Weligama Hotel Properties Limited
Issue of upto 195,000,000 Ordinary Voting Shares
at LKR 9.00 per share
Weligama Hotel
Properties
Limited
Issue of upto 195,000,000
Ordinary Voting Shares
at LKR 9.00 per share
4 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
This Information Memorandum is dated 31st March 2013.
IMPORTANT:
This Information Memorandum contains important information and
requires your careful attention. It should be read in its entirety. If you
are in any doubt regarding the contents of this document or if you
require any clarification or advice you may consult your Investment
Advisor, Bank Manager, Lawyer or any other Professional Advisor in this
regard.
Marriott International, Inc. is a leading lodging company based in Bethesda,
Maryland, USA. Its heritage can be traced to a small root beer stand opened
in Washington, D.C. in 1927 by J. Willard and Alice S. Marriott. Today it has
more than 3,800 properties in 74 countries and territories. The company
operates and franchises hotels and licenses vacation ownership resorts under
18 brands, including Marriott Hotels & Resorts, The Ritz-Carlton, JW Marriott,
Bulgari, EDITION, Renaissance, Gaylord Hotels, Autograph Collection, AC Hotels
by Marriott, Courtyard, Fairfield Inn & Suites, SpringHill Suites, Residence Inn,
TownePlace Suites, Marriott Executive Apartments, Marriott Vacation Club, Grand
Residences by Marriott, and The Ritz-Carlton Destination Club.
There are approximately 300,000 employees at headquarters, managed and
franchised properties. Marriott is consistently recognized as a top employer and
for its superior business operations, which it conducts based on five core values:
put people first, pursue excellence, embrace change, act with integrity, and serve
our world. In fiscal year 2011, Marriott International reported revenues of over
$12 billion.
Marriott International’s goal is to create significant value by aggressively building
its brands and growing its businesses. The company is dedicated to providing
exceptional service to customers, growth opportunities for associates, and
attractive returns to shareholders and owners.
For more information, please visit the company web site at www.marriott.com, and
for the latest company news, visit www.marriottnewscenter.com.
l 5
Invitation to the Investor
This invitation made by Weligama Hotel Properties Limited (WHP)
provides an opportunity for prospective investors to participate in
the flourishing tourism industry.
WHP is the owning entity of a 200-room five-star resort that is under
construction in Weligama Bay. The proposed resort will be managed
by the world famous hospitality brand Marriott International USA,
which manages more than 3,800 properties in 74 countries and
territories worldwide.
WHP is a subsidiary of East West Properties Plc, which has interests
in real estate investments, destination management, financial
services, media and other investments.
The company hereby offers prospective investors 195,000,000
shares at the share offer price of LKR 9.00 to raise LKR 1,755 mn.
The funds to be raised on this issue will be utilised to part finance
the construction of the aforementioned resort which is expected to
be operational by the end of year 2014.
6 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
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Executive King Room- 39sqm
8 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
Sea side landscaping
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CONTENTS
Chairman’s Message
08
Headline News - Daily Financial Times
10
1.0 Corporate Information
12
2.0 Summary of the Offer
13
3.0 An Overview of the Company
20
4.0 An Overview of the Industry
41
5.0 Procedure for Application
46
6.0 Declarations
49
Audited Financial Statements Of Weligama Hotel Properties Limited
54
Independent Auditor’s Report
55
Important Disclosures
84
Application Form
86
10 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
Chairman’s Message
31st March 2013
Dear Investors,
On behalf of the management of Weligama Hotel Properties Limited, it
Therefore, Weligama Hotel Properties Limited has embarked on this
is with pleasure that I present this Information Memorandum to you. The
venture at an opportune time. The resort is situated in a scenic
issue of shares in Weligama Hotel Properties Limited under this Infor-
environment on the Weligama Bay and will offer high quality, affordable
mation Memorandum provides investors with the opportunity to invest
accommodation for travelers. Apart from its 190 catergorised rooms
in the burgeoning tourism industry and benefit from the operations and
and 10 suites, the resort offers more than 800sqm of meeting space
marketing of a global hospitality giant.
that can house up to 1000 people, along with all other hotel facilities
and amenities. The resort is expected to maintain an occupancy rate
The funds raised through this share issue will permit the Company to
above 60% from the year of stabilisation and will be supported by the
complete construction of the 200-room five-star resort property located
strong marketing expertise and resources of the operator. The global
on three acres of land along the Weligama Bay. The resort will be man-
hotel chain’s extensive network of tour operators is complemented by
aged by Marriott International Inc. under a 25-year management agree-
the world’s largest rewards scheme, ‘Marriott Rewards.’ This is the
ment and will be branded under their signture brand ‘Marriott Hotels &
largest loyalty program in the world with 44 Million members.
Resorts.’ Marriott International is one of the world’s foremost hospitality
brands, which manages 3,800 properties in 74 countries and is also
All the required approvals for the resort were obtained and construction
the world’s largest publically traded hospitality group.
began in March 2012 and is due to be completed by November 2014.
A highly competent team has already begun work on the develop-
Sri Lanka’s tourism industry is witnessing significant growth after the
ment of the project from the design phase (concept, architectural and
conclusion of the internal conflict in 2009. Demonstrating the potential
engineering), through construction to full operations. The resort is being
of the industry, tourist arrivals increased by 18% in 2012, surpassing
built according to Marriott Design Guidelines and the interiors are being
tourist inflow to the Maldives which is considered a tourism hotspot in
designed by the world-famous Wilson Associates. The landscaping
South Asia. Furthermore, since 2009, Sri Lanka has been in the media
design is by Belt Collins, which consistently ranks as one of the top 200
spotlight and is now considered one of the most sought after tourist
international design firms. East West Engineering Services, a subsidiary
destinations globally by world-renowned travel magazines and industry
of East West Properties Plc, is responsible for construction.
bodies such as Lonely Planet, National Geographic, Conde Nast Traveller, British Airways HighLife Magazine and The New York Times. In the
The estimated cost of the project through construction to implementa-
wake of this increase in demand, the industry is facing a shortage in
tion is approximately USD 32.4mn. As primary investors, East West
tourist accommodation. For instance, if Sri Lanka is to meet Govern-
Properties Plc has already provided 13% of this cost by way of equity.
ment targets of 2.5 million tourists by 2016, the room inventory has
A further 45% (LKR 1.9bn / USD 14.6mn) is being brought in through a
to increase by approximately about 24,000 in the next four years. This
combination of loan financing from local and foreign institutions.
provides prospective investors with numerous business opportunities.
l 11
Five Year Summary
FY2014/15
FY2015/16
FY2016/17
FY2017/18
FY2018/19
Revenue (LKR Mn)
641
1,635
1,870
2,124
2,233
Expenses (LKR Mn)
403
943
1,046
1,158
1,227
Gross operating profit (LKR Mn)
238
692
824
966
1,006
Net operating income (LKR Mn)
182
543
632
716
744
(124)
(126)
(127)
(119)
(110)
-
-
-
-
-
PAT (LKR Mn)
57
417
505
597
634
EPS (LKR)
0.1
0.9
1.1
1.3
1.4
70.6
9.7
8.0
6.8
6.4
Interest expense (LKR Mn)
Taxation (LKR Mn)
PE (x) @ LKR 9.00
We hope to source the balance 42% or LKR 1.8bn (USD 13.6mn) from
The Company will be listed on the Colombo Stock Exchange through an
independent equity partners.
Initial Public Offering within 18 months of the successful completion of
the private placement.
Given the unique, high quality features of this offering, we believe that
prospective investors will gain a substantial Return on Investment in a
We look forward to welcoming you as a shareholder in Weligama Hotel
two-year period. The following tables summarise the projected financial
Properties Limited.
performance for the first five years of operations. A detailed financial
analysis as well as assumptions made and valuations are discussed
elsewhere in this document.
Yours Faithfully,
Nahil Wijesuriya
Chairman
12 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
Headline news Daily Financial Times
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14 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
1.0 Corporate Information
Issuer : Weligama Hotel Properties Limited
Legal Form : A Limited Liability Company
Auditors to the Company : V.S. & Associates
Chartered Accountants,
15/11, Victoria Place,
Elvitigala Mawatha,
Company Registration Number : PV 77431
Colombo 08
Registered Office : #12-01, East Tower,
Bankers to the Company : Hatton National Bank
World Trade Center,
No: 479, TB Jayah Mawatha,
Colombo 01
PO Box: 837,
Tel:+94 (0) 11 2 437755
Colombo 10
Fax: +94 (0) 11 2 432040
E mail: vijitha@eastwest.lk
Website: www.eastwest.lk
Principal Place of Business : Weligama
Board of Directors : Mr. Nahil Wijesuriya
Mr.Vijitha Wijesuriya
Ms. Anika Wijesuriya
Mr. Nishantha Sooriyaarachchi
Secretaries to the Company : SSP Corporate Services (Pvt) Limited
No: 101, Inner Flower Road,
Colombo 03
Tel: +94 (0) 11 2 573894
Mangers / Bankers to the Issue : Bank of Ceylon
BOC Square, No: 01,
Bank of Ceylon Mawatha, Colombo 01
l 15
2.0 Summary of the Offer
Issuer
:
Weligama Hotel Properties Limited
Type of Securities to be Issued
:
Ordinary Voting Shares
Upon allotment these shares will rank pari passu with the existing
issued shares of the Company, with full voting rights and the right to participate in any dividend declared to ordinary shareholders by the Company after the allotment of the offered shares. Prospective shareholders will also have the right to an equal share in the distribution of the surplus assets of the Company on liquidation.
Number of Securities to be Issued
:
195,000,000
Issue Price
:
LKR 9.00 per share, payable in cash.
The Board of Directors has resolved in its opinion that the issue price is fair and reasonable to the company and to all existing shareholders.
Minimum Subscription per Application
10,000 shares (LKR 90,000)
:
Applications in excess of the minimum
subscription shall be in multiples of 1,000 shares.
Date of Opening of the Issue
02nd May 2013
:
However, applications may be made forthwith
Closing Date
28th June 2013 or on the date on which the issue
:
is oversubscribed, whichever is earlier
Amount to be Raised
:
LKR 1,755,000,000
Objective of the Issue
:
The LKR 1,755 mn to be raised on this issue
will be utilised to part finance the construction of the aforementioned resort, which is expected to be operational by the end of 2014.
16 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
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All-day Dinning Restaurant
Seating Capacity 180
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Great Room
Lobby Lounge
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Speciality Seafood Resturant
Big Fish
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3.0 An Overview of the Company
3.1 Business Operations
3.1.1 Target Markets
Weligama Hotel Properties Limited was incorporated in February 2011
The resort will be positioned as a full service five-star hotel and will
as a Limited Company under the Companies Act of 2007. The principal
target clientele from Europe as well as new markets such as China
business activity of the Company is the construction and operation of
and India. Average room rates will begin at an estimated USD 180. The
hotels for the leisure and tourism industry. The Company is currently in
management team of the hotel is confident of maintaining over 60%
the process of constructing a 200-room five-star hotel, which will be
occupancy rate throughout the period of operation, largely supported by
managed by global hotel chain ‘Marriott International’. The resort hotel
the marketing expertise and broad client base of Marriott International
is built on a three acre extent of land, along with a further 2 acres for
Inc.
offsite back of house facilities and parking in Weligama. The Company
has already invested LKR 210mn in the land and initial development
Fully Independent Traveller (FIT): Based on the overall product offering
work is underway. Construction of the hotel is due to be completed by
that is envisaged as well as the market positioning of the new resort
August 2014. Once complete, the proposed resort will comprise of the
in competing regional markets, it is expected that the property will
following:
successfully attract the FIT segment. This hotel will be the first upscale
resort managed by a prestigious international chain, opening in the
Weligama Bay area. Operations of the resort will be supported by
Details of the property
Marriott’s already well-established booking engine and loyalty program.
Number of units
Area (sqm)
Standard rooms
190
45
Suites
10
100
Meeting rooms
03
151
Function halls
01
690 (max 1,000 px)
Spa
01
100
Gymnasium
01
80
Pool
01
200
Wholesale: The Company will embark on concentrated marketing and
promotional efforts to attract business from travel agents and tour
operators who specialise in arranging tour packages for group travelers.
The branding campaign being planned for the resort is expected to play
a decisive role in achieving significant occupancy rates in the wholesale
segment of the business.
Other amenities
MICE: The resort is well positioned to attract tourist traffic in the MICE
Specialty restaurant, all-day dining restaurant, kids club, pool, bar etc
(Meetings Incentives Conferences and Exhibitions) segment. Once
Aug-­‐13 Sep-­‐13 Oct-­‐13 Nov-­‐13 Dec -­‐ 13 Jan-­‐14 Feb-­‐14 Mar-­‐14 Apr-­‐14 May-­‐14 Jun-­‐14 Jul-­‐14 Aug-­‐14 Sep-­‐14 Oct-­‐14 Nov-­‐14 Jul-­‐13 Civil constructions Interior works Landscaping Electro-­‐mechanical works Finishing works Staff training Commissioning
Testing Commercial operation Jun-­‐13 May-­‐ 13 l 23
complete it will have considerable meeting space, which will be easily
accessible thourgh the highway connecting Colombo to the south of the
country. It is expected that the resort’s market penetration in this
segment will be higher than industry averages.
3.1.2 Project Schedule
Construction work has already begun and as at March 2013, the
Company finished the civil construction of six out of eleven floors. The
efficient construction practices of East West Engineering Services have
ensured that project costs have stayed within budget.
The progress of the construction work can be viewed at
http://www.marriott.lk
24 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
View from main road
View of ballroom roof slab
View of first guestroom floor
l 25
View from main road
MEP service floor
View of hotel from the sea side
26 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
3.2 Corporate Structure
3.2.1 The Group Structure
100% Weligama Hotel Properties Limited Hotel Properties Ltd Hotel Properties Ltd East West Engineering Services (Pvt) Ltd Properties Ltd Hotel Properties Ltd East West Hotel Developers (Pvt) Ltd Properties Ltd Hotel Properties Ltd East West Leisure (Pvt) Ltd Hotel Properties Ltd 99% 99% East West Properties Plc 100% 51% The Parent Company
East West Properties Plc (referred to as ‘EAST’), is listed on the Colombo
Stock Exchange with a market capitalisation of LKR 2.1bn. Its core business is in real estate development, with its main focus on the rental of
its commercial warehousing complex in Peliyagoda, Sri Lanka. Together
with its real estate investments, EAST also has an interest in destination
People’s Media Network (Pvt.) Limited Hotel Properties Ltd Hotel Properties Ltd Media and Entertainment
EAST provides infrastructure services to two radio stations (Vasantham
FM, The Buddhist Channel) and a television station(The Buddhist TV
Channel). EAST is expanding its broadcast tower infrastructure in is
currently located in four locations around the country.
management, financial services, and media. It also manages an invest-
Securities, Investment and Venture Capital
ment portfolio valued at over LKR 550 million.
EAST holds an investment portfolio currently valued at LKR 550mn,
Property and Real Estate
EAST owns five acres of land at Peliyagoda with 38,000 sqft of
warehousing space and has commenced a redevelopment program of
the land over the next five years. It plans to set up multi-storey office/
warehouse style buildings, which will see it reach 200,000 sqft of rentable space. EAST also has a 6700 sqft building on Galle Road, Colombo
04. In 2005 the company had significant real estate holdings within
the Nawam Mawatha Business Complex. East West Group built and
owned commercial buildings in Nawam Mawatha totaling 200,000 sqft
of commercial office space. These building were sold to Akbar Brothers
and Dilmah.
Resorts and Spas
The East West Group bought a controlling interest in the Ceylon Continental hotel in April 2008. The hotel was previously built and managed
by the InterContinental Hotel Group. The East West Group managed the
hotel for a period of 2 years before selling it in April 2010. The valuation
of 250,000 USD per key for the 200-room property made it an attractive sale, realising substantial capital gains in excess of 100%. Presently
EAST is focusing on completing the 200 key hotel in Weligama which is
being built under its subsidiary Weligama Hotel Properties Limited.
which consists of blue-chip companies and investments in high growth
areas such as tourism, finance and manufacturing. East West Venture
Capital is a private equity fund with offices in Singapore and Sri Lanka.
EAST invests in high growth companies with the aim of helping management teams reach their full potential. Its vast network of contacts
includes strategic partners, co-investors, family trusts, high net-worth
individuals, successful entrepreneurs and bankers. Furthermore, EAST
has strong working relationships with key Sri Lankan government agencies.
l 27
3.2.2 The Board of Directors
Name
Age
Address
Designation
M W A D J Nahil Wijesuriya
67
24/3F, Crescat Residencies
Chairman
75, Galle Road, Colombo 03
M W A D J Vijitha Wijesuriya
27
24/3F, Crescat Residencies
Managing Director
75, Galle Road, Colombo 03
M W A D A Anika V Wijesuriya
26
24/3F, Crescat Residencies
Executive Director
75, Galle Road, Colombo 03
Nishantha P Sooriyaarachchi
36
No. 05, Mangala Road, Kalubowila
Executive Director
28 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
3.2.3 Profile of the Board of Directors
M W A D J Nahil Wijesuriya
M W A D J Vijitha Wijesuriya
Chairman
Managing Director
Nahil Wijesuriya is a Professional Engineer specializing in Mechanical
Vijitha Wijesuriya holds a Bachelor of Science Degree from Imperial
and Productions Engineering. He gained his professional qualifications
College, London and is an Associate of the Royal College of Science.He
from The Leicester College of Technology (UK). Following his graduation
is also a Managing Director of East West Properties Plc., East West En-
he began working with P&O Shipping Lines (UK), eventually moving on
gineering Services (Pvt) Limited, Peoples Media Network (Pvt) Limited,
to become the Chief Engineer at Ceylon Shipping Corporation. In 1975
Wijesuriya Holdings (Pvt) Limited and East West Enterprises Limited.
he became Deputy Chief Engineer of the Colombo Dockyard. In 1977 he
founded the East West Group of Companies. Through this Parent
company, he founded many successful businesses in Sri Lanka
including TV broadcasting channels, ETV1 and ETV2, now known as
Swarnavahini; East West Information Systems now known as EWIS. He
has also completed several substantial property developments having
successfully speculated the London and Singapore property markets.
M W A D A Anika V Wijesuriya
Anika Wijesuriya holds a BA Honors Degree in Finance and
Economics from the University of Durham (UK), where she continues
to be an Associate of the Durham Business School. She was a Director
at Hotel Services Plc where she gained substantial experience in hotel
administration, finance, sales and operations. She is also a Director of
East West Properties Plc.
l 29
3.2.4 Other Directorships Held by the Board
Name of the Director
Other Directorships Held
M W A D J Nahil Wijesuriya
East West Properties Plc
East West Engineering Services (Pvt) Ltd
East West Hotel Developers (Pvt) Ltd
East West Leisure (Pvt) Ltd
People’s Media Network (Pvt) Limited
M W A D J Vijitha Wijesuriya
East West Properties Plc
East West Engineering Services (Pvt) Ltd
East West Hotel Developers (Pvt) Ltd
East West Leisure (Pvt) Ltd
Nishantha P Sooriyaarachchi
People’s Media Network (Pvt) Limited
Nishantha Sooriyaarachchi holds a Higher National Diploma in
M W A D A Anika V Wijesuriya
East West Properties Plc
Accountancy and he is a Certified Business Accountant of the Institute
Nishantha P Sooriyaarachchi
East West Properties Plc
of Chartered Accountants of Sri Lanka. He has 11 years’ experience
East West Engineering Services (Pvt) Ltd
in the East West Group of Companies. He is also a Director of Peoples
East West Hotel Developers (Pvt) Ltd
Media Network (Pvt) Limited and East West Properties Plc.
East West Leisure (Pvt) Ltd
People’s Media Network (Pvt) Limited
3.2.5 Directors’ Direct Shareholding
Name of the Director
M W A D J Vijitha Wijesuriya
Number of shares held
46
30 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
3.3 Capital Structure
3.3.1 Equity
3.3.1.1. The shareholders of Weligama Hotel Properties Limited
As at the date of this information memorandum, the stated capital of
Shareholder structure before the Private Placement
the company is Sri Lankan Rupees five hundred and fifty million (LKR
Name of the shareholder
550mn) represented by two hundred and fifty five million (255 mn) fully
East West Properties Plc
paid Ordinary Voting Shares.
East West Hotel
The company subdivided its initial 5.5mn shares to 255mn shares on
M W A D J Vijitha Wijesuriya
Number of shares
% Shareholding
254,995,364
99.998
4,590
0.002
46
0.000
Developers (Pvt ) Limited
31st January 2013. The subdivision ratio was 01 existing share into 46
shares.
Shareholder structure after the Private Placement
Name of the shareholder
As at the date of this prospectus, the company has no other class of
East West Properties Plc
shares other than the above-mentioned Ordinary Voting Shares.
Number of shares
% Shareholding
254,995,364
56.666
4,590
0.001
46
0.000
195,000,000
43.333
East West Hotel Developers
The company has not engaged in any share issues, redemption, repur-
(Pvt) Ltd
chase or reduction in stated capital in the last two years preceding the
M W A D J Vijitha Wijesuriya
date of this information memorandum, other than the initial share issue
Private Placement
in 2011.
3.3.2 Debt
There are no restrictions applicable to non-resident shareholders when
The company has requested a loan of USD 14.6mn from Overseas
investing in shares of the company. The company has no outstanding
Private Investment Corporation (OPIC), USA to finance the balance
convertible debt securities as at the date of this information memo-
construction work. (OPIC is the U.S. Government’s development finance
randum. The company has no debentures in issue at present and has
institution. OPIC achieves its mission by providing investors with financ-
not given any option to any person to subscribe for either shares or
ing, guarantees, political risk insurance, and support for private equity
debentures of the company.
investment funds. To date, OPIC has supported more than $200 billion
of investment in over 4,000 projects. The association with ‘Marriott’ has
enabled the company to seek support from OPIC.)
The interest on the USD loan is expected to be below 6% for a 10-year
period with a grace period of two years. The dollar revenue from normal
business operations may act as a natural hedge and may minimise the
foreign exchange rate risk to a large extent. Moreover, management of
the Company has also indicated the possibility of obtaining a USD 15mn
loan from two domestic private banks at an interest rate of 6.5% for
a 10-year period with a grace period of two years in the case of nonapproval of the loan application from OPIC.
Loan Amortisation Schedule Forecast
In USD ‘000
Yearly installment
Interest
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY25
FY26
2,028
2,028
2,028
2,028
2,028
2,028
2,028
2,028
2,028
2,028
948
877
803
723
638
548
452
349
240
124
Principal
1,080
1,151
1,225
1,305
1,390
1,480
1,577
1,679
1,788
1,904
Balance
13,500
12,349
11,123
9,818
8,428
6,948
5,371
3,692
1,904
-
l 31
3.4 Consultants and Contractors
•
The initial feasibility study was carried out by HVS, one of the
world’s leading consulting and services organisations with a
focus on the hotel, restaurant, shared ownership, gaming, and
leisure industries. (http://www.hvs.com/AboutUs/).
•
East West Properties Plc’s wholly owned company East West
Engineering Services (Pvt) Limited has undertaken the construction of the hotel.
•
The Company is working together with internationally acclaimed
design firm, Wilson Associates for the interior designing work.
Specialising in interior architectural design (for hotels, restaurants, clubs, casinos and high-end residential properties), Wilson
Associates is consistently named as one of the top hospitality
interior design firms in the world. To date, the firm has designed
and installed more than one million guest rooms in thousands of
hotels worldwide and has a client list that includes more than 20
of the world’s top 100 billionaires. (http://www.wilsonassociates.
com/)
•
The landscape architects working on the project are Belt Collins
from Thailand. Belt Collins is an international planning, design
and consulting firm that provides value to their clients’ landbased assets, and the firm consistently ranks as one of the top
200 international design firms and in the top 500 U.S.-based
design firms in Engineering News-Record. Since their incorporation in 1953, they have completed over 16,000 projects in 70
countries around the world. (http://www.beltcollins.com/).
•
Other consultants include Marriott Hotel Development (http://
www.marriott.com/hotel-development/real-estate-investment.
mi) and Huge Associates from New York (http://www.haifire.com/
AboutUs/index.html) for fire and life safety.
32 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
3.5 Marriott International Inc
Marriott International, Inc. (NYSE: MAR) is a leading lodging company
The company operates and franchises hotels and licenses vacation
based in Bethesda, Maryland, USA with more than 3,800 properties in
ownership resorts under 18 brands including: Marriott Hotels & Resorts,
74 countries and territories. It is reported to have revenues of over USD
The Ritz-Carlton, JW Marriott, Bulgari, EDITION, Renaissance, Gaylord
12 billion in the 2012 fiscal year. In the 85 years since its inception and
Hotels, Autograph Collection, AC Hotels by Marriott, Courtyard, Fairfield
the 55 years since opening its first hotel, Marriott has firmly established
Inn & Suites, Spring Hill Suites, Residence Inn, Towne Place Suites, Mar-
a culture and a tradition of innovation, service and leading performance.
riott Executive Apartments, Marriott Vacation Club, Grand Residences by
As a publicly held company listed on the New York Stock Exchange
Marriott, and The Ritz-Carlton Destination Club. There are approximately
(NYSE), Marriott International Inc. offers the advantages of a strong
300,000 employees at headquarters and in managed and franchised
balance sheet, sound management, and a record of industry leadership.
properties.
Marriott International is ranked by FORTUNE as the lodging industry’s
most admired company and one of the best companies to work for,
with an evolving development portfolio of innovative and award-winning
brands.
Occupancy
Marriott International
Market Coverage
74 countries across five continents
“Marriott Rewards”
• Over 40 mn members
• Industry’s leading loyalty program
Reservation System
• MARSHA – first globally integrated
reservations system
• Generated more than 95mn reservations in 2012
Marketing
Source: Marriott International
Average Daily Rate (USD)
Annual SG&A expenses of $645mn
Reservation Centers/Web/Mobile
• 12 language sites
• 2,500 associates
• World’s largest lodging web site
• 9th largest consumer retail website in the world
• 30mn visitors per month
Source: Marriott International
l 33
Ballroom
Capacity 750
34 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
3.6 SWOT Analysis
Strengths
• Pristine environment underpinned by rich natural surroundings.
• The new resort is to be operated by Marriott, which is expected to generate reasonable levels of international demand, while also leveraging on Marriott’s existing network of international guests.
• Offers scenic sea views and direct access to a large stretch of unspoiled shoreline and secluded beach.
• This will be the first upscale resort managed by a prestigious international brand in the area.
Challenges
• The resort is relatively far away from the Bandaranaike International Airport in Katunayake and the Hambantota International Airport.
• There are a limited range of available amenities in the area that would support a resort destination such as retail outlets, restaurants and other types of accommodation.
• The quality of available infrastructure and utilities in the area is limited.
• There is a need to ramp-up the marketing and advertising efforts of the Sri Lankan government to promote Sri Lanka as an attractive
tourism destination.
Opportunities
• The end of the civil war in May 2009 has and will very likely continue to boost Sri Lanka’s attractiveness as an attractive tourism destination.
• The second international airport that was opened in Hambantota in 2013 will enable more international flights to Sri Lanka.
• Overall improvements in transportation and infrastructure development are expected in the coming years.
• There are a large number of untapped international feeder markets.
• The completion of the Southern Expressway (Colombo-Matara) will improve the accessibility of the property.
Threats
• There will very likely be a large number of new suppliers in this area in the future.
• We expect increased competition from other established resort destinations in the region.
• There is limited upside potential in terms of ADR due to the competitive pricing offered by other popular tourist destinations such as Phuket and Bali.
l 35
3.6.1 Key Strengths
ASPAC
ASPAC ADR
ASPAC
Occupancy
(USD)
REVPAR
Marriott
73%
141
110
Starwood
65%
166
109
Hyatt
70%
237
165
Shangri-La
62%
196
122
A Great Brand
•
The ‘Marriott’ brand is recognised and respected by travelers
around the world and the agreement with the Company offers a
great competitive advantage.
•
Marriott International is the largest publically traded hospitality
chain in world to date.
Market Brands
coverage
(USD)
ASPAC - Asia Pacific
Source: Company Websites
Room
count
(aprox)
No of
properties
Marriott
647,883
3,800
74
18
complemented by the world’s largest rewards scheme-‘Marriott
Hilton Worldwide
651,189
3,957
90
10
Rewards.
Starwood
322,300
1,089
82
9
Hyatt
135,144
492
46
8
Shangri-La
32,000
78
6
4
Mövenpick
15,708
76
26
1
Source: Company Websites
•
Marriott has managed to maintain average occupancy levels of
73% and RevPAR of USD110 in the Asia Pacific region.
Location
Source: Google maps
•
Marriott International’s strong marketing and advertising is
Strategic Location
•
The hotel is situated in a scenic environment facing the Indian
Ocean with 110 meters of road and beach frontage on either
side of the property.
36 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
3.6 SWOT Analysis (CONTD)
•
The accessibility to the hotel will further improve with the
Low Cost Construction
completion of the Southern Expressway (Galle-Matara) and
•
The hotel is built by East West Properties Plc’s own subsidiary
Katunayake Expressway (Katunayake International Airport – Co-
East West Engineering Services under the strict guidelines of
lombo). The completion of the Katunayake Expressway will allow
Marriott International.
access to the hotel with a expected travel time of two hours.
•
•
Construction is being carried out by well experienced profession-
The hotel is located 120km from Mattala International Airport
als’ utilising low cost construction techniques guaranteeing a
average travel time is 1hr 30 mins; 145km from Colombo -
lower cost mark-up than other contractors.
average travel time is 1hr 45mins.
Well-Negotiated Management Agreement
Best in the Region
•
•
Marriott International will be the first international operator of its
The 25-year management agreement is well negotiated to obtain
the lowest possible management fee structure.
size to start operations in the Southern Coastal area of Sri Lanka.
•
•
From an evaluation of the occupancy, rate structure, market
included in the management agreement, guarantees
orientation, chain affiliation, location, facilities, amenities, reputa-
consistant performance based evaluation of the operator.
tion and quality of the area’s resorts, as well as the comments
of management representatives, it is evident that there are currently no properties that can be considered primary competitors
of the new resort.
•
However, HVS in their feasibility study have identified 11 properties that are considered competitive on a secondary basis with
the resort, which includes: the Jetwing Lighthouse, Weligama
Bay Resort, The Fortress, Heritance Ahungalla, Vivanta by Taj
– Bentota, Mandara Resort, Unawatuna Beach Resort, Bentota
Beach Resort, among other resorts in the region. Although the
facilities, rate structures or market orientations of these hotels
prevent their inclusion among the supply of primary competitors,
they do compete with the new resort to some extent.
•
The performance evaluation using a competitive pool of hotels
There are several properties proposed for development in the
near future and are likely to become competitive in time. For
instance, the Shangri-La, Hambantota. However, due to the
nature of real estate development, it is impossible to determine
with certainty every hotel that will open in the future, or their
marketing strategies and effect on the market.
171
24
26
32
641
Spa/Health Club
Banquets
Other Income
Total
94
12
14
18
204
437
Food & Beverage
Spa/Health Club
Banquets
Other Expenses
Total
DEPARTMENTAL INCOME
57
65
4
14
10
34
182
Insurance
Incentive Management Fee
Reserve for Replacement
Total
Net Operating Income
543
92
25
42
10
632
126
47
49
11
19
758
74
716
176
74
68
13
21
892
744
184
78
70
13
22
928
78
1,006
777
193
82
74
14
23
970
82
1,052
552
161
100
110
181
1,605
742
65
40
47
347
243
2,347
118
73
94
631
1,431
FY2019/20
781
233
111
83
15
25
1,014
86
1,101
586
170
106
117
192
1,686
781
68
43
50
365
255
2,467
124
78
99
663
1,503
FY2020/21
818
245
117
87
16
26
1,063
91
1,154
618
180
112
124
202
1,772
821
72
46
52
383
268
2,593
130
84
105
696
1,578
FY2021/22
857
257
123
91
16
27
1,114
95
1,209
652
190
119
130
213
1,861
863
75
49
55
402
282
2,724
137
89
110
731
1,657
FY2022/23
898
270
129
95
17
29
1,167
100
1,268
688
200
125
138
225
1,955
908
79
53
58
422
296
2,863
144
96
116
767
1,740
FY2023/24
1,223
105
1,329
725
211
132
145
237
2,054
955
83
56
61
443
311
3,009
151
103
123
806
1,827
FY2024/25
940
283
135
100
18
16
635
966
521
152
95
104
171
1,527
706
62
37
44
331
232
2,233
113
68
88
601
1,363
FY2018/19
30
GOP AFTER MGT FEES
824
487
142
89
97
159
1,453
671
59
35
41
315
221
2,124
107
63
83
573
1,298
FY2017/18
6
22
216
Management Fee
692
455
132
83
91
149
1,279
591
52
33
36
277
194
1,870
94
59
72
503
1,141
FY2016/17
Property Taxes
238
GROSS OPT PROFIT (GOP)
425
124
77
85
139
1,118
518
45
30
31
242
169
1,635
82
55
62
440
996
FY2015/16
FIXED EXPENSES
58
199
36
Prop. Operations & Maint.
Total
40
Marketing
Utilities
65
Administrative & General
UNDISTRIBUTED OPT. EXP
66
Rooms
DEPARTMENTAL EXP
388
Food & Beverage
FY2014/15
Rooms
REVENUE
In LKR mn
Forecast of Income and Expense, Proposed Resort
l 37
3.7 Financial Information
(737)
(842)
23%
(124)
Debt service
In LKR mn
NOI
Interest Expense
Taxation
PAT
EPS
PE (x) @ LKR 9
Forecast of Net Profit FY15
182
(124)
57
0.1
70.6
FY16
543
(126)
417
0.9
9.7
417
FY17
632
(127)
505
1.1
8.0
360
FY18
716
(119)
597
1.3
6.9
442
FY19
744
(110)
634
1.4
6.4
467
-
(277)
744
FY19
FY20
777
(100)
677
1.5
6.0
497
-
(280)
777
FY20
FY18
716
274
FY18
716
FY21
781
(89)
692
1.5
5.9
499
-
(283)
781
FY21
FY19
744
277
FY19
744
FY22
818
(77)
741
1.6
5.5
533
-
(286)
818
FY22
FY20
777
280
FY20
777
FY23
857
(64)
793
1.8
5.1
569
-
(288)
857
FY23
FY21
781
283
FY21
781
FY24
898
(50)
848
1.9
4.8
606
-
(291)
898
FY24
FY22
818
286
FY22
818
FY25
940
(35)
(109)
796
1.8
5.1
537
(109)
(294)
940
FY25
FY23
857
288
FY23
857
(116)
(297)
985
FY26
FY24
898
291
FY24
898
FY26
985
(18)
(116)
851
1.9
4.7
9,761
57
-
(274)
716
FY18
FY17
632
272
FY17
632
FCFE
-
(272)
632
FY17
FY16
543
126
FY16
543
9,190
-
(126)
543
(737)
FY15
182
124
(1,264)
FY15
182
Sales Proceeds
-
182
NOI
Taxation
FY15
In LKR mn
FY16
FY14
-
(2,106)
(842)
18%
FY13
-
FY14
-
FY13
-
Forecast of Free Cash Flow to Equity In LKR mn
NOI
Debt service
Sales Proceeds
Equity inv
IRR
Leveraged Yield
In LKR mn
NOI
Sales Proceeds
Investment
IRR
Overall Yield FY25
940
294
FY25
940
FY26
985
297
9,190
FY26
985
9,190
38 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
3.7 Financial Information (CONTD)
l 39
3.7.1 Notes to the Forecast
3.7.1.1 Occupancy Rate
Occupancy rate
The occupancy rate in the first year of operations (FY15) is expected
2006
2007
2008
2009
2010
to be at 45%. The occupancy level is projected to increase to 55% in
South coast hotels
41%
48%
46%
50%
72%
78%
FY16 and 60% in FY17 before stabilising at 65% in the fourth year of
Sri Lankan average
48%
46%
44%
48%
70%
77%
operations.
Marriott - Asia
Pacific region
76%
73%
71%
64%
67%
73%
FY15
45%
Occupancy rate
FY16
55%
FY17
60%
2011
Source: SLTDA, Marriott International
FY18 onwards
65%
3.7.1.2 Average room rate (ARR)
The forecasted occupancy rate is in line with the occupancy levels in
The average room rate is anticipated at USD 180 in the initial year
the southern coastal region and is comparable to Sri Lanka’s five-star
of operation. The ARR is projected to increase by 5% thereafter. The
hotel occupancy levels as well as regional occupancy levels of Marriott
resort’s average room rate was projected using a competitive position-
International.
ing method. In projecting average rates of growth for the resort market
in the competitive market area, the company has considered historical
data gathered through market research.
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY25
180
187
195
202
210
219
227
236
246
255
265
ARR (USD)
Average room rate - South coast hotels
Room size (sqft)
Average room rate (USD)
Rate per Sqft
Competitor 01 (Galle)
646
213
0.33
Competitor 02 (Thalpe)
528
207
0.39
Competitor 03 (Galle)
690
179
0.26
Competitor 04 (Galle)
302
175
0.58
Competitor 05 (Galle)
753
405
0.54
Competitor 06 (Ahungalle)
310
158
0.51
Competitor 07 (Bentota)
368
228
0.62
Average
0.46
The proposed hotel ARR rate based on region average
188
Average room rate was calculated using peak and off season rates
Source: Company websites
Average room rate - Marriott Resort Hotels
Room size (sqft)
Average room rate (USD)
Rate per Sqft
Goa (India)
409
250
0.61
Sanya (China)
409
281
0.69
Okinawa (Japan)
409
234
0.57
Pattaya (Thailand)
409
197
0.48
Miri (Malaysia)
409
124
0.30
Average
0.53
The proposed hotel ARR rate based on resort hotel average
217
Source: Marriott International
40 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
3.7.1 Notes to the Forecast (CONTD)
Index of tourist prices
Accommodation - Beaches
% YoY
Food
% YoY
All items
% YoY
2,725
11%
3,101
7%
2,458
10%
2000/01
2001/02
3,128
15%
3,361
8%
2,813
14%
2002/03
4,363
39%
5,462
63%
3,890
38%
2003/04
5,123
17%
5,937
9%
4,413
13%
2004/05
5,835
14%
6,240
5%
4,761
8%
2005/06
5,345
-8%
6,358
2%
4,674
-2%
2006/07
5,987
12%
6,941
9%
5,235
12%
2007/08
5,805
-3%
6,031
-13%
4,941
-6%
2008/09
5,941
2%
5,800
-4%
4,910
-1%
2009/10
5,967
0%
5,826
0%
4,940
1%
2010/11
6,247
5%
6,183
6%
5,204
5%
2011/12
8,134
30%
6,678
8%
6,315
21%
CAGR
10%
7%
9%
3.7.1.3 Construction Cost
The average construction cost per room is assumed to be USD 162,000
(including land cost.) The company has estimated a higher average
cost per room to incorporate any cost overruns that might occur due to
changes in the operating environment.
Construction cost per room - regional averages
Hotel
Hotel operator
No of rooms
Cost per room - excluding land (USD)
200
117,188
Local Peers
Competitor 08 (Beruwala)
Domestic
First Class and Upper Mid-Scale - India
144,267
Double Tree by Hilton Gurgaon
Hilton Worldwide
184
143,400
Regenta One Hyderabad
Royal Orchid Hotels
158
159,400
Vivanta by Taj Surya
Indian Hotels Company
180
130,000
ITC Grand Chola
ITC Limited
600
306,600
Park Hyatt Hyderabad
Hyatt International
252
473,200
Luxury and Upscale - India
Source: HIFI, Media Reports
389,900
l 41
3.7.1.4 Room Revenue
3.7.1.9 Departmental Expenses
Room revenue is determined by two variables: occupancy and average
Operating expenses are projected based on cost margins in the respec-
rate. The proposed property is expected to stabilise at an occupancy
tive revenue categories. The following table is an indication of the
level of 65% with an average rate of US$ 202 during its fourth year of
operating cost margins that have been used in forecasting.
operation in 2017/18. Following the year of stabilisation, the property’s
average rate is projected to increase along with the underlying rate of
Cost margins
inflation.
Room expenses - cost margin
17%
F &B Expenses - cost margin
55%
3.7.1.5 Food and Beverage Revenue
Spa expenses - cost margin
50%
Food and beverage revenue is generated by a hotel’s restaurants,
Other expenses - cost margin
55%
lounges, coffee shops, snack bars, banquet rooms and room service.
Banquet expenses - cost margin
55%
In addition to providing a source of revenue, these outlets serve as an
amenity that assists in the sale of guest rooms. Although food and bev-
3.7.1.10 Undistributed Operating Expenses
erage revenue varies directly with changes in occupancy, the earnings
This category includes administration and general expenses, marketing
generated by banquet sales and outside capture are relatively fixed. The
expenses, expenses on property operations, maintenance and utility.
projected food and beverage revenue is USD 79.40 per occupied room
The following table depicts the assumptions made for the first year of
in the first year of operation. Revenue per room is expected to increase
operations. These numbers have been inflated using projected inflation
to USD 89.2 by the year of stabilisation of resort operations.
rates for future periods.
3.7.1.6 Banqueting Revenue
Other expenses (USD per key)
The banqueting revenue forecast is based on average covers and the
Administration cost
5,005
Marketing expenses
3,059
Property operations and maintenance
2,781
Utilities
4,449
average amounts spent on food and beverages. During the first five
years of operation, the average number of covers per month is expected
to be within the range of 800-1100. Beyond that it is anticipated to
increase by 2% year on year. The average spend on food and beverages
is assumed to be USD 41 per visitor in the first year of projection, and
thereafter it is expected to grow by 5% year-on-year.
3.7.1.7 Spa/Health Club Revenue
The average spend per spa treatment is expected to be USD 45 per
visitor and average spend on product sales is USD 25 in the first year
of projection. Thereafter the average spend is expected to grow by 5%
year-on-year.
3.7.1.8 Other Income
The content of ‘other income’ varies considerably between resorts,
making a comparison of this department with other resorts invalid.
Other income for this resort is composed primarily of income from
guests’ laundry, recreational activities, airport pick-ups, and commissions on foreign currency exchange. The projected revenue rate for the
first year of operations is USD 14.90 per occupied room and thereafter
it is expected to grow at a pace of 5% year-on-year.
3.7.1.11 Fixed Expenses
Property taxes, insurance expenses
1.0% and 0.6% of total revenues have been allocated to property taxes
and insurance expenses respectively.
Reserve for replacement expenses
Furniture, fixtures and equipment (FF&E) are essential to the operation
of a hotel, and their quality often influences the standard or grading of
a property. Included in this category are all non-real estate items that
are typically capitalised rather than expensed. The FF&E of a hotel are
often exposed to heavy use and must be replaced at regular intervals.
Based on the MOU agreements between Marriott and the company, a
reserve for replacement of FF&E for the resort is 1.5% for the first year
of operation, 2.5% during the second year of operation, and 3.5% until
year five, 4.5% from year six onwards.
42 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
3.7.1 Notes To The Forecast (CONTD)
3.7.1.12 Management Fee
• 3.5% of total revenue
• Incentive royalty fee of 6% of the gross operating income excluding the management fee for the first two years, 7% of the gross operating income excluding management fee for 3-5 years and 7.5% of the gross operating income excluding management fee from year 6 onwards.
3.7.1.13 Inflation Rate and Exchange Rate
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY25
Inflation
7%
7%
7%
7%
7%
6%
6%
6%
6%
6%
6%
LKR/USD
131
133
134
135
137
138
139
141
142
144
145
3.7.1.14 Taxation
In accordance with the agreement entered into with the Board of Investments (BOI) of Sri Lanka under Section 17 of the Board of Investments
(BOI) of Sri Lanka Law No. 04 of 1978, profits of Weligama Hotel Properties Limited are exempted from income tax for a period of ten years
from the year in which the Company commences to make profits, or any
year of assessment not later than two (2) years reckoned from the date
of commencement of commercial operations, whichever is earlier.
l 43
4.0 An Overview of the Industry
4.1 Sri Lanka
However following the end of the civil war in May 2009, several
Sri Lanka has several features that make it an attractive tourist destina-
countries including the United States, Britain and Japan have lifted
tion: a vibrant culture, sites of historical importance, exotic beaches,
their travel advisories against Sri Lanka. This together with the recovery
rich biodiversity and a well-preserved natural environment, and friendly
of the global economy has had a positive impact on both tourism and
people. These are also solid building blocks for tourism development.
tourism industry related investments. The country is now experiencing
Sri Lanka is home to many UNESCO World Heritage Sites that include
an unprecedented growth in tourism with tourist arrivals rising from a
places in the ancient kingdom cities (Siririya, Anuradhapura and Polon-
mere 450,000 in 2009 to one million in 2012. The strong growth in
naruwa), as well as historical colonial architecture. There are also sev-
arrivals highlights the strong recovery and has brought about hopes of
eral pilgrimage sites sacred to Buddhists, Hindus and others. Sri Lanka
continued growth for Sri Lanka’s tourism industry the future.
has welcomed numerous foreign travelers and pilgrims over the years,
with the industry flourishing until the outbreak of the civil war in 1983.
The leisure sector under-performed for several years largely due to the
unfavorable security condition that prevailed on the island since then.
Negative travel adversaries also hampered the growth of the industry
and hotels suffered for years with low earnings owing to low tourist
arrivals, as well as due to rising fuel and other costs including interest
rates. Industry prospects also faced a setback due to natural disasters,
notably the Indian Ocean tsunami in 2004.
Tourist Arrivals (in ‘000)
Source: SLTDA
44 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
4.0 An Overview of the Industry (CONTD)
Tourist Arrivals – Country of residence
Composition of the tourist arrivals
Source: SLTDA
Source: SLTDA
Tourist Arrivals – Purpose of Visit
Tourist Arrivals – Seasonality
Source: SLTDA
Source: SLTDA
Tourist Arrivals – Average Length of Stay
Source: SLTDA
% Occupancy
Source: SLTDA
l 45
4.1.2 Tourism Development Strategy: 2011-2016
It is estimated that 2.5mn tourist arrivals by 2016 will require around
The Development Policy Framework of the Government of Sri Lanka
45,000 hotel rooms catering to the tourism industry. However, as per
aims at positioning Sri Lanka as a model tourist destination, benefiting
end 2012 statistics, the country has nearly 21,000 SLTDA approved
from the country’s natural advantages of having the highest biodiversity
hotel rooms. This means the industry has the task of adding around
in Asia, a vibrant culture, historical sites, exotic beaches, and friendly
24,000 rooms to the current capacity, over the next four years. Current
people. All of these are strong foundations on which to develop a high
facilities also need to be refurbished. Attracting tourists while work-
growth tourism industry. The Government has set a target of attracting
ing towards an arrivals target of 2.5mn by the year 2016 requires a
2.5mn high-spending tourists by the year 2016. The 5-year master plan
focused plan and dedicated execution. Three primary areas of focus are:
prepared by the Ministry of Economic Development under the guidance
of the Hon. Minister of Economic Development for the period of 2011 –
2016 addresses a range of issues related to the strategy for Sri Lanka
tourism. This strategy includes environmental, social, cultural, economic,
institutional and promotional aspects that are closely aligned with the
national development agenda.
Some of the key objectives to be achieved through the 5-year strategy
are as follows:
1.
Increased tourist arrivals from 650,000 in 2010 to 2.5mn by
2016.
2. Attract USD 3,000 Mn as Foreign Direct Investment (FDI) into the
country within a five year period.
3. Increase tourism related employment from 125,000 in 2010
to 500,000 by 2016, and expand tourism based industries and
services across the island.
4. Distribute the economic benefits of tourism to a larger cross
section of society and integrate tourism into the real economy.
5. Increase foreign exchange earnings from USD 500 Mn in 2010
to USD 2.75bn by 2016.
6. Contribute towards improving Sri Lanka’s global trade and
economic linkages.
7. Position Sri Lanka as the world’s most treasured island for tourism.
The Sri Lankan tourism industry has to think beyond traditional approaches and get involved in product development so as to offer tourists
a unique and unforgettable experience.
1) Segmenting the market and identifying the right target customers.
2) Marketing, communication and promotion activities.
3) Facilitating the visits.
46 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
4.0 An Overview of the Industry (CONTD)
4.1.3 Tourism Infrastructure Projects
Implementation of flagship infrastructure projects for development of
The concept of tourism zones was introduced after the 2004 tsunami
the tourism zones in the Western and Eastern coastal belt is already
that wreaked damage and destruction to large stretches of Sri Lanka’s
underway. This will cover areas such as Arugam Bay, Trincomalee, Kal-
coastline. Introduced by the Sri Lanka Tourist Board, the purpose of the
pitiya, Negombo, Dedduwa, Galle, Mullaitivu and Hambantota. With the
zones were to better manage tourism development. The objective was
implementation of e-tourism solutions and efficient delivery of visitors’
to set specific guidelines and to manage these zones efficiently in order
information, it is easy to promote new destinations. New safari parks,
to avoid ad-hoc tourism development. For the purpose of marketing
botanical gardens and zoological gardens will be established to meet
each of these zones, specific themes were introduced. There are cur-
the increasing demands for public recreation.
rently 45 tourism zones all over the country.
l 47
4.2 South Coast
The tourism industry on the South Coast of Sri Lanka is seasonal
quality beaches, and currently has land parcels available with minimal
and witnesses increased tourist arrivals from October to March. Peak
development restrictions.
season is characterised by better weather conditions, calmer seas, and
increased travel from European countries during their harsh winters.
The period from April to August is the low season due to the onset of
monsoons and hot summers. The other months of the year experience
moderate demand. The market benefits from a long duration stay that
averages at approximately 10 nights.
The years 2011 and 2012 saw several mergers and acquisitions in
hospitality companies, with ownership and brand changes for a number
of resorts on the South coast. Some examples include two Serendib
Leisure properties that were branded as Avani (a hotel brand by Minor
International), two Amaya branded properties that were rebranded
to Chaaya by the John Keells Group and Citrus respectively, and the
independent Neptune hotel that was rebranded as Heritance by Aitken
Spence Hotels. The market witnessed a decrease in the total inventory
in 2011/12 over that in 2010/11, as several resorts were closed for
renovation or refurbishments.
Important landmarks include the wildlife sanctuaries of Yala National
Park, the holy city of Kataragama and the ancient cities of Tissamaharama, Kirinda and Galle. Although Galle is an ancient city and a UNESCO
World Heritage Site and the city contains much history behind it, the
only ruins remaining now date back to the Portuguese invasion. For the
past few years, the Southern Province has become a major tourist destination for leisure and relaxation. The coastline offers great opportunities
for swimming and other water sports such as surfing.
A majority - 81% of customers - were foreign leisure visitors, comprising 55% of the group travelers and 26% individual travelers. The other
segments include domestic leisure customers who account largely for
weekend traffic to hotels, as well as people traveling for meetings and
conferences from corporate in Sri Lanka and other countries such as
India. Currently, resorts offer a limited amount of meeting space. Therefore there is considerable potential in the MICE segment of the tourism
industry as larger resorts with good quality meeting spaces open up.
The accessibility of the beach resorts along the South Coast has
improved after the completion of the Southern Expressway, and several
tourists now choose to drive directly to the beach regions instead of
spending a night in Colombo city. In the future, too, the improved connectivity to Colombo and the international airport will continue to be an
advantage for this region. The South Coast is an attractive destination
for investment in tourism since it is an established market, offers good
4.2.1 Area Overview - Weligama
Weligama Bay is situated in the Matara district. Situated at a distance
of 144 km from Sri Lanka’s largest city Colombo, Weligama is a popular
tourist destination and hosts several boutique hotels. Tourism and fishing are the two main businesses of the city. Weligama is most famous
for its distinct stilt fishermen and an offshore islet known as Taprobane,
where a dream house of French Count de Mauny was built, and still
stands today.
There are many sites of historical importance and tourist attractions
within and in the vicinity of Weligama, such as the Galle Fort located in
the Galle district, which houses the Dutch Reformed Church. Weligama
is also one of 45 tourism zones that have been introduced by the SLTDA
in order to avoid ad-hoc development all over the country.
48 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
5.0 Procedure for Application
5.1 Who May Apply
case of approved Provident Funds, Trust Funds and approved
Applications are invited for the subscription up to One Hundred and
Contributory Pension Schemes, the applications should be in the
Ninety Five Million (195,000,000) ordinary voting shares of the Com-
name of the Trustees/ Board of Management.
pany from the following categories of applicants:
5.
•
•
Citizens of Sri Lanka who are resident in or outside Sri Lanka
tion should either be residents of Sri Lanka or non-residents.
and are above 18 years of age.
An applicant of a joint application will not be eligible to submit
a separate application either individually or jointly. Only one
Companies, Corporations, Societies and other corporate bodies
application should be made by any person or entity. Multiple
incorporated or established in Sri Lanka.
•
Joint applicants should note that all parties in the joint applica-
applications will be rejected.
Approved Provident Funds, Trust Funds and Contributory Pension
Schemes registered/incorporated/established in Sri Lanka.
6.
Application forms may be signed by someone on behalf of the
applicant(s) provided that such person holds the Power of At-
•
Foreign citizens above 18 years of age.
•
Regional Funds and Country Funds approved by the Ministry of
a Notary Public should accompany such application and should
Finance/Securities and the Exchange Commission of Sri Lanka.
be lodged with Managers/Registrars to the Issue along with
Corporate bodies incorporated or established outside of Sri
the application form. The original POA document should not be
Lanka.
attached.
•
Applications will not be accepted from individuals under the age of 18
torney (POA) for the applicant(s). A copy of such POA certified by
7.
A Sri Lankan citizen must state his/her National Identity Card
years or in the name of sole proprietorships, partnerships, unincorpo-
(NIC) number in the application form. In the case of corporate
rated trusts or non-corporate bodies.
entities the company registration number must be given. A
foreign citizen must state his/her passport number in the space
5.2 How to Apply
1.
company and constitute a part of this Information Memorandum.
2.
provided.
Applications must be made on the application forms which ac8.
tions thereof and the terms and conditions set out in this
Applications are permitted on exact size photocopies of the ap-
Information Memorandum, together with the remittance (cheque,
plication form that is issued with this Information Memorandum.
bank draft or bank guarantee as the case may be) for the full
amount payable on application, should be enclosed in a sealed
Care must be taken to follow the instructions on the reverse of
envelope marked ‘Weligama Hotel Properties Limited – Private
the application form. Applications which do not strictly conform
Placement’ and be addressed and dispatched by post or deliv-
to such instructions and/or the terms and conditions set out in
ered by hand to the following address:
this Information Memorandum or which are incomplete or illegible, may be rejected.
3.
Applications should be made for a minimum of ten thousand
(10,000) Ordinary Voting Shares or multiples of 1,000 thereof.
4.
Applications by Companies, Corporations, Societies and other
corporate bodies, approved Provident Funds, Trust Funds and
approved Contributory Pension Schemes registered / incorporated / established in Sri Lanka should be made under their
common seal or in any other manner as provided by their
Articles of Association or such other constitutional documents
of such applicants or as per the statutes governing them. In the
Application forms properly filled in accordance with the instruc-
SSP Corporate Services (Private) Limited,
Secretaries to Weligama Hotel Properties Limited,
101, Inner Flower Road,
Colombo 03
Applications sent by post or delivered to any collection points should
reach the office of the Company Secretary at least by 1630 hrs on
the third market day immediately upon the closure of the subscription
list. Applications received after the said duration may be rejected even
though they have been delivered to any collection point prior to the closing date or carry a postmark dated prior to the closing date.
l 49
5.3 Mode of Payment
5.4 Payment by Non-Residents
1.
Payment should be made separately in respect of each applica-
This section is applicable to citizens of Sri Lanka above 18 years of
tion, only by way of cheque, Bank Draft or Bank Guarantee, as
age who are residents overseas, corporate bodies incorporated or
the case may be. Each application form should be accompanied
established outside Sri Lanka, foreign citizens above 18 years of age
by no more than one cheque, Bank Draft or Bank Guarantee.
(irrespective of whether they are resident in Sri Lanka or overseas) and
Applications with two or more cheques, Bank Drafts or Bank
Regional or Country Funds approved by the Ministry of Finance/SEC.
Guarantees will be rejected. Application forms accompanied by
2.
cash will not be accepted. All expenses inclusive of chargers
Applications in respect of such applicants should be made in conformity
relating to Real Time Gross Settlements (RTGS) should be borne
with the requisite declarations accompanied by the documentation
by the applicants.
stipulated by the Controller of Exchange of Sri Lanka.
Payments for Applications for the values less than Sri Lankan
Such applicants should make their payments in one of the following
Rupees One Hundred Million (LKR 100,000,000) should be by
ways:
way of a cheque, Bank Draft or Bank Guarantees. Payments for
applications for the values above and inclusive of Sri Lankan
1.
tained with any Licensed Commercial Bank in Sri Lanka.
Rupees One Hundred Million (LKR 100,000,000) should be supported by a Bank Guarantee. Cheques and Bank Drafts will not
be accepted for values above and inclusive of Sri Lankan Rupees
•
in the Sri Lankan securities market. The intermediary may the applicants discuss with their respective bankers, all matters
open a SIA on the investor’s behalf. Accordingly payment concerning the issuance of Bank Guarantees and all charges
for ordinary shares could be made through Bank Drafts involved.
purchased out of the funds in the SIA and made payable to “Weligama Hotel Properties Limited - Share Issue Account”.
Cheques and Bank Drafts should be drawn upon a Licensed
Commercial Bank in Sri Lanka and crossed “Account Payee
Only” and made payable to ‘Weligama Hotel Properties Limited –
•
made out of the funds available in the SIA.
acceptable to the Company and the Managers to the Issue and
4.
•
Foreign Currency Banking Unit (FCBU) account of the Account” and be payable on demand.
applicant with any Licensed Commercial Bank in Sri Lanka, in which case such applicant could for
The amount payable should be calculated by multiplying the
ward his/her application supported by a Bank Guarantee drawn
on the applicant’s FCBU account pending allotment of Ordinary
Ordinary share. If there is any discrepancy in the amount payable
shares. Upon allotment of shares, payment for the shares allot-
and the amount specified in the cheque/Bank Draft or Bank
ted would be called on the Bank Guarantee. Foreign currency to
Guarantee, the application will be rejected.
the extent of Sri Lankan Rupee equivalent value of the shares
allotted should then be credited to a SIA opened in favour of the
In the event that cheques are not realised prior to the date of
applicant via the aforementioned FCBU Account and payment for
deciding the basis of allotment, the monies will not be refunded
such shares should be made through the funds in the SIA.
and no allotment of Ordinary shares will be made. Cheques must
be honored on first presentation for the application to be valid.
6.
Inward remittances of foreign currency may be held in a in favor of “Weligama Hotel Properties Limited – Share Issue
number of shares applied for by the issue price of LKR 9.00 per
5.
An endorsement should be made on the Bank Draft by the authorized dealer to the effect that such payment has been Share Issue Account.’ The Bank Guarantees should be in a form
should be issued by a Licensed Commercial Bank in Sri Lanka
A foreign investor may open a SIA with an authorised foreign exchange dealer (Licensed Commercial Bank) for investing One Hundred Million (LKR 100,000,000). It is advisable that
3.
Payment through a Securities Investment Account (SIA) main-
All cheques and Bank Drafts received in respect of applications
will be banked immediately after the closure of the subscription
list.
•
Bank Guarantees issued by a Licensed Commercial Bank in Sri
Lanka against the applicant’s SIA maintained with the said bank
will also be accepted from foreign investors and non-resident Sri
Lankan citizens.
50 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
5.0 Procedure for Application (CONTD)
•
Bank Guarantees should be in a form acceptable to the Com-
5.6 Basis of Allotment of Shares
pany and the Managers to the Issue and payable on demand to
In the event of an over subscription, the basis of allotment of shares will
“Weligama Hotel Properties Limited - Share Issue Account”. An
be decided by the Board of Directors of the Company before the expiry
endorsement should be made by the Licensed Commercial Bank
of seven (07) market days from the date of closure of the subscription
on the face of the Bank Guarantee to the effect that such Bank
list.
Guarantee has been drawn against the Applicant’s FCBU account
or SIA maintained with the said bank.
No preferential allotments will be made by the Company with regard
to any specific individual or entity. The allotments will be made in a fair
2.
Payment by Non-Resident Sri Lankans via Rupee Accounts for Non -Resident Sri Lankan Investments ( RANSI)
•
Non-resident Sri Lankans can remit money for investment
purposes in Sri Lankan companies through Rupee Accounts for
Non-Resident Sri Lankan Investments (RANSI) maintained with
authorised dealers.
5.5 Refunds and Share Certificates
1.
Where an Application is not accepted subsequent to the cheque
being realised, the applicant’s money in full or where an application is accepted only in part, the balance of the applicant’s
money will be refunded.
2.
If the applicant has provided accurate and complete details of
the applicant’s bank account in the application form, the refund
payment will be made to the bank account specified by the
applicant through the 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 the bank account in the
application form or has provided inaccurate or incomplete details
of the bank account, refund payment will be made by a crossed
cheque drawn in favour of the applicant and sent by Registered
Post to the address provided by such applicant in the application
form. In the case of a joint application, a crossed cheque will be
drawn in favour of the applicant whose name appears first in the
application form.
3.
Share certificates will be dispatched before the expiry of twenty
five (25) market days, from the date of closure of the subscription list by registered post to the address provided by each
shareholder in their respective application forms. Joint applicants
shall be entitled to only one share certificate for the Ordinary
shares held jointly, which shall be dispatched to the joint holder
whose name appears first in the Register of Shareholders. The
Company shall not be bound to register more than three (03)
persons (including the principal holder) as joint holders of any
shares.
manner.
l 51
6.0 Declarations
6.1 Declaration by the Directors
31 March 2013
We, the undersigned being the Directors of Weligama Hotel Properties
Limited hereby declare and confirm that this Information Memorandum
has been seen and approved by us and we collectively and individually
accept full responsibility for the accuracy of the information given and
confirm that after making all reasonable inquiries and to the best of our
knowledge and belief, there are no other facts the omission of which
would make any statement herein misleading or inaccurate. Where
representations regarding the future performance of the Company
have been given in the Information Memorandum, such representations have been made after due and careful inquiry of the information
available to the Company and making assumptions that are considered
to be reasonable at the present point in time and according to our best
judgment.
Sgd.
M W A D J Nahil Wijesuriya
Chairman
Sgd.
M W A D J Vijitha Wijesuriya
Managing Director
Sgd.
M W A D A Anika V Wijesuriya
Executive Director
Sgd.
Nishantha P Sooriyaarchchi
Executive Director
52 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
6.0 Declarations (CONTD)
6.2 Declaration by the Managers to the Issue
31 March 2013
We, Bank of Ceylon of BOC Square, No:01, Bank of Ceylon Mawatha,
Colombo being the Managers to this Share Issue of Weligama Hotel
Properties Limited hereby declare that to the best of our knowledge
and belief the Information Memorandum constitutes full and fair
disclosure of all material facts about the Issue and Weligama Hotel
Properties Limited whose shares are being offered.
Sgd.
Deputy General Manager
International Treasury and Investment
l 53
Executive King Room- 39sqm
Main Lobby
56 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
AUDITED FINANCIAL STATEMENTS OF
WELIGAMA HOTEL PROPERTIES LIMITED
l 57
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF
WELIGAMA HOTEL PROPERTIES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of Weligama
We have obtained all the information and explanations which to the best
Hotel Properties Limited, which comprise the Balance Sheet as at 31st
of our knowledge and belief were necessary for the purposes of our
March 2012, and the Income Statement, Statement of Changes in Eq-
audit. We therefore believe that our audit provides a reasonable basis
uity and Cash Flow Statement for the year then ended, and a summary
for our opinion.
of significant accounting policies and other explanatory notes exhibited
on pages 7 to 20.
Opinion
Management’s Responsibility for the Financial Statements
maintained proper accounting records for the year ended 31st March
Management is responsible for the preparation and fair presentation
2012 and the financial statements give a true and fair view of the
of these financial statements in accordance with Sri Lanka Accounting
Company’s state of affairs as at 31st March 2012 and its loss and cash
Standards. This responsibility includes: designing, implementing and
flows for the year then ended in accordance with Sri Lanka Accounting
maintaining internal control relevant to the preparation and fair presen-
Standards.
tation of financial statements that are free from material misstatement,
whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable
in the circumstances.
In our opinion, so far as appears from our examination, the Company
Report on Other Legal and Regulatory Requirements
In our opinion, these financial statements also comply with the requirements of Section 151(2) of the Companies Act No. 07 of 2007.
Scope of Audit and Basis of Opinion
Our responsibility is to express an opinion on these financial statements
based on our audit. We conducted our audit in accordance with Sri
Lanka Auditing Standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance whether the financial
statements are free from material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation.
V.S. & ASSOCIATES
CHARTERED ACCOUNTANTS
Colombo
10th September 2012
58 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED
31ST MARCH 2012
1.
REPORTING ENTITY
1.1.1.General
1.2.3. Functional and Presentation Currency
Weligama Hotel Properties Limited, is a limited liability Company
The Financial Statements are presented in Sri Lankan Rupees,
which is the Company’s functional currency.
incorporated and domiciled in Sri Lanka. The registered office
of the Company is located at # 12-01, East Tower, World Trade
1.2.4. Use of Estimates and Judgements
Center, Colombo 01 and the principal place of the business is
The presentation of Financial Statements in conformity with
SLAS requires management to make judgements, estimates
located at No. 700, Matara Road, Pelena, Weligama.
and assumptions that affect the application of Accounting Poli
The Company’s name was changed from Weligama Hotel
cies and the reported amounts of assets, liabilities, income and
Properties (Pvt) Limited to Weligama Hotel Properties Limited
expenses. Actual results may differ from those estimates and
with effect from 08th December 2011.
judgemental decisions.
1.1.2. Principal Activities and Nature of operations
Estimates and underlying assumptions are reviewed on an
The principal activity of the Company is to carry on the business
ongoing basis. Revisions to accounting estimates are recog-
of operators, owners, managers and developers of Boutique Ho-
nised in the period in which the estimates are revised if the
tels, Residential Villas and Hotels. The Company has not started
revision affects only that period or in the period of the revision
commercial operations.
and future periods if the revision affects both current and future
periods.
The Company utilised Staff and Heavy Vehicles free of charge
from East West Engineering Services (Pvt) Limited which is a
1.2.5. Materiality and Aggregation
Related Party of the Company.
Each material class of similar items is presented separately in
the Financial Statements. Items of dissimilar nature of function
1.1.3. Number of Employees
are presented separately unless they are immaterial as permit-
ted by Sri Lanka Accounting Standard No. 3 (Revised 2005) –
Company did not employ any staff.
“Presentation of Financial Statements”.
1.1.4. Approval of Financial Statements by the Board of Directors
The Financial Statements for the year ended 31st March 2012,
1.2.6.Offsetting
were authorised for issue by the Board of Directors in accor-
dance with the resolution passed at the meeting held on 10th
Assets and liabilities and income and expenses are not setoff
unless permitted by Sri Lanka Accounting Standards.
September 2012.
1.2.7. Significant Accounting Policies
1.2.
BASIS OF PREPARATION
1.2.1. Statement of Compliance
1.2.7.1. The Accounting Policies set out below are consistent with those
used in the previous year.
The Financial Statements have been prepared in accordance
with the Sri Lanka Accounting Standards (SLAS), adopted by
The Institute of Chartered Accountants of Sri Lanka (ICASL) and
1.2.7.2. Comparative information has where necessary been reclassified
to conform with the current presentation.
the requirements of the Companies Act No. 07 of 2007 and Sri
Lanka Accounting and Auditing Standards Act No. 15 of 1995.
1.2.7.3. The Directors have made an assessment of the Company’s ability to continue as a going concern in the foreseeable future, and
1.2.2. Basis of Measurement
The Financial Statements have been prepared on the historical
cost basis.
they do not intend either to liquidate or cease trading.
l 59
1.3.
ASSETS AND BASES OF VALUATION
1.3.1. Property, Plant & Equipment and Depreciation
1.3.1.5.Depreciation
Depreciation on Property, Plant & Equipment has been provided
1.3.1.1. Valuation
on the straight line basis so as to write off the cost of Property,
Valuation of property, plant & equipment is at cost or valuation
Plant & Equipment over their estimated useful lives. The esti-
less accumulated depreciation and accumulated impairment, if
mated useful lives used for this purpose which are consistent
any, provided on the basis stated in 1.3.1.5. below.
with those of previous years are as follows.
1.3.1.2.Cost
Buildings
Over 30 Years
Furniture & Fittings
Over 5 Years
tion or construction together with any expenses incurred in
Office Equipment
Over 5 Years
bringing the assets to its working condition for its intended use.
Kitchen Equipment
Over 5 Years
Electrical Equipment
Over 5 Years
Expenditure incurred for the purpose of acquiring, extending or
Computers & Accessories
Over 5 Years
The cost of Property, Plant & Equipment is the cost of acquisi-
improving assets of a permanent nature by means of which to
CCTV Camera System
Over 5 Years
carry on the business or to increase the earning capacity of the
Plant & Machinery
Over 5 Years
business is treated as capital expenditure.
1.3.1.3. Restoration Cost
Expenditure incurred on repairs or maintenance of Property,
Plant and Equipment in order to restore or maintain the future
Tools & Equipment
Over 5 Years
Water Tanks
Over 5 Years
Transformer
Over 10 Years
Depreciation of an asset begins when it is available for use and
economic benefits expected from originally assessed standard
ceases at the earlier of the date that the asset is classified as
of performance, is recognised as an expense when incurred.
held for sale and the date that the asset is derecognised.
1.3.1.4.Derecognition
1.3.1.6. Capital Work in Progress
An Item of Property, Plant & Equipment is derecognised upon
Capital Work in Progress is stated at cost. These are expenses
disposal or when no future economic benefits are expected
of a capital nature directly incurred in the construction of Hotel
from its use or disposal. Any gain or loss arising on derecogni-
Buildings.
tion of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the asset)
1.3.2. Other Receivables
is included in the Income Statement in the year the asset is
Other Receivables are stated at the amounts estimated to be
realised.
derecognised.
1.3.3. Cash & Cash Equivalents
For the purpose of the Cash Flow Statement, cash & cash
equivalents comprise of cash in hand cash at banks.
1.3.4. Impairment of Assets
Assets that have an indefinite useful life are not subject to
amortisation and are tested annually for impairment. Assets
that are subject to amortisation are reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use.
60 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED
31ST MARCH 2012
For the purposes of assessing impairment, assets are grouped
1.7.1.1.Others
at the lowest levels for which there are separately identifiable
Other Income is recognised on an accrual basis.
Gains and Losses on disposal of an item of property, plant &
cash flows (cash generating units).
1.4.
LIABILITIES & PROVISIONS
equipment are determined by comparing the net sales proceeds
Liabilities classified as current liabilities in the Balance Sheet
with the carrying amounts of property, plant & equipment and
are those obligations payable on demand or within one year
are recognised net within “Other Operating Income” in the
from the Balance Sheet date. Liabilities classified, as non-
Income Statement.
current liabilities are those obligations, which expire beyond a
period of one year from the Balance Sheet date.
1.7.2. Expenditure Recognition
All expenditure incurred in running of the business & in
1.4.1. Employee Benefits
maintaining the capital assets in a state of efficiency has been
1.4.1.1.Defined Benefit Plan – Retirement Gratuity
charged to revenue in arriving at the profit for the year.
Provision has not been made for gratuity in the accounts under
the payment of Gratuity Act No. 12 of 1983, since the Company
Expenditure incurred for the purpose of acquiring, extending
does not employ any staff. All operational services are provided
or improving assets of a permanent nature by means of which
by East West Properties PLC.
to carry on the business or for the purpose of increasing the
earning capacity of the business has been treated as capital
1.4.1.2.Defined Contribution Plans - Employees Provident Fund &
expenditure.
Employees Trust Fund
Contributions for Employees Provident Fund and Employees
1.7.3. Foreign Currency Transactions
Trust Fund have not been made since the Company does not
All foreign exchange transactions are translated to Sri Lanka
Rupees at the rate of exchange ruling at the time the transac-
employ any staff.
tion is effected, where foreign exchange transaction are covered
1.4.2. Trade and Other Payables
by forward exchange contracts the rate used is that of the
Trade and Other Payables are stated at their costs.
contract.
1.5.
RELATED PARTY TRANSACTIONS
Disclosures have been made in respect of the transactions
been translated at the rates of exchange ruling at the Balance
between parties who are defined as related parties as per Sri
Sheet date.
Assets and liabilities denominated in foreign currency have
Lanka Accounting Standard No. 30 – “Related Party Disclosures”.
Exchange gains or losses arising from foreign currency transactions are included in the Income Statement.
1.6.
PRE-OPERATIONAL EXPENSES
Expenses incurred prior to the commencement of commercial
1.7.4. Income Tax Expenses
operations of the Company are classified as Pre-Operational
1.7.4.1. Current Tax
Expenses.
The Company is exempt from Income Tax for a period of 10
years under Section 17 (2) of the Board of Investment of Sri
1.7.
INCOME STATEMENT
Lanka Law No. 4 of 1978.
1.7.1. Revenue Recognition
Revenue is recognised to the extent that it is probable that the
For the above purpose the year of assessment shall be
economic benefits will flow to the Company and the revenue
reckoned from the year in which the Company commences to
can be reliably measured.
make profits or any year of assessment not later than two (2)
years reckoned from the date of commencement of commercial
The following specific criteria are used for the purpose of recognition of revenue.
operations whichever year is earlier.
l 61
1.7.4.2.Deferred Tax
Deferred tax has not been provided due to the Company being
exempt from income tax for a period of 10 years under Section
17 (2) of the Board of Investment of Sri Lanka Law No. 4 of
1978.
1.8.
CASH FLOW STATEMENT
The Cash Flow Statement has been prepared using the “Indirect
method” in accordance with the Sri Lanka Accounting Standard
No. 9 – “Cash Flow Statements”.
1.9.
NEW ACCOUNTING STANDARDS ISSUED BUT NOT
EFFECTIVE AS AT BALANCE SHEET DATE
The Institute of Chartered Accountants of Sri Lanka has issued
a new volume of Sri Lanka Accounting Standards which will
become applicable for financial periods beginning on or after
1st January 2012. Accordingly, these Standards have not been
applied in preparing these financial statements as they were not
effective for the year ended 31st March 2012.
These Sri Lanka Accounting Standards comprise Accounting
Standards prefixed both SLFRS (corresponding to IFRS) and
LKAS (corresponding to IAS). Application of Sri Lanka Accounting Standards prefixed SLFRS and LKAS for the first time shall
be deemed to be an adoption of SLFRSs.
The Company is in the process of evaluating the impact that will
result from adopting SLFRS and LKAS which are applicable to
the Company for the financial period beginning 1st April 2012.
62 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
CERTIFICATE OF APPROVED ACCOUNTANT UNDER SECTION
107 (2) (a) OF THE INLAND REVENUE ACT, NO. 10 OF
2006.
BALANCE SHEET
SCHEDULE I
1.
To Messrs.: Weligama Hotel Properties Limited
2.
Names and addresses of persons carrying on the Business:
7.
We do hereby certify that,
a) We have,
Mr. M.W.A.D.J.N. Wijesuriya,
i. Examined the following Books of Original Entry:
24-3F, Crescat Residencies,
Cash Book, Journal Book
ii. Examined the following final Books of Accounts:
General Ledger
No. 75, Galle Road,
Colombo 03.
Mr. M.W.A.D.J.V. Wijesuriya,
24-3F, Crescat Residencies,
iii.
Reconciled the Bank balances as shown in the Bank Statements
with those shown in the Books of Accounts
No. 75, Galle Road,
Colombo 03.
b) Physical Inventory: Not Applicable
Mr. D.S. Karaliedda, (Resigned w.e.f. 18.05.2012)
c) Accounts have been maintained on an accrual basis.
24-3F, Crescat Residencies,
d) Our further comments and observations: Not Applicable
No. 75, Galle Road,
Colombo 03.
Mr. Nishantha P. Sooriyaarachchi, (Appointed w.e.f.
V.S. & ASSOCIATES
21.03.2012)
CHARTERED ACCOUNTANTS
No. 32/1, Mangala Road,
Colombo
Kalubowila.
10th September 2012
Ms. M.W.A.D.A.A.V. Wijesuriya, (Appointed w.e.f.
10.05.2012)
24-3F, Crescat Residencies,
No. 75, Galle Road,
Colombo 03.
3.
Place where the Business is carried on:
Registered Office :
# 12-01, East Tower, World Trade Center, Colombo 01.
Principal Place
No. 700, Matara Road, Pelena,
:
Weligama.
4.
Name of the Business: Weligama Hotel Properties Limited
5.
Nature of the Business: Operators, owners, managers and
developers of Boutique Hotels, Residential Villas and Hotels.
6.
The accounts of the above mentioned business for the accounting period commencing 01st April 2011 and ending on 31st
March 2012 were audited by us.
l 63
INCOME STATEMENT FOR THE YEAR ENDED
31ST MARCH 2012
NOTES2012
Rs.
REVENUEOther Operating Income
2
348,656.00
348,656.00
Administrative Expenses 3
(17,983,366.49)
Promotional & Marketing Expenses
4
(5,754,375.43)
Net Profit / (Loss) from Operating Activities(23,389,085.92)
Finance Cost
5
(6,989,109.42)
Net Profit / (Loss) from Ordinary Activities before Tax(30,378,195.34)
Income Tax Expenses
6
-
Profit / (Loss) for the year(30,378,195.34)
Earnings / (Loss) per Ordinary Share
7(16.57)
64 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
BALANCE SHEET AS AT 31ST MARCH 2012
NOTES 20122011
Rs.Rs.
ASSETS
NON - CURRENT ASSETS
Property, Plant & Equipment
8
275,306,703.03 140,529,189.00
275,306,703.03 140,529,189.00
CURRENT ASSETS
Deposits, Advances & Prepayments
9
24,720,321.82 20,000.00
Amounts Due from Related Parties
10
219,713,946.24 28,643.00
Directors Current Accounts
11
2,010.00 10.00
Cash and Cash Equivalents
12
1,185,861.52 1,154,711.89
TOTAL ASSETS
520,928,842.61 141,732,553.89
EQUITY & LIABILITIES
Equity
Stated Capital
13
550,001,000.00 1,000.00
Pre - Operational Expenses
-
(4,145,397.02)
Retained Earnings
(30,378,195.34)
TOTAL EQUITY
519,622,804.66 (4,144,397.02)
NON - CURRENT LIABILITIES -CURRENT LIABILITIES Accrued Expenses
14
Amounts Due to Related Parties
15
Related Party Loan
Directors Current Account
16
TOTAL EQUITY & LIABILITIES
757,735.99 446,914.03 -
101,387.93 25,000.00
358,900.00
145,493,050.91
-
520,928,842.61 141,732,553.89
I certify that these financial statements are in compliance with the requirements of the Companies Act No. 07 of 2007.
(Sgd.)
Finance Officer
The Board of Directors is responsible for the preparation and presentation of these financial statements.
Approved and signed for and on behalf of the Board by,
(Sgd.)(Sgd.)
Director
Director
l 65
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31ST MARCH 2012
Balance as at 25th February 2011
Issue of Shares
Pre - Operational Expenses
StatedPre-Operational
Retained
Total
CapitalExpenses Earnings
Rs.Rs.Rs.Rs.
---1,000.00 -
-
1,000.00
-
(4,145,397.02)
-
(4,145,397.02)
Balance as at 31st March 2011
1,000.00 (4,145,397.02)
-
(4,144,397.02)
550,000,000.00 -
-
550,000,000.00
Pre-Operational Expenses Write-off
-
4,145,397.02 -
4,145,397.02
Net Loss for the year
-
-
(30,378,195.34)
(30,378,195.34)
Issue of Shares
Balance as at 31st March 2012
550,001,000.00 -
(30,378,195.34)
519,622,804.66
66 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31ST MARCH 2012 20122011
Rs.Rs.
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit / (Loss) before Interest & Taxation (23,424,585.92)
Adjustment for
Depreciation
963,519.72 Pre - Operational Expenses
4,145,397.02 (3,724,982.48)
OPERATING PROFIT / (LOSS) BEFORE WORKING CAPITAL CHANGES(18,315,669.18) (3,724,982.48)
Changes in Working Capital
(Increase) / Decrease in Deposits, Advances & Prepayments
(24,700,321.82)
(20,000.00)
(Increase) / Decrease in Amounts Due from Related Parties
(219,597,289.21)
330,257.00
(Increase) / Decrease in Directors Current Accounts
99,387.93 (10.00)
Increase / (Decrease) in Accrued Expenses
732,735.99 25,000.00
Cash Generated from / (used in) Operating Activities(261,781,156.29) (3,389,735.48)
Tax Paid
-
Interest Paid
(6,953,609.42)
(420,414.54)
Net Cash Flow from / (used in) Operating Activities(268,734,765.71) (3,810,150.02)
Cash Flow from / (used in) Investing Activities
Purchase of Property, Plant & Equipment
(89,318,945.32)
(140,529,189.00)
Capital Work in Progress
(46,422,088.43)
Net Cash Flow from / (used in) Investing Activities (135,741,033.75)(140,529,189.00)
Cash Flow from / (used in) Financing Activities
Issue of Shares 550,000,000.00 1,000.00
Proceeds from Related Party Loans
-
145,493,050.91
Repayment of Related Party Loans
(145,493,050.91)
Net Cash Flow from / (used in) Financing Activities
404,506,949.09 145,494,050.91
Net Increase / (Decrease) in Cash & Cash Equivalents
31,149.63 1,154,711.89
Cash & Cash Equivalents at the beginning of the year
1,154,711.89 Cash & Cash Equivalents at the end of the year (Note: A)
1,185,861.52 1,154,711.89
NOTE: A
Cash & Cash Equivalents at the end of the year
Cash at Bank
1,185,861.52 1,154,711.89
1,185,861.52 1,154,711.89
l 67
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 31ST MARCH 2012
NOTESRs.
2
OTHER OPERATING INCOME
Sundry Income
348,656.00
348,656.00
3
ADMINISTRATIVE EXPENSES
Electricity
289,049.06
Water
43,657.34
Telephone
244,245.27
ADSL Charges
4,740.31
Dialog TV
6,158.84
Insurance
2,335.69
Security Charges
2,019,421.99
Printing & Stationery
246,418.29
Office Expenses
385,247.76
Site Expenses
3,247,421.84
Maintenance
- Office Equipment
213,659.00
- Computers
1,500.00
- Plant & Machinery
36,695.00
Travelling & Transport
407,045.13
Recruitment Charges
13,664.00
Rates & Taxes
3,106.67
Pre-Operational Expenses Write-off
4,145,397.02
Stamp Duty
2,750,000.00
Registration & Licence Fees
2,743,565.10
Consultancy Fees
21,000.00
Secretarial Fees
49,318.46
Professional Fees
56,200.00
Audit Fees
90,000.00
Depreciation
963,519.72
17,983,366.49
4
PROMOTIONAL & MARKETING EXPENSES Advertisements
Foreign Travelling
Market and Economic Feasibility Study
37,878.50
2,687,878.80
3,028,618.13
5,754,375.43
68 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
NOTES TO THE ACCOUNTS
NOTESRs.
5
FINANCE COST
Bank Charges
Overdraft Interest
Interest on Related Party Loan
6
INCOME TAX EXPENSES
6.1 Reconciliation of Accounting Profit / (Loss) and Taxable Income
Accounting Loss (before Taxation)
Aggregate Disallowed Expenses
Aggregate Allowable Expenses
Adjusted Trading Loss
7
35,500.00
171.18
6,953,438.24
6,989,109.42
(30,378,195)
6,410,869
(7,928,237)
(31,895,563)
EARNINGS / (LOSS) PER ORDINARY SHARE
The calculation of basic earnings / (loss) per ordinary share is based on the profit / (loss) a ttributable to ordinary share holders and the number of ordinary shares outstanding during the year.
2012
Profit / (Loss) after Taxation (Rs.)
(30,378,195.34)
Net Profit / (Loss) attributable to Ordinary Share Holders (Rs.)
(30,378,195.34)
Weighted average number of Ordinary Shares used as denominator (I)
1,833,433
Basic earnings / (loss) per ordinary share (Rs.)
(16.57)
(I)
Qualifying Ordinary Shares at the beginning of the year
100
Effect of shares issued during the year
1,833,333
Weighted average number of Ordinary Shares at the end of the year
1,833,433
NOTES
As at 01.04.2011
8
PROPERTY, PLANT & EQUIPMENT
Land
Buildings
Furniture & Fittings
Office Equipment
Kitchen Equipment
Electrical Equipment
Computers & Accessories
CCTV Camera System
Rs.
140,529,189.00 -
-
-
-
-
-
-
Additions /
As at 31.03.2012
(Disposals)
Rs.
34,654,446.00 32,909,584.00 2,600.00 189,997.20 61,060.00 154,295.00 599,257.43 150,198.00 Rs.
175,183,635.00
32,909,584.00
2,600.00
189,997.20
61,060.00
154,295.00
599,257.43
150,198.00
l 69
NOTES
As at 01.04.2011
Rs.
Additions /
As at 31.03.2012
(Disposals)
Rs.
Rs.
8
Plant & Machinery
-
15,582,811.74 15,582,811.74
Tools & Equipment
-
287,610.00 287,610.00
Water Tanks
-
398,085.95 398,085.95
Transformer
-
4,329,000.00 4,329,000.00
140,529,189.00 89,318,945.32 229,848,134.32
DEPRECIATION
Buildings
-
274,246.53 274,246.53
Furniture & Fittings
-
43.33 43.33
Office Equipment
-
7,485.19 7,485.19
Kitchen Equipment
-
2,969.50 2,969.50
Electrical Equipment
-
5,079.42 5,079.42
Computers & Accessories
-
20,067.82 20,067.82
CCTV Camera System
-
13,266.40 13,266.40
Plant & Machinery
-
513,956.89 513,956.89
Tools & Equipment
-
7,009.67 7,009.67
Water Tanks
-
11,169.97 11,169.97
Transformer
-
108,225.00 108,225.00
-
963,519.72 963,519.72
NET BOOK VALUE
140,529,189.00 228,884,614.60
Capital Work in Progress
Buildings - Hotel
-
46,422,088.43 46,422,088.43
140,529,189.00 275,306,703.03
Buildings of the Company consists of existing building situated at assessment no. 667, Matara Road, Pelena amounting to Rs. 32,909,584/- as at the Balance Sheet date. The cost of the land is calculated at Rs. 125,000/- per perch. (i.e. Rs. 125,000/- x 15 = Rs.1,875,000/-)
The Capital Work in Progress cost of Rs. 46,422,088.43 has been spent on a New Hotel Premises c onsisting of 200 rooms at no. 700, Matara Road, Pelena.
70 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
NOTES TO THE ACCOUNTS
NOTESRs.
9DEPOSITS, ADVANCES & PREPAYMENTS
DEPOSITS
Electricity
- Sri Lanka Electricity Board
1,250,000.00
Internet
- Dialog Axiata PLC
4,000.00
Fuel
- Hussain Hadjiar & Sons
150,000.00
Container Deposit
- Hanjin Shipping Lanka (Pvt) Ltd.
80,000.00
Vehicle Service Deposit
- Vehicle No. LJ 3068
20,000.00
LC Margin on Import Machinery
- Hatton National Bank PLC
20,628,116.24
ADVANCES
Construction Costs
- Boundary Wall
- Bar Bending
- Concrete & Block Work
Materials
- Metal - Gall Metal Crusher
- Metal - G.W. Enterprises
- Concrete
Machinery Hire
Property, Plant & Equipment
- Land
600,000.00
418,000.00
310,270.00
55,000.00
55,000.00
300,000.00
799,680.00
50,000.00
PREPAYMENTS
Vehicle Insurance 255.58
24,720,321.82
10
AMOUNTS DUE FROM RELATED PARTIES
East West Engineering Services (Pvt) Ltd.
1,584,989.78
East West Hotel Development (Pvt) Ltd.
990.00
East West Properties PLC
218,100,313.46
Rathgama Hotel Properties (Pvt) Ltd.
27,653.00
219,713,946.24
11DIRECTORS CURRENT ACCOUNTS
Mr. M.W.A.D.J.N. Wijesuriya
Mr. M.W.A.D.J.V. Wijesuriya 2,000.00
10.00
2,010.00
l 71
NOTESRs.
12
CASH AND CASH EQUIVALENTS
Hatton National Bank PLC
- A/C No. 002010549810
Petty Cash
1,045,862.52
139,999.00
1,185,861.52
13
STATED CAPITAL
Balance as at beginning of the year
100 Ordinary Shares
1,000.00
Issued during the year
5,500,000 Ordinary Shares
550,000,000.00
Balance as at end of the year
5,500,100 Ordinary Shares
550,001,000.00
14
ACCRUED EXPENSES
Electricity
Water
Telephone
ADSL Charges
Security Charges
Foreign Travelling
Secretarial Fees
Audit Fees
15
AMOUNTS DUE TO RELATED PARTIES
East West Enterprises Ltd.
Wijesuriya Holdings (Pvt) Ltd.
16DIRECTOR’S CURRENT ACCOUNT
Mr. D.S. Karaliedda
123,408.01
23,182.40
83,305.25
4,740.31
302,576.06
125,100.00
5,423.96
90,000.00
757,735.99
123,281.03
323,633.00
446,914.03
101,387.93
101,387.93
72 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
NOTES TO THE ACCOUNTS
17
RELATED PARTY DISCLOSURES
17.1
Parent and Ultimate Controlling Party
The Company’s ultimate parent undertaking and controlling party is East West Properties PLCwhich is incorporated in Sri Lanka.
17.2 Identity of the Related Parties
The Company carries out transactions in ordinary course of its business with parties who are defined as Related Parties in Sri Lanka Accounting Standard 30 “Related Party Disclosures (revised 2005)”, the details of which are reported below.
17.3 Transaction with Related Parties
The Company had following transaction with related entity during the year under review.
Name of the Related Party
Relationship
Nature of
East West Properties PLC
Amount
Transaction
Parent
Interest paid at the
rate of 6% on
Short Term Loan
Utilising Company East West Engineering Services (Pvt) Ltd.
Affiliate
Staff and Heavy Vehicles
free of charge
Rs.
6,953,438.24
-
The Company has received Short Term Loans from East West Properties PLC in the previous year and during the year. The Company made a
share issue of 5,500,000 Ordinary Shares at a price of Rs. 100/- on 1st December 2011 against the Short Term Loan balance.
The Related Parties balances of the following Companies as at the Balance Sheet date in the Company’s Books of Accounts were,
East West Engineering Services (Pvt) Ltd.
Rs.
1,584,989.78 Dr.
East West Hotel Development (Pvt) Ltd.
Rs.
990.00 Dr.
East West Properties PLC
Rs.
218,100,313.46 Dr.
Rathgama Hotel Properties (Pvt) Ltd.
Rs.
27,653.00 Dr.
East West Enterprises Ltd.
Rs.
123,281.03 Cr.
Wijesuriya Holdings (Pvt) Ltd.
Rs.
323,633.00 Cr.
No interest have been received or paid on the above Related Party balances.
l 73
17
RELATED PARTY DISCLOSURES (CONTD.)
17.4 Transaction with Key Management Personnel
According to Sri Lanka Accounting Standard 30 (Revised2005) “Related Party Disclosures”,
Key Management Personnel, are those having authority and responsibility for planning,
directing and controlling the activities of the entity. Accordingly, the Board of Directors
(including executive and non-executive Directors) have been classified as Key Management
Personnel of the Company.
The Directors Current Account balances of the following Directors as at the Balance Sheet
date in the Company’s Books of Accounts were,
Mr. M.W.A.D.J.N. Wijesuriya
Rs.
2,000.00 Dr.
Mr. M.W.A.D.J.V. Wijesuriya Rs.
10.00 Dr.
Mr. D.S. Karaliedda
Rs.
101,387.93 Cr.
Mr. M.W.A.D.J.N. Wijesuriya, Mr. M.W.A.D.J.V. Wijesuriya, Mr. D.S. Karaliedda (Resigned
w.e.f. 18.05.2012) and Mr. N.P. Sooriyaarachchi (Appointed w.e.f. 21.03.2012) who are Directors of the Company are also Directors of East West Properties PLC.
Mr. M.W.A.D.J.N. Wijesuriya and Mr. M.W.A.D.J.V. Wijesuriya who are Directors of the Company are also Directors of East West Engineering Services (Pvt) Ltd, East West Enterprises
Ltd, Rathgama Hotel Properties (Pvt) Ltd, East West Hotel Development (Pvt) Ltd and Wijesuriya
Holdings (Pvt) Ltd.
18
CAPITAL EXPENDITURE COMMITMENTS
The Company is constructing a New Hotel Building at an estimated cost of Rs. 2,135,687,534.53
Out of this, a sum of Rs. 46,422,088.43 was expended as at the Balance Sheet date.
19
CONTINGENT LIABILITIES
There are no Contingent Liabilities as at 31st March 2012.
20
RESTATEMENT OF COMPARATIVE FIGURES
Comparative information including quantitative, narrative and descriptive information is
disclosed in respect of the previous period for all amounts reported in the Financial Statements
in order to enhance the understanding of the current period’s Financial Statements and to
enhance the inter period comparability.
21
EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
All material post Balance Sheet events have been considered and where appropriate adjustments
to or disclosure have been made in the financial statements.
22DIRECTORS RESPONSIBILITIES
The Board of Directors take responsibility for the preparation and presentation of these financial
statements.
74 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
COMPUTATION OF ADJUSTED PROFIT / (LOSS)
FOR THE YEAR ENDED 31ST MARCH 2012
Rs.
Rs.
NET PROFIT / (LOSS) AS PER ACCOUNTS(30,378,195)
Add:
Depreciation (Statement I)
963,520 Advertisements (Statement III)
9,470 Foreign Travelling
2,687,879 Stamp Duty
2,750,000 6,410,869
(23,967,326)
Less:
Depreciation Allowance (Statement II)
(7,928,237)
ADJUSTED TRADING LOSS FOR THE YEAR(31,895,563)
ADJUSTED LOSS CARRIED FORWARD TO
YEAR OF ASSESSMENT 2012 / 2013(31,895,563)
l 75
NOTES TO THE COMPUTATION STATEMENT I
RECONCILIATION OF PROPERTY, PLANT & EQUIPMENT
Cost
Accumulated
W.D.V.
Depreciation
Rs.
Rs.
Rs.
A)LAND
As at 01.04.2011
140,529,189.00 -
140,529,189.00
Additions
Additions - 2011/2012
34,654,446.00 -
34,654,446.00
175,183,635.00 -
175,183,635.00
Depreciation
-
-
-
As at 31.03.2012
175,183,635.00 -
175,183,635.00
B)BUILDINGS
As at 01.04.2011
-
-
Additions
01 No. Cost of Hotel Building - Staff
32,909,584.00 -
32,909,584.00
32,909,584.00 -
32,909,584.00
Depreciation
-
274,246.53 (274,246.53)
As at 31.03.2012
32,909,584.00 274,246.53 32,635,337.47
C)
FURNITURE & FITTINGS
As at 01.04.2011
-
-
Additions
02 Nos. Chairs
2,600.00 -
2,600.00
2,600.00 -
2,600.00
Depreciation
-
43.33 (43.33)
As at 31.03.2012
2,600.00 43.33 2,556.67
D)
OFFICE EQUIPMENT
As at 01.04.2011
-
-
Additions
01 No. BR 9045 LED TED
1,250.00 -
1,250.00
01 No. Topcon RL-H4C Rotary Laser Horizontal
Level Rechargeable Battery
81,560.69 -
81,560.69
01 No. Leica Disto D3 Laser Distance Meter
38,770.51 -
38,770.51
01 No. Calculator - Casio FX 991 ES
1,800.00 -
1,800.00
01 No. Petty Cash Box
2,352.00 -
2,352.00
01 No. BIOCA 228 Standalone Fingerprint Time Recorder
54,264.00 -
54,264.00
Rs.
-
274,246.53
43.33
76 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
NOTES TO THE COMPUTATION STATEMENT I
RECONCILIATION OF PLANT & EQUIPMENT (CONTD.)
Cost
Accumulated
W.D.V.
Depreciation
Rs.
Rs.
Rs.
D)
OFFICE EQUIPMENT (CONTD.)
Additions
01 No. Industrial Motor Siren LK-MX
10,000.00 -
10,000.00
189,997.20 -
189,997.20
Depreciation
-
7,485.19 (7,485.19)
As at 31.03.2012
189,997.20 7,485.19 182,512.01
E)
KITCHEN EQUIPMENT
As at 01.04.2011
-
-
Additions
01 No. Singer Microwave Oven
9,500.00 -
9,500.00
01 No. Sisil W’Wind Jet T/T
Gas Cooker
6,650.00 -
6,650.00
01 No. Singer Refrigerator-DI
Rect Cool
39,900.00 -
39,900.00
01 No. Blender
3,800.00 -
3,800.00
01 No. Pioneer Whistling Kettle
1,210.00 -
1,210.00
61,060.00 -
61,060.00
Depreciation
-
2,969.50 (2,969.50)
As at 31.03.2012
61,060.00 2,969.50 58,090.50
F)
ELECTRICAL EQUIPMENT
As at 01.04.2011
-
-
Additions
01 No. Singer Steam Iron
1,710.00 -
1,710.00
01 No. Ceiling Fan
3,515.00 -
3,515.00
01 No. 200Ltr Air Compressor
60,000.00 -
60,000.00
01 No. Electric Impact Drill ZIJ-FF-13
6,885.00 -
6,885.00
01 No. Electric Meter JI-FF-255
22,050.00 -
22,050.00
01 No. ZIC-FF3-26 Rotary Hammery
13,275.00 -
13,275.00
01 No. Telesonic Radio
2,300.00 -
2,300.00
01 No. Bladeless Fan
6,750.00 -
6,750.00
01 No. Singer Washing Machine
20,710.00 -
20,710.00
01 No. Dry & Vacuum Cleaner
17,100.00 -
17,100.00
154,295.00 -
154,295.00
Depreciation
-
5,079.42 (5,079.42)
As at 31.03.2012
154,295.00 5,079.42 149,215.58
Rs.
7,485.19
2,969.50
5,079.42
l 77
RECONCILIATION OF PLANT & EQUIPMENT (CONTD.)
Cost
Accumulated
W.D.V.
Depreciation
Rs.
Rs.
Rs.
G)
COMPUTERS & ACCESSORIES
As at 01.04.2011
-
-
Additions
01 No. XP Design Jet Triple A1 Printer 165,238.93 -
165,238.93
03 Nos. Dialog Dongles
7,402.50 -
7,402.50
02 Nos. SNT 650VA Line Interactive UPS System
9,520.00 -
9,520.00
04 Nos. SNT 1.2KVA Line Interactive UPS System
40,096.00 -
40,096.00
01 No. 3YK 920 Screen-W
365,000.00 -
365,000.00
01 No. Network Switch CISCO 24 Port SR 224T-EU 10/100 SF 100-24
12,000.00 -
12,000.00
599,257.43 -
599,257.43
Depreciation
-
20,067.82 (20,067.82)
As at 31.03.2012
599,257.43 20,067.82 579,189.61
H)
Rs.
20,067.82
CCTV CAMERA SYSTEM
As at 01.04.2011
-
-
Additions
01 No. N/V Security Camera with Accessories
30,320.00 -
30,320.00
01 No. UPS DCP 1.2KV
10,500.00 -
10,500.00
01 No. Router D-Link DEL-2640U
WiFi 4 Port ADSL
6,400.00 -
6,400.00
04 Nos. 8320 Camera
21,200.00 -
21,200.00
04 Nos. KPC 133 Camera
22,000.00 -
22,000.00
01 No. 8160 DVR with Accessories
55,880.00 -
55,880.00
01 No. Power Supply P4 350W,
01 No. Power Supply P4 450W with
Other Accessories
3,898.00 -
3,898.00
150,198.00 Depreciation
-
As at 31.03.2012
150,198.00 -
13,266.40 150,198.00
(13,266.40)
13,266.40 136,931.60
13,266.40
78 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
NOTES TO THE COMPUTATION STATEMENT I
RECONCILIATION OF PLANT & EQUIPMENT (CONTD.)
Cost
Accumulated
W.D.V.
Rs.
Rs.
Depreciation
I)
Rs.
PLANT & MACHINERY
As at 01.04.2011
-
-
Additions
01 No. Tower Crane QTZ63 (5013)
10,286,321.20 -
10,286,321.20
01 No. Construction Elevator SC 200/200
4,609,890.27 -
4,609,890.27
01 No. Concrete Mixture with Diesel Engine
210,000.00 -
210,000.00
01 No. Construction Cost of Distribution Panel
308,105.28 -
308,105.28
01 No. Submersible Pump with Accessories
22,495.00 -
22,495.00
01 No. BX 1-250 Welding Plant
35,000.00 -
35,000.00
01 No. LT 8.7/19 M 1 (2.2 KW) 230V / 50Hz High Pressure Washer
68,399.99 -
68,399.99
01 No. Porker Vibrator
42,600.00 -
42,600.00
15,582,811.74 Depreciation
-
As at 31.03.2012
15,582,811.74 J)
Rs.
-
513,956.89 15,582,811.74
(513,956.89)
513,956.89 15,068,854.85
TOOLS & EQUIPMENT
As at 01.04.2011
-
-
Additions
01 No. JIG Saw
4,000.00 -
4,000.00
01 No. Aluminium Ladder
15,500.00 -
15,500.00
01 No. External Vibrator
10,000.00 -
10,000.00
01 No. Bar Cutter Blade
12,000.00 -
12,000.00
01 No. 21G-RR02-15 Hammer with Hilti Bit
53,100.00 -
53,100.00
01 No. Material Testing Equipment
47,300.00 -
47,300.00
01 No. Drill Bit Set
1,675.00 -
1,675.00
01 No. Bench Drill 3/4 HP Long
22,500.00 -
22,500.00
01 No. Bench Vice 6’ SZ
4,950.00 -
4,950.00
01 No. Drill Press Vice 5”
2,115.00 -
2,115.00
01 No. Chain Block 3 tons
7,250.00 -
7,250.00
02 Nos. Oxygen and Acetylene Cylinders with Regulator G-Weld, Flashback Arrestor, Gas Cutter and Other Accessories
76,925.00 -
76,925.00
513,956.89
l 79
RECONCILIATION OF PLANT & EQUIPMENT (CONTD.)
Cost
Accumulated
W.D.V.
Depreciation
J)
Rs.
Rs.
Rs.
Rs.
TOOLS & EQUIPMENT (CONTD.)
Additions
05 Nos. Carpenter Hammer,
01 No. Ball Hammer with
01 No. Crowbar
3,925.00 -
3,925.00
01 No. Cut-off Machine, Cut Wheel with Drill and Drill Bit
26,370.00 -
26,370.00
287,610.00 Depreciation
-
As at 31.03.2012
287,610.00 -
7,009.67 287,610.00
(7,009.67)
7,009.67 280,600.33
K)
WATER TANKS
As at 01.04.2011
-
-
Additions
01 No. Water Tank - 500L
87,343.31 -
87,343.31
02 Nos. Water Tank - 500L
174,686.64 -
174,686.64
03 Nos. Water Tank - 5250L
136,056.00 -
136,056.00
398,085.95 -
398,085.95
Depreciation
-
11,169.97 (11,169.97)
As at 31.03.2012
398,085.95 11,169.97 386,915.98
7,009.67
11,169.97
L)TRANSFORMER
As at 01.04.2011
-
-
Additions
01 No. 1000KVA New Bulk Supply
4,329,000.00 -
4,329,000.00
4,329,000.00 -
4,329,000.00
Depreciation
-
108,225.00 (108,225.00)
108,225.00
As at 31.03.2012
4,329,000.00 108,225.00 4,220,775.00
DEPRECIATION FOR THE YEAR963,519.72
80 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
NOTES TO THE COMPUTATION STATEMENT I
DEPRECIATION ALLOWANCE
Cost
RateDepreciationDepreciation
Allowance Allowance
Claimed in
Claimed for
previous years
the year
Rs.
%
Rs.
Rs.
W.D.V.
Rs.
A)BUILDINGS
Additions
01 No. Cost of Hotel Building - Staff
32,909,584.00 6 2/3
-
2,193,972.27 30,715,611.73
B)
FURNITURE & FITTINGS
Additions
02 Nos. Chairs
2,600.00 20
-
520.00 2,080.00
C)
OFFICE EQUIPMENT
Additions
01 No. BR 9045 LED TED
1,250.00 25
-
312.50 937.50
01 No. Topcon RL-H4C Rotary Laser Horizontal
Level Rechargeable Battery
81,560.69 25
-
20,390.17 61,170.52
01 No. Leica Disto D3 Laser Distance Meter
38,770.51 33 1/3
-
12,923.50 25,847.01
01 No. Calculator - Casio FX 991 ES
1,800.00 25
-
450.00 1,350.00
01 No. Petty Cash Box
2,352.00 33 1/3
-
784.00 1,568.00
01 No. BIOCA 228 Standalone Fingerprint Time Recorder
54,264.00 25
-
13,566.00 40,698.00
01 No. Industrial Motor Siren LK-MX
10,000.00 33 1/3
-
3,333.33 6,666.67
D)
KITCHEN EQUIPMENT
Additions
01 No. Singer Microwave Oven
9,500.00 33 1/3
-
3,166.67 6,333.33
01 No. Sisil W’Wind Jet T/T
Gas Cooker
6,650.00 33 1/3
-
2,216.67 4,433.33
01 No. Singer Refrigerator-DI
Rect Cool
39,900.00 33 1/3
-
13,300.00 26,600.00
01 No. Blender
3,800.00 33 1/3
-
1,266.67 2,533.33
01 No. Pioneer Whistling Kettle
1,210.00 33 1/3
-
403.33 806.67
E)
ELECTRICAL EQUIPMENT
Additions
01 No. Singer Steam Iron
1,710.00 33 1/3
-
570.00 1,140.00
01 No. Ceiling Fan
3,515.00 33 1/3
-
1,171.67 2,343.33
01 No. 200Ltr Air Compressor
60,000.00 33 1/3
-
20,000.00 40,000.00
l 81
DEPRECIATION ALLOWANCE (CONTD.)
Cost
RateDepreciationDepreciation
Allowance Allowance
Claimed in
Claimed for
previous years
the year
Rs.
%
Rs.
Rs.
W.D.V.
Rs.
E)
ELECTRICAL EQUIPMENT (CONTD.)
Additions
01 No. Electric Impact Drill ZIJ-FF-13
6,885.00 33 1/3
-
2,295.00 4,590.00
01 No. Electric Meter JI-FF-255
22,050.00 33 1/3
-
7,350.00 14,700.00
01 No. ZIC-FF3-26 Rotary Hammery
13,275.00 33 1/3
-
4,425.00 8,850.00
01 No. Telesonic Radio
2,300.00 33 1/3
-
766.67 1,533.33
01 No. Bladeless Fan
6,750.00 33 1/3
-
2,250.00 4,500.00
01 No. Singer Washing Machine
20,710.00 33 1/3
-
6,903.33 13,806.67
01 No. Dry & Vacuum Cleaner
17,100.00 33 1/3
-
5,700.00 11,400.00
F)
COMPUTERS & ACCESSORIES
Additions
01 No. XP Design Jet Triple A1 Printer 165,238.93 25
-
41,309.73 123,929.20
03 Nos. Dialog Dongles
7,402.50 25
-
1,850.63 5,551.87
02 Nos. SNT 650VA Line Interactive UPS System
9,520.00 25
-
2,380.00 7,140.00
04 Nos. SNT 1.2KVA Line Interactive UPS System
40,096.00 25
-
10,024.00 30,072.00
01 No. 3YK 920 Screen-W
365,000.00 25
-
91,250.00 273,750.00
01 No. Network Switch CISCO 24 Port SR 224T-EU 10/100 SF 100-24
12,000.00 25
-
3,000.00 9,000.00
G)
CCTV CAMERA SYSTEM
Additions
01 No. N/V Security Camera with Accessories
30,320.00 25
-
7,580.00 22,740.00
01 No. UPS DCP 1.2KV
10,500.00 25
-
2,625.00 7,875.00
01 No. Router D-Link DEL-2640U
WiFi 4 Port ADSL
6,400.00 25
-
1,600.00 4,800.00
04 Nos. 8320 Camera
21,200.00 25
-
5,300.00 15,900.00
04 Nos. KPC 133 Camera
22,000.00 25
-
5,500.00 16,500.00
01 No. 8160 DVR with Accessories
55,880.00 25
-
13,970.00 41,910.00
01 No. Power Supply P4 350W,
01 No. Power Supply P4 450W with
Other Accessories
3,898.00 25
-
974.50 2,923.50
82 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
NOTES TO THE COMPUTATION STATEMENT II
DEPRECIATION ALLOWANCE (CONTD.)
Cost
RateDepreciationDepreciation
Allowance Allowance
Claimed in
Claimed for
previous years
the year
Rs.
%
Rs.
Rs.
W.D.V.
Rs.
H)
PLANT & MACHINERY
Additions
01 No. Tower Crane QTZ63 (5013)
10,286,321.20 33 1/3
-
3,428,773.73 6,857,547.47
01 No. Construction Elevator SC 200/200
4,609,890.27 33 1/3
-
1,536,630.09 3,073,260.18
01 No. Concrete Mixture with Diesel Engine
210,000.00 33 1/3
-
70,000.00 140,000.00
01 No. Construction Cost of Distribution Panel
308,105.28 33 1/3
-
102,701.76 205,403.52
01 No. Submersible Pump with Accessories
22,495.00 33 1/3
-
7,498.33 14,996.67
01 No. BX 1-250 Welding Plant
35,000.00 33 1/3
-
11,666.67 23,333.33
01 No. LT 8.7/19 M 1 (2.2 KW) 230V / 50Hz High Pressure Washer
68,399.99 33 1/3
-
22,800.00 45,599.99
01 No. Porker Vibrator
42,600.00 33 1/3
-
14,200.00 28,400.00
I)
TOOLS & EQUIPMENT
Additions
01 No. JIG Saw
4,000.00 33 1/3
-
1,333.33 2,666.67
01 No. Aluminium Ladder
15,500.00 33 1/3
-
5,166.67 10,333.33
01 No. External Vibrator
10,000.00 33 1/3
-
3,333.33 6,666.67
01 No. Bar Cutter Blade
12,000.00 33 1/3
-
4,000.00 8,000.00
01 No. 21G-RR02-15 Hammer with Hilti Bit
53,100.00 33 1/3
-
17,700.00 35,400.00
01 No. Material Testing Equipment
47,300.00 33 1/3
-
15,766.67 31,533.33
01 No. Drill Bit Set
1,675.00 33 1/3
-
558.33 1,116.67
01 No. Bench Drill 3/4 HP Long
22,500.00 33 1/3
-
7,500.00 15,000.00
01 No. Bench Vice 6’ SZ
4,950.00 33 1/3
-
1,650.00 3,300.00
01 No. Drill Press Vice 5”
2,115.00 33 1/3
-
705.00 1,410.00
01 No. Chain Block 3 tons
7,250.00 33 1/3
-
2,416.67 4,833.33
02 Nos. Oxygen and Acetylene Cylinders with Regulator G-Weld, Flashback Arrestor, Gas Cutter and Other Accessories
76,925.00 33 1/3
-
25,641.67 51,283.33
05 Nos. Carpenter Hammer,
01 No. Ball Hammer with
01 No. Crowbar
3,925.00 33 1/3
-
1,308.33 2,616.67
01 No. Cut-off Machine, Cut Wheel with Drill and Drill Bit
26,370.00 33 1/3
-
8,790.00 17,580.00
l 83
DEPRECIATION ALLOWANCE (CONTD.)
Cost
RateDepreciationDepreciation
Allowance Allowance
Claimed in
Claimed for
previous years
the year
Rs.
%
Rs.
Rs.
W.D.V.
Rs.
J)
WATER TANKS
01 No. Water Tank - 500L
87,343.31 33 1/3
-
29,114.44 58,228.87
02 Nos. Water Tank - 500L
174,686.64 33 1/3
-
58,228.88 116,457.76
03 Nos. Water Tank - 5250L
136,056.00 33 1/3
-
45,352.00 90,704.00 DEPRECIATION ALLOWANCE CLAIMED FOR THE YEAR 7,928,236.53 84 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
NOTES TO THE COMPUTATION STATEMENT III
ADVERTISEMENTS Disallowed
Deduction
Rs.
%
Advertisements for the year
37,878.50 25
9,469.63
9,469.63
*
Added back in the Tax Computation.
*
Rs.
l 85
YEAR OF ASSESSMENT 2011 / 2012
Property, Plant & Equipment Cost Accumulated Carrying Tax Temporary
Depreciation Amount Base Difference
Rs. Rs. Rs. Rs. Rs.
32,909,584.00 2,600.00 189,997.20 61,060.00 154,295.00 599,257.43 150,198.00 15,582,811.74 287,610.00 398,085.95 274,246.53 43.33 7,485.19 2,969.50 5,079.42 20,067.82 13,266.40 513,956.89 7,009.67 11,169.97 32,635,337.47 2,556.67 182,512.01 58,090.50 149,215.58 579,189.61 136,931.60 15,068,854.85 280,600.33 386,915.98 30,715,611.73 2,080.00 138,237.69 40,706.67 102,863.33 449,443.06 112,648.50 10,388,541.16 191,740.00 265,390.63 1,919,725.74
476.67
44,274.32
17,383.83
46,352.25
129,746.55
24,283.10
4,680,313.69
88,860.33
121,525.35
50,335,499.32 855,294.72 49,480,204.60 42,407,262.78 7,072,941.82
Provision Paid Buildings Furniture & Fittings Office Equipment Kitchen Equipment Electrical Equipment Computers & Accessories CCTV Camera System Plant & Machinery Tools & Equipment Water Tanks Gratuity - - Deferred Tax Liability 7,072,942 28% 1,980,424 Deferred Tax Asset - 28% - Total Deferred Tax Liabilities 1,980,424
-
86 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
IMPORTANT DISCLOSURES
Confidentiality
The information contained in this Information Memorandum is being
provided on a confidential basis to the recipient solely for the purpose of
evaluating an investment in Weligama Hotel Properties Limited (Hereinafter sometimes referred to as the “Company”).
By accepting a copy of this Information Memorandum the recipient
agrees, for itself and its related bodies corporate and each of their
management, officers, employees, agents, representatives and advisers,
to maintain the confidentiality of this information. Any reproduction or
distribution of this Information Memorandum, in whole or in part, or any
disclosure of its contents, or use of any information contained in this
Information Memorandum for any purpose other than to evaluate an
investment in the Company, is prohibited.
Status of Information Memorandum
The information contained in this Information Memorandum or subsequently provided to the recipient whether orally or in writing by, or on
behalf of the Company, or any of their respective Management, officers,
employees, agents, representatives, managers to the issue and advisers
(the “Parties”) a provided to the recipient on the terms and conditions
set out in this notice.
The information contained in this Information Memorandum has been
furnished by the Company and other sources deemed reliable but no
assurance can be given by the Parties as to the accuracy or completeness of this information.
To the full extent permitted by law:
(a) No representation or warranty (express or implied) is given; and
(b) No responsibility or liability (including in negligence) is accepted,
by the Parties as to the truth, accuracy or completeness of any statement, opinion, forecast, information or other matter (whether express or
implied) contained in this Information Memorandum or its appendices or
as to any other matter concerning them.
To the full extent permitted by law, no responsibility or liability (including
in negligence) is accepted by the Parties:
(a) For, or in connection with any act or omission, directly or indirectly in
reliance upon; and
(b) For any cost, expense, loss or other liability, directly or indirectly,
arising from, or in connection with, any omission from or defects in, or
any failure to correct any information,
In this Information Memorandum or any other communication (oral
or written) about or concerning them, or the issue of securities in the
Company.
The delivery of this Information Memorandum does not under any
circumstances imply that the affairs or prospects of the Company or
any information affecting it have been fully or correctly stated in this
Information Memorandum or have not changed since the date of this
Information Memorandum or since the date at which the information
is expressed to be applicable. No responsibility or liability (including in
negligence) is assumed by the Parties for updating any such information
or to inform the recipient of any new information of which the Parties
may become aware.
Forward-Looking Statment
Recipients of this information are advised that the forecasts included
in this Information Memorandum are forward-looking statements and
therefore are inherently notional. Due to the subjective judgments and
inherent uncertainties of statements about future events, there can
be no assurance that the Company’s actual future results, or subsequent forecasts, will not vary significantly from the forecasts and other
forward-looking statements set out in this Information Memorandum.
The inclusion of the forward-looking statements set out in the Information Memorandum should not be regarded as a representation or warranty with respect to their accuracy or the accuracy of the underlying
assumptions or that the Company will achieve or is likely to achieve any
particular results.
The provision of this Information Memorandum is not and should not
be considered as a recommendation in relation to an investment in the
Company or that an investment in the Company is a suitable investment
for the recipient.
Investor Enquiries
This Information Memorandum does not purport to provide all of the
information the recipient may require in order to evaluate an investment in the Company. Recipients should make their own enquiries and
evaluations they consider appropriate to verify the information contained
in the Information Memorandum and to determine the suitability of
an investment in the Company (including regarding their investment
objectives, financial situation, and particular needs) and should seek all
necessary financial, legal, tax and investment advice. Recipients of this
Information Memorandum are cautioned that the Company is in its early
stages and that any investment in the Company carries risk.
l 87
WELIGAMA HOTEL PROPERTIES LIMITED
Application Form for the Private Placement of Shares
FOR OFFICE USE ONLY
Master Serial No:
Bank Serial No:
Please read the instructions on the reverse carefully
Please use BLOCK CAPITAL
PRIVATE PLACEMENT OF ONE HUNDRED NINETY FIVE MILLION (195,000,000)
ORDINARY SHARES OF THE COMPANY AT AN ISSUE PRICE OF NINE RUPEES (LKR 9.00)
PER SHARE PAYABLE IN FULL ON APPLICATION
ISSUE OPENS ON
ISSUE CLOSES ON
02
28
May
June
DATE
2013
2013
2013
To: The Directors, Weligama Hotel Properties Limited, 12-01, 12th Floor, East Tower,
World Trade Center, Colombo 01
I/We, the undersigned hereby apply for and request you to allot to me/us the number of ordinary shares stated below on the above Share Issue. The
amount payable on application is remitted herewith. I/We hereby agree to accept the shares applied for or such smaller number as may be allotted to
me/us, subject to the terms and conditions contained in the Information Memorandum dated 31st March 2013 and the Articles of Association of the
Company. I/We authorize you to procure my/our name(s) to be placed in the Register of Members of Weligama Hotel Properties Limited for such
number of shares that may be allotted on the basis of acceptance by the Company.
NUMBER OF SHARES
,
PRICE PER SHARE
,
MODE OF PAYMENT (Please tick as appropriate)
NAME OF BANK
CHEQUE
AMOUNT PAYABLE (LKR)
LKR 9.00
,
NAME OF BRANCH
,
,
CHEQUE/BANK DRAFT / GUARANTEE NO.
BANK DRAFT
BANK GUARANTEE
SOLE/FIRST APPLICANT
JOINT APPLICANTS
STATUS (MR/MRS/MS/OTHER
1.
SURNAME WITH INITIALS/
NAME OF CORPORATE BODY
1.
2.
2.
1.
ADDRESS
2.
CONTACT TELEPHONE NO.
1.
2.
NATIONAL IDENTITY CARD NO.
/COMPANY REG.NO./PASSPORT NO.
NATIONALITY
(Please tick (ü) as appropriate)
RESIDENCY IN SRI LANKA
(Please tick (ü) as appropriate)
1.
2.
SRI LANKAN
OTHER
RESIDENT
NON-RESIDENT
REFUND INSTRUCTIONS (Please tick as appropriate)
DIRECT TRANSFER VIA SLIPS
1.
2.
1.
1.
SRI LANKAN
SRI LANKAN
RESIDENT
RESIDENT
OTHER
OTHER
NON-RESIDENT
NON-RESIDENT
CHEQUE SENT VIA POST TO SOLE / PRIMARY APPLICANT
DIRECT TRANSFER VIA SLIPS
BANK NAME
BRANCH NAME
ACCOUNT TYPE
BANK CODE
BRANCH CODE
ACCOUNT NUMBER
DECLARATION IN TERMS OF THE SECTION 15 OF THE EXCHANGE CONTROL ACT OF SRI LANKA
TICK ONE
BOX ONLY
I/We, the above applicant(s), of the above mentioned Ordinary Shares hereby declare that I am/we are citizens of and resident in
Sri Lanka and I am/we are not acting as nominee(s) of any person(s) resident outside Sri Lanka. (For Sri Lankan Citizens resident
in Sri Lanka)
I/We, the above applicant(s), of the above mentioned Ordinary Shares hereby declare that I/we have made the remittances enclosed
out of funds authorized by the Controller of Exchange. Confirmation from the Bank to such effect is attached to this application.
(For non- residents, foreign citizens and corporate bodies established outside Sri Lanka).
SIGNATURE(S) OF THE APPLICANT(S)
SOLE / PRIMARY APPLICANT
FIRST JOINT APPLICANT
SECOND JOINT APPLICANT
88 l Weligama Hotel Properties Limited Issue of Ordinary Voting Shares
INSTRUCTIONS
APPLICATION FORM
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.
Application must be completed in FULL in BLOCK CAPITAL.
Please tick (√) in the boxes appropriate to you.
In the event of particular section in this Application Form is not
applicable, please indicate “N/A” in the relevant section.
The Application should be made for a minimum of ten thousand
(10,000) Shares and in Multiples of hundred (1,000) Shares
thereof. ANY APPLICATION MADE FOR LESS THAN TEN
THOUSAND (10,000) SHARES OR FOR A NUMBER WHICH IS
NOT A MULTIPLE OF HUNDRED (1,000) SHARES WILL BE
REJECTED AT THE OUTSET.
Sri Lankan citizen should indicate their NIC number in the
Application Form. The passport number will only be accepted
only when the NIC number is not available. Foreign citizens must
state the passport number in the space provided. Corporate
entities must provide the company registration number. ANY
APPLICATION FORM WHICH DOES NOT STATE THE NIC,
PASSPORT OR COMPANY REGISTRATION NUMBER, AS THE
CASE MAY BE, WILL BE REJECTED.
Applications will NOT be accepted from individuals below 18 years of
age or those in the names of sole proprietorships, partnerships,
unincorporated trusts and non-corporate bodies.
If the ownership of Shares is desired in the name of one Applicant, full
details should be given only under the heading, SOLE/FIRST
APPLICANT. In the case of joint Applicants, the signatures and
particulars in respect of all Applicants must be given under the
relevant headings.
Joint Application Forms are permitted only for natural persons not
exceeding three Applicants. Joint Applicants should note that all
parties should either be residents of Sri Lanka or non-residents. An
Applicant of a joint Application should not apply through a separate
Application Form either individually or jointly.
Remittances in respect of Applications made by citizens of Sri Lanka
who are above 18 years of age and resident overseas, corporate bodies
incorporated or established outside Sri Lanka, Global, regional or
country funds approved by the SEC and foreign citizens (irrespective of
whether they are resident in Sri Lanka or overseas) who are above 18
years of age should be in accordance with the instructions contained
under “Payment by Non-residents” in the Information Memorandum.
In the case of Applications made under Power of Attorney (POA), a copy
of the said POA certi“ied by a Notary Public should accompany such
Applications to be lodge with the Registrars to the issue. The original
POA should not be attached.
In the case of corporate applicants, the common seal or rubber stamp
should be af“ixed and the Application Form should be duly signed as
stipulated in the constitutional document of such Applicant.
All applicants are requested to state their residency and nationality in
the appropriate spaces provided in the Application Form.
MODE OF PAYMENT
I.
II.
Payment should be made separately in respect of each Application by
way of a cheque or bank draft or bank guarantee. Remittances on
Applications will be deposited in a separate bank account in the
name of “Weligama Hotel Properties Limited – Share Issue
Account”.
Payment for Applications for Shares of a value below LKR III.
100,000,000/- could be supported by a cheque or bank draft
or bank guarantee. In such instances, Application Form should be
accompanied by ONLY ONE cheque or bank draft or bank
guarantee and should be issued for the full amount indicated in the
Application Form. Cheques or bank drafts should be drawn on any
Licensed Commercial Bank in Sri Lanka and crossed “Account
Payee Only” and made payable to “Weligama Hotel Properties
III.
IV.
V.
VI.
VII.
Limited – Share Issue Account”. Applications accompanying
two or more cheques or bank drafts or bank guarantees for
values below LKR 100,000,000/ will be rejected at the outset.
Applicants making Applications for Shares of a value above LKR
100,000,000/- will be permitted to submit multiple bank drafts
(not cheques)or multiple bank guarantees.
Such Applicants are required to attach a list to the Application
Form giving details of payment, such as amount of bank draft/bank
guarantee, name of bank, name of branch and bank draft/bank
guarantee number. Bank guarantees should be issued by any
Licensed Commercial Bank in Sri Lanka and in favour of
“Weligama Hotel Properties Limited – Share Issue Account” in
a manner acceptable to the Company and be payable on demand.
Applications accompanying multiple bank drafts (not
cheques) or multiple bank guarantees for values above LKR
100, 000,000/- will not be rejected.
Please note that bank guarantees should be valid for a
minimum of one (1) month from the date of opening the Issue.
Cash will not be accepted.
Investors residing in outstation areas from which cheque clearance
may take over two (02) Market Days are advise to make payment
via bank draft to avoid any delays.
FORWARDING COMPLETED APPLICATIONS
Application Forms duly completed together with the remittances
(cheque or bank draft or bank guarantee only), for the full amount
payable enclosed in a sealed envelope addressed to S S P CORPORATE
SERVICES (PRIVATE) LIMITED, SECRETARIES TO WELIGAMA
HOTEL PROPERTIES LIMITED, 101, INNER FLOWER ROAD,
COLOMBO 3 and marked “WELIGAMA HOTEL PROPERTIES LIMITED
– PRIVATE PLACEMENT” on the top left hand corner, by post or courier
or delivered by hand prior to 4.30 p.m. Local Time on the Closure
Date.
REFUNDS ON APPLICATIONS
I.
Any refund payment will be made to the bank account speci“ied by
the Applicant through SLIPS transfer on or before the expiry of ten
(10) Market Days from the Closure Date and a payment advice will
be issued to the Applicant provided that the Applicant has
submitted accurate and complete details of his/her bank account
in the Application Form subject to a maximum limit of Rupees Five
Million (LKR 5, 000,000/-) for SLIPS transfer.
II.
In the event of refunds over Rupees Five Million (Rs. 5,000,000/-)
or if the Applicant has not provided details of the bank account in
the Application Form or has provided inaccurate or incomplete
details of the bank account, the refund payments will be made by a
crossed cheque in favour of the Applicant and sent by ordinary
post at the risk of the Applicant. In the case of joint Applications, a
crossed cheque will be drawn in favour of the Applicant whose
name appears “irst in the Application Form. Where payment for
Application is supported by a bank guarantee, such bank
guarantees will be presented to the respective banks and called
upon by the Registrars to the Issue only after the allotment of
Shares in issue.
PLEASE REFER INFORMATION MEMORANDUM FOR
DETAILS. APPLICATIONS WHICH ARE NOT IN
ACCORDANCE WITH THE ABOVE INSTRUCTIONS MAY
BE REJECTED.