwise, upon the board of directors authorizing a dividend distribution the shareholders must approve such distribution by an ordinary resolution. Date of dispatch of dividend payment when the approval of the shareholders is required If the approval of the shareholders is required for the dividend payment as per the Articles, the date of dispatch of the dividend payment shall be within seven (7) Market Days from and excluding the date on which the related resolution is passed by the shareholders at a meeting. The Entity shall promptly notify the Exchange of the date of dispatch of the dividend payment. The Ex-Dividend ('XD') date shall be the Market Day immediately following the date on which the related resolution is passed by the shareholders at the meeting.

c.

d.

Date of dispatch of dividend payment when the approval of the shareholders is not required If the approval of the shareholders is not required for the payment of a dividend as per the Articles, the date of dispatch of the dividend payment shall be within seven (7) Market Days from the XD date. The 'XD' date shall be the seventh (7th) Market Day excluding the date of the announcement. The Entity shall promptly notify the Exchange of the date of dispatch of the dividend payment.

e.

Once a dividend distribution has been announced an Entity shall not alter the dividend per share without consulting the Exchange. Solvency Certificate The Entity shall forward to the Exchange a certified copy of the certificate of solvency issued by a firm of auditors as soon as the same is issued and in any event prior to dispatching the dividend payment.

f.

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g.

Dividend distribution by way of a scrip dividend (i) Additional Listing Application

The Entity shall submit the following documents to the Exchange within seven (07) Market Days, from and excluding the date of announcement. 1. Listing Application in conformity with Appendix 5A of the Listing Rules. 2. A circular to shareholders, if approval of the shareholders is required to issue shares by way of a scrip dividend, in terms of the Articles of Association of the Entity. 3. The Notice of General Meeting, if approval of the shareholders is required to issue shares by way of a scrip dividend in terms of the Articles of Association of the Entity. 4. a copy of the Board Resolution certified by the Company Secretary recommending the issue and the listing of the shares arising from the scrip dividend and confirmation by the Board that in its opinion the consideration for which the shares are to be issued is fair and reasonable to the Entity and to all existing shareholders. 5. Where the issue of shares by way of a scrip dividend requires the approval of the shareholders of the Entity, an extract of such Article certified to be a true copy by the Company Secretary. 6. The relevant fee payable to the Exchange as set out in Section 10 of the Listing Rules. (ii) Dates for the issue of shares by way of a scrip dividend If the approval of the shareholders is required for the scrip dividend as per the Articles, the Entity shall allot the shares issued by way of the scrip dividend on the date on which the related resolution is passed by the shareholders at a meeting. The Entity shall complete direct uploads to the relevant CDS accounts and dispatch the share certificates within seven (7) Market Days from and excluding the date on which the relevant resolution is passed by the shareholders at the meeting. The Ex-Dividend ('XD') date shall be the Market Day immediately following the date on which the related resolution is passed by the shareholders at the meeting. If the approval of the shareholders is not required for the scrip dividend as per the Articles, the Entity shall allot the shares issued by way of the scrip dividend, complete direct uploads to the relevant CDS accounts and dispatch the share certificates within fourteen (14) Market Days from the date of announcement to the Exchange.

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The 'XD' date shall be the Market Day immediately following the date of allotment. (iii) Once a dividend distribution by way of a scrip dividend has been announced, an Entity shall not alter details of such scrip dividend without consulting the Exchange. (iv) Solvency Certificate The Entity shall forward to the Exchange a certified copy of the certificate of solvency issued by a firm of auditors as soon as the same is issued and in any event prior to submitting the Declaration to the Exchange as specified in (v) below. (v) Declaration to the Exchange The Entity shall submit to the Exchange a Declaration as set out in Appendix 5C of the Rules on the Market Day immediately following the day on which the direct deposit of shares is completed. 7.2 RESOLUTIONS The Exchange must be notified at the same time as shareholders regarding any resolution to be voted on at any members' meeting. The Exchange shall be notified immediately after the meeting whether the resolution was passed or not. 7.3 CIRCULARS TO SHAREHOLDERS Fifty (50) copies of circulars to shareholders should be sent to the Exchange at the same time as they are dispatched to the holders of Listed Securities. 7.4 INTERIM FINANCIAL STATEMENTS (Please refer CSE Circular No. 03/2009 dated 18th March 2009 for transition provisions relating to submission of Interim Financial Statements). a. (i) A Listed Entity shall give to the Exchange for public release, an Interim Financial Statement prepared on a quarterly basis (hereinafter referred to as Financial Statements), as soon as the figures have been approved by the board of directors of the Entity and in any event not later than forty five (45) days from the end of the first, second and third quarters and two (2) months from the end of the fourth quarter. (ii) Where the Securities are listed on the DiriSavi Board, a Listed Entity shall give to the Exchange for public release, an Interim Financial Statement prepared on a half yearly basis (hereinafter referred to as Financial Statements), as soon as the figures have been approved by the board of directors of the Entity and in any event not later than two (2) months from the end of the half year.

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(iii)The Entity shall give to the Exchange the Financial Statements in a CD-ROM as an unprotected PDF document (uncompressed without any pictures or logos) as well as a signed copy of the Financial Statements. (iv)The Entity shall send to the Exchange the Financial Statements after the close of trading but not later than 17:00 hours. b. A Listed Entity shall ensure that the Financial Statements fulfill the following requirements; (i) comply with the Sri Lanka Accounting Standards (SLAS) 35 and include group and company results separately in the case of a Holding Company. (ii) include the additional notes and ratios as set out in Appendix 7B to the Rules. (iii) be signed by two Directors.

(iv)state that the Financial Statements are not audited. 7.5 CIRCULATIONOF ANNUAL REPORT

(Please refer CSE Circular No. 03/2009 dated 18th March 2009 for transition provisions relating to submission of Annual Report). a. A Listed Entity shall ensure that the annual report is issued to the Entitys shareholders and given to the Exchange within a period not exceeding five (05) months from the close of the financial year of the Listed Entity.The Audited Financial Statements shall be published in accordance with the Sri Lanka Accounting Standards. Without prejudice to the other provisions relating to issuance of annual reports, a Listed Entity may issue its annual report in a CDROM to its shareholders provided that the Entity complies with the following: (i) the Listed Entity shall provide a printed copy of the annual report to a shareholder upon such shareholders request in writing; the Listed Entity shall designate a person to attend to the shareholders requests as stated in subparagraph (a) above; the Listed Entity shall ensure that a printed copy of the annual report is forwarded to the shareholder requesting the annual report, within eight (8) Market Days from the date of receipt of the request;

b.

(ii)

(iii)

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(iv)

the Listed Entity shall designate a person/s to answer queries from shareholders relating to the use of the CD-ROM; together with the CD-ROM the Listed Entity shall issue a note to the shareholders containing the following statement/information: 1. that the Listed Entity shall forward a printed copy of the annual report to the shareholder requesting such printed copy within eight (8) Market Days from the date of receipt of the written request; and 2. the Listed Entitys web site and email address, name/s of designated person/s attending to the shareholders requests and queries and contact number/s; and 3. a request form to enable the shareholder to request for a printed copy of the annual report, with the particulars of the Listed Entitys facsimile number and mailing address.

(v)

c.

The Entity shall give to the Exchange thirty five (35) copies of the annual report in printed form and one (1) copy in a CD-ROM. The Entity shall send the annual report to the Exchange after the close of trading but not later than 17:00 hours.

d.

If an Entity prior to circulating the annual report, files copies of financial statements with the Registrar General of Companies in compliance with Section 170 (1) of the Companies Act, the Entity shall also simultaneously submit such financial statements to the Exchange. The Entity shall give to the Exchange thirty five (35) copies of such financial statements in printed form and one (1) copy in a CD-ROM.

7.6 CONTENTS OF ANNUAL REPORT (Please refer CSE Circular No. 03/2009 dated 18th March 2009 for transition provisions relating to Annual Reports). A Listed Entity must include in its annual report and accounts, inter alia; i) Names of persons who during the financial year were directors of the Entity. Principal activities of the Entity and its subsidiaries during the year and any changes therein. The names and the number of shares held by the 20 largest holders of voting and non-voting shares and the percentage of such shares held. The Public Holding percentage. A statement of each directors holding and Chief Executive Officers holding in shares of the Entity at the beginning and end of each financial year.

ii)

iii)

iv) v)

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vi) vii)

Information pertaining to material foreseeable risk factors of the Entity. Details of material issues pertaining to employees and industrial relations of the Entity. Extents, locations, valuations and the number of buildings of the Entitys land holdings and investment properties. Number of shares representing the Entitys stated capital. A distribution schedule of the number of holders in each class of equity securities, and the percentage of their total holdings in the following categories:

viii)

ix) x)

No. of Holders

Holdings 1-1000 shares 1,001-10,000 shares 10,001-100,000 shares 100,001-1,000,000 shares Over 1,000,000 shares

Total Holdings %

xi)

The following ratios and market price information: EQUITY 1. Dividend per share 2. Dividend pay out 3. Net asset value per share 4. Market value per share - highest and lowest values recorded during the financial year - value as at the end of financial year DEBT (onlyif listed) 1. Interest rate of comparable government security 2. Debt/equity ratio 3. Interest cover 4. Quick asset ratio 5. The market prices & yield during the year (ex interest) -Highest Price

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6. xii)

-Lowest price -Last traded price (as at dd/mm/yy) Any changes in credit rating (for the Entity or any other instrument issued by the Entity), if applicable.

Significant changes in the Entitys or its subsidiaries fixed assets and the market value of land, if the value differs substantially from the book value; If during the year the Entity has raised funds either through a public issue, Rights Issue, and private placement; a. a statement as to the manner in which the proceeds of such issue has been utilized. b. if any shares or debentures have been issued, the number, class and consideration received and the reason for the issue; and, c. any material change in the use of funds raised through an issue of Securities. EMPLOYEE SHARE OPTION SCHEMES The following information shall be disclosed in the Annual Report of the Listed Entity in respect of each ESOS: The number of options granted to each category of Employees during the financial year. Total number of options vested but not exercised by each category of Employees during the financial year. Total number of options exercised by each category of Employees and the total number of shares arising therefrom during the financial year. Options cancelled during the financial year and the reasons for such cancellation. The exercise price. A Declaration by the directors of the Entity confirming that the Entity or any of its subsidiaries has not, directly or indirectly, provided funds for the ESOS. EMPLOYEE SHARE PURCHASE SCHEMES The following information shall be disclosed in the Annual Report of the Listed Entity in respect of each ESPS: The total number of shares issued under the ESPS during the financial year. The number of shares issued to each category of Employees during the financial year. The price at which the shares were issued to the Employees. A Declaration by the directors of the Entity confirming that the

xiii)

xiv) a.

b.

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Entity or any of its subsidiaries has not, directly or indirectly, provided funds for the ESPS. xv) Disclosures pertaining to Corporate Governance practices in terms of Rules 7.10.3, 7.10.5 c. and 7.10.6 c. of Section 7 of the Rules. Related Party transactions exceeding 10% of the Equity or 5% of the total assets of the Entity as per Audited Financial Statements, whichever is lower. Details of investments in a Related Party and/or amounts due from a Related Party to be set out separately. The details shall include, as a minimum: i. The date of the transaction; ii. The name of the Related Party; iii. The relationship between the Entity and the Related Party; iv. The amount of the transaction and terms of the transaction; v. The rationale for entering into the transaction. For the purpose of Rule 7.6 (xvi): Equity shall mean net assets of the Listed Entity excluding Preference Shares issued by the Entity; Related Party shall have the same meaning as defined in Sri Lanka Accounting Standard 30 (Revised 2005) - Related Party Disclosures. 7.7SECURITIES CERTIFICATES Listed Entities shall issue Definitive Certificates in respect of Securities which are listed in the Exchange, printed in letter press or off-set in 8"x10 1/2" two tone (colour), preferably rainbow, sensitized 95 gsm security printing paper with a visible water mark and an invisible print and a border unique to each Entity. 7.8 DISCLOSURES OF DEALINGS BY DIRECTORS A Listed Entity shall make an immediate announcement to the Exchange of disclosures made by a director in terms of Section 200 of the Companies Act, of any acquisition or disposal of a relevant interest in shares issued by the Entity. 7.9 LOSS OF CERTIFICATES The entities shall inform the CDS as and when a report is lodged with the Entity on any loss of certificates or when the Entity discovers a forgery in a certificate of the Entity.

xvi)

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7.10

CORPORATE GOVERNANCE Compliance a. A Listed Entity shall publish in the annual report relating to the financial year commencing on or after 01st April 2007 a statement confirming that as at the date of the annual report they are in compliance with the Corporate Governance Rules and if they are unable to confirm compliance, set out the reasons for its inability to comply. A Listed Entity shall comply with these Corporate Governance Rules with effect from the financial year commencing on or after 01st April 2008 and the annual report must contain the relevant affirmative statements. Where a Listed Entity is required by any law applicable to such Listed Entity to comply with rules on Corporate Governance promulgated under such law, the board of directors of the Exchange may exempt such Listed Entity from the requirement to comply with these Corporate Governance Rules either in full or in part. Such Listed Entity shall make disclosures of compliance with Corporate Governance Rules applicable to that sectorand the annual report must contain the relevant affirmative statements.

b.

c.

7.10.1 NON EXECUTIVE DIRECTORS a. The board of directors of a Listed Entity shall include at least, two non-executive directors; or such number of non-executive directors equivalent to one third of the total number of directors whichever is higher.

b.

The total number of directors is to be calculated based on the number as at the conclusion of the immediately preceding Annual General Meeting. Any change occurring to this ratio shall be rectified within ninety (90) days from the date of the change.

c.

7.10.2 INDEPENDENT DIRECTORS a. Where the constitution of the board of directors includes only two non-executive directors in terms of Rule 7.10.1.a above, both such non-executive directors shall be independent. In all other instances two or 1/3 of non-executive directors appointed to the board of directors, whichever is higher shall be independent.

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b.

The board shall require each non-executive director to submit a signed and dated declaration annually of his/her independence or non-independence against the specified criteria. A specimen of the said declaration is given in Appendix 7A of this Section.

7.10.3 DISCLOSURES RELATING TO DIRECTORS a. The board shall make a determination annually as to the independence or non-independence of each non-executive director based on such declaration and other information available to the board and shall set out in the annual report the names of directors determined to be independent. In the event a director does not qualify as independent against any of the criteria set out below but if the board, taking account all the circumstances, is of the opinion that the director is nevertheless independent, the board shall specify the criteria not met and the basis for its determination in the annual report. In addition to disclosures relating to the independence of a director set out above, the board shall publish in its annual report a brief resume of each director on its board which includes information on the nature of his/her expertise in relevant functional areas.

b.

c.

Upon appointment of a new director to its board, the Entity shall forthwith provide to the Exchange a brief resume of such director for dissemination to the public. Such resume shall include information on the matters itemized in paragraphs (a), (b) and (c) above. 7.10.4CRITERIA FOR DEFINING INDEPENDENCE Subject to Rule 7.10.3 (a)and (b),a non-executive director shall not be considered independent if he/she: a. has been employed by the Listed Entity during the period of two years immediately preceding appointment as director; currentlyhas/had during the period of two (2) years immediately preceding appointment as a director, a Material Business Relationship with the Listed Entity, whether directly or indirectly; has a Close Family Member who is a director, Chief Executive Officer (and/or an equivalent position) in the Listed Entity; has a Significant Shareholding in the Listed Entity; has served on the board of the Listed Entity continuously for a period exceeding nine (9) years from the date of the first appointment; provided however, if such director is re-appointed after a period of two (2) years from the date of completion of the preceding nine (9) year period, he will be considered as independent for the purposes of this Section.

d.

b.

c.

d. e.

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f.

is employed in another company or business, (i) in which a majority of the other directors of the Listed Entity are employed or are directors; or in which a majority of the other directors of the Listed Entity have a Significant Shareholding or Material Business Relationship; or that has a Significant Shareholding in the Listed Entity or with which the Listed Entity has a Business Connection;

(ii)

(iii)

g.

Is a director of another company, (i) in which a majority of the other directors of the Listed Entity are employed or are directors; or that has a Business Connection Significant Shareholding; in the Listed Entity or a

(ii)

h.

Has a Material Business Relationship or a Significant Shareholding in another company or business, (i) in which a majority of the other directors of the Listed Entity are employed or are directors; and/or which has a Business Connection with the Listed Entity or Significant Shareholding in the same.

(ii)

For the purposes of Rule 7.10.4; Close Family Member shall mean and include the directors spouse, parents, grandparents, children, brothers, sisters, grandchildren and any person who is financially dependent on such director. Financially dependent individuals include any person who received more than half of their support for the most recent fiscal year from a director and/or his or her spouse Listed Entity shall mean the listed Entity to the board of which the director is appointed, its parent and/or subsidiary company, and a subsidiary of the parent company.

Material Business Relationship shall mean a relationship resulting in income/non-cash benefitsequivalent to 20% of the directors annual income.

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Business Connection

shall mean a relationship resulting in transaction value equivalent to 10%of the turnover of that company or business. shall mean a shareholding carrying not less than 10% of the voting rights of a company.

Significant Shareholding

7.10.5 REMUNERATION COMMITTEE A Listed Entity shall have a remuneration committee in conformity with the following: a. COMPOSITION The remuneration committee shall comprise; of a minimum of two independent non-executive directors (in instances where an Entity has only two directors on its Board); or of non-executive directors a majority of whom shall be independent, whichever shall be higher. In a situation where both the parent company and the subsidiary are listed Entities, the remuneration committee of the parent company may be permitted to function as the remuneration committee of the subsidiary. However, if the parent company is not a Listed Entity, then the remuneration committee of the parent company is not permitted to act as the remuneration committee of the subsidiary. The subsidiary shall have a separate remuneration committee. One non-executive director shall be appointed as Chairman of the committee by the board of directors. b. FUNCTIONS The Remuneration Committee shall recommend the remuneration payable to the executive directors and Chief Executive Officer of the Listed Entity and/or equivalent position thereof, to the board of the Listed Entity which will make the final determination upon consideration of such recommendations. c. DISCLOSURE IN THE ANNUAL REPORT

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The annual report should set out the names of directors (or persons in the parent companys committee in the case of a group company) comprising the remuneration committee, contain a statement of the remuneration policy and set out the aggregate remuneration paid to executive and non-executive directors. The Term remuneration shall make reference to cash and all noncash benefits whatsoever received in consideration of employment with the Listed Entity. (excluding statutory entitlements such as Employees Provident Fund and Employees Trust Fund). 7.10.6 AUDIT COMMITTEE A Listed Entity shall have an audit committee in conformity with the following: a. COMPOSITION The audit committee shall comprise; of a minimum of two independent non-executive directors (in instances where a Entity has only two directors on its board); or of non-executive directors a majority of whom shall be independent, whichever shall be higher. In a situation where both the parent company and the subsidiary are listed Entities, the audit committee of the parent company may function as the audit committee of the subsidiary. However, if the parent company is not a Listed Entity, then the audit committee of the parent company is not permitted to act as the audit committee of the subsidiary. The subsidiary should have a separate audit committee. One non-executive director shall be appointed as Chairman of the committee by the board of directors. Unless otherwise determined by the audit committee, the Chief Executive Officer and the Chief Financial Officer of the Listed Entity shall attend audit committee meetings. The Chairman or one member of the committee should be a Member of a recognized professional accounting body. b. FUNCTIONS Shall include,

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(i)

Overseeing of the preparation, presentation and adequacy of disclosures in the financial statements of a Listed Entity, in accordance with Sri Lanka Accounting Standards. Overseeing of the Entitys compliance with financial reporting requirements, information requirements of the Companies Act and other relevant financial reporting related regulations and requirements. Overseeing the processes to ensure that the Entitys internal controls and risk management, are adequate, to meet the requirements of the Sri Lanka Auditing Standards. Assessment of the independence and performance of the Entitys external auditors. To make recommendations to the board pertaining to appointment, re-appointment and removal of external auditors and to approve the remuneration and terms of engagement of the external auditors.

(ii)

(iii)

(iv)

(v)

c.

DISCLOSURE IN THE ANNUAL REPORT The names of the directors (or persons in the parent companys committee in the case of a group company) comprising the audit committee should be disclosed in the annual report. The committee shall make a determination of the independence of the auditors and shall disclose the basis for such determination in the annual report. The annual report shall contain a report by the audit committee, setting out the manner of compliance by the Entity in relation to the above, during the period to which the annual report relates.

7.11

RE- PURCHASE / REDEMPTIONS / MINORITY BUYOUTS

7.11.1 RE- PURCHASE OF SHARES A Listed Entity may re-purchase its own shares as set out in the Companies Act and in compliance with the following procedure: a. The Entity should be authorized by its Articles to re-purchase its shares. An offer to re-purchase shares shall be, in the first instance, on a pro-rata basis applicable to all shareholders. Where a shareholder does not accept the offer or accepts the offer only in part, the Entity is permitted to re-purchase additional shares

b.

c.

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from any shareholder. In the event the number of such additional shares exceeds the maximum number of shares that the entity is willing to re-purchase, the number of additional shares shall be reduced on a pro- rata basis. d. In the first instance, the Entity is required to make an announcement to the Exchange of the decision of the Board to re-purchase shares, immediately upon such decision being made. The announcement shall include (i) (ii) (iii) (iv) e. (i) The maximum number of shares to be re-purchased. The price per share at which the re-purchases is to be carried out. The proposed date of commencement and closing of the offer to re-purchase. A certified extract of the relevant Article which authorizes the Entity to re-purchase its shares. The circular to shareholders shall include: 1. the price at which the shares are to be purchased, 2. the maximum number of shares to be re-purchased, 3. opening and closing dates of the offer with clear instructions as to the procedure for acceptance, and; 4. the date of payment. with a Form for Acceptance attached to the circular. At the close of the offer period the Entity shall make the payment due on the shares in respect of all Acceptances received up to the date of closing, within ten (10) Market Days from the date of closing the offer (excluding the date of closing the offer). Acceptees/Offerees shall be entitled to interest (as defined) on payments not made within this period.

(ii)

(iii)

f.

Upon payments being made the Entity shall file a declaration with the Exchange confirming the following and make a request to the Exchange to cancel the shares: (i) (ii) (iii) number of shares re-purchased. number of shares in issue and Stated Capital of the Entity subsequent to the re-purchase. the CDS account to which the shares were re-purchased (for the purpose of cancelling the shares)

The Exchange shall make an announcement in the market. 7.11.2 REDEMPTION OF SHARES a. An Entity may redeem its shares where the terms of issue specified such redemption as set out in the Companies Act. The Entity shall, immediately upon an occurrence which requires

b.

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redemption of shares, make an announcement to the Exchange. Such announcement shall include: (i) Total number of shares to be redeemed. (ii) Number of shares in issue and Stated Capital of the Entity subsequent to the redemption of shares. (iii) Consideration to be paid. (iv) Circumstances under which the redemption is to be carried out. c. Upon payments being made in respect of the shares redeemed, the Entity shall make an immediate disclosure to the Exchange on the following and make a request to the Exchange to cancel the shares: Total number of shares redeemed. Number of shares in issue and Stated Capital of the Entity subsequent to the redemption of shares. (iii) Consideration paid and a confirmation to the effect that such consideration has been duly dispatched The Exchange shall make an announcement in the market. 7.11.3 MINORITY BUYOUTS In the event of a purchase of shares under Sections 93 and 100 of the Companies Act, an Entity shall, immediately upon an occurrence which requires the Entity to buy-out shares, make an announcement to the Exchange. Such announcement shall include the total number of shares to be purchased, the name/s of the persons from whom the shares will be purchased, the name/s of the person/s who will purchase the shares (if applicable) and the circumstances under which the shares have to be purchased. The Entity shall disclose to the Exchange immediately upon the completion of such purchase of shares, the total number of shares purchased, the name/s of the persons from whom the shares were purchased, the name/s of the person/s who purchased the shares (if applicable) and the circumstances under which the shares had to be purchased. In the event such shares are purchased by the Entity, upon payments being made the Entity shall file a declaration with the Exchange confirming the following and make a request to the Exchange to cancel the shares: (i) (ii) (iii) number of shares purchased. number of shares in issue and Stated Capital of the Entity subsequent to the minority buyout. the CDS account to which the shares were purchased (for the purpose of cancelling the shares). (i) (ii)

The Exchange shall make an announcement in the market.

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APPENDIX 7A SPECIMEN DECLARATION

I, .....full name .. of place of residence being a Christian make oath and say /not being a Christian solemnly, sincerely and truly affirm and declare as follows in terms of rule of the Listing Rules: a. I am a non-executive director of ..(Entity) being so appointed on .. b. I have been / have not been employed by the Listed Entity*, during the period of two years immediately preceding my appointment as director of the Entity. c. I currently have / do not have a Material Business Relationship with the Listed Entity, directly or indirectly. d. I had / did not have during the period of two years immediately preceding appointment as director, a Material Business Relationship with the Listed Entity, directly or indirectly. e. I have / do not have a Close Family Member(s) who is a director or Chief Executive Officer (or equivalent position) in the Listed Entity; f. I have / do not have a Significant Shareholding in the Listed Entity;

g. I have / have not served on the Board of the Listed Entity for a period exceeding nine years from the date of the first appointment; h. I am / am not employed in another company or business, (i) in which a majority of the other directors of the Listed Entity are employed or are directors; or in which a majority of the other directors of the Listed Entity have a Significant Shareholding or Material Business Relationship; or that has a Significant Shareholding in the Listed Entity or with which the Listed Entity has a Business Connection;

(ii)

(iii)

i.

I am / am not a director of another company, (i) in which a majority of the other directors of the Listed Entity are employed or are directors; or that has a Business Connection in the Listed Entity or a Significant Shareholding;

(ii)

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j.

I have / do not have a Material Business Relationship or a Significant Shareholding in another company or business, (i) in which a majority of the other directors of the Listed Entity are employed or are directors; and/or which has a Business Connection with the Listed Entity or Significant Shareholding in the same;

(ii)

k. Disclosure of such other information which the applicant believes could reasonably be construed to have a bearing on the independence of such director. * Listed Entity as referred to in this declaration shall be the Listed Entity to the Board of which the director is appointed and would include any parent or subsidiary company of the Listed Entity and any subsidiary of the parent company.

(Sgd.) . Director Date:

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APPENDIX 7B a) Additional Notes Liability to management fees or any other similar expenditure not provided for in the interim accounts Any material change in the use of funds raised through an IPO/Rights/Debenture Issue The names and the number of shares held by the 20 largest holders of voting and non-voting shares and the percentage of such shares held The Public Holding percentage A statement of each directors holding and Chief Executive Officers holding in shares of the Entity

Number of shares representing the Entitys stated capital. b) Listed Entities should include the following in the Interim Financial Statements (quarterly or half yearly as applicable) Current Interim Period Net Asset Value Per share Share price during the Interim Period - Highest price - Lowest price

Current Period

Current Period Current Period

- Last traded price Current Period

c) Entities listed on the Debt Securities Board should include the following in the Interim Financial Statements (quarterly) Current Interim Period Debt/equity ratio Quick asset ratio Interest cover Current Period Current Period Current Period

Interest yield as at date Current Period of last trade (dd/mm/yy)

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Yield to maturity of trade Current Period done on (dd/mm/yy) Interest Rate of comparable Government security Current Period The market prices during the year/half year (ex interest) - Highest price Current Period - Lowest price Current Period - Last traded price Current Period

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SECTION 8

CORPORATE DISCLOSURE

8.1

IMMEDIATE DISCLOSURE OF PRICE SENSITIVE INFORMATION a. A Listed Entity shall make immediate disclosure of price sensitive information to the Exchange in order to ensure the maintenance of a fair and orderly securities market.

b.

For the purposes of this Section price sensitive information in relation to any listed Securities of an Entity is a reference to information which:(i) relates to specific matters relating to, or of concern (directly or indirectly) to the Entity and; is not generally known to those persons who are accustomed or would be likely to deal in those listed Securities but which would if it were generally known to them be likely to affect materially the price of the listed Security.

(ii)

Such information includes, but is not limited to, information known to the Entity, concerning the Entitys property, assets, business, financial condition and prospects; mergers and acquisitions; and dealings with employees, suppliers and customers; material contracts or development projects, whether entered into in the ordinary course of business or otherwise; as well as information concerning a significant change in ownership of the Entitys Securities owned by insiders, or a change in effective or voting control of the issuer, and any developments that affect materially the present or potential rights or interests of the issuer's shareholders. Refer Appendix 8A of the Rules for some events which are likely to require immediate disclosure to the Exchange.

c.

The Exchange does not normally consider disclosure of an Entitys internal estimates or projections of its earnings or of other data relating to its affairs to be necessary. If such estimates or projections are released, they should be prepared carefully, on a reasonable factual basis, and should be stated realistically with appropriate qualifications. Should subsequent developments indicate that actual performance will not be reflective of prior estimates or projections, they shall be promptly reported with adequate explanation of the reasons for the variance.

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8.2

ANNOUNCEMENTTO THE EXCHANGE a. Disclosure of price sensitive information should be made by way of an announcement to the Exchange. Such announcement shall be in writing, and shall be signed by an authorized officer of the Entity. To facilitate the dissemination of information, copies of the announcement may be made simultaneouslyto the news media. Under no circumstances should disclosure of price sensitive information be made on an individual or selective basis to analysts, shareholders or other persons unless such information has previously been disclosed and disseminated to the Exchange. b. Content of Announcement: Each announcement shall:(i) (ii) be balanced and fair, be factual, clear and concise; avoid over-technical language, and should be expressed to the extent possible in language comprehensible to the layman; contain sufficient quantitative information to allow investors to evaluate its relative importance to the activities of the Entity. Thus, the announcement should avoid:omission of important unfavorable facts, or the slighting of such facts; presentation of favorable possibilities as certain, or as more probable than is actually the case; presentation of projections without sufficient qualification or without sufficient factual basis; avoid negative statements phrased to create a positive implication; avoid the use of promotional jargon calculated to excite rather than to inform; and explain the consequences or effects of the information on the Entitys future prospects. If the consequences or effects cannot be assessed, explain why.

(iii)

(iv)

(v)

(vi)

8.3

WHERE INFORMATION MAY BE WITHHELD BY THE ENTITY The Exchange recognizes that in the following circumstances disclosures may be withheld for bona fide purposes. However, such situations constitute an infrequent exception to the normal requirement of immediate public disclosure. Hence, in cases of doubt, the presumption must always be in favour of disclosure:

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a.

when immediate disclosure could prejudice the ability of the Entity to pursue its corporate objectives or a bona fide transaction that is contemplated. when the facts are in a state of flux and a disclosure could be counter productive and could mislead the public and the market. when the Entity is holding negotiations with a third party and has not reached an agreement in-principle on the relevant transaction.

b.

c.

Whenever price sensitive information is withheld on the aforesaid basis the Entity must ensure that strictest confidentiality is maintained of such information and that access to such information is to be granted only on a need to know basis. The Entity should also ensure that any persons with access to such unpublished price sensitive information should not trade in the Securities of the Entity and any connected Entity of which Securities may be affected by such information. The Entity must be prepared to make an immediate public announcement if required by the Exchange. In the event that rumours concerning such information or the Entity should develop, immediate public disclosure is required. 8.4 CLARIFICATIONS ON UNUSUAL TRADING ACTIVITIES IN A LISTED SECURITY a. Where there is an unusual price movement or trading activity in the listed Security of an Entity without any apparent publicly available information, the Entity shall respond promptly to any inquiries made by the Exchange. The aforesaid requirement to respond to inquiries of the Exchange does not limit or qualify the responsibility of an Entity to unilaterally respond to unusual price movements or trading activities in its listed Securities.

b.

8.5

CLARIFICATIONS OF RUMORS OR REPORTS a. Where there is a rumor or a report pertaining to an Entity, the Entity shall respond promptly to any inquiries made by the Exchange. The aforesaid requirement to respond to inquiries of the Exchange does not limit or qualify the responsibility of an Entity to unilaterally respond to any rumors or reports.

b.

8.6

TRADING BY CONNECTED PARTIES Connected persons should not trade on the basis of price sensitive information that has not been disclosed to the public. Moreover, connected persons shall not trade in the Securities of the Listed Entity even after release of the information to the Exchange for a period, which should not be less than two (02) Market Days after the release of the information to permit thorough public dissemination and evaluation thereof. In computing this period of two (02) Market Days, the day on which disclosure is made will be excluded.

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For the purposes of this Rule, an individual is connected with an Entity if, and only if:a. he is a director of that Entity or a related Entity or his spouse and children under 18 years of age; or b. he occupies a position as an officer (other than director) or employee of that Entity or a related Entity or a position involving a professional business relationship between himself (or his employer or an Entity of which he is a director) and the first Entity or a related Entity which in either case may reasonably be expected to give him access to information which, in relation to Listed Securities of either Entity, is unpublished price sensitive information and which it would be reasonable to expect (a person in his position not to disclose except) for the proper performance of his function.

8.7

RELEASE OF INFORMATION ISSUED BY A REGULATORY AUTHORITY The Exchange may release any information issued by a Regulatory Authority in relation to a Listed Entity, if, in the opinion of the Exchange, such release is necessary to safeguard the interests of the investing public.

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APPENDIX 8A SOME EVENTS REQUIRING IMMEDIATE DISCLOSURE The following events, while not comprising a complete list of all the situations which may require disclosure, are likely to require immediate disclosure (subject to materiality): 1. non payment of interest on the due date on account of Debt Securities. 2. non payment of capital on the redemption date on account of Debt Securities. 3. joint ventures, mergers, acquisitions or take-overs. 4. a decision to declare dividends. 5. any decision to change the stated capital of the Listed Entity including reduction of stated capital, Rights Issues, issue of shares credited as fully paid up by way of capitalization of reserves, redemptions, repurchases, minority buy-outs by the Entity and issue of shares of a class which is not already listed (irrespective of whether the company proposes or does not propose to obtain a listing for such shares issued). 6. change in the Directors, Company Secretary, Registrars or Auditors of the Entity. 7. full details of any trade which amounts to 10% or more of the voting rights of the Entity. 8. a change in control of the Entity. 9. change of address of the registered office of the Entity or of any offices at which the register of the Securities of the Entity is kept. 10. a call of Securities for redemption. 11. an event of default on interest and/or principal payments in respect of loans not paid within thirty (30) days. 12. appointment, resignation, suspension or removal of the Chief Executive Officer 13. occurrence of any event which would result in the winding up of the Entity or any of its subsidiaries or the appointment of a receiver or liquidator of the Entity or any of its subsidiaries. 14. details of guarantees and sureties granted if the total exceeds 20% of the Listed Entitys net worth as per the Balance Sheet Value. Entities shall only report those guarantees and sureties granted beyond the regular course of business.

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15. alteration or amendment of the rights and privileges of any unlisted Securities issued by the Entity. 16. a tender offer for another Entitys Securities. 17. any changes in the corporate purpose and any material alterations in the Entitys activities or the initiation of new activities. 18. any major transaction as defined in Section 185 of the Companies Act. 19. any decision to summon a meeting of the Board by a Director in the event of insolvency in terms of Section 219 of Companies Act. 20. any decision to summon an Extraordinary General Meeting by directors in the event of serious loss of capital in terms of Section 220 of the Companies Act. 21. the acquisition or loss of a contract. 22. a change in capital investment plans. 23. a labour dispute or dispute with sub-contractors or suppliers that will have a material impact on the Entity 24. any investment that will have a material impact on the Entity 25. judicial or quasi judicial actions of any nature initiated by or against the Entity which are of material importance 26. any Licensing or Franchising Agreement or its cancellation which may materially affect the Entitys operations. 27. any occurrence of an event of default under the terms and conditions of any issue of debentures, promissory notes, bonds or any other Security issued by the Entity. 28. any acquisition of voting rights which results in the Entity becoming the holding Entity. 29. Related Party transactions exceeding 10% of the Equity or 5% of the total assets of the Entity as per the latest Audited Financial Statements, whichever is lower. Details of investments in a Related Party and/or amounts due from a Related Party to be set out separately.

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The details shall include, as a minimum: i. ii. iii. iv. v. The date of the transaction; The name of the relevant Related Party; The relationship between the Entity and the Related Party; The amount of the transaction and terms of the transaction; The rationale for entering into the transaction.

For the purpose of item 29 of Appendix 8A: Equity shall mean net assets of the Listed Entity excluding Preference Shares issued by the Entity; Related Party shall have the same meaning as defined in Sri Lanka Accounting Standard 30 (Revised 2005) - Related Party Disclosures.

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SECTION 9 PRIVATE ENFORCEMENT 9.1 NON-COMPLIANCE WITH LISTING RULES In the event of any violation and/or non-compliance with any of the Rules of the Exchange by any Entity whose Securities are listed on the Exchange, the Exchange shall transfer the Securities of such Entity to the Default Board and may publicly reprimand such Entity and/or suspend trading of Securities of such Entity for any period of time and/or delist the Entity from the Exchange. If an Entity fails to pay interest on the Debt Securities listed on the Exchange on the due date the Securities shall be transferred to the Default Board. 9.2 TRANSFER TO THE DEFAULT BOARD Prior to transferring the Securities of the Entity to the Default Board the Exchange shall inform the Entity, in writing, of the default and that the Securities of the Entity would be transferred to the Default Board. The Securities shall be transferred out of the Default Board upon the Entity complying with the relevant Listing Rules. In the event the Security continues to be on the Default Board for a period in excess of one (01) month, the Exchange, in consultation with the SEC, shall have the right to issue a press notice informing the public of the nature of the violation. If the Securities continue to be on the Default Board for a period in excess of three (03) months from the date of transferring the Securities of the Entity to the Default Board, the Exchange, at its discretion, may refer the matter to the SEC for necessary action. 9.3 TRADING HALTS AND SUSPENSIONS a. TRADING HALTS The Exchange may at its discretion impose a Trading Halt on the Securities of a Listed Entity in the following instances: (i) Prior to an announcement of any price sensitive information of a Listed Entity. To obtain a clarification from the Entity on a rumour/report regarding the Entity. When an unusual movement in price/volume of a security is noted. If the Exchange deems it necessary for the purpose of

(ii)

(iii)

(iv)

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disseminating information. (v) To do so upon being directed by the SEC.

The duration of a Trading Halt will be determined by the Exchange or the SEC as the case may be and may be extended beyond one Market Day. b. SUSPENSIONS The Exchange may at any time suspend the trading of Securities of a Listed Entity if in the Exchanges opinion any of the following applies: (i) The Entity is unable or unwilling to comply with, or violates, a Listing Rule The Exchanges Rules require the suspension By operation of law

(ii) (iii)

The SEC may at its sole discretion direct the Exchange to suspend the Securities of any Listed Entity.

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SECTION 10PRIVATE FEES The fees set out in this Section do not include the Value Added Tax (VAT) or any other taxes that are imposed by the Relevant Authorities. 10.1 EQUITY a. INITIAL LISTING FEE The initial listing fee payable when the shares of an Entity are listed on the Exchange shall be Rs.150,000/-. Fees shall be payable with the application and are non-refundable whether or not a listing is granted. b. LISTING FEE FOR FURTHER ISSUE OF SECURITIES Where the listing is for a further issue of Securities by way of a Rights Issue of shares, issue of shares credited as fully paid-up by way of a capitalization of reserves, private placement, Employee Share Ownership Plan (ESOP), share swaps, scrip dividend or issue of Warrants the fee payable shall be Rs.50,000/-. Where the listing is for a further issue of shares by way of a public subscription the fee payable shall be Rs.75,000/-. Where the listing is for a further issue of shares of a class which is not already listed the fee payable shall be Rs.50,000/-. Fees shall be payable with the application and are non-refundable whether or not a listing is granted.
C.

ANNUAL LISTING FEES Annual fee shall be Rs. 50,000/- or 0.003% of the market capitalisation of the Listed Entity as at 31st December of the year immediately preceding, whichever is higher, subject to a Maximum of Rs. 1,000,000/-. Listed Entities shall pay the annual listing fee to the Exchange on or before the 15th day of February in each calendar year. If the listing is granted during the year, the fee payable shall be prorated.

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10.2

DEBT
a.

INITIAL LISTING FEE


The initial listing fee payable when the Debt Securities of an Entity are listed on the Exchange shall be Rs.100,000/-.

b.

ANNUAL LISTING FEES An Entity which has listed its Debt Securities on the Exchange shall pay an annual fee of Rs.50,000/- to the Exchange on or before the 15th day of February in each calendar year. If the listing is granted during the year, the fee payable shall be prorated.

10.3

FUNDS
a. INITIAL LISTING FEE There is no fee charged by the Exchange when the units of a Fund are listed on the Exchange. b. ANNUAL LISTING FEES When units of a Fund are listed on the Exchange the annual listing fee payable by the Managing Company to the Exchange on or before the 15th day of February in each calendar year shall be Rs. 50,000/-. If the listing is granted during the year, the fee payable shall be prorated.

10.4

CDS FEES
An Entity shall pay to the CDS a fee for the clearing functions provided by the CDS. The fee will be Rs. 15/- per transaction executed on the Automated Trading System, subject to a minimum charge of Rs. 10,000/and a maximum charge of Rs. 500,000/- per annum. The fee will be based on transactions executed from January to December in each calendar year. The CDS fee shall be paid on or before 15th February in each calendar year to the Central Depository Systems (Pvt.) Ltd.

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