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Alumex Limited

Prospectus

Invitation to Invest in the Initial Public Offering

through an Offer for Subscription of Seventeen Million Eight Hundred and Fifty Seven Thousand Two Hundred (17,857,200) Ordinary Voting Shares at Rs. 14/- per Share and

an Offer for Sale of Forty Two Million Three Thousand Four Hundred (42,003,400)

Ordinary Voting Shares at Rs. 14/- per Share

To be listed on the Diri Savi Board of the Colombo Stock Exchange

Financial Advisors and Managers to the Offering Registrars to the Offering

INVITATION TO THE INVESTOR This invitation represents an opportunity to participate in the future growth prospects of Alumex Group, the premier manufacturer of aluminium extrusions and market leader* in Sri Lanka since 1988. Alumex Limited (Alumex) is a subsidiary of Hayleys PLC, a diversified Sri Lankan multinational with multifaceted manufacturing operations and capabilities with products marketed in over 80 countries across the globe. The quest for continuous improvement, ongoing infrastructure development and the growth in the retail sector have established Alumex as a dominant player in the Sri Lankan aluminium industry. The Company has also entered in to licensing agreements with globally renowned manufacturers of aluminium extrusions and accessories in the world to manufacture high end aluminium profiles. Through this Prospectus, Alumex invites the public to subscribe for the Offering of Fifty Nine Million Eight Hundred and Sixty Thousand Six Hundred (59,860,600) Ordinary Voting Shares comprising of an “Offer for Subscription” tranche and an “Offer for Sale” tranche amounting to Seventeen Million Eight Hundred and Fifty Seven Thousand Two Hundred (17,857,200) and Forty Two Million Three Thousand Four Hundred (42,003,400) Shares respectively, at the Share Price of Rs. 14.00 per Share. In this document, the prospective investor will find detailed information about Alumex Group and its business operations in addition to other statutory information relating to the Offering. The Board of Directors of the Company urges the investing public to read this Prospectus carefully prior to making an investment decision.

*Source: Data One import statistics and Annual Reports of the listed peers

I | Alumex Limited – Initial Public Offeringi | Alumex Limited – Initial Public Offering

This Prospectus is dated February 17, 2014.

FOR ENQUIRIES, PLEASE CONTACT THE MANAGERS TO THE OFFERING

Registration of the Prospectus

A copy of this Prospectus has been delivered for registration to the Registrar General of Companies in Sri Lanka in accordance with the Companies Act No. 07 of 2007 (the “Companies Act”). The following documents were attached to the copy of the Prospectus delivered to the Registrar General of Companies in Sri Lanka:

1) The written consent by the Financial Advisors and Managers to the Offering, Auditors and Reporting Accountants to the Company and to the Offering, Company Secretaries, Lawyer to the Offering, Bankers to the Company, Bankers to the Offering and Registrars to the Offering for the inclusion of their respective names in this Prospectus.

2) The written consent by the Auditors to the Offering and to the Company that they have given their written consent to include their statement in the Prospectus in the form and context in which it is included.

3) A declaration by each of the Directors of the Company in terms of the Companies Act, confirming that each of them have read the provisions of the Companies Act and the CSE Listing Rules relating to the issue of a Prospectus and that those provisions have been complied with.

The said Financial Advisors and Managers to the Offering, Auditors and Reporting Accountants to the Company and to the Offering, Company Secretaries, Lawyer to the Offering, Bankers to the Offering, Bankers to the Company, and Registrars to the Offering, have not withdrawn such consent, before the delivery of a copy of the Prospectus for registration with the Registrar General of Companies in Sri Lanka.

Registration of the Prospectus in Jurisdictions Outside of Sri Lanka

This Prospectus has not been registered with any authority outside of Sri Lanka. Non-resident investors may be affected by the laws of the jurisdiction of their residence. Such investors are responsible to comply with the laws relevant to the country of residence and the laws of Sri Lanka, when making the investment.

Responsibility for the Content of the Prospectus

This Prospectus has been prepared from information provided by Alumex Limited (hereinafter referred to as “Alumex” or the “Company”) and from publicly available sources. The Directors of the Company have seen and approved this Prospectus and collectively and individually, accept full responsibility for the accuracy of the information given and confirm that after making all reasonable enquires and to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading or inaccurate.

Where representations regarding the future performance of Alumex have been given in this Prospectus, such representations have been made after due and careful enquiry of the information available to Alumex and making assumptions that are considered to be reasonable at the present point in time in their best judgement.

The delivery of this Prospectus shall not under any circumstance constitute a representation or create any implication or suggestion that there has been no material change in the affairs of the Company since the date of this Prospectus.

If you are in doubt regarding the contents of this document, you should consult your stockbroker, bank manager, lawyer or any other professional advisor.

Alumex Limited – Initial Public Offering | ii

Alumex accepts responsibility for the information contained in this Prospectus. While the Company has taken reasonable care to ensure full and fair disclosure of information, prospective investors are advised to carefully read this Prospectus and rely on their own examination and assessment of the Company including the risks involved prior to making any investment decision.

Representation

No person is authorised to give any information or make any representation not contained in this Prospectus and if given or made, any such information or representation must not be relied upon as having been authorised by the Company.

Forward Looking Statements

Any statements included in this Prospectus that are not statements of historical fact constitute “Forward Looking Statements”. These can be identified by the use of forward looking terms such as “expect”, “anticipate”, “intend”, “may”, “plan to”, “believe”, “could” and similar terms or variations of such terms. However, these words are not the exclusive means of identifying Forward Looking Statements. As such, all or any statements pertaining to expected financial position, business strategy, plans and prospects of the Company are classified as Forward Looking Statements.

Such Forward Looking Statements involve known and unknown risks, uncertainties and other factors including but not limited to regulatory changes in the sectors in which the Company operates and its ability to respond to them, the Company’s ability to successfully adapt to technological changes, exposure to market risks, general economic and fiscal policies of Sri Lanka, inflationary pressures, interest rate volatilities, the performance of financial markets both globally and locally, changes in domestic and foreign laws, regulation of taxes and changes in competition in the industry and further uncertainties that may or may not be in the control of the Company.

Such factors may cause actual results, performance and achievements to materially differ from any future results, performance or achievements expressed or implied by Forward Looking Statements herein. Forward Looking Statements are also based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future.

Given the risks and uncertainties that may cause the Company’s actual future results, performance or achievements to materially differ from that expected, expressed or implied by Forward Looking Statements in this Prospectus, investors are advised not to place sole reliance on such statements.

Investment Considerations

It is important that this Prospectus is read carefully prior to making an investment decision. For information concerning certain risk factors, which should be considered by prospective investors, see “Investment Consideration and Associated Risks” in Section 12.0 of this Prospectus.

Presentation of Currency Information and Other Numerical Data

The financial statements of the Company and currency values of economic data or industry data in a local context will be expressed in Sri Lanka Rupees. References in the Prospectus to “LKR”, “Rupees” or “Rs.” are to the lawful currency of Sri Lanka.

Certain numerical figures in the Prospectus have been subject to rounding adjustments, accordingly numerical figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

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Alumex accepts responsibility for the information contained in this Prospectus. While the Company has taken reasonable care to ensure full and fair disclosure of information, prospective investors are advised to carefully read this Prospectus and rely on their own examination and assessment of the Company including the risks involved prior to making any investment decision.

Representation

No person is authorised to give any information or make any representation not contained in this Prospectus and if given or made, any such information or representation must not be relied upon as having been authorised by the Company.

Forward Looking Statements

Any statements included in this Prospectus that are not statements of historical fact constitute “Forward Looking Statements”. These can be identified by the use of forward looking terms such as “expect”, “anticipate”, “intend”, “may”, “plan to”, “believe”, “could” and similar terms or variations of such terms. However, these words are not the exclusive means of identifying Forward Looking Statements. As such, all or any statements pertaining to expected financial position, business strategy, plans and prospects of the Company are classified as Forward Looking Statements.

Such Forward Looking Statements involve known and unknown risks, uncertainties and other factors including but not limited to regulatory changes in the sectors in which the Company operates and its ability to respond to them, the Company’s ability to successfully adapt to technological changes, exposure to market risks, general economic and fiscal policies of Sri Lanka, inflationary pressures, interest rate volatilities, the performance of financial markets both globally and locally, changes in domestic and foreign laws, regulation of taxes and changes in competition in the industry and further uncertainties that may or may not be in the control of the Company.

Such factors may cause actual results, performance and achievements to materially differ from any future results, performance or achievements expressed or implied by Forward Looking Statements herein. Forward Looking Statements are also based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future.

Given the risks and uncertainties that may cause the Company’s actual future results, performance or achievements to materially differ from that expected, expressed or implied by Forward Looking Statements in this Prospectus, investors are advised not to place sole reliance on such statements.

Investment Considerations

It is important that this Prospectus is read carefully prior to making an investment decision. For information concerning certain risk factors, which should be considered by prospective investors, see “Investment Consideration and Associated Risks” in Section 12.0 of this Prospectus.

Presentation of Currency Information and Other Numerical Data

The financial statements of the Company and currency values of economic data or industry data in a local context will be expressed in Sri Lanka Rupees. References in the Prospectus to “LKR”, “Rupees” or “Rs.” are to the lawful currency of Sri Lanka.

Certain numerical figures in the Prospectus have been subject to rounding adjustments, accordingly numerical figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

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Presentation of Macroeconomic and Industry Data

Economic and Industry data used throughout this Prospectus are derived from the Central Bank of Sri Lanka (CBSL), International Aluminium Association, London Metal Exchange, and various other industry data sources, which the Company believes to be reliable, but the accuracy and completeness of that information is not guaranteed. Similarly, industry surveys and other publications, while believed to be reliable, have not been independently verified and neither the Company nor the Managers to the Offering make any representation as to the accuracy of that information.

The Colombo Stock Exchange (CSE) has taken reasonable care to ensure full and fair disclosure of information in this Prospectus. However, the CSE assumes no responsibility for accuracy of the statements made, opinions expressed or reports included in this Prospectus. The pricing of the Shares issued herein has been decided by the Company.

Alumex Limited – Initial Public Offering | iv

OFFERING AT A GLANCE TOTAL NUMBER OF ORDINARY VOTING SHARES OFFERED 59,860,600

NUMBER OF ORDINARY VOTING SHARES OFFERED FOR SALE

REFERRED TO AS “OFFER FOR SALE” 42,003,400

NUMBER OF ORDINARY VOTING SHARES OFFERED FOR

SUBSCRIPTION REFERRED TO AS “OFFER FOR SUBSCRIPTION” 17,857,200

PRICE PER SHARE ON OFFER RS. 14/-

TOTAL SUBSCRIPTION/CONSIDERATION TO BE RECEIVED BY

ALUMEX LIMITED AND SELLING SHAREHOLDERS RS. 838,048,400/-

CONSIDERATION TO BE RECEIVED BY THE SELLING

SHAREHOLDERS THROUGH THE OFFER FOR SALE RS. 588,047,600/-

SUBSCRIPTION TO BE RECEIVED BY ALUMEX LIMITED

THROUGH THE OFFER FOR SUBSCRIPTION RS. 250,000,800/-

MINIMUM INVESTMENT (MINIMUM INVESTMENT WILL BE ALLOTTED TO ALL SUCCESSFUL

APPLICANTS ON THE OFFERING)

100 SHARES (RS. 1,400/-) APPLICATION IN EXCESS OF MINIMUM

SUBSCRIPTION SHOULD BE IN MULTIPLES OF

100 SHARES

OPENING DATE OF OFFERING MARCH 06, 2014

CLOSING DATE OF OFFERING

MARCH 25, 2014 OR THE DAY ON WHICH THE OFFERING

BECOMES OVERSUBSCRIBED, WHICHEVER IS

EARLIER

EARLIEST CLOSING DATE OF OFFERING MARCH 06, 2014

CSE LISTING

TO BE LISTED ON THE DIRI SAVI BOARD

OF THE CSE SUBJECT TO COMPLIANCE WITH THE CSE

LISTING RULES AND SEC DIRECTIVES

Alumex Limited – Initial Public Offering | IVAlumex Limited – Initial Public Offering | iv

OFFERING AT A GLANCE TOTAL NUMBER OF ORDINARY VOTING SHARES OFFERED 59,860,600

NUMBER OF ORDINARY VOTING SHARES OFFERED FOR SALE

REFERRED TO AS “OFFER FOR SALE” 42,003,400

NUMBER OF ORDINARY VOTING SHARES OFFERED FOR

SUBSCRIPTION REFERRED TO AS “OFFER FOR SUBSCRIPTION” 17,857,200

PRICE PER SHARE ON OFFER RS. 14/-

TOTAL SUBSCRIPTION/CONSIDERATION TO BE RECEIVED BY

ALUMEX LIMITED AND SELLING SHAREHOLDERS RS. 838,048,400/-

CONSIDERATION TO BE RECEIVED BY THE SELLING

SHAREHOLDERS THROUGH THE OFFER FOR SALE RS. 588,047,600/-

SUBSCRIPTION TO BE RECEIVED BY ALUMEX LIMITED

THROUGH THE OFFER FOR SUBSCRIPTION RS. 250,000,800/-

MINIMUM INVESTMENT (MINIMUM INVESTMENT WILL BE ALLOTTED TO ALL SUCCESSFUL

APPLICANTS ON THE OFFERING)

100 SHARES (RS. 1,400/-) APPLICATION IN EXCESS OF MINIMUM

SUBSCRIPTION SHOULD BE IN MULTIPLES OF

100 SHARES

OPENING DATE OF OFFERING MARCH 06, 2014

CLOSING DATE OF OFFERING

MARCH 25, 2014 OR THE DAY ON WHICH THE OFFERING

BECOMES OVERSUBSCRIBED, WHICHEVER IS

EARLIER

EARLIEST CLOSING DATE OF OFFERING MARCH 06, 2014

CSE LISTING

TO BE LISTED ON THE DIRI SAVI BOARD

OF THE CSE SUBJECT TO COMPLIANCE WITH THE CSE

LISTING RULES AND SEC DIRECTIVES

V | Alumex Limited – Initial Public Offeringv | Alumex Limited – Initial Public Offering

TABLE OF CONTENTS

1.0 CORPORATE INFORMATION ............................................................................................................................................... 1

2.0 RELEVANT PARTIES TO THE OFFERING ............................................................................................................................... 4

3.0 ABBREVIATIONS USED IN THE PROSPECTUS ....................................................................................................................... 5

4.0 GLOSSARY OF TERMS RELATED TO THE OFFERING ............................................................................................................. 7

5.0 DETAILS OF THE OFFERING ............................................................................................................................................... 10

5.1 The Offering ................................................................................................................................................................. 10 5.2 Selling Shareholders .................................................................................................................................................... 10 5.3 Nature of the New Shares/Nature of the Existing Shares on Offer ............................................................................. 11 5.4 Share Price ................................................................................................................................................................... 11 5.5 Size of the Offering ...................................................................................................................................................... 11 5.6 Objectives of the Offering ............................................................................................................................................ 11 5.7 Listing ........................................................................................................................................................................... 13 5.8 Cost of the Offering ..................................................................................................................................................... 14 5.9 Brokerage .................................................................................................................................................................... 14 5.10 Minimum Subscription and Underwriting ................................................................................................................... 14 5.11 Opening of Subscription List and Closure Date ............................................................................................................ 15 5.12 Inspection of Documents ............................................................................................................................................. 15 5.13 Eligible Applicants ........................................................................................................................................................ 15 5.14 Procedure for Application ............................................................................................................................................ 16 5.15 Payment of Application Monies ................................................................................................................................... 20 5.16 Rejection of Applications ............................................................................................................................................. 23 5.17 Banking of Payments ................................................................................................................................................... 24 5.18 Returning of Monies of Rejected Applications ............................................................................................................ 24 5.19 Allocation of Shares on Offer/Basis of Allocation ........................................................................................................ 24 5.20 Refunds on Applications .............................................................................................................................................. 25 5.21 Successful Applicants and CDS Lodgement .................................................................................................................. 27 5.22 Declaration to the CSE and Secondary Market Trading ............................................................................................... 27

6.0 OVERVIEW OF THE ALUMINIUM INDUSTRY ..................................................................................................................... 28

6.1 Overview ...................................................................................................................................................................... 28 6.2 Aluminium Production Process .................................................................................................................................... 28 6.3 Markets for Aluminium ................................................................................................................................................ 30 6.4 Aluminium Industry in Sri Lanka .................................................................................................................................. 30

7.0 BUSINESS OPERATIONS OF ALUMEX GROUP .................................................................................................................... 33

7.1 Group Structure ........................................................................................................................................................... 33 7.2 Vision and Mission ....................................................................................................................................................... 35 7.3 Values of Alumex Group .............................................................................................................................................. 36 7.4 Business Processes ...................................................................................................................................................... 36 7.5 Current Product and Service Portfolio ......................................................................................................................... 40 7.6 Market Structure ......................................................................................................................................................... 41 7.7 Market Segmentation and Positioning ........................................................................................................................ 41 7.8 Operational Markets .................................................................................................................................................... 42 7.9 Services ........................................................................................................................................................................ 42 7.10 International Standards and Accreditations ................................................................................................................ 43 7.11 International Affiliations .............................................................................................................................................. 44 7.12 Projects Undertaken .................................................................................................................................................... 46 7.13 Consolidation of Operations ........................................................................................................................................ 50 7.14 Core Competencies of Alumex Group ......................................................................................................................... 52 7.15 Accolades and Awards ................................................................................................................................................. 55 7.16 Human Resources ........................................................................................................................................................ 55

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7.17 Corporate Social Responsibility ................................................................................................................................... 56 7.18 Future Direction of Alumex Group .............................................................................................................................. 58 7.19 Major Assumptions Relating to Future Plans of Alumex Group .................................................................................. 60

8.0 CORPORATE STRUCTURE.................................................................................................................................................. 61

8.1 The Board of Directors of Alumex Limited ................................................................................................................... 61 8.2 Profiles of the Board of Directors ................................................................................................................................ 61 8.3 Other Directorships Held by the Board of Directors .................................................................................................... 64 8.4 Board of Directors of the Subsidiary Companies ......................................................................................................... 71 8.5 Directors’ Interest in Shares ........................................................................................................................................ 71 8.6 Directors’ Emoluments ................................................................................................................................................ 72 8.7 Directors’ Interests in Assets ....................................................................................................................................... 72 8.8 Directors’ Interests in Contracts .................................................................................................................................. 73 8.9 Statement – Board of Directors ................................................................................................................................... 73 8.10 Corporate Governance Practices ................................................................................................................................. 73 8.11 Corporate Management of Alumex Limited ................................................................................................................ 75 8.12 Corporate Management’s Emoluments ....................................................................................................................... 76 8.13 Statement – Chairman/Chief Executive ....................................................................................................................... 76

9.0 OTHER COMPANY INFORMATION .................................................................................................................................... 77

9.1 Relationship with Key Customers and Suppliers of Alumex Limited ............................................................................ 77 9.2 Dividend Policy ............................................................................................................................................................ 77 9.3 Details of Material Indebtedness ................................................................................................................................. 78 9.4 Working Capital ........................................................................................................................................................... 78 9.5 Litigation, Disputes and Contingent Liabilities ............................................................................................................. 79 9.6 Mortgages and Charges on Assets ............................................................................................................................... 79 9.7 Material Contracts ....................................................................................................................................................... 79 9.8 Details of Commissions Paid ........................................................................................................................................ 79 9.9 Details of Benefits Paid to Promoters .......................................................................................................................... 79

10.0 CAPITAL STRUCTURE ........................................................................................................................................................ 80

10.1 An Overview of the Stated Capital ............................................................................................................................... 80 10.2 Share Split .................................................................................................................................................................... 81 10.3 Transfer of Shares of Alumex Limited .......................................................................................................................... 81 10.4 Shareholders of Alumex Limited .................................................................................................................................. 81 10.5 Details Pertaining to the locked-in Shares ................................................................................................................... 82 10.6 Details of Other Changes to Stated Capital .................................................................................................................. 83 10.7 Details of Convertible Debt Securities ......................................................................................................................... 83 10.8 Details of Shares Sold Privately in Conjunction with the Offering ............................................................................... 83 10.9 Free Transferability of Shares ...................................................................................................................................... 83 10.10 Take-over Offers .......................................................................................................................................................... 84

11.0 MANAGEMENT DISCUSSION AND ANALYSIS .................................................................................................................... 85

11.1 Summarised Financial Statements of Alumex Group for the Five Years Ended March 31, 2013 ................................. 85 11.2 Performance of Alumex Group for the Five Years Ended March 31, 2013 .................................................................. 86 11.3 Recent Performance of Alumex Group ........................................................................................................................ 87

12.0 INVESTMENT CONSIDERATION AND ASSOCIATED RISKS .................................................................................................. 90

12.1 Risks Relating to Macro-Environmental Factors .......................................................................................................... 90 12.2 Risks Relating to the Existing Businesses of Alumex Group ......................................................................................... 91 12.3 Risks Relating to Future Plans ...................................................................................................................................... 92 12.4 Capital Market Related Risks ....................................................................................................................................... 93

13.0 TAXATION AND EXCHANGE CONTROL .............................................................................................................................. 94

13.1 Corporate Taxation ...................................................................................................................................................... 94 13.2 Economic Service Charge ............................................................................................................................................. 94 13.3 Value Added Tax .......................................................................................................................................................... 95

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7.17 Corporate Social Responsibility ................................................................................................................................... 56 7.18 Future Direction of Alumex Group .............................................................................................................................. 58 7.19 Major Assumptions Relating to Future Plans of Alumex Group .................................................................................. 60

8.0 CORPORATE STRUCTURE.................................................................................................................................................. 61

8.1 The Board of Directors of Alumex Limited ................................................................................................................... 61 8.2 Profiles of the Board of Directors ................................................................................................................................ 61 8.3 Other Directorships Held by the Board of Directors .................................................................................................... 64 8.4 Board of Directors of the Subsidiary Companies ......................................................................................................... 71 8.5 Directors’ Interest in Shares ........................................................................................................................................ 71 8.6 Directors’ Emoluments ................................................................................................................................................ 72 8.7 Directors’ Interests in Assets ....................................................................................................................................... 72 8.8 Directors’ Interests in Contracts .................................................................................................................................. 73 8.9 Statement – Board of Directors ................................................................................................................................... 73 8.10 Corporate Governance Practices ................................................................................................................................. 73 8.11 Corporate Management of Alumex Limited ................................................................................................................ 75 8.12 Corporate Management’s Emoluments ....................................................................................................................... 76 8.13 Statement – Chairman/Chief Executive ....................................................................................................................... 76

9.0 OTHER COMPANY INFORMATION .................................................................................................................................... 77

9.1 Relationship with Key Customers and Suppliers of Alumex Limited ............................................................................ 77 9.2 Dividend Policy ............................................................................................................................................................ 77 9.3 Details of Material Indebtedness ................................................................................................................................. 78 9.4 Working Capital ........................................................................................................................................................... 78 9.5 Litigation, Disputes and Contingent Liabilities ............................................................................................................. 79 9.6 Mortgages and Charges on Assets ............................................................................................................................... 79 9.7 Material Contracts ....................................................................................................................................................... 79 9.8 Details of Commissions Paid ........................................................................................................................................ 79 9.9 Details of Benefits Paid to Promoters .......................................................................................................................... 79

10.0 CAPITAL STRUCTURE ........................................................................................................................................................ 80

10.1 An Overview of the Stated Capital ............................................................................................................................... 80 10.2 Share Split .................................................................................................................................................................... 81 10.3 Transfer of Shares of Alumex Limited .......................................................................................................................... 81 10.4 Shareholders of Alumex Limited .................................................................................................................................. 81 10.5 Details Pertaining to the locked-in Shares ................................................................................................................... 82 10.6 Details of Other Changes to Stated Capital .................................................................................................................. 83 10.7 Details of Convertible Debt Securities ......................................................................................................................... 83 10.8 Details of Shares Sold Privately in Conjunction with the Offering ............................................................................... 83 10.9 Free Transferability of Shares ...................................................................................................................................... 83 10.10 Take-over Offers .......................................................................................................................................................... 84

11.0 MANAGEMENT DISCUSSION AND ANALYSIS .................................................................................................................... 85

11.1 Summarised Financial Statements of Alumex Group for the Five Years Ended March 31, 2013 ................................. 85 11.2 Performance of Alumex Group for the Five Years Ended March 31, 2013 .................................................................. 86 11.3 Recent Performance of Alumex Group ........................................................................................................................ 87

12.0 INVESTMENT CONSIDERATION AND ASSOCIATED RISKS .................................................................................................. 90

12.1 Risks Relating to Macro-Environmental Factors .......................................................................................................... 90 12.2 Risks Relating to the Existing Businesses of Alumex Group ......................................................................................... 91 12.3 Risks Relating to Future Plans ...................................................................................................................................... 92 12.4 Capital Market Related Risks ....................................................................................................................................... 93

13.0 TAXATION AND EXCHANGE CONTROL .............................................................................................................................. 94

13.1 Corporate Taxation ...................................................................................................................................................... 94 13.2 Economic Service Charge ............................................................................................................................................. 94 13.3 Value Added Tax .......................................................................................................................................................... 95

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13.4 Nation Building Tax ...................................................................................................................................................... 95 13.5 Withholding Tax on Dividends ..................................................................................................................................... 95 13.6 Stamp Duty .................................................................................................................................................................. 95 13.7 Share Transaction Levy ................................................................................................................................................ 95 13.8 Exchange Control ......................................................................................................................................................... 95

14.0 THE COLOMBO STOCK EXCHANGE ................................................................................................................................... 97

14.1 Governance.................................................................................................................................................................. 97 14.2 Branches of the CSE ..................................................................................................................................................... 97 14.3 Stock Market Indices ................................................................................................................................................... 97 14.4 Trading on the CSE ....................................................................................................................................................... 97 14.5 Trading Sessions .......................................................................................................................................................... 97 14.6 Settlement Procedure .................................................................................................................................................. 98 14.7 Transaction Costs ......................................................................................................................................................... 98 14.8 Recent Performance .................................................................................................................................................... 99

15.0 STATUTORY DECLARATIONS .......................................................................................................................................... 103

15.1 Signing of Prospectus and Statutory Declaration by the Directors ............................................................................ 103 15.2 Statutory Declaration by Financial Advisors and Managers to the Offering .............................................................. 104 15.3 Statutory Declaration by the Company ..................................................................................................................... 104

16.0 FINANCIAL STATEMENTS AND AUDITORS’ REPORT ........................................................................................................ 105

16.1 Accountants’ Report for Inclusion in the Prospectus ................................................................................................. 105 16.2 Five Year Summary of Financial Statements .............................................................................................................. 108 16.3 Audit Report and Financial Statements as at March 31, 2013 ................................................................................... 114 16.4 Reviewed Financial Statements for Nine Months Ended December 31, 2013 .......................................................... 153

ANNEX A – PUBLIC HOLDING ......................................................................................................................................................... 183

ANNEX B – COLLECTION POINTS .................................................................................................................................................... 187

ANNEX C – CUSTODIAN BANKS ..................................................................................................................................................... 197

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INDEX ON TABLES AND FIGURES ILLUSTRATED IN THE PROSPECTUS LIST OF TABLES Table 5-1: Offering Tranches .................................................................................................................................................................... 10 Table 5-2: Categories of Investors ............................................................................................................................................................ 10 Table 5-3: Divestiture of Existing Shares ................................................................................................................................................... 10 Table 5-4: Cost Break Down of Powder Coating Facility ........................................................................................................................... 12 Table 5-5: Identification Information ........................................................................................................................................................ 19 Table 6-1: Performance Properties and Applications of Aluminium ......................................................................................................... 28 Table 6-2: Aluminium Products in Sri Lanka ............................................................................................................................................. 31 Table 6-3: Real GDP and Construction at Constant (2002) Prices ............................................................................................................. 31 Table 7-1: Plant Specifications .................................................................................................................................................................. 38 Table 7-2: Production Capacity ................................................................................................................................................................. 40 Table 7-3: International Affiliation of Alumex Group ............................................................................................................................... 45 Table 7-4: Commercial and Industrial Projects ......................................................................................................................................... 46 Table 7-5: Residential Projects ................................................................................................................................................................. 47 Table 7-6: Commercial and Industrial Projects ......................................................................................................................................... 47 Table 7-7: International Projects .............................................................................................................................................................. 49 Table 7-8: Consolidation of Operations .................................................................................................................................................... 51 Table 7-9: Human Resources of Alumex Group ........................................................................................................................................ 56 Table 8-1: Board of Directors of Alumex Limited ...................................................................................................................................... 61 Table 8-2: Alternate Directors of Alumex Limited .................................................................................................................................... 61 Table 8-3: Other Directorships Held by Board of Directors of Alumex Limited ........................................................................................ 64 Table 8-4: Board of Directors of Avro Enterprises (Private) Limited and Alco Industries (Private) Limited .............................................. 71 Table 8-5: Directors’ Direct Shareholding in Alumex Limited ................................................................................................................... 71 Table 8-6: Share Transactions of Directors in Alumex Limited ................................................................................................................. 72 Table 9-1: Loans of Alumex Group as at December 31, 2013 ................................................................................................................... 78 Table 9-2: Leasing and Hire Purchase Commitments of Alumex Limited as at December 31, 2013 ......................................................... 78 Table 9-3: Capital Commitments as at December 31, 2013 ...................................................................................................................... 78 Table 10-1: Stated Capital of Alumex Limited ........................................................................................................................................... 80 Table 10-2: Changes in Stated Capital of Alumex Limited ........................................................................................................................ 80 Table 10-3: Transfer of Shares by Shareholders ....................................................................................................................................... 81 Table 10-4: Shareholders of Alumex Limited ............................................................................................................................................ 81 Table 10-5: Locked in Shareholders of Alumex Limited ............................................................................................................................ 82 Table 11-1: Summarised Audited Income Statements of Alumex Group ................................................................................................. 85 Table 11-2: Summarised Audited Statements of Financial Position of Alumex Group ............................................................................ 85 Table 11-3: Summarised Income Statements of Alumex Group ............................................................................................................... 87 Table 11-4: Summarised Statements of Financial Position of Alumex Group .......................................................................................... 87 Table 14-1: Transaction Costs ................................................................................................................................................................... 98 Table 14-2: Stock Market Statistics 2009 – 2013 .................................................................................................................................... 102 LIST OF FIGURES Figure 6-1: Aluminium Production Plant ................................................................................................................................................... 28 Figure 6-2: Major Bauxite Producing Countries ........................................................................................................................................ 29 Figure 6-3: Primary Aluminium Production January - October 2013 ........................................................................................................ 29 Figure 6-4: Global Aluminium Consumption ............................................................................................................................................. 30 Figure 6-5: Real GDP Growth Rate and the Construction Sector Growth ................................................................................................. 32 Figure 7-1: Group Structure of Alumex Group .......................................................................................................................................... 33 Figure 7-2: Business Process ..................................................................................................................................................................... 36 Figure 7-3: Market Structure .................................................................................................................................................................... 41 Figure 7-4: Customer Service Offered by Alumex Group .......................................................................................................................... 43 Figure 7-5: Alumex Group Structure as at April 01, 2011 ........................................................................................................................ 50 Figure 7-6: Alumex Group’s Distribution Network in Sri Lanka................................................................................................................ 54 Figure 11-1: Total Revenue ....................................................................................................................................................................... 86 Figure 11-2: Total Sales Volume ............................................................................................................................................................... 86 Figure 11-3: Revenue Mix ......................................................................................................................................................................... 86 Figure 11-4: Volume Mix .......................................................................................................................................................................... 86 Figure 11-5: Gross Profit and Margin ........................................................................................................................................................ 87 Figure 11-6: Net Profit and Margin ........................................................................................................................................................... 87 Figure 11-7: Revenue for Nine Months Ended December 31, 2012 and 2013 ......................................................................................... 88 Figure 11-8: Volume for Nine Months Ended December 31, 2012 and 2013 ........................................................................................... 88 Figure 11-9: Gross Profit for Nine Months Ended December 31, 2012 and 2013 ..................................................................................... 88 Figure 11-10: Net Profit for Nine Months Ended December 31, 2012 and 2013 ...................................................................................... 88

1 | Alumex Limited – Initial Public Offering

Alumex Limited – Initial Public Offering | 1

1.0 CORPORATE INFORMATION

The Company Alumex Limited

Legal Form of the Company A limited liability company incorporated in Sri Lanka on November 6, 2006 under the Companies Act No. 17 of 1982, re-registered on October 8, 2007 under the Companies Act No. 7 of 2007 and converted to a public limited liability company on February 22, 2013

Company Registration Number PV 539 PB

Place of Incorporation Colombo, Sri Lanka

Registered Office Alumex Limited Sapugaskanda Makola Tel: 011 2400332 Fax:011 2400415 Website: www.alumexgroup.com

Company Secretaries Hayleys Group Services (Private) Limited 400, Deans Road Colombo 10 Tel: 011 2627650 Fax:011 2627645

Auditors to the Company Ernst & Young Chartered Accountants 201, De Saram Place Colombo 10 Tel: 011 2463500 Fax: 011 2697369

Bankers to the Company

Commercial Bank of Ceylon PLC Foreign Branch Commercial House 21, Sir Razik Fareed Mawatha Colombo 01 Sampath Bank PLC Head Office 110, Sir James Peiris Mawatha Colombo 02

2 |Alumex Limited – Initial Public Offering

Bankers to the Company National Development Bank PLC Head Office 40 Navam Mawatha Colombo 02 Bank of Ceylon Corporate Branch 2nd Floor, Head Office 04, Bank of Ceylon Mawatha Colombo 01

Note: Alumex was incorporated as Alutec Anodising and Machine Tools (Private) Limited and renamed as Alumex (Private) Limited on November 22, 2012. The Alumex Group has been in operation since 1988 as described in Section 7.1.1.



Bankers to the Company National Development Bank PLC Head Office 40 Navam Mawatha Colombo 02 Bank of Ceylon Corporate Branch 2nd Floor, Head Office 04, Bank of Ceylon Mawatha Colombo 01

Note: Alumex was incorporated as Alutec Anodising and Machine Tools (Private) Limited and renamed as Alumex (Private) Limited on November 22, 2012. The Alumex Group has been in operation since 1988 as described in Section 7.1.1.



BOARD OF DIRECTORS OF ALUMEX LIMITED

Mr. Abeyakumar Mohan Pandithage Chairman/Chief Executive

Mr. Rohan Palitha Peris Managing Director/Executive Director

Mr. Dediwela Widanaarachchilage Pramuk Nishantha Dediwela Executive Director

Mr. Sarath Clement Ganegoda Non-Executive Director

Mr. Ranil Prasad Pathirana Non-Executive Director

Mr. Ali Asghar Akbarally Non-Executive Director

Mr. Huzaifa Hamzaally Abdulhusein Non-Executive Director

Dr. Harsha Cabral Independent Non-Executive Director

Mr. Somasiri Munaweera Independent Non-Executive Director

Mr. Aroon Janak Hirdaramani Alternate to Mr. R.P.Pathirana

Non-Executive Director

Mr. Tyeabally Akbarally Alternate to Mr. A.A.Akbarally

Non-Executive Director


2.0 RELEVANT PARTIES TO THE OFFERING

Financial Advisors and Managers to the Offering NDB Investment Bank Limited 40, Navam Mawatha Colombo 02 Tel: 011 2300385 Fax: 011 2300393

Lawyer to the Offering/Legal Advisors Mrs. D P Pieris Attorney-at-Law and Notary Public (Solicitor England and Wales) 3/14 D, Kynsey Road

Colombo 08 Tel: 011 4610476 Fax: 011 4614476

Auditors and Reporting Accountants to the Offering Ernst & Young Chartered Accountants 201, De Saram Place Colombo 10 Tel: 011 2463500 Fax: 011 2697369

Registrars to the Offering P W Corporate Secretarial (Pvt) Ltd 3/17, Kynsey Road Colombo 08 Tel:011 4640360 Fax:011 4740588

Bankers to the Offering

Sampath Bank PLC 110, Sir James Peiris Mawatha Colombo 02 Tel: 011 2303050 Fax:011 4712013

Alumex Limited – Initial Public Offering | 44 |Alumex Limited – Initial Public Offering

2.0 RELEVANT PARTIES TO THE OFFERING

Financial Advisors and Managers to the Offering NDB Investment Bank Limited 40, Navam Mawatha Colombo 02 Tel: 011 2300385 Fax: 011 2300393

Lawyer to the Offering/Legal Advisors Mrs. D P Pieris Attorney-at-Law and Notary Public (Solicitor England and Wales) 3/14 D, Kynsey Road

Colombo 08 Tel: 011 4610476 Fax: 011 4614476

Auditors and Reporting Accountants to the Offering Ernst & Young Chartered Accountants 201, De Saram Place Colombo 10 Tel: 011 2463500 Fax: 011 2697369

Registrars to the Offering P W Corporate Secretarial (Pvt) Ltd 3/17, Kynsey Road Colombo 08 Tel:011 4640360 Fax:011 4740588

Bankers to the Offering

Sampath Bank PLC 110, Sir James Peiris Mawatha Colombo 02 Tel: 011 2303050 Fax:011 4712013



3.0 ABBREVIATIONS USED IN THE PROSPECTUS

Abbreviation Description

AAMT Alutec Anodizing and Machine Tools (Private) Limited ASI All Share Index ASRI All Share Total Return Index ATS Automated Trading System AWPLR Average Weighted Prime Lending Rate BOI Board of Investment of Sri Lanka BOQ Bill of Quantities CAGR Compound Annual Growth Rate CBSL Central Bank of Sri Lanka CCD Circumscribing Diameter CDS Central Depository Systems (Private) Limited CSE Colombo Stock Exchange

CSR Corporate Social Responsibility

DUBAL Dubai Aluminium Company Limited EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation FCA Fellow of the Institute of Chartered Accountants, Sri Lanka FCBU Foreign Currency Banking Unit FCMA Fellow of the Institute of Certified Management Accountants, Sri Lanka FCMA-UK Fellow of the Chartered Institute of Management Accountants, UK FY Financial Year GDP Gross Domestic Product GoSL Government of Sri Lanka GRI Global Reporting Initiative HR Human Resources ICTAD Institute for Construction Training and Development

IPO Initial Public Offering ISO International Organization for Standardization KVA Kilovolt-ampere LCB Licensed Commercial Bank LKR Sri Lanka Rupee LOI Letter of Intent mm Millimetre NAITA National Apprentice and Industrial Training Authority of Sri Lanka NBT Nation Building Tax NDBIB NDB Investment Bank Limited NIC National Identity Card NVQ National Vocational Qualification PER Price Earnings Ratio


Abbreviation Description POA Power of Attorney RGFCA Resident Guest Foreign Currency Accounts RGRCA Resident Guest Rupee Current Account RDA Road Development Authority RTGS Real Time Gross Settlements RUSAL RUSAL United Company S&P SL20 Standard & Poor's Sri Lanka 20 Index SEC Securities and Exchange Commission of Sri Lanka SIA Securities Investment Account SLIPS Sri Lanka Inter-bank Payment System SLS Sri Lanka Standards Institution UAE United Arab of Emirates UK United Kingdom USA United States of America VAT Value Added Tax VTA Vocational Training Institute YoY Year on Year



4.0 GLOSSARY OF TERMS RELATED TO THE OFFERING

Alumex Group/Group Alumex Limited and its subsidiaries

Applicant/s Any investor who submits an Application Form under this Prospectus

Application Form/Application The application form that constitute part of this Prospectus through which the investor/s may apply for the Offered Shares

Board/Board of Directors/Directors The Board of Directors of Alumex

Closure Date The date of closure of the subscription list as set out in Section 5.1 of this Prospectus

Company/Alumex Alumex Limited

Financial Advisors and Managers to the Offering/Managers to the Offering

NDB Investment Bank Limited (NDBIB)

Foreign Investor • Citizens of Sri Lanka who are resident outside Sri Lanka and above 18 years of age;

• Corporate bodies incorporated or established outside Sri Lanka;

• Foreign citizens above 18 years of age (irrespective of whether they are resident in Sri Lanka or overseas);

• Regional and country funds approved by the SEC

Please refer Section 5.13 of this Prospectus for further details IPO/Offering The Offer for Subscription of New Shares and the Offer for Sale of Vendor Shares proposed to be offered simultaneously at the Share Price in terms of this Prospectus.

Local Time Sri Lanka Time

Market Day Any day on which CSE is open for trading

New Shares Seventeen Million Eight Hundred and Fifty Seven Thousand Two Hundred (17,857,200) new Ordinary Voting Shares to be offered by the Company to the public at the Share Price


Non-Retail Investor Category Investors who do not fall under Retail Individual Investor Category and Unit Trust Investor Category

Offer for Sale An invitation to the Public by the Company for and on behalf of the Selling Shareholders to purchase existing Ordinary Shares of the Company held by the Selling Shareholder, in terms of Section 5.1

Offer for Subscription An invitation to the Public by the Company to subscribe for New Shares in terms of Section 5.1

Offered Shares Fifty Nine Million Eight Hundred and Sixty Thousand Six Hundred (59,860,600) Ordinary Voting Shares offered to the Public at the Share Price through this Prospectus

Ordinary Shares/Issued and Paid up Ordinary Shares/Ordinary Voting Shares/Shares Ordinary voting shares of the Company

Public The investors qualifying as public as defined in Annex A

Prospectus This prospectus dated February 17, 2014 issued by Alumex

Retail Individual Investor Category Individual investors who subscribe for Offered Shares up to a value of Rs. 100,000/- (i.e. up to and inclusive of 7,100 Shares)

Selling Shareholders Shareholders of the Company offering existing Ordinary Shares of the Company as morefully described in Section 5.2, to facilitate a listing of the Shares of the Company on the CSE

Share Price Rs. 14/- per Share

Stated Capital The stated capital of Alumex

Share Transfer Form The share transfer form, attached to the Application Form/Application that constitutes part of this Prospectus which the Investors shall complete when completing the Application Form/Application



4.0 GLOSSARY OF TERMS RELATED TO THE OFFERING

Alumex Group/Group Alumex Limited and its subsidiaries

Applicant/s Any investor who submits an Application Form under this Prospectus

Application Form/Application The application form that constitute part of this Prospectus through which the investor/s may apply for the Offered Shares

Board/Board of Directors/Directors The Board of Directors of Alumex

Closure Date The date of closure of the subscription list as set out in Section 5.1 of this Prospectus

Company/Alumex Alumex Limited

Financial Advisors and Managers to the Offering/Managers to the Offering

NDB Investment Bank Limited (NDBIB)

Foreign Investor • Citizens of Sri Lanka who are resident outside Sri Lanka and above 18 years of age;


• Foreign citizens above 18 years of age (irrespective of whether they are resident in Sri Lanka or overseas);

• Regional and country funds approved by the SEC

Please refer Section 5.13 of this Prospectus for further details IPO/Offering The Offer for Subscription of New Shares and the Offer for Sale of Vendor Shares proposed to be offered simultaneously at the Share Price in terms of this Prospectus.

Local Time Sri Lanka Time

Market Day Any day on which CSE is open for trading

New Shares Seventeen Million Eight Hundred and Fifty Seven Thousand Two Hundred (17,857,200) new Ordinary Voting Shares to be offered by the Company to the public at the Share Price


Non-Retail Investor Category Investors who do not fall under Retail Individual Investor Category and Unit Trust Investor Category

Offer for Sale An invitation to the Public by the Company for and on behalf of the Selling Shareholders to purchase existing Ordinary Shares of the Company held by the Selling Shareholder, in terms of Section 5.1

Offer for Subscription An invitation to the Public by the Company to subscribe for New Shares in terms of Section 5.1

Offered Shares Fifty Nine Million Eight Hundred and Sixty Thousand Six Hundred (59,860,600) Ordinary Voting Shares offered to the Public at the Share Price through this Prospectus

Ordinary Shares/Issued and Paid up Ordinary Shares/Ordinary Voting Shares/Shares Ordinary voting shares of the Company

Public The investors qualifying as public as defined in Annex A

Prospectus This prospectus dated February 17, 2014 issued by Alumex

Retail Individual Investor Category Individual investors who subscribe for Offered Shares up to a value of Rs. 100,000/- (i.e. up to and inclusive of 7,100 Shares)

Selling Shareholders Shareholders of the Company offering existing Ordinary Shares of the Company as morefully described in Section 5.2, to facilitate a listing of the Shares of the Company on the CSE

Share Price Rs. 14/- per Share

Stated Capital The stated capital of Alumex

Share Transfer Form The share transfer form, attached to the Application Form/Application that constitutes part of this Prospectus which the Investors shall complete when completing the Application Form/Application



Unit Holder An individual who has made an investment in units not exceeding the value of Rs. 10,000,000/- in a particular unit trust fund that subscribes for Shares [Ref: SEC/LEG/11/06/01]

Unit Trust Investor Category Growth or balanced unit trusts operated by managing companies licensed by the SEC to operate such unit trusts, where such unit trust comprises of not less than 500 Unit Holders resident in Sri Lanka who together hold at least 50% of that unit trust

Vendor Shares Forty Two Million Three Thousand and Four

Hundred (42,003,400) Ordinary Voting Shares offered for sale by the Selling Shareholders to the Public at the Share Price as detailed in Section 5.2


5.0 DETAILS OF THE OFFERING

5.1 The Offering

The Offering contemplated herein shall constitute an invitation made to the Public to subscribe for Fifty Nine Million Eight Hundred and Sixty Thousand Six Hundred (59,860,600) Ordinary Voting Shares at the Share Price.

The Offering constitutes two tranches, details of which are listed below:

Table 5-1: Offering Tranches

Description Number of

Ordinary Shares on Offer

Percentage of Offering

The Offer for Subscription of New Shares constituting 5.97% of the Ordinary Shares (post IPO) 17,857,200 29.83%

The Offer for Sale of Vendor Shares constituting 14.03% of the Ordinary Shares (post IPO) 42,003,400 70.17%

Total 59,860,600 100.00%

The Offered Shares would be allotted/transferred to the extent possible based on the Applications for Offered Shares, among the following broad investor categories in the proportions given below.

Table 5-2: Categories of Investors Category Percentage of Offering Retail Individual Investor Category 40% Unit Trust Investor Category 10% Non-Retail Investor Category 50% 100%

5.2 Selling Shareholders

Shareholders mentioned below are offering for sale, a total of Forty Two Million Three Thousand and Four Hundred (42,003,400) existing Ordinary Shares constituting approximately 14.03% of the Ordinary Voting Shares (post IPO) in order to facilitate the listing of the Ordinary Shares on the CSE.

Table 5-3: Divestiture of Existing Shares

Selling Shareholder Number of Shares Offered

Date of Acquisition

Hayleys PLC 18,687,700 November 04, 2010 Rosewood (Private) Limited 9,159,700 November 22, 2010 Akbar Brothers (Private) Limited 9,159,700 November 22, 2010 Star Pack Investments (Private) Limited 4,996,300 November 22, 2010 Total 42,003,400

The above listed Selling Shareholders have complied with Rule 2.1.1 (e) (i) of the CSE Listing Rules.

The Selling Shareholders will own approximately 75.95% of the total number of Shares of the Company, post IPO.



5.0 DETAILS OF THE OFFERING

5.1 The Offering

The Offering contemplated herein shall constitute an invitation made to the Public to subscribe for Fifty Nine Million Eight Hundred and Sixty Thousand Six Hundred (59,860,600) Ordinary Voting Shares at the Share Price.

The Offering constitutes two tranches, details of which are listed below:

Table 5-1: Offering Tranches

Description Number of

Ordinary Shares on Offer

Percentage of Offering

The Offer for Subscription of New Shares constituting 5.97% of the Ordinary Shares (post IPO) 17,857,200 29.83%

The Offer for Sale of Vendor Shares constituting 14.03% of the Ordinary Shares (post IPO) 42,003,400 70.17%

Total 59,860,600 100.00%

The Offered Shares would be allotted/transferred to the extent possible based on the Applications for Offered Shares, among the following broad investor categories in the proportions given below.

Table 5-2: Categories of Investors Category Percentage of Offering Retail Individual Investor Category 40% Unit Trust Investor Category 10% Non-Retail Investor Category 50% 100%

5.2 Selling Shareholders

Shareholders mentioned below are offering for sale, a total of Forty Two Million Three Thousand and Four Hundred (42,003,400) existing Ordinary Shares constituting approximately 14.03% of the Ordinary Voting Shares (post IPO) in order to facilitate the listing of the Ordinary Shares on the CSE.

Table 5-3: Divestiture of Existing Shares

Selling Shareholder Number of Shares Offered

Date of Acquisition

Hayleys PLC 18,687,700 November 04, 2010 Rosewood (Private) Limited 9,159,700 November 22, 2010 Akbar Brothers (Private) Limited 9,159,700 November 22, 2010 Star Pack Investments (Private) Limited 4,996,300 November 22, 2010 Total 42,003,400

The above listed Selling Shareholders have complied with Rule 2.1.1 (e) (i) of the CSE Listing Rules.

The Selling Shareholders will own approximately 75.95% of the total number of Shares of the Company, post IPO.



5.3 Nature of the New Shares/Nature of the Existing Shares on Offer

From the date of allotment, the New Shares shall rank equal and pari passu in all respects with the existing Ordinary Voting Shares and each New Share shall confer on the holder thereof the right to one vote on a poll at a meeting of the Company on any resolution, the right to an equal share in any dividend that may be paid by the Company and the right to an equal share in the distribution of the surplus assets of the Company in a liquidation.

From the date of completion of the transfer of the Vendor Shares to the Applicant, which date shall be even to the date of allotment of the New Shares, referred to above, such Shares shall rank pari passu, in all respects with the existing other Ordinary Shares and the New Shares allotted in terms of this Prospectus, and such Share shall confer on the holder thereof the right to one vote on a poll at a meeting of the Company on any resolution, the right to an equal share in any dividend that may be paid by the Company and the right to an equal share in the distribution of the surplus assets of the Company in a liquidation.

5.4 Share Price

The IPO Share Price is Rs. 14/- per Share. The Board of Directors is of the opinion, that the IPO Share Price of the tranche, pertaining to the Offer for Subscription, is fair and reasonable to the Company and to all existing shareholders of the Company.

5.5 Size of the Offering

If the Offering is fully subscribed, the Company and the Selling Shareholders, shall receive Rupees Two Hundred and Fifty Million Eight Hundred (Rs. 250,000,800/-) and Rupees Five Hundred and Eighty Eight Million Forty Seven Thousand Six Hundred (Rs. 588,047,600/-) respectively constituting a total of Rupees Eight Hundred and Thirty Eight Million Forty Eight Thousand Four Hundred (Rs. 838,048,400/-).

5.6 Objectives of the Offering

(i) Alumex has experienced a significant increase in demand for its powder coated products in the recent past and at present operates at almost 100% of its existing powder coating facility. The Company plans to acquire a new powder coating plant which would double the Company’s existing powder coating capacity of 1800MT per annum to cater to the said increased demand. Further, it also plans to invest in die manufacturing equipments to cater to the excess demand arising from powder coated products. Funds amounting to Rupees Two Hundred and Fifty Million Eight Hundred (Rs. 250,000,800/-) raised via the issue of Seventeen Million Eight Hundred and Fifty Seven Thousand Two Hundred (17,857,200) New Shares, would be utilised to finance the proposed production capacity expansion in the powder coating facility of Alumex, subsequent to meeting the IPO expenses in relation to the New Shares amounting to approximately Rupees Ten Million (Rs. 10,000,000/-) (refer Section 5.8).


The total cost of the powder coating plant together with the die manufacturing equipment is approximately Rs. 240 million and comprise of the following,

Table 5-4: Cost Break Down of Powder Coating Facility

Item Description Approximate

Cost (Rs. million)

Powder Coating Plant - Italtechno Powder Coating Plant - Building - Freight/Insurance, Taxes - Power Supply/Air Dryer/Waste Water System/ Installation/Other

100 32 35 23

190 Die Manufacturing Process

- Die Polishing Plant - Wire Cutter

22 18

40 General Power Supply

- 1000 KVA Generator 10 10 Total 240

Alumex has successfully evaluated the quotations from the suppliers for the powder coating plant and has subsequently placed the purchase order with Italtecno, Italy. Alumex expects the machine to be delivered during the Quarter 4 of the Financial Year (FY) 2013/14. With regard to the purchase of the equipment for the die manufacturing process mentioned above, quotations have been obtained from suppliers, and Alumex has already placed the purchase order with Micro Technica Technologies with the expected delivery during the Quarter 4 of the FY 2013/14.

Additionally, with respect to the building, it is still at the initial stage of finalising the design and is expected to commence construction work by March 2014.

Other equipments such as Air Dryer, Waste Water System, Wire Cutter etc. would be procured at the appropriate time subsequent to a proper evaluation by the management and the technical staff.

The funds raised through the New Shares would be utilised in full and the new powder coating facility would be in operation during FY 2014/15. The Company will not receive any proceeds raised via the Offer for Sale tranche of the Offering detailed in Section 5.1 above. All proceeds from the sale of Vendor Shares would be for the account of the Selling Shareholders.

Cost overruns in implementing the project (if any) will be financed by Alumex using bank borrowings and internally generated funds.

Subsequent to the completion of the new powder coating plant, it is expected that the Company’s revenue from the powder coating segment would increase gradually over the years and thereby have a positive impact on the profitability of the Company. The volumes and the revenue recorded through the existing powder coating plant, which has a similar capacity to the new plant, are presented in Section 11.2.1 and Section 11.3.1 of this Prospectus.


The total cost of the powder coating plant together with the die manufacturing equipment is approximately Rs. 240 million and comprise of the following,

Table 5-4: Cost Break Down of Powder Coating Facility

Item Description Approximate

Cost (Rs. million)

Powder Coating Plant - Italtechno Powder Coating Plant - Building - Freight/Insurance, Taxes - Power Supply/Air Dryer/Waste Water System/ Installation/Other

100 32 35 23

190 Die Manufacturing Process

- Die Polishing Plant - Wire Cutter

22 18

40 General Power Supply

- 1000 KVA Generator 10 10 Total 240

Alumex has successfully evaluated the quotations from the suppliers for the powder coating plant and has subsequently placed the purchase order with Italtecno, Italy. Alumex expects the machine to be delivered during the Quarter 4 of the Financial Year (FY) 2013/14. With regard to the purchase of the equipment for the die manufacturing process mentioned above, quotations have been obtained from suppliers, and Alumex has already placed the purchase order with Micro Technica Technologies with the expected delivery during the Quarter 4 of the FY 2013/14.

Additionally, with respect to the building, it is still at the initial stage of finalising the design and is expected to commence construction work by March 2014.

Other equipments such as Air Dryer, Waste Water System, Wire Cutter etc. would be procured at the appropriate time subsequent to a proper evaluation by the management and the technical staff.

The funds raised through the New Shares would be utilised in full and the new powder coating facility would be in operation during FY 2014/15. The Company will not receive any proceeds raised via the Offer for Sale tranche of the Offering detailed in Section 5.1 above. All proceeds from the sale of Vendor Shares would be for the account of the Selling Shareholders.

Cost overruns in implementing the project (if any) will be financed by Alumex using bank borrowings and internally generated funds.

Subsequent to the completion of the new powder coating plant, it is expected that the Company’s revenue from the powder coating segment would increase gradually over the years and thereby have a positive impact on the profitability of the Company. The volumes and the revenue recorded through the existing powder coating plant, which has a similar capacity to the new plant, are presented in Section 11.2.1 and Section 11.3.1 of this Prospectus.



(ii) In order to be eligible for the reduced rate of corporate tax for the period commencing from the year of assessment 2013/2014 to 2015/2016 in terms of Section 59D(1) of the Inland Revenue Act No. 10 of 2006 as amended by Act No. 18 of 2013 (Inland Revenue Act). Section 59D(1) reads as follows;

“59D (1)the tax rate applicable on the profits and income within the meaning of paragraph (a) of section 3 (other than any profits and income from the sale of any capital assets), of any company which lists its shares on or after April 1, 2013 but prior to April 1, 2014, in the Colombo Stock Exchange licensed by the Securities and Exchange Commission of Sri Lanka and issues by way of Initial Public Offering not less than twenty per centum of its shares to the general public, shall be reduced by fifty per centum for the year of assessment in which such shares are listed and for another two years of assessment immediately succeeding that year of assessment subject where such company after listing continues to maintain not less than twenty per centum of holding of its shares by the general public.”

(iii) A listing of the Shares on the CSE shall provide the Company access to the capital market of Sri Lanka thereby enabling the Company to raise equity funds for future expansions and growth.

(iv) The listing through the IPO would facilitate Alumex to broad-base the ownership of the Company as per the ‘Public Holding’ Rule of the CSE, which would strengthen its identity through increased visibility and brand image amongst the public.

5.7 Listing

The Offering herein contemplated comprises of Fifty Nine Million Eight Hundred and Sixty Thousand Six Hundred (59,860,600) Ordinary Shares. If fully subscribed, the Offered Shares will amount to 20% of the Issued and Paid up Ordinary Shares subsequent to the Offering.

An application has been made to the CSE for permission for a listing of Two Hundred and Ninety Nine Million Three Hundred and Two Thousand Eight Hundred and Forty (299,302,840) Ordinary Voting Shares, being the entirety of the Issued and Paid up Ordinary Shares represented in the Stated Capital subsequent to the IPO.

It is expected that the Company will meet the minimum Stated Capital requirement [CSE Listing Rule 2.1.3(a)] and the minimum Public Holding requirement [CSE Listing Rule 2.1.3(c)] of the CSE on the completion of the Offering pursuant to which the listing of the entire Ordinary Voting Shares will take place on the Diri Savi Board of the CSE. The minimum Stated Capital requirement of the CSE stipulates that the stated capital of the entity for which a listing is sought on the Diri Savi Board of the CSE, should not be less than Rupees One Hundred Million (Rs. 100,000,000/-) at the time of listing whilst the minimum Public Holding requirement stipulates that, 10% of the total number of shares for which a listing is sought should be in the hands of a minimum number of 200 Public shareholders. If in the event the Company being not able to comply with Rule 2.1.3(a) and Rule 2.1.3(c) of the CSE Listing Rules, the Company will return all Application monies received by it.

Alumex has positive net assets as per the consolidated audited financial statements for the year immediately preceding the date of application and an operating history of more than one (01) year, thus has complied with Rule 2.1.3(b) and Rule 2.1.3(d) of the CSE Listing Rules respectively.


What constitutes ‘Public Holding’ is ascertained in terms of the Directive issued by the Securities and Exchange Commission of Sri Lanka, under Section 13(c) and 13(cc) of the Securities and Exchange Commission Act No. 36 of 1987 (as amended) issued on December 20, 2013 (Ref: SEC/LEG/13/12/37), ‘Public Holding’ definition is set out in Annex A of this Prospectus.

5.8 Cost of the Offering

The total costs associated with the Offering are estimated to be approximately Rs. 33 million. These include all direct costs and expenses associated with the Offering, inclusive of but not limited to the initial listing fees to the CSE, management/advisory fees to the Financial Advisors and Managers to the Offering, fees for the registrar function, advisory fees, certain legal, consultancy and accountancy fees, advertising and promotional costs, printing costs, brokerage commissions and stamp duty. Such costs will be recovered from the proceeds of the Offering and internally generated cash of Rs. 10 million and Rs. 23 million respectively.

5.9 Brokerage

Brokerage at the rate of zero decimal six per centum (0.6%) of the value of the Offered Shares will be paid in respect of the number of Shares allotted/transferred on Applications bearing the original seal of any bank operating in Sri Lanka or a member/trading member of the CSE or Financial Advisors and Managers to the Offer or any other intermediary appointed by the Company and/or Financial Advisors and Managers to the Offering involved in the marketing of the Offering.

5.10 Minimum Subscription and Underwriting

The total amount of funding required by the Company (to be raised on the Offer for Subscription tranche) to meet the cost of the powder coating facility and to meet part of the cost of the Issue, is Rupees Two Hundred and Fifty Million (Rs. 250,000,000/-), (cost of the powder coating facility being Rs. 240,000,000/- and to meet part of the cost of the Issue of Rs. 10,000,000/-, the balance sum of Rs. 23,000,000/- being funded by the Company out of its internally generated funds as set out in Section 5.8 of the Prospectus). Any amount undersubscribed of the said Rs. 250,000,000/- except the Rs. 66,265,400/- referred to in the paragraph below, would be funded by the Company out of its internally generated funds and out of debt capital to be secured.

Subject to CSE Listing Rule 2.1.3 being complied with, in the event of an undersubscription, the subscribers will be allocated the Shares they have applied for and the funds raised thereby will be utilised in the first instance to fulfil the Offer for Subscription tranche, of the Offering detailed in Section 5.1 above. In terms of CSE Listing Rule 2.1.3 (a), the Company is required to raise a minimum sum of Rs. 66,265,400/- on the Offer for Subscription tranche in order to increase its Stated Capital to Rs. 100,000,000/- in order to qualify for a listing.

As set out in Section 5.7 of this Prospectus, if in the event the Company being not able to comply with Rule 2.1.3(a) and Rule 2.1.3(c) of the CSE Listing Rules (having already complied with Rule 2.1.3(b) and 2.1.3(d)), the Company will return all Application monies received by it.

The Company shall seek a listing even if the Offering is not fully subscribed [subject to the Company satisfying the requirements of the CSE Listing Rule 2.1.3(a) and 2.1.3(c)].

Accordingly, the Company has not entered into any underwriting arrangement with regards to this Offering.


What constitutes ‘Public Holding’ is ascertained in terms of the Directive issued by the Securities and Exchange Commission of Sri Lanka, under Section 13(c) and 13(cc) of the Securities and Exchange Commission Act No. 36 of 1987 (as amended) issued on December 20, 2013 (Ref: SEC/LEG/13/12/37), ‘Public Holding’ definition is set out in Annex A of this Prospectus.

5.8 Cost of the Offering

The total costs associated with the Offering are estimated to be approximately Rs. 33 million. These include all direct costs and expenses associated with the Offering, inclusive of but not limited to the initial listing fees to the CSE, management/advisory fees to the Financial Advisors and Managers to the Offering, fees for the registrar function, advisory fees, certain legal, consultancy and accountancy fees, advertising and promotional costs, printing costs, brokerage commissions and stamp duty. Such costs will be recovered from the proceeds of the Offering and internally generated cash of Rs. 10 million and Rs. 23 million respectively.

5.9 Brokerage

Brokerage at the rate of zero decimal six per centum (0.6%) of the value of the Offered Shares will be paid in respect of the number of Shares allotted/transferred on Applications bearing the original seal of any bank operating in Sri Lanka or a member/trading member of the CSE or Financial Advisors and Managers to the Offer or any other intermediary appointed by the Company and/or Financial Advisors and Managers to the Offering involved in the marketing of the Offering.

5.10 Minimum Subscription and Underwriting

The total amount of funding required by the Company (to be raised on the Offer for Subscription tranche) to meet the cost of the powder coating facility and to meet part of the cost of the Issue, is Rupees Two Hundred and Fifty Million (Rs. 250,000,000/-), (cost of the powder coating facility being Rs. 240,000,000/- and to meet part of the cost of the Issue of Rs. 10,000,000/-, the balance sum of Rs. 23,000,000/- being funded by the Company out of its internally generated funds as set out in Section 5.8 of the Prospectus). Any amount undersubscribed of the said Rs. 250,000,000/- except the Rs. 66,265,400/- referred to in the paragraph below, would be funded by the Company out of its internally generated funds and out of debt capital to be secured.

Subject to CSE Listing Rule 2.1.3 being complied with, in the event of an undersubscription, the subscribers will be allocated the Shares they have applied for and the funds raised thereby will be utilised in the first instance to fulfil the Offer for Subscription tranche, of the Offering detailed in Section 5.1 above. In terms of CSE Listing Rule 2.1.3 (a), the Company is required to raise a minimum sum of Rs. 66,265,400/- on the Offer for Subscription tranche in order to increase its Stated Capital to Rs. 100,000,000/- in order to qualify for a listing.

As set out in Section 5.7 of this Prospectus, if in the event the Company being not able to comply with Rule 2.1.3(a) and Rule 2.1.3(c) of the CSE Listing Rules (having already complied with Rule 2.1.3(b) and 2.1.3(d)), the Company will return all Application monies received by it.

The Company shall seek a listing even if the Offering is not fully subscribed [subject to the Company satisfying the requirements of the CSE Listing Rule 2.1.3(a) and 2.1.3(c)].

Accordingly, the Company has not entered into any underwriting arrangement with regards to this Offering.



5.11 Opening of Subscription List and Closure Date

The subscription list for the Offered Shares will open at 9.00 a.m. on March 06, 2014 and shall, subject to the occurrence of the events in the following paragraph, remain open for fourteen (14) Market Days (including the date of opening) until closure at 4.30 p.m. on March 25, 2014.

In the event of an oversubscription of the Offering prior to March 25, 2014, the Company shall inform the CSE in writing immediately of such fact and the subscription list will be closed at 4.30 p.m. on the same day on which it is fully subscribed. Also, the Board reserves the discretion to close the subscription list on any Market Day within the period of fourteen (14) Market Days irrespective of whether the Offering is oversubscribed or not, by providing one (01) Market Day’s prior notice to the CSE.

5.12 Inspection of Documents

Articles of Association, Auditors’ Reports and Audited Financial Statements for the five (05) financial years ended March 31, 2013 (i.e. the five (05) financial years immediately preceding the date of this Prospectus) and Interim Financial Statements for the nine (09) month period ended December 31, 2013 and all other documents, including material contracts and management agreements entered into by the Company would be made available for inspection by the Public during normal working hours at Hayleys Group Services (Private) Limited, No. 400, Deans Road, Colombo 10, for a period not less than fourteen (14) Market Days as per Rule 3.1.19(a) of the CSE Listing Rules.

The Prospectus, Application Form and Articles of Association of the Company will be available on the website of the CSE, www.cse.lk, the website of the Company, www.alumexgroup.com and the website of the Financial Advisors and Managers to the Offering, www.ndbib.com for a period not less than fourteen (14) Market Days as stipulated in Rule 3.1.19(b) of the CSE Listing Rules.

5.13 Eligible Applicants

In order to achieve the objective referred in Section 5.6 (ii), Applications from investors qualifying as “Public” (as defined in Annex A) will be given priority in accepting and allocation of the Offered Shares.

Applications are invited from the following categories of investors having a valid CDS Account:

• Citizens of Sri Lanka who are resident in or outside Sri Lanka and above 18 years of age; or

• Companies, corporations or institutions incorporated or established within Sri Lanka; or

• Corporate bodies incorporated or established outside Sri Lanka; or

• Approved unit trusts licensed by the SEC; or

• Approved provident funds and contributory pension schemes registered/incorporated/ established in Sri Lanka (in this case, Applications should be in the name of the trustee/board of management in order to facilitate the opening of the CDS account); or

• Foreign citizens above 18 years of age (irrespective of whether they are resident in Sri Lanka or overseas); or

• Regional and country funds approved by the SEC.

Applications made by individuals under 18 years of age or those in the names of sole proprietorships, partnerships, unincorporated trusts and non-corporate bodies will be rejected.


Applications submitted under the Unit Trust Investor Category should conform to the criteria defined by the SEC Directive dated June 6, 2011 (Ref: SEC/LEG/11/06/01).

Eligible Applicants may fall into one of the following categories.

• Retail Individual Investor Category

• Unit Trust Investor Category

• Non-Retail Investor Category

Please refer Section 4.0 “Glossary of Terms Related to the Offering” for definitions of the aforementioned categories.

5.14 Procedure for Application

Applicants applying for the Offered Shares should submit their Applications in the manner as set out in this Prospectus.

The Prospectus will be made available free of charge from the collection points listed in Annex B. The Prospectus can also be downloaded from www.cse.lk, www.alumexgroup.com and www.ndbib.com.

5.14.1 How to Apply

APPLICANTS SHOULD APPLY ONLY THROUGH ONE INVESTOR CATEGORY (INCLUDING JOINT APPLICANTS) AND WOULD BE PERMITTED TO SUBMIT ONLY ONE APPLICATION FORM. TWO OR MORE APPLICATIONS SUBMITTED BY THE SAME APPLICANT EITHER UNDER THE SAME CATEGORY OR DIFFERENT CATEGORIES WILL BE CONSTRUED AS MULTIPLE APPLICATIONS AND WILL BE REJECTED.

Applicants falling under Retail Individual and Non-Retail Investor Categories should apply for the Offered Shares on the Application Form printed for this purpose, which constitutes part of this Prospectus. Such Application Forms will be made available from the collection points listed in Annex B and can also be downloaded from www.cse.lk, www.alumexgroup.com and www.ndbib.com.

Applicants applying under the Unit Trust Investor Category must apply for Offered Shares using the separate YELLOW coloured Application Form printed for this purpose, which constitutes part of this Prospectus. Such Application Forms will be made available through the registered office of the Company, Alumex Limited, Sapugaskanda, Makola, Registrars to the Offering, P W Corporate Secretarial (Private) Limited, 3/17, Kynsey Road, Colombo 08, and Financial Advisors and Managers to the Offering, NDB Investment Bank Limited, No. 40, Navam Mawatha, Colombo 02. Exact size copies of the Application Form printed on YELLOW coloured paper as specified herein will also be permissible under the Unit Trust Investor Category.

Applications submitted under the Unit Trust Investor Category should accompany a confirmation by the trustee confirming that such unit trust is in conformity with the criteria defined by the SEC Directive dated June 6, 2011 (Ref: SEC/LEG/11/06/01) and CSE Listing Rule 3.1.5(b)(iii).

Applicants applying under Retail Individual, Non-Retail and Unit Trust Investor Categories should submit their Application Forms to the Registrars to the Offering in terms of Section 5.14.8.

An Applicant of a joint Application, applying through another Application Form is deemed to have made multiple Applications and will be rejected.



All resident Applicants should indicate in the Application for Shares, their NIC number or the company registration number as the case may be. The passport number may be indicated only if the Applicant does not have a NIC number.

As per the Directive of the Securities and Exchange Commission made under Circular No. 08/2010 dated November 22, 2010 and Circular No. 13/2010 issued by the Central Depository System (Private) Limited dated November 30, 2010, all Shares allotted must be directly uploaded to the CDS accounts. Existing Shares transferred to Applicants allocated on the Offer for Sale tranche would similarly be directly uploaded to the CDS account of the Applicant. As such, all Applicants should indicate their CDS account number in the Application Form. Applicants who do not have a CDS account are advised to open a valid CDS account prior to submitting the Application, in order to facilitate the uploading of allotted/transferred Shares to their CDS account.

Please note that upon the allotment/transfer of Shares under this Offering, the allotted/transferred Shares would be credited to the Applicant’s CDS account so indicated. Please note that a SHARE CERTIFICATE SHALL NOT BE ISSUED.

Any Application which does not carry a valid CDS account number or indicates a number of a CDS account which is not opened at the time of the closure of the subscription list or which indicates an inaccurate/incorrect CDS account number, shall be rejected and no allotment/transfer of Shares will be made.

You can open a CDS account through any member/trading member of the CSE as set out in Annex B or through any custodian banks as set out in Annex C of this Prospectus.

An Applicant who has made an Application under a margin trading account should not apply individually or jointly on a separate Application Form. Such Applications will also be construed as multiple Applications and will be rejected.

Subject to the above, the Company reserves the right to reject multiple Applications and suspected multiple Applications which are not allowed.

Please note that Applicant information such as full name, address, NIC number/passport number and residency will be downloaded from the database of CDS, based on the CDS account number indicated in the Application Form. Such information shall take precedence over information provided in the Application Form.

Application Forms stating third party CDS accounts instead of their own CDS account numbers, except in the case of margin trading accounts, will be rejected.

Care must be taken to follow the instructions on the reverse of the Application Form. Applications that do not strictly conform to such instructions and additional conditions set out hereunder or which are illegible may be rejected.

PLEASE NOTE THAT ALLOTMENT/TRANSFER OF SHARES WILL ONLY BE MADE IF YOU HAVE A VALID CDS ACCOUNT AT THE TIME OF SUBMISSION OF APPLICATION.

Applicants have the option of having their Shares ‘locked’ in the CDS as described below. Shares that are locked will not be available for trading purposes and will not be visible to the participant. Such Applicants would have to fill in the relevant section provided in the Application Form for this purpose. If the Applicant has not specified that the Shares need to be deposited to the ‘locked’ balance in the CDS account, the said Shares would be deposited to Applicant’s ‘trading’ balance in the CDS account.

Operation of a ‘locked’ balance in the CDS

In order to preserve the confidentiality of shareholder information and to ensure that securities are not made available for trading for those shareholders who do not want to trade the securities, the CDS provides a mechanism where securities can be ‘locked’ in the CDS account.


The CDS maintains two balances for each CDS account, namely a ‘trading’ balance and a ‘locked’ balance. The trading balance would be visible to the CDS participant and all dealings and trading would be permitted on the said trading balance, as done normally.

As opposed to the trading balance, the locked balance will not be visible to the CDS participant and all dealings on such locked balance would be suspended thereby maintaining the confidentiality of the information and also safeguarding the account holder from any unauthorised sale by a broker.

At the option and request of an account holder, the CDS would transfer a named quantity of securities from the locked balance to the trading balance of a CDS account and/or from the trading balance to the locked balance.

5.14.2 Number of Shares Applied

Applications should be for a minimum of one hundred (100) Shares [for a value of Rupees one thousand four hundred (Rs.1,400/-)] and in multiples of hundred (100) Shares thereof.

Applications for less than one hundred (100) Shares or for a number which is not in multiples of hundred (100) Shares will be rejected and the accompanying cheques, bank drafts or bank guarantees will not be sent for clearing but be returned via ordinary post at the risk of the Applicant, or in the case of joint Applicants, the first named Applicant. The cheque or bank draft or bank guarantee or RTGS transfer should be issued to the exact value of the number of Shares applied for multiplied by the Share Price. Cheques, bank drafts, bank guarantees or RTGS transfers not conforming to the above requirement will be rejected at the outset.

Please refer Section 5.15.1 for details with respect to the mode of remittance.

5.14.3 Identification Information

All Applicants should provide in the Application, their CDS account number in the appropriate cage provided.

Applicants are requested to state their residency and nationality in the appropriate spaces provided in the Application Form.

The NIC, passport, or company registration number as the case may be, must be stated in the Application Form and any Application Form which does not provide the appropriate identification information will be rejected.

Resident Applicants may use the Passport for purposes of identification only if they do not have a NIC number.




As per the Directive of the Securities and Exchange Commission made under Circular No. 08/2010 dated November 22, 2010 and Circular No. 13/2010 issued by the Central Depository System (Private) Limited dated November 30, 2010, all Shares allotted must be directly uploaded to the CDS accounts. Existing Shares transferred to Applicants allocated on the Offer for Sale tranche would similarly be directly uploaded to the CDS account of the Applicant. As such, all Applicants should indicate their CDS account number in the Application Form. Applicants who do not have a CDS account are advised to open a valid CDS account prior to submitting the Application, in order to facilitate the uploading of allotted/transferred Shares to their CDS account.




An Applicant who has made an Application under a margin trading account should not apply individually or jointly on a separate Application Form. Such Applications will also be construed as multiple Applications and will be rejected.

Subject to the above, the Company reserves the right to reject multiple Applications and suspected multiple Applications which are not allowed.

Please note that Applicant information such as full name, address, NIC number/passport number and residency will be downloaded from the database of CDS, based on the CDS account number indicated in the Application Form. Such information shall take precedence over information provided in the Application Form.

Application Forms stating third party CDS accounts instead of their own CDS account numbers, except in the case of margin trading accounts, will be rejected.

Care must be taken to follow the instructions on the reverse of the Application Form. Applications that do not strictly conform to such instructions and additional conditions set out hereunder or which are illegible may be rejected.

PLEASE NOTE THAT ALLOTMENT/TRANSFER OF SHARES WILL ONLY BE MADE IF YOU HAVE A VALID CDS ACCOUNT AT THE TIME OF SUBMISSION OF APPLICATION.

Applicants have the option of having their Shares ‘locked’ in the CDS as described below. Shares that are locked will not be available for trading purposes and will not be visible to the participant. Such Applicants would have to fill in the relevant section provided in the Application Form for this purpose. If the Applicant has not specified that the Shares need to be deposited to the ‘locked’ balance in the CDS account, the said Shares would be deposited to Applicant’s ‘trading’ balance in the CDS account.

Operation of a ‘locked’ balance in the CDS

In order to preserve the confidentiality of shareholder information and to ensure that securities are not made available for trading for those shareholders who do not want to trade the securities, the CDS provides a mechanism where securities can be ‘locked’ in the CDS account.


The CDS maintains two balances for each CDS account, namely a ‘trading’ balance and a ‘locked’ balance. The trading balance would be visible to the CDS participant and all dealings and trading would be permitted on the said trading balance, as done normally.

As opposed to the trading balance, the locked balance will not be visible to the CDS participant and all dealings on such locked balance would be suspended thereby maintaining the confidentiality of the information and also safeguarding the account holder from any unauthorised sale by a broker.

At the option and request of an account holder, the CDS would transfer a named quantity of securities from the locked balance to the trading balance of a CDS account and/or from the trading balance to the locked balance.

5.14.2 Number of Shares Applied

Applications should be for a minimum of one hundred (100) Shares [for a value of Rupees one thousand four hundred (Rs.1,400/-)] and in multiples of hundred (100) Shares thereof.

Applications for less than one hundred (100) Shares or for a number which is not in multiples of hundred (100) Shares will be rejected and the accompanying cheques, bank drafts or bank guarantees will not be sent for clearing but be returned via ordinary post at the risk of the Applicant, or in the case of joint Applicants, the first named Applicant. The cheque or bank draft or bank guarantee or RTGS transfer should be issued to the exact value of the number of Shares applied for multiplied by the Share Price. Cheques, bank drafts, bank guarantees or RTGS transfers not conforming to the above requirement will be rejected at the outset.

Please refer Section 5.15.1 for details with respect to the mode of remittance.

5.14.3 Identification Information

All Applicants should provide in the Application, their CDS account number in the appropriate cage provided.

Applicants are requested to state their residency and nationality in the appropriate spaces provided in the Application Form.

The NIC, passport, or company registration number as the case may be, must be stated in the Application Form and any Application Form which does not provide the appropriate identification information will be rejected.

Resident Applicants may use the Passport for purposes of identification only if they do not have a NIC number.



Tabulated below is the relevant identification information that a prospective investor should provide depending on the legal status:

Table 5-5: Identification Information

Citizenship/Legal Form

Identification Information

NIC Number

Passport Number

Company Registration

Number

Common Seal or

Rubber Stamp

Sri Lankan Citizens Sri Lankan Citizens with no NIC Number - Note I Foreign Citizens - Note II Corporate Entities - Note III

Note I: In the case of Sri Lankan citizens, the passport number will be accepted only when the NIC number is not available. The CDS account must be for the same passport number.

Note II: Foreign citizens must state the passport number in the space provided.

Note III: The company registration number must be provided. The common seal or rubber stamp should be affixed and the Application Form duly signed as stipulated in the constitutional documents of such Applicants.

A valid CDS account number must be stated in the Application Form, and any Application Form which does not provide the appropriate identification information will be rejected. All information about the Applicant (i.e. name, address, nationality and NIC or passport number) will be downloaded from the database of CDS, based on the number given in the Application Form. In the event of any discrepancy between the information in the CDS and in the Application, the information in the CDS shall take precedence.

If the CDS account number is not indicated in the Application Form, or the number indicated in the form is found to be inaccurate/incorrect, or the account number indicated is not opened at the time of closing the Offering such Application will be rejected and no allotments of Shares will be made.

5.14.4 Key Responsibility of a Non-Resident Investor

Non-resident investors may be affected by the laws of the jurisdiction of their residence. If the non-resident investors wish to apply for the Shares, it is their responsibility to comply with the laws relevant to the jurisdiction of their residence and of Sri Lanka.

5.14.5 Margin Trading

Applicants who wish to apply through their margin trading account, should submit the Application in the name of the “margin provider/Applicant’s name” signed by the margin provider.

The Applicants should state the relevant CDS account number relating to the margin trading account in the space provided for the CDS account number in the Application Form. The Shares shall be uploaded to the CDS account number of the margin trading account.

A photocopy of the margin trading agreement must be submitted along with the Application.


Please note that the margin provider can apply under its own name and such Applications will not be construed as multiple Applications. Details of multiple Applications are available under Section 5.14.1.

5.14.6 Applications Made Under Power of Attorney

In the case of Applications made under Power of Attorney (POA), a copy of the said POA, certified by a Notary Public to be a true copy of the original, should be lodged with the Registrars to the Offering along with the Application Form. The original POA should not be attached.

5.14.7 Joint Applications

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 Application Form. In the case of joint Applicants, the signatures and particulars in respect of all Applicants must be given under the relevant headings in the Application Form.

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 shall not apply through a separate Application Form either individually or jointly.

5.14.8 Submission of Applications

Application Forms properly and legibly filled in accordance with the instructions thereof, along with the applicable remittance (cheque or bank draft or bank guarantee or RTGS transfer only) for the full amount payable on Application should be enclosed in an envelope marked “Alumex Limited – Initial Public Offering” on the top left-hand corner and be addressed and dispatched by post or courier or delivered by hand to the Registrars to the Offering at the following address prior to 4.30 p.m. Local Time on the Closure Date.

P W Corporate Secretarial (Pvt) Ltd 3/17, Kynsey Road Colombo 08.

Applications may also be handed over to the Financial Advisors and Managers to the Offering, Bankers to the Offering and their designated branches, members and trading members of the CSE as set out in Annex B, prior to 4.30 p.m. Local Time on the Closure Date.

In the case of Applications dispatched by courier or post, such Applications should reach the Registrars to the Offering not later than 4.30 p.m. Local Time on the Market Day immediately following the Closure Date. Any Applications received after the above deadline shall be rejected even though the courier or postmark is dated prior to the Closure Date.

5.15 Payment of Application Monies

5.15.1 Mode of Remittance

Payment should be made separately in respect of each Application by way of a cheque or bank draft or bank guarantee for the full amount payable on application. Remittances on Applications will be deposited in a separate bank account in the name of “Alumex Limited – Initial Public Offering”.



Payment for Applications for Shares of a value below Rs. 100,000,000/- may 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. Any Application for Shares of a value below Rs. 100,000,000/- accompanied by two or more cheques or bank drafts or bank guarantees will be rejected at the outset.

Applicants making Applications for Shares of a value above and inclusive of Rs. 100,000,000/- will be permitted to submit multiple bank drafts (not cheques) or multiple bank guarantees or RTGS transfers. 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 number/bank guarantee number. Applications for Shares of a value above and inclusive of Rs. 100,000,000/- accompanying multiple bank drafts (not cheques) or multiple bank guarantees will not be rejected.

Cash will not be accepted. Anyone wishing to pay cash should obtain a bank draft from any Licensed Commercial Bank (LCB) in Sri Lanka.

5.15.2 Cheques or Bank Drafts - Resident Sri Lankan Investors

Cheques or bank drafts should be drawn on any LCB in Sri Lanka and crossed “Account Payee Only” and made payable to “Alumex Limited – Initial Public Offering”.

Cheques or bank drafts accompanying Application Forms made for less than one hundred (100) Shares, i.e. Rupees One Thousand Four Hundred (Rs. 1,400/-) or for a number which is not in multiples of hundred (100) Shares (as mentioned in Section 5.14.2) will not be sent for clearing and shall be returned via ordinary post at the risk of the Applicant, or in the case of joint Applicants, to the first named Applicant.

In the event that cheques are not realised within two (02) Market Days from the day of presenting the same to the bank for clearing, the Directors reserve the right to reject the Applications and return the Application monies. No allocation of Shares will be made to such Applicants.

Applicants residing in outstation areas from which cheque clearance may take over two (02) Market Days are advised to make payment via bank drafts to avoid any delays.

Cheques must be honoured on first presentation to the bank for the Application to be valid. Applications supported by cheques which are not honoured on first presentation will be rejected.

5.15.3 Bank Guarantees – Resident Sri Lankan Investors

Applications made by resident Sri Lankan investors backed by bank guarantees presented in line with the requirements set out in Section 5.15.1 will be accepted. Bank guarantees will be presented to the respective banks only after the Offered Shares have been allotted/transferred. Bank guarantees should be issued by any LCB in Sri Lanka and in favour of “Alumex Limited – Initial Public Offering” in a manner acceptable to the Company and be payable on demand.

Bank guarantees should be valid for a minimum of one (01) month from the date of opening of the Offering (i.e. March 06, 2014).

Investors are encouraged to discuss with their relevant bankers with regard to the issuance of bank guarantees and all related charges that would be incurred by the investors.

Foreign Investors and non-resident Sri Lankan investors should refer Section 5.15.5.


5.15.4 RTGS Transfers - Resident Sri Lankan Investors

In case of RTGS transfers, such transfers should be made to the credit of “Alumex Limited – Initial Public Offering” bearing the account number 0001 1008 6210 at Sampath Bank PLC with value on the Opening Date of Offering (i.e. the funds to be made available to the above account on the Opening Date of Offering).

The Applicant should obtain a confirmation from the Applicant’s bank, to the effect that arrangements have been made to transfer payment for the full amount payable on application to the credit of “Alumex Limited – Initial Public Offering” bearing the account number 0001 1008 6210 at Sampath Bank PLC with value on the opening date of Offering (i.e. the funds to be made available to the above account on the opening date of Offering) and should be attached with the Application Form.

5.15.5 Foreign Currency Remittance

This section is applicable to:

• Citizens of Sri Lanka who are above 18 years of age and resident overseas;


• Regional or country funds approved by the SEC;

• Foreign citizens (irrespective of whether they are resident in Sri Lanka or overseas) who are above 18 years of age.

The abovementioned Applicants should make their payments using one of the following methods as the case may be.

(a) A Foreign Investor may invest through a SIA maintained with any LCB in Sri Lanka. The procedure for arranging payments through a SIA is presented below:

- A Foreign Investor may use the services of a custodian bank as an intermediary when investing in the Sri Lankan securities market;

- The intermediary may open a SIA, on investor’s behalf;

- In conjunction with the SIA, an account with the CDS must be opened in case the investor does not already possess a valid CDS account;

- In respect of regional or country funds investing for the first time in Sri Lanka, the intermediary will facilitate the approval process regulated by the SEC;

- Payment for Offered Shares should be made through a bank draft or bank guarantee or RTGS transfer issued by a LCB against the funds arranged through the SIA and made payable to “Alumex Limited – Initial Public Offering”.

(b) A Foreign Investor may invest through inward remittances of foreign currency held in a FCBU account of the Applicant maintained with any LCB in Sri Lanka:

- The Applicant should forward the Application Form supported by an unconditional bank guarantee drawn on the Applicant’s FCBU account pending allotment/transfer of Offered Shares, with confirmation from the LCB that upon notification of the allotment/transfer of shares, the allotment/transfer value would be remitted through the Applicant’s SIA;



- Upon allotment/transfer of Offered Shares, foreign currency to the extent of the Sri Lanka Rupee equivalent value of Offered Shares allotted/transferred would be called on the bank guarantee drawn on the Applicant’s FCBU account. The requisite funds would then be credited to a SIA opened in favour of the Applicant via the aforementioned FCBU account;

- This procedure would protect a prospective investor from any losses accruing due to fluctuating exchange rates.

(c) In addition to the payments made through FCBU and SIA mentioned above, a foreign citizen resident in Sri Lanka under the Resident Guest Scheme may invest through the RGFCA/RGRCA-Investors maintained with any LCB in Sri Lanka. An investor who wishes to avail him/herself of this facility should make the payment for Offered Shares through a bank draft or an unconditional bank guarantee or RTGS transfer in Sri Lanka Rupees or by converting foreign currency funds available in the RGFCA/RGRCA-Investors as the case may be (based on the guidelines provided by the Exchange Control Department of CBSL) and made payable to “Alumex Limited – Initial Public Offering”.

The endorsement must be clearly indicated on the cheque or bank draft or the bank guarantee or the RTGS transfer confirmation to the effect that, arrangements have been made to facilitate such payment to be made against funds available in the individual’s SIA/FCBU/RGFCA/RGRCA-Investors account. Alternatively, a document detailing the endorsement could be submitted along with the payment and Application.

Applications supported by foreign currency remittances should be made in conformity with requisite declarations accompanied by the documentation stipulated by the Controller of Exchange.

5.15.6 Restrictions Applicable to Foreign Citizens Resident in Sri Lanka

Foreign citizens resident in Sri Lanka may make payments through Sri Lanka Rupee Accounts only if they possess dual citizenship where one such citizenship is Sri Lankan. Foreign citizens having Sri Lankan citizenship should attach a certified copy of the citizenship certificate with the Application Form.

Foreign citizens residing in Sri Lanka having valid residency visas should note that they cannot make remittances via cheques or bank drafts or bank guarantees or RTGS transfers drawn on Sri Lanka Rupee accounts maintained with any LCBs in Sri Lanka but may do so via SIA/FCBU/RGFCA/RGRCA-Investors account as detailed in Section 5.15.5 above. Applications made by foreign citizens not in accordance to the foregoing shall be rejected.

5.16 Rejection of Applications

• Application Forms which are incomplete in any way and/or are not in accordance with the terms and conditions set out in Section 5.0 of this Prospectus will be rejected at the absolute discretion of the Company.

• Any Application which does not carry a CDS account number, or indicates a number of a CDS account which is not opened at the time of the closure of the subscription list or which indicates an inaccurate or incorrect CDS account number, shall be rejected and no allotment/transfer of Shares will be made.

• Application Forms stating third party CDS accounts instead of their own CDS account numbers, except in the case of margin trading accounts, will be rejected.



- Upon allotment/transfer of Offered Shares, foreign currency to the extent of the Sri Lanka Rupee equivalent value of Offered Shares allotted/transferred would be called on the bank guarantee drawn on the Applicant’s FCBU account. The requisite funds would then be credited to a SIA opened in favour of the Applicant via the aforementioned FCBU account;

- This procedure would protect a prospective investor from any losses accruing due to fluctuating exchange rates.

(c) In addition to the payments made through FCBU and SIA mentioned above, a foreign citizen resident in Sri Lanka under the Resident Guest Scheme may invest through the RGFCA/RGRCA-Investors maintained with any LCB in Sri Lanka. An investor who wishes to avail him/herself of this facility should make the payment for Offered Shares through a bank draft or an unconditional bank guarantee or RTGS transfer in Sri Lanka Rupees or by converting foreign currency funds available in the RGFCA/RGRCA-Investors as the case may be (based on the guidelines provided by the Exchange Control Department of CBSL) and made payable to “Alumex Limited – Initial Public Offering”.

The endorsement must be clearly indicated on the cheque or bank draft or the bank guarantee or the RTGS transfer confirmation to the effect that, arrangements have been made to facilitate such payment to be made against funds available in the individual’s SIA/FCBU/RGFCA/RGRCA-Investors account. Alternatively, a document detailing the endorsement could be submitted along with the payment and Application.

Applications supported by foreign currency remittances should be made in conformity with requisite declarations accompanied by the documentation stipulated by the Controller of Exchange.

5.15.6 Restrictions Applicable to Foreign Citizens Resident in Sri Lanka

Foreign citizens resident in Sri Lanka may make payments through Sri Lanka Rupee Accounts only if they possess dual citizenship where one such citizenship is Sri Lankan. Foreign citizens having Sri Lankan citizenship should attach a certified copy of the citizenship certificate with the Application Form.

Foreign citizens residing in Sri Lanka having valid residency visas should note that they cannot make remittances via cheques or bank drafts or bank guarantees or RTGS transfers drawn on Sri Lanka Rupee accounts maintained with any LCBs in Sri Lanka but may do so via SIA/FCBU/RGFCA/RGRCA-Investors account as detailed in Section 5.15.5 above. Applications made by foreign citizens not in accordance to the foregoing shall be rejected.

5.16 Rejection of Applications

• Application Forms which are incomplete in any way and/or are not in accordance with the terms and conditions set out in Section 5.0 of this Prospectus will be rejected at the absolute discretion of the Company.

• Any Application which does not carry a CDS account number, or indicates a number of a CDS account which is not opened at the time of the closure of the subscription list or which indicates an inaccurate or incorrect CDS account number, shall be rejected and no allotment/transfer of Shares will be made.

• Application Forms stating third party CDS accounts instead of their own CDS account numbers, except in the case of margin trading accounts, will be rejected.


• Applications delivered by hand after 4.30 p.m. Local Time on the Closure Date of the Offering will be rejected. Applications received by courier/post after 4.30 p.m. Local Time on the succeeding Market Day immediately following the Closure Date of the Offering, will also be rejected even if they carry a courier acceptance date/postmark date earlier than the Closure Date.

• Applications made for less than one hundred (100) Shares or for a number which is not in multiples of hundred (100) Shares will be rejected.

• Applicants should apply only through one investor category and would be permitted to submit only one Application Form. Two or more Applications submitted by the same Applicant either under the same category or different categories will be construed as multiple Applications and will be rejected.

• The Company reserves the right to reject multiple Applications and suspected multiple Applications which are not allowed, as mentioned in Section 5.14.1.

• Payment for Applications of Offered Shares of a value below Rs. 100,000,000/- accompanying two or more cheques or bank drafts or bank guarantees as mentioned in Section 5.15.1, will be rejected at the outset.

• Applications made by individuals below 18 years of age or those in the names of sole proprietorships, partnerships, unincorporated trusts and non-corporate bodies will be rejected.

Notwithstanding any provision contained herein, the Board of Directors shall reserve the right to refuse any Application or to accept any Application in full or part.

5.17 Banking of Payments

All cheques or bank drafts or bank guarantees in respect of Applications will not be banked or called on until the Market Day after the Closure Date of the subscription list, in terms of the CSE Listing Rules.

5.18 Returning of Monies of Rejected Applications

Where an Application Form is rejected, the cheque or bank draft or bank guarantee received in respect of the Application will be returned via ordinary post at the risk of the Applicant. In the case of joint Applicants, the cheque or bank draft or bank guarantee received in respect of the Application will be returned to the first named Applicant.

Where the Application Form is accepted and the cheque or bank draft or bank guarantee is not honoured by the bank at the first presentation, the Application will also be rejected and the dishonoured cheque or bank draft or bank guarantee will be returned via ordinary post at the risk of the Applicant. In the case of joint Applicants, the dishonoured cheque or bank draft or bank guarantee will be returned to the first named Applicant.

5.19 Allocation of Shares on Offer/Basis of Allocation

The allotment /transfer of Shares on Offer will be made to the various categories of Applicants, as set out in Section 5.1, treating all Applicants in a fair manner as may be decided by the Board at its discretion.

In determining the basis of allocation within the Retail Individual Investor Category, individual investors who subscribe for a smaller number of shares shall be given priority in terms of the CSE Listing Rule 3.1.5 (b) (ii) (2).

In the event of an undersubscription in the Retail Individual Investor Category, the Unit Trust Investor Category shall be given first priority in the allocation of the unsubscribed Shares.



In the event of an undersubscription in the Unit Trust Investor Category, the Retail Individual Investor Category shall be given first priority in the allocation of the unsubscribed Shares.

In the event of an undersubscription in the Non-Retail Investor Category, the quantum of Shares unsubscribed may be redistributed to the other two categories that may be oversubscribed in a fair manner at the discretion of the Board of Directors.

In the event of an undersubscription in the Retail Individual Investor Category and the Unit Trust Investor Category, the quantum of Shares unsubscribed may be redistributed to the Non-Retail Investor Category that may be oversubscribed.

In the event of an oversubscription in any one or more of the categories, in spite of the aforementioned distribution, the Offered Shares will be allocated at the discretion of the Board of Directors of the Company in a fair manner.

Redistribution will not apply in the event of an oversubscription or undersubscription in all the categories.

The Board of Directors of the Company will endeavour to decide and announce to the CSE the basis of allocation as soon as practicable so as to ensure compliance with the Listing Rules. Upon the allocation being decided, an announcement will be made to the CSE.

A written confirmation informing successful Applicants on their allocation of Offered Shares will be dispatched within ten (10) Market Days from the Closure Date as required by the CSE.

5.20 Refunds on Applications

Where an Application is accepted only in part or rejected in its entirety subsequent to cheques being realised, the balance/entirety of the monies received on Application as the case may be, will be refunded. Such refunds will be made on or before the expiry of ten (10) Market Days from the Closure Date (excluding the Closure Date) as required by the CSE Listing Rules. Applicants would be entitled to receive interest at the last quoted AWPLR published by the CBSL plus 5%, on any refunds not made by the expiry of the abovementioned period.

Refunds via SLIPS

The refund payment will be made to the bank account specified by the Applicant through the SLIPS on or before the expiry of ten (10) Market Days from the Closure Date (excluding the Closure Date) as required by the CSE Listing Rules and a payment advice shall be issued to the Applicant provided that the Applicant has submitted accurate and complete details of Applicant’s bank account in the Application Form.

However, SLIPS transfers are subject to a maximum limit of Rupees Five Million (Rs. 5,000,000/-) imposed by the CBSL with effect from October 29, 2010 as per Operating Instruction Circular No. 11/2010 dated October 25, 2010.

Even though the Applicant has requested for SLIPS transfer for refund amounts and submitted accurate and complete details of the bank account in the Application Form, refund amounts exceeding Rupees Five Million (Rs. 5,000,000/-) 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 a joint Application, a crossed cheque will be drawn in favour of the Applicant whose name appears first in the Application Form.


In the event the refund payment is effected via SLIPS based on the bank account details provided by the Applicant in the Application Form, but is rejected by the Applicant’s bank due to inaccurate or incomplete information, such refund payments would be made via a crossed cheque in favour of the Applicant and sent by ordinary post at the risk of the Applicant. In such instances, the Company together with the Registrars to the Offering will send the refund cheques to such Applicants at the earliest possible and the Applicant should not hold the Company or the Registrars to the Offering accountable for such delays.

Bank codes and branch codes could be obtained from the website, www.lankaclear.com through the Quick Links access.

Refunds via Crossed Cheque

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 with respect to refunds via SLIPS, the refund payment 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 a joint Application, a crossed cheque will be drawn in favour of the Applicant whose name appears first in the Application Form.

A request for cancellation of crossing on the refund cheque, in instances where the Applicant does not maintain a current account, should be addressed to the Registrars to the Offering in writing, stating the cheque number and the fact that the Applicant does not maintain a current account. The refund cheque and a clear photocopy of the Applicant’s NIC should accompany the letter.

In the event of a refund cheque being delivered by hand by a third party to the Registrars to the Offering for cancellation of crossing, a letter of authorisation signed by the Applicant stating the NIC number of such third party should also be presented with the refund cheque. Refund cheques on which the crossings have been cancelled by the Registrars to the Offering should preferably be collected in person or by a third party authorised by the Applicant. Where an Applicant has requested the delivery of the cheque on which the crossing has been cancelled via post, such cheque will be sent at the risk of the Applicant.



5.21 Successful Applicants and CDS Lodgement

The Offered Shares allotted/transferred (allocated) will be directly uploaded to the respective CDS account given in the Application Form before the expiry of eighteen (18) Market Days from the Closure Date of the Offering as required by the CSE Listing Rules.

A written confirmation, upon the completion of crediting the respective CDS accounts will be sent to the Applicant within two (02) Market Days of crediting the CDS accounts by ordinary post to the address provided by each Applicant in their respective Applications.

Applicants have the option of having their Shares ‘locked’ in the CDS. Shares that are locked would not be available for trading purposes and would not be visible to the participant. Such Applicants would have to fill in the relevant section provided in the Application Form for this purpose. If the Applicant has not specified that the Shares need to be deposited to the ‘locked’ balance, the said Shares would be deposited to Applicant’s ‘trading’ balance.

Refer Section 5.14.1 for definition of ‘locked’.

Shares shall not be transferable by the Applicant/Shareholders during the period between the date of allotment/transfer of the Offered Shares and up to the date of listing (excluding the date of listing) of the Ordinary Voting Shares on the CSE.

Upon the Ordinary Voting Shares being listed on the CSE, such Shares shall be freely transferable except for those Shares described in Section 10.3 and 10.5 of this Prospectus.

5.22 Declaration to the CSE and Secondary Market Trading

The Company will submit to the CSE a declaration on the Market Day immediately following the day on which Applicants’ CDS accounts are credited with the Offered Shares. Trading of Ordinary Voting Shares on the secondary market will commence on or before the third (3rd) Market Day from the receipt of the declaration by the CSE as per the CSE Listing Rules.


As per the Directive of the Securities and Exchange Commission made under Circular No. 08/2010 dated November 22, 2010 and Circular No. 13/2010 issued by the Central Depository System (Private) Limited dated November 30, 2010, all Shares allotted shall be directly uploaded to the CDS accounts. Existing shares transferred to Applicants allocated on the Offer for Sale tranche would similarly be directly uploaded to the CDS Account of the Applicant. As such, all Applicants should indicate their CDS account number in the Application Form. Applicants who do not have a CDS account are advised to open a valid CDS account prior to submitting the Application, in order to facilitate the uploading of allotted Shares to their CDS account.





6.0 OVERVIEW OF THE ALUMINIUM INDUSTRY 6.1 Overview

Aluminium is one of the most versatile, sustainable and widely used metals. It represents the second largest metals market in the world. At present, aluminium has outpaced steel, copper and zinc in terms of consumption growth. It is believed that production of aluminium is one of the most environmentally friendly processes across the metals and mining industry as it can be endlessly recycled while keeping its distinctive properties.

At present, rising prices for substitute metals, such as zinc and copper have stimulated a direct increase in demand for aluminium. Further, due to its unique combination of properties, the variety of applications of aluminium continues to increase. Performance properties and application of aluminium are depicted in the table below.

Table 6-1: Performance Properties and Applications of Aluminium Performance Properties Applications High conductivity of heat and electricity Condenser tubes, radiators and air conditioners in

the automobile industry, and in nuclear reactors, boilers, cookers and cookware

Low density and strength Aircraft, lightweight vehicles, and ladders

Durability Weather-proof and corrosion-resistant

Easy shaping and corrosion resistance Curtain walling, window frames, rolling blinds, doors, exterior cladding and roofing, suspended ceilings, wall panels and partitions

6.2 Aluminium Production Process

The main source of aluminium is bauxite. Bauxite is a rock containing a mixture of hydrous Al oxides. Production of bauxite is widely available in bauxite-rich areas in Western and Central Africa, South America, Caribbean, Oceania and Southern Asia, China, Mediterranean and Russia. As the next stage of the production process, alumina is refined from bauxite via the Bayer Process. It is believed that countries like India, Iceland, China, Russia, and UAE will enjoy growth and development of aluminium production.

Figure 6-1: Aluminium Production Plant



In 2013, the total world aluminium production was approximately 47 million metric tons according to the statistics provided by the International Aluminium Institute.

Moreover, China produced a total of 20 million metric tons whilst other Asian countries have produced 2.2 million metric tons during 2013. Further, India is expected to be ranked as the second most promising aluminium market globally due to the rapid urbanization. Source: RUSAL

The global aluminium industry is fairly concentrated and majority of the key producers are major corporations such as Alcoa Inc., Dubai Aluminum Co. Ltd. (DUBAL), RUSAL United Co. (RUSAL) and BHP Billiton Limited. However, given the high capital intensity and energy consumption in the production of aluminium, major firms now invest in smelting operations which have access to cheap power resources.

The increase in the world population along with a rapid development and urbanization of the developing countries have contributed mainly towards the rising global demand for aluminium. As per the industry research carried out by Infiniti Research Limited, the global aluminium market is expected to grow at a Compound Annual Growth Rate (CAGR) of 5.90% over next five years. Moreover, the global consumption of aluminium is forecast to reach approximately 58 million tons in 2015 based on a research carried out by RUSAL as depicted in Figure 6-4.

Figure 6-2: Major Bauxite Producing Countries

Figure 6-3: Primary Aluminium Production January - October 2013


Source: RUSAL

Figure 6-4: Global Aluminium Consumption

Thus far the construction industry represents as the biggest consumer of aluminium in developing countries owing to the substantial investments in the infrastructure development. Construction and transportation industries are known to be the major consumers of most of the aluminium produced in the above countries.

6.3 Markets for Aluminium

Aluminium is widely used in many products. Transportation, beverage cans and other packaging, and building/construction are well known markets for aluminium. Thus far, the construction industry is considered as the biggest consumer of aluminium in developing countries owing to the substantial investments in the infrastructure development.

Building and Construction: Aluminium is a widely used product in the residential, industrial, commercial, farm, and highway sectors.

Transportation: The majority of the aluminium is currently being used in automotive and light truck applications, as vehicle manufacturers continue to opt for lightweight aluminium solutions to improve fuel economy, reduce emissions and enhance vehicle performance.

Packaging: Aluminium is also used in products such as beverage cans and bottles, food containers, and household and institutional foil. Furthermore, aluminium's low weight gives it a competitive advantage over other materials with regard to shipping costs.

Electrical: Aluminium has many advantages for electrical applications. It is lightweight, strong, corrosion resistant, and a highly efficient conductor. It is also infinitely recyclable, making it a perfect fit for today’s environment.

6.4 Aluminium Industry in Sri Lanka

The Sri Lankan aluminium industry is poised for rapid expansion in downstream sectors such as casting and fabricating. The demand and consumption of aluminium is expected to increase as a result of the continuing trend of economic growth. Higher consumption levels in building and infrastructure, power, consumer durables and other industrial sectors will contribute towards the aforementioned increase in consumption. As a result, the aluminium demand in Sri Lanka is anticipated to grow more than 50% by 2019 according to the industry experts.



With the influx of high-rises and its ability to substitute timber products, aluminium extrusions have become an invaluable product. Sri Lankan aluminium extrusion market consists of the following as depicted below.

Table 6-2: Aluminium Products in Sri Lanka Extrusion Technology and Services

Aging Ovens, Anodizing Chemicals, Anodizing Systems, Automated Handling Systems, Belts, Billet Casting

Equipment, Billet Suppliers, Computer Numerical Control (CNC) Fabrication Centres, Die Cleaning Equipment, Die Design, Die Ovens/Die Preheat

Furnaces, Die Polishing Equipment, Die Storage Systems, Dies, Dross Treatment/Removal, Furnaces – Billet Heating, Gas Suppliers/Systems, Handling Systems and Materials

Extruded Profiles Building and Construction Transportation, Solar , Electrical, Industrial, Defence

Other Products and Services

Metalworking Tools, Consulting, Software, Media, Publication

Source: Sri Lanka Aluminium Extrusion International

The development strategy and policy measures adopted by authorities during the post-conflict period in Sri Lanka have been well established to achieve the target of becoming a ‘US Dollar 100 billion’ economy. The stronger economic performance in Sri Lanka has lifted country’s per capita income substantially. Thus, the rapid growth in the economy indicates the need for a development plan in Colombo and its immediate environs.

Consequently, the construction sector recorded a remarkable growth of 21.6% in 2012 compared to 14.2% in 2011. This is considered as the highest growth registered by the sub sector in the past ten years. Public infrastructure development projects such as road development, power projects, port and airport development and housing development projects contributed mainly towards the driven growth.

Table 6-3: Real GDP and Construc on at Constant (2002) Prices Year 2009 2010 2011 2012* 2013

(6 Months)* Real GDP (Rs.Mn) 2,449,214 2,645,542 2,863,715 3,047,277 1,575,418 Construc on (Rs.Mn) 162,790 177,912 203,204 247,091 134,471 Share of GDP 6.65% 6.72% 7.10% 8.11% 8.54%

*Provisional Figures Source: Central Bank of Sri Lanka


Source: Central Bank of Sri Lanka

As illustrated in the above figure, construction share as a percentage of GDP indicates a continuous growth and accounted to 8.11% in 2012 in comparison to 7.10% achieved in 2011. Aluminium extrusion industry in Sri Lanka has experienced an expansion due to its wide application in industries such as construction, aviation, defence, solar, power and electrical. Therefore, demand for aluminium is seeing strong growth in Sri Lanka, underpinned by a rapid infrastructure development.

Figure 6-5: Real GDP Growth Rate and the Construction Sector Growth



7.0 BUSINESS OPERATIONS OF ALUMEX GROUP

7.1 Group Structure

The current group structure of Alumex Group is presented below.

v

Figure 7-1: Group Structure of Alumex Group

7.1.1 Alumex Group

Alumex is a subsidiary company within the diversified conglomerate, Hayleys PLC (acquired on November 04, 2010). Hayleys PLC is a diversified Sri Lankan multinational with multifaceted manufacturing operations and capabilities with products marketed in over 80 countries across the globe. The Alumex Group currently holds over 50% of the local market share (source: Data One import statistics and Annual Reports of the listed peers), in the business of manufacture of Aluminium extrusions in Sri Lanka, under the registered brand name “Alumex”. Alumex Group has a long history of over twenty five years having commenced commercial operations in the aluminium business in 1988 through Alumex (Private) Limited which was incorporated in 1986 (Please refer Section 7.13 of this Prospectus) and possesses a well-established customer base. Together, the Group is shaping a future through a global reach and local presence within extrusions and building systems.

Alumex Group has three extrusion plants, two powder coating lines, two anodizing lines and one wood effect coating facility in Sri Lanka.

7.1.2 Alumex Limited

Alumex Group is the premier manufacturer of aluminium extrusions in Sri Lanka. The manufacturing operation is comprised of facilities for melting and casting, die manufacturing, extruding and surface coating profiles for industrial and architectural industry. Over the years, Alumex has developed its processes to cater to the demands of the architectural industry by improving its quality and capacity. The Company has a 7 inch extruder which can cater to a majority of the demand in Sri Lanka. It also produces the entire range of products required from mill finished, anodised, powder coated to wood effect profiles. Alumex received international recognition from AluK of Italy and in recent times, Fletcher Aluminium of New Zealand certified Alumex to manufacture their profiles in Sri Lanka. Alumex is an ISO 9001:2008 certified company and an approved applicator for JOTUN and DGL International powders. It also operates as the parent company for two fully owned subsidiaries namely, Avro Enterprise (Private) Limited and Alco Industries (Private) Limited.


Alumex presently markets its products in Maldives, India and Bangladesh. In the past, Alumex has done several projects in Australia. In future, Alumex hopes to receive international certification for its own designs for windows and door systems which will create more opportunities in the international markets. The main objective of Alumex is to grow its exports and have a strong presence in the South Asian region as morefully described in Section 7.18.

7.1.3 Alco Industries (Private) Limited

Alco Industries (Private) Limited, a company approved by the Board of Investments (BOI), was incorporated in 2010. It has a modern facility which manufactures aluminium components required by industries such as building construction (interior and exterior), bus body/lorry body building and rail coach building hardware. It also manufactures components such as clamps and connectors required by the Ceylon Electricity Board, door handles, rollers, brackets, tile and carpet edging, hinges, ladders, components required by the air conditioning industry and heat sinks required by the electrical/electronics industry, etc.

The main objective of this company is to manufacture components and industrial tools required by the Sri Lankan industries by introducing the latest technical advancements in components technology to Sri Lanka. It has many environmental friendly features and exploits the emerging opportunities of the increasing market potential for components industry especially in the current development phase that the country is marching towards.

Alco Industries (Private) Limited’s plant is equipped with a modern press machine of 1540US Tons capacity, working tables (tables, stretcher systems, pullers, saw, cooling fans, etc.), multi log heating furnace, die furnace with three compartments, aging furnace, etc. The most important machinery in the process is the hydraulic press machine, and the input to the press machine comes through log pre-heater and log shear, whilst the output is transferred to the cooling bed. Die pre-heating is an auxiliary process to the press operation. Artificial aging is a strengthening mechanism to components produced.

Alco Industries (Private) Limited utilises most energy efficient systems affiliated to the industry at present (e.g.: multi cell die pre-heating oven). Controlling of cooling rate is paramount important parameter in the field of heat treatments for metals. For this, a sophisticated air cooling system has been introduced to the initial table, which is the first part of the cooling bed. The operation of the press machine and associated machinery is controlled by Programmable Logic Control (PLC) units; as a result utilisation of human beings in the process is minimised. Due to its superior manufacturing technology, the plant is highly energy efficient and is able to reduce the cost of production substantially.

7.1.4 Avro Enterprises (Private) Limited

Avro Enterprises (Private) Limited was incorporated in 2008. In addition to performing as a retail channel for aluminium extrusion and components, it has a product portfolio covering a range of aluminium accessories and related products supplied by both manufacturing plants.

Avro Enterprises (Private) Limited is the national distributor for Alpolic Aluminium Composite panels manufactured by Mitsubishi Plastic Inc. Japan, Corian Composite panels manufactured by DuPont Inc. USA, Elumatec Aluminium and UPVC processing machines manufactured by Elumatec Germany and Assa Abloy/Interlock Aluminium hardware accessories manufactured by Interlock New Zealand.



The objective of Avro Enterprises (Private) Limited is to become the Leading Building System Solution Provider in the Sri Lankan market.

7.2 Vision and Mission

Vision: To be the premier aluminium extrusions provider in the South Asian Region


7.3 Values of Alumex Group

Integrity: Ethical and transparent in all our dealings

Enduring Customer Value: Enhancing experiences for every customer, from the rural farmer to the global consumer

A Will to Win: Exhibiting the will to win that which is important to Alumex and its shareholders

Respect for People: Treating everyone with respect and dignity, providing for the development of our people and rewarding them for good performance

Good Citizenship: Caring for the communities in which they work, actively supporting their growth and being environmentally responsible in all we do

Teamwork: Working with each other and with partners across boundaries to make things happen

7.4 Business Processes

Aluminium is a flexible metal that exposed itself to many production methods which in turn lead to the introduction of a range of different products that can be made out of aluminium.

Figure 7-2: Business Process



7.4.1 Raw Materials

Alumex Group imports semi-finished casting products (Aluminium Alloyed 6063/6061 logs) from internationally recognized manufacturers. Its main imported products are logs and ingots and plays an integral role in the production of many aluminium products. Ingots and logs are used in the extrusion process. Plate, wire, sheet, foil, rod, and bar products are all produced by pressing or rolling ingots and logs/billets. Group’s average aluminium consumption is approximately 400 metric tons per month out of which imported aluminium is approximately 300 metric tons. The balance is sourced locally in scrap form for recycling through which aluminium alloyed logs (6063/6061) are made.

All the material used in the plants are from world renowned manufacturers. The Company imports aluminium extrusion logs from international manufacturers such as DUBAL (UAE), Hydro Aluminium and Rio Tinto Alcan. Chemicals for anodizing are supplied by SurTec (Germany). Powders for powder coatings are supplied by Orica/Dulux (Australia/ New Zealand), Akzo Nobel (Europe) and JOTUN from Norway.

7.4.2 Billet Casting (Melting)

In addition to the imported logs, Alumex produces logs locally from recycled aluminium mixed with virgin ingots. This is a manufacturing process where a liquid material is (usually) poured into a mould, which contains a hollow cavity of the desired shape, and then allowed to solidify.

The log casting section has a modern foundry shop equipped with melting furnaces (two), a vertical hot top casting machine and homogenizing facilities for manufacturing of logs. It also has a hi-tech spectrometer (a photon measuring device that captures the spectrum of the signal) to analyse the alloying components/metals to ensure the quality of the logs. Thus, Alumex Group is well equipped to meet the growing demand in wide array of aluminium products and components.

7.4.3 Extrusion Die Designing and Manufacturing

Alumex Group is the sole designer/manufacturer of aluminium extrusion dies for virtually any shape of aluminium profiles in Sri Lanka and this ability providing the Company with an advantage over its competitors. The designs are done according to the customers/industry requirements as well as to get the best out of extruder such as reduction in pressure and maximum production. The die shop is equipped with sophisticated CNC machinery with CAD/CAM software for wire cutting and spark erosion, milling machines and other die finishing facilities including heat treatment and surface treatment equipment.


The process of manufacture consists of the design being drawn on a BS: H13 high carbon die steel plate (blank) according to the specification given in the die drawing. Subsequently, it is processed by lathe machining, drilling, milling, grinding, CNC Electrical Discharge Machine (EDM), CNC wire cut machines and sent through a heat treatment process to carry out case hardening work. The die (mould) will then be sent through a nitriding process. The experienced designers and production engineers of Alumex create high quality dies within very short lead-times.

7.4.4 Plant Specifications

Table 7-1: Plant Specifications Plant Specification Alumex Limited Plant 1 - Extrusion Press 1000 metric tons

- Billet Size 5” (122mm) Alumex Limited Plant 2 - Extrusion Press 1850 metric tons

- Billet Size 7” (178mm) Alco Industries (Private) Limited Plant 1 - Extrusion Press 1540 metric tons for

Manufacturing of Component - Billet Size 6” (154mm)

7.4.5 Extrusion

Extruding is a process whereby aluminium logs are heated to approximately 450-500°C and forcing the hot metal through a steel die. The output of this process is called mill finished aluminium extrusion. A smaller percentage of extruded aluminium will be sent out to customers as ‘mill finished’ products upon request after aging.

The use of aluminium extrusion has increased noticeably due to its distinctive properties, which facilitate to produce multitude of products that can be readily formed into complex shapes. Extruded aluminium is considered inexpensive and lead times for custom shapes are relatively brief. Extruded aluminium is mostly used in architectural applications to form complex shapes and the life-cycle value of the product remains high due to aluminium’s recyclability. It is the most abundant green metal in the world.

Alumex Group has three extrusion machines, out of which two are operating sixteen (16) hour per day, every day except Saturdays and Sundays and utilises capacity up to 40% of its 1000 metric tons per month available capacity. The third machine operates as and when it is necessary. Additionally, the Group is capable of extruding any profile up to circumscribing diameter (CCD) 220 mm. The present production capacity is in excess of 12,000 metric tons per annum. The largest consumer of these products in Sri Lanka is the building industry, which uses aluminium extrusions in window and door frames. Other applications for extruded aluminium products include engineering applications, bicycle frames, structural automotive components, pipes and tubes, furniture, bus, lorry and rail coaches.



7.4.6 Stretching and Cutting

As the extruded section emerges, it is cooled and cut to the desired length. A "stretcher" may be employed after the profile has been quenched in order to straighten the extrusion and correct any twist that may have occurred subsequent to extrusion. Thereafter, a finish cut saw is used to cut the profile to the specified commercial lengths.

7.4.7 Aging

Heat treatment is then used to optimise the material’s inherent mechanical properties and ensures maximum strength, hardness, and elasticity for the specific extrusion profile. Natural aging occurs at room temperature whilst artificial aging takes place through controlled heating in an aging oven.

7.4.8 Anodizing

Anodizing is an electrochemical process that forms a protective coating of aluminium oxide, which is a hard, durable, weather resistant substance that protects the base metal, on the surface of the aluminium. Extruded and aged aluminium profiles will be immersed into an acid electrolyte bath and an electric current passed through the medium to anodize. The two anodizing plants have a combined capacity of over 5,400 metric tons per annum. The

process is capable of coating to a thickness range of 5 to 25 micron. Colour options available are natural, bronze (light to dark) and black.

7.4.9 Powder Coating

Powder coating is a type of dry coating, which is applied as a free-flowing, dry powder. The coating is typically applied electrostatically and is then cured under heat to allow it to flow and form a "cover". The powder is made out of polyester and is usually used to create a hard finish that is tougher than conventional paint.

Powder coating is the most favoured, durable, and cost-effective alternative for finished extrusions as it increases protection from cold, heat, corrosion and scratching. Powder coating finishes are being used widely in the production of thousands of consumer, commercial and industrial products in Sri Lanka at present. It provides an attractive finish for aluminium extrusion products whilst its mechanical properties can be crafted to meet the varied requirements of customers.

Alumex Group has a polyester powder coating plant with a capacity of over 1,800 metric tons per annum and has planned to double its capacity. Polyester powder coating, also known as colour coating on aluminium, is a solvent-free, durable, factory applied coating for aluminium substrates. It is a thermosetting coating where the resin cross links after being stove at around 200 ˙C (curing). Alumex Group offers a range of powder colours and powder qualities with 10 years, 15 years and 20 years guarantees.



7.4.6 Stretching and Cutting

As the extruded section emerges, it is cooled and cut to the desired length. A "stretcher" may be employed after the profile has been quenched in order to straighten the extrusion and correct any twist that may have occurred subsequent to extrusion. Thereafter, a finish cut saw is used to cut the profile to the specified commercial lengths.

7.4.7 Aging

Heat treatment is then used to optimise the material’s inherent mechanical properties and ensures maximum strength, hardness, and elasticity for the specific extrusion profile. Natural aging occurs at room temperature whilst artificial aging takes place through controlled heating in an aging oven.

7.4.8 Anodizing

Anodizing is an electrochemical process that forms a protective coating of aluminium oxide, which is a hard, durable, weather resistant substance that protects the base metal, on the surface of the aluminium. Extruded and aged aluminium profiles will be immersed into an acid electrolyte bath and an electric current passed through the medium to anodize. The two anodizing plants have a combined capacity of over 5,400 metric tons per annum. The

process is capable of coating to a thickness range of 5 to 25 micron. Colour options available are natural, bronze (light to dark) and black.

7.4.9 Powder Coating

Powder coating is a type of dry coating, which is applied as a free-flowing, dry powder. The coating is typically applied electrostatically and is then cured under heat to allow it to flow and form a "cover". The powder is made out of polyester and is usually used to create a hard finish that is tougher than conventional paint.

Powder coating is the most favoured, durable, and cost-effective alternative for finished extrusions as it increases protection from cold, heat, corrosion and scratching. Powder coating finishes are being used widely in the production of thousands of consumer, commercial and industrial products in Sri Lanka at present. It provides an attractive finish for aluminium extrusion products whilst its mechanical properties can be crafted to meet the varied requirements of customers.

Alumex Group has a polyester powder coating plant with a capacity of over 1,800 metric tons per annum and has planned to double its capacity. Polyester powder coating, also known as colour coating on aluminium, is a solvent-free, durable, factory applied coating for aluminium substrates. It is a thermosetting coating where the resin cross links after being stove at around 200 ˙C (curing). Alumex Group offers a range of powder colours and powder qualities with 10 years, 15 years and 20 years guarantees.


7.4.10 Wood Coating

The woodex process at Alumex Group offers a range of innovative finishes such as wood, marble and granite to aluminium profiles. Alumex Group pioneered the wood coating products in Sri Lanka and has gained a significant market share similar to the other segments. The process combines a strong protective coating with a decorative appearance whilst offering a real alternative to typical architectural materials such as wood, marble or granite. Woodex has high weather resistantance and requires minimum maintenance.

It is expected that the wood finished extrusions will substitute wooden doors, windows, etc. and penetrate the local construction and interior designing to a great extent. Designs produced comprise of teak, mahogany and rosewood finishes.

7.4.11 Polished Anodized Aluminium Extrusions

Polished anodized extrusions are a newly added products by Alumex Group. It is expected to capture a substantial share of the market both locally and internationally. This process provides the normal anodized product a more attractive and protective coating and it is expected to be successful in the extrusion market. Alumex Group anticipates the product to be popular with overseas buyers in the future.

7.4.12 Production Capacities and Utilised Capacities

Table 7-2: Production Capacity

Product /Plant Capacity (Per Annum) Current Utilisation

Extrusion 12,000 metric tons 40% Anodizing 5400 metric tons 40% Powder Coating* 3600 metric tons 50% Wood Effect 360 metric tons 50% Die Manufacturing 2400 units 40% Aluminium Melting 4800 metric tons 45% *Includes the proposed state of the art Powder Coating Plant scheduled to start commercial production in April/May 2014 with a capacity of 2400 metric tons.

7.5 Current Product and Service Portfolio

Alumex Group is renowned for its 26 years of industry expertise in design and development of aluminium profiles. Alumex product innovations can be found in various industries from architectural to engineering, including designs tailored to suit customer requirements.

7.5.1 Product Range

Alumex is the driving force in the local aluminium extrusion and fabrication market. As the undisputed market leader in Sri Lanka, it has introduced many designs, concepts, products to suit the local construction and engineering industry to propagate many applications. Thus, saving time, money and becoming the most cost efficient service segments to the end users. Alumex Group also enjoys a strong geographical presence in Sri Lanka through its island wide dealer network.



Figure 7-3: Market Structure

(i) Tested Aluminium Proprietary Systems Manufacturer Presence Under License

- AluK: Italy

- Fletcher Aluminium: New Zealand

(ii) Alumex Architectural Aluminium Extrusions/Window and Door Systems

Shop fronts, partitioning, sliding doors/windows (single, double, triple, etc), swing doors, curtain walls, casement windows, turn and tilt, sliding folding, pivoted, euro groove, double glazed, roller shutters, sky lights.

(iii) Industrial Aluminium Components

Ladders, lorry/bus bodies, rails, boat/ship buildings, show cases, hand rails, a/c diffusers, heat sinks, clamps and connectors, tower bolts, hinges, round tubes/bars, equal/unequal angles, channels, solar structures, square/rectangular tubes, glazing beads, brackets, tiles and carpet edgings, door handles, hand rails, components for pantry cupboards and customised designs to suit individual requirements.

7.6 Market Structure

Alumex Group carefully manages the aforementioned channels by carrying out various marketing activities such as, promotions, trainings, seminars, sponsorships and other services.

7.7 Market Segmentation and Positioning

The total aluminium market in Sri Lanka can be segmented to the following three markets;

(i) Top end market - Aluminium Proprietary Window and Door Systems (i.e. AluK, Fletcher Aluminium, SAPA,etc.)

Features:

- Expensive products

- Not readily available

- Cannot buy in smaller quantities


- Longer delivery periods

- Larger product range and designs

- Use of quality accessories

- High replacement repair cost

- Designer accessories

(ii) Middle market - High quality aluminium extrusion designs and system (i.e. Gulf Extrusions, Alumex Windows and Door systems)

Features:

- Expensive but value for money

- Readily available

- Can buy in smaller quantities

- Limited product range to suit the local and regional markets

- Use of quality accessories

- High quality with warranties

- Use of the best raw material in the world

- Trained craftsmen to handle fabrication work

- Reasonable repair/ replacement cost

(iii) Low end market - Average quality aluminium extrusion designs (i.e. Chinese, other local suppliers etc.)

Features:

- Offers big discounts

- Low quality

- Low thickness profiles

- Readily available

- Use of Low quality accessories

- No warranties

- Short life span

7.8 Operational Markets

Alumex brand has achieved an established position in the top and the middle market segments in Sri Lanka. It mainly operates in the top end and the middle market due to the comparatively healthy margins in the segments. Alumex Group has its operations predominently in the domestic market which covers modern house builders and commercial building market such as high rise condominiums, office complexes and hotels. Moreover, in addition to the general dealer market, Alumex Group operates in regional export markets such as Australia, Maldives, India and Bangladesh.

7.9 Services

Alumex Group has committed to provide customer service in an instantaneous manner and in a most effective way to the Sri Lankan and overseas markets. It offers services from the point of designing to the completion of installation providing shop drawings, proposing joinery systems with technical advice, site inspection, and Installation guidance with training.



7.10 International Standards and Accreditations

Excellence in business operations of Alumex has been rewarded with the following accreditations by leading global institutes. Being an ISO 9001:2008 certified aluminium extrusion manufacturer, Alumex management and staff are commited to offer the best services to the customers provide with innovate designs and develop new technologies to upgrade the Sri Lankan Aluminium Extrusion Market.

All products of Alumex complies with British (BS), American (ASTM), European (EN) and Australia/ New Zealand (ANZ) standards.

Alloy: Designation alloy number EN AW 6063, 6060, 6082

- Alloy EN AW 6063: The most popular extrusion alloy used, which takes a good surface finish, corrosion resistant and able to heat treat for strength.

- Alloy EN AW 6082: This is an alloy which has good tensile strength and extrudability. This is widely used in automobile structures, structural engineering, ladders, furniture, etc.

Temper: T1, T4, T5, T6

Mechanical Properties for T5:

- Ultimate Tensile Strength 160 Mpa

- Elongation 7% (minimum)

Figure 7-4: Customer Service Offered by Alumex Group


Aluminium Extrusion Dimensions and Tolerances:

- BS EN 755 Part 01 to 09 (Former BS 1474)

- EN 12020 Part 01 and 02

Aluminium Extrusion Surface Treatments:

Anodizing Finish: Aluminium alloy anodic oxidation coating

- BS EN 12373-1:2001 Clause 6, 7, 8, 9 (BS: 6161) and EN ISO 2360:2003

- BS 3987 Clauses 2,3,5,6

Micron Thickness Range: From minimum 10 Microns to 25 Microns depending on the customer’s requirements.

Powder coating Finish:

- BS 6496:1984 Clause: 10.4, 10.5, 10.6, 10.7 and 10.8

- EN ISO 2360:2003, 6272-1:2004, 1520:2001, 1519:2002, 2409:2004

- Minimum Film Thickness: 60 Microns

7.11 International Affiliations

Around 10% of architectural extrusions are imported due to the non-availability of Aluminium Proprietary system in Sri Lanka. To overcome this competition and prevent such imports coming to Sri Lanka, Alumex Group has entered in to licensing agreements with globally renowned manufacturers of aluminium extrusions and accessories, AluK in Verona, Italy and Fletcher Aluminium in Auckland, New Zealand. Alumex has manufactured high end Aluminium Proprietary Window and Door Joinery Systems under license since year 2008. This strategy is now in full swing and it is expected to increase its market share at least by another 10% by end of the year.


Aluminium Extrusion Dimensions and Tolerances:

- BS EN 755 Part 01 to 09 (Former BS 1474)

- EN 12020 Part 01 and 02

Aluminium Extrusion Surface Treatments:

Anodizing Finish: Aluminium alloy anodic oxidation coating

- BS EN 12373-1:2001 Clause 6, 7, 8, 9 (BS: 6161) and EN ISO 2360:2003

- BS 3987 Clauses 2,3,5,6

Micron Thickness Range: From minimum 10 Microns to 25 Microns depending on the customer’s requirements.

Powder coating Finish:

- BS 6496:1984 Clause: 10.4, 10.5, 10.6, 10.7 and 10.8

- EN ISO 2360:2003, 6272-1:2004, 1520:2001, 1519:2002, 2409:2004

- Minimum Film Thickness: 60 Microns

7.11 International Affiliations

Around 10% of architectural extrusions are imported due to the non-availability of Aluminium Proprietary system in Sri Lanka. To overcome this competition and prevent such imports coming to Sri Lanka, Alumex Group has entered in to licensing agreements with globally renowned manufacturers of aluminium extrusions and accessories, AluK in Verona, Italy and Fletcher Aluminium in Auckland, New Zealand. Alumex has manufactured high end Aluminium Proprietary Window and Door Joinery Systems under license since year 2008. This strategy is now in full swing and it is expected to increase its market share at least by another 10% by end of the year.



Table 7-3: International Affiliation of Alumex Group International License Description Fletcher Aluminium – New Zealand

Fletcher Aluminium is a subsidiary of Fletcher Group which is one of the largest conglomerates in New Zealand. Fletcher Aluminium proprietary systems have been extensively used for more than 25 years in Sri Lanka, Australasia and Far Eastern countries. Alumex Group commenced manufacturing Fletcher proprietary systems under license in Sri Lanka since 2011.

AluK- Italy

The AluK Group is a leader in the design and manufacture of a range of sophisticated Aluminium building systems. It is widely used in commercial applications and facades in Europe and Middle East. Alumex Group is the exclusive manufacturer of AluK systems under license in Sri Lanka for the Asian market since 2008.

Mitsubishi Plastics Inc. – Japan

Mitsubishi Plastic, Japan has been manufacturing Alpolic Aluminium composite panels since 1971 and are the world’s most popular brand. Avro Enterprises (Private) Limited is the national distributors of Alpolic composite materials in Sri Lanka.

DGL International Powder and Thermal polymer Alloy Coatings - New Zealand

Alumex Group is recognized as the exclusive approved applicator in Sri Lanka for DGL International of New Zealand powder coating range of products. It offers coating warranties from 10 to 25 years based on the type of product applied.

JOTUN MENA – United Arab Emirates Alumex Group is Sri Lanka’s only approved applicator for

JOTUN powder coating range of products from Norwegian based manufacturer and offers warranties up to 10 years. JOTUN is the premier brand in Europe and Middle East. These products have also been used in the world’s tallest building, Burj Kalifa.



Table 7-3: International Affiliation of Alumex Group International License Description Fletcher Aluminium – New Zealand

Fletcher Aluminium is a subsidiary of Fletcher Group which is one of the largest conglomerates in New Zealand. Fletcher Aluminium proprietary systems have been extensively used for more than 25 years in Sri Lanka, Australasia and Far Eastern countries. Alumex Group commenced manufacturing Fletcher proprietary systems under license in Sri Lanka since 2011.

AluK- Italy

The AluK Group is a leader in the design and manufacture of a range of sophisticated Aluminium building systems. It is widely used in commercial applications and facades in Europe and Middle East. Alumex Group is the exclusive manufacturer of AluK systems under license in Sri Lanka for the Asian market since 2008.

Mitsubishi Plastics Inc. – Japan

Mitsubishi Plastic, Japan has been manufacturing Alpolic Aluminium composite panels since 1971 and are the world’s most popular brand. Avro Enterprises (Private) Limited is the national distributors of Alpolic composite materials in Sri Lanka.

DGL International Powder and Thermal polymer Alloy Coatings - New Zealand

Alumex Group is recognized as the exclusive approved applicator in Sri Lanka for DGL International of New Zealand powder coating range of products. It offers coating warranties from 10 to 25 years based on the type of product applied.

JOTUN MENA – United Arab Emirates Alumex Group is Sri Lanka’s only approved applicator for

JOTUN powder coating range of products from Norwegian based manufacturer and offers warranties up to 10 years. JOTUN is the premier brand in Europe and Middle East. These products have also been used in the world’s tallest building, Burj Kalifa.


7.12 Projects Undertaken

Alumex Group has provided aluminium fabrications to various projects carried out within the country. A list highlighting some of the commercial and residential projects carried out with the involvement of Alumex Group are depicted below;

Table 7-4: Commercial and Industrial Projects Year Project Fabricator 2013 Sethsiripaya Stage II Access Projects 2013 Colombo Harbour Extension Project Ashaie Glass 2013 Sports Ministry Building Ashaie Glass 2013 Bank Hill Sports Complex Ashaie Glass 2013 Nine Wells Hospital Smooth Aluminium 2013 Hambantota Port Projects Smooth Aluminium 2013 Kingsbury Hotel Alufab LTD 2013 Chaya Tranz Access Projects 2013 Cape Weligama Resort Access Projects 2013 Hemas Hospital- Thalawathugoda Access Projects 2013 Census Department Access Projects 2013 Ceylinco Life- Gampaha Access Projects 2013 Ceylinco Life- Kurunagala Access Projects 2013 Victoria Golf Course Access Projects 2013 National Archives Central Engineering Consultancy Bureau 2013 Provincial Council - Haputhale Daya Construction 2013 Utility Building for NuwaraEliya P.C. Daya Construction 2013 HNB- Jaffna, Negombo Instyle Aluminium 2013 DSI Office/ Warehouse Tudawe Brothers 2013 Dialog Head Office Tudawe Brothers 2013 Mercedes Showroom Ajax Engineering 2013 Railway Station Kilinochchi Fine Aluminium 2012 Northshore College Access Projects 2012 Hotel Sea Shells Access Projects 2012 CECB Head Office Access Projects 2012 People’s Bank Head Office Access Projects 2012 Southern Highway Toll Gates SEC/Alucare 2012 ITI- Phase 2 Alu V Glass 2012 Inland Revenue Building Ashaei Glass 2012 Kettarama Cricket Stadium Alucare (Private) Limited 2012 Pallekale Cricket Stadium Alucare (Private) Limited 2012 Green Building - Maldives Contech (Private) Limited 2011 Admin Complex Hambanthota SM Construction



Table 7-5: Residential Projects

Year Project Fabricator 2013 Airport Garden Hotel Tudawe Engineering 2013 Blue Ocean Residencies Ashaie Glass 2013 Pearl City Hotel TCI 2013 Marine City LHP 2013 Anis House Access Projects 2013 Regeneration Housing Project Tudawe Brothers 2013 Lonci Project - Maldives Tangiglo 2013 Rehendi Project - Maldives FW Construction 2013 Ensor- Maldives Contech (Private) Limited 2012 Golden Rose Hotel Ashaie Glass 2012 Raufathuge Apartments - Maldives Contech (Private) Limited 2012 Kurigum - Maldives Contech (Private) Limited 2011 Rise Apartments - Australia Access Projects 2011 Jundaloupe Apartment - Australia Access Projects 2011 Karankage House - Maldives Contech (Private) Limited 2010 Supun Super Residencies LHP 2010 Sky Apartments - Australia Access Projects 2008 Summerland Apartments Mr. Aneez 2006 Nivasipura Project ICC 2006 Seagul Court Wellawatta Fine Aluminium

Table 7-6: Commercial and Industrial Projects Colombo Port 1

Supun Arcade

Hemas Hospital

People’s Bank Head Office


Jewellery Shop

SLINTEC - Homagama

The Kingsbury Hotel

Golden Rose

Ceylon Petroleum Pership Building

Marine City- Dehiwala

Hambantota Port View


Jewellery Shop

SLINTEC - Homagama

The Kingsbury Hotel

Golden Rose

Ceylon Petroleum Pership Building

Marine City- Dehiwala

Hambantota Port View



Table 7-7: International Projects

Green Building- Maldives

Joondalup-Australia

Raufathuge Project- Maldives

Residential Building- Perth, Australia


7.13 Consolidation of Operations

Figure 7-5: Alumex Group Structure as at April 01, 2011

Alumex Group was initially incorporated as Alumex (Private) Limited in November 1986. The commercial operations began two years later, in 1988.

In November 2006, Alutec Anodizing and Machine Tools (Private) Limited (AAMT) was incorporated.

As of April 01, 2011, as depicted in Figure 7-5 above, Alumex Group comprised of 6 companies, where AAMT was the ultimate parent company having direct/indirect ownerships in the group companies. A minority stake of 6.5% of Alutec Extrusion (Private) Limited was held by outside parties, comprising of few aluminium distributors.

With the consolidation strategy commenced in 2012, the ownership structure of the Alumex Group was simplified by the following share transfers and amalgamations.


7.13 Consolidation of Operations

Figure 7-5: Alumex Group Structure as at April 01, 2011

Alumex Group was initially incorporated as Alumex (Private) Limited in November 1986. The commercial operations began two years later, in 1988.

In November 2006, Alutec Anodizing and Machine Tools (Private) Limited (AAMT) was incorporated.

As of April 01, 2011, as depicted in Figure 7-5 above, Alumex Group comprised of 6 companies, where AAMT was the ultimate parent company having direct/indirect ownerships in the group companies. A minority stake of 6.5% of Alutec Extrusion (Private) Limited was held by outside parties, comprising of few aluminium distributors.

With the consolidation strategy commenced in 2012, the ownership structure of the Alumex Group was simplified by the following share transfers and amalgamations.



Step 1 – Share Transfers

On January 17, 2012, all the intermediary shareholdings held by United Ceylon Insurance Company and Alumex (Private) Limited were transferred to AAMT as follows;

Table 7-8: Consolidation of Operations

Description Transferor Transferee Purchase

Consideration 8.45% stake of Alutec Extrusions (Private) Limited

United Ceylon Insurance Company Limited

Alutec Anodizing and MachineTools (Private) Limited

Rs. 17,778,800.00

43.87% stake of Alumex (Private) Limited

United Ceylon Insurance Company Limited

Rs. 175,055,723.85

60% stake of Alutec Extrusions (Private) Limited

Alumex (Private) Limited

Rs. 126,240,000.00

99.99% stake of Avro Enterprises (Private) Limited

Alumex (Private) Limited

Rs. 8,001,000.00

On March 02, 2012, 6.5% minority shareholding of Alutec Extrusions (Private) Limited was transferred to AAMT by way of a share swap offering 1 share of AAMT for every 63 shares held in Alutec Extrusions (Private) Limited at a consideration of Rs. 13,734,500/-.

Subsequent to these transfers all Alumex Group companies were held as 100% owned subsidiaries of AAMT.

Step 2 – Amalgamations

Proceeding further with the consolidation process, the following amalgamations were carried out;

• On March 22, 2012, United Ceylon Insurance Company Limited was amalgamated with its parent company, AAMT, resulting in the surviving entity being AAMT and United Ceylon Insurance Company Limited losing its corporate existence.

• On March 30, 2012 Alutec Extrusions (Private) Limited was amalgamated with Alumex (Private) Limited (both being 100% owned subsidiaries of AAMT), resulting in the surviving entity being Alutec Extrusions (Private) Limited and Alumex (Private) Limited losing its corporate existence.

Step 3 – Change of Corporate Name

As part of aligning the Group’s brand name “Alumex” to its legal corporate entity, AAMT was renamed as Alumex (Private) Limited on November 22, 2012. Alumex (Private) Limited was subsequently re-registered as Alumex Limited on February 22, 2013.

Step 4 – Final Amalgamation

Completing the consolidation process, Alutec Extrusions (Private) Limited, a 100% owned subsidiary of Alumex Limited (former AAMT) at the time of amalgamation, was amalgamated with Alumex Limited on March 31, 2013, resulting in the surviving entity being Alumex Limited and Alutec Extrusions (Private) Limited losing its corporate existence.


The consolidation of operations resulted in a much simpler Group structure as follows;

Alumex Limited currently holds 100% stakes in Alco Industries (Private) Limited and Avro Enterprises (Private) Limited.

7.14 Core Competencies of Alumex Group

(i) Exclusive Designs

Alumex Group has over 700 profile designs inclusive of Windows (side hung, top hung, turn and tilt, double glazed, sliding–single/multi track etc.), doors (swing, sliding, sliding/folding), curtain walls, partitions, shop fronts, solar panels/structures and components for various industries, air conditioning, engineering and transportation. Additionally, these architectural designs can be used for single storied houses and multi storied commercial high rise buildings in any weather conditions. Many of the latest exclusive designs developed are registered under Industrial Designs at the Registrar of Companies. Alumex Group caters to the Special Designs market segment as well. They have developed over 250 exclusive designs for the specialized manufacturers of various components for both local and export markets.

The Group has the ability to design and manufacture aluminium extruded profiles up to 220mm CCD. Alumex Group also provides different types of finishes (wood finish, polished anodizing, powder coating, anodizing, and mill finished) to support selection of choices for architects, consultants and engineers.

(ii) Modern and Advanced Technology

A key successful factor that has driven Alumex Group to procure a successful growth over the years is its technical competency and state-of-the-art technology. Alumex Group is equipped with modern extrusion machinery, anodizing facilities, powder coating, foundry shop equipped with a spectrometer to produce high quality alloyed billets, CNC wire cut/spark erosion machinery for die making and correction, surface polishing facilities and a wood effect sublimation plant.

(iii) Uniquely Positioned – Die Design and Manufacturing

Alumex Group is the only aluminium extruder in Sri Lanka with the ability to design and manufacture extrusion dies that caters to all required surface finishes /designs and different needs of the customers.



(iv) Support and Services

Alumex Group provides shop drawings with recommended Alumex designs to any potential client who wants to use aluminium extrusions for their requirement, on-the-job and off-the job training facilities and free of charge site visits for technical assistance. Additionally, testing of products at site and troubleshooting will be arranged as requested by the customer and this facility is exclusively available for Sri Lankan customers. Alumex Group also provides warranties up to 10 years against the manufacturing defects.

(v) Proprietary Rights

Alumex Group has obtained the rights to manufacture high quality, exclusive, state of the art window and door joinery system of AluK in Verona, Italy and Fletcher Aluminium in Auckland, New Zealand, under licenses for commercial and architectural applications such as curtain walls/ structural facades projects in Sri Lanka and Asia.

(vi) Competent Staff

The technical expertise, industrial experience of over 26 years and the market leadership of the Alumex Group are distinct advantages to meet its objectives successfully. The Alumex Group has the required infrastructure and an able talented team of Sri Lankan professionals, technicians and resource personnel who can successfully overcome any challenges they face in the market.

(vii) Island Wide Distribution Network

Alumex Group has an island wide distribution network with 57 dealers and 5 Alumex distribution centres in Makola, Kotte, Jaffna, Anuradhapura and Ratnapura to provide dealers easy access to its range of products. Further, Alumex is planning to add 4 more distribution centres to their network in the near future.


Figure 7-6: Alumex Group’s Distribution Network in Sri Lanka


Figure 7-6: Alumex Group’s Distribution Network in Sri Lanka



7.15 Accolades and Awards

Alumex Group has been recognised for the commitment towards innovation and providing value added aluminium solutions.

Year 2013

Mass Lanka (Top Twenty) Awards 2013

Awarded by Lakdiriya Development Foundation in recognition of the contribution made to the construction industry with innovative products and generation of employment.

Year 2012

E-Swabhimani Awards 2012

Awarded by ICT Agency of Sri Lanka in appreciation of the services made to e-Business and Commerce.

Best Display Stalls in Exhibitions

Best Display on Aluminum Products at the Construction Expo 2012.

Year 2011

Most Innovative Trade Stall

Merit Award in the Architect Exhibition 2011.

Appreciation Awards for Sponsorships awarded by

- Sri Lanka Institute of Architects

- National Construction Association of Sri Lanka

- Sri Lanka Constructor’s Association

- Central Engineering Consultancy Bureau (CECB) Engineer’s Association

7.16 Human Resources

Alumex Group has placed a prime importance on its human resource management function. The Human Resource (HR) function is headed by Group Manager HR and supported by a team of executives and support staff. The HR policies of the Group are built with a view of recruiting the right person for the right job, equipping the individual with the appropriate tools and skills for optimum performance whilst rewarding and recognizing their excellence.

All recruitments are done after a careful assessment and medical screening. All new members to the Alumex Group are given a proper induction, which explains the Company policies, procedures, operational environment, ethics and working standards of the Company. A high level of loyalty and integrity are considered to be essential in conducting business activities and are strongly embedded into the corporate culture of Alumex Group.

Performance evaluation of Alumex staff is carried out through periodic reviews which give a comprehensive feedback on their performance matched against set targets and realized levels of achievements. Alumex Group has a well-established reward structure to recognize the achievements of its employees who portray excellence during their employment.


Alumex Group places a high importance in training the staff which requires development of skills and competences that have been the springboard in enhancing performance. The training calendar is designed annually by the HR division, using the training and development requirements of each division and matched against the projects in hand and future projects envisaged, with the skills and knowledge required for optimum performance. In addition, team members are given the opportunity to actively participate in relevant external seminars, workshops and training programmes both local and overseas to sharpen their respective skills.

Being a knowledge based entity, Alumex Group continuously strives to contribute to creating a knowledge gaining and sharing culture by encouraging team members to pursue higher studies and professional qualifications, which the Company sponsors, as it adds value to the pool of knowledge available within the Company for it to draw upon. Alumex Group periodically reviews staff welfare services in order to uplift the quality of work life of its human resource. The dedicated first aid treatment centre, death donation scheme, employee loan schemes such as distress loan, nutritious meals at a subsidised rate and donation of school items to the children of the employees are some of the welfare facilities available to the employees and their families. Also Company believes on employee engagement and therefore family get-togethers, pirith ceremonies and staff cricket matches are organised annually.

As at December 31, 2013 the total staff strength of Alumex Group amounted to 415 employees under the following categorisation.

Alumex currently has a branch union of ‘Free Trade Zone and General Services Employee Union’ and there are no significant agreements entered into between the Company and labour union.

7.17 Corporate Social Responsibility

Responsibility and commitment towards community remain an integral feature within the Corporate Social Responsibility (CSR) framework of Alumex Group.

Health and Safety Policy

Alumex is committed to providing and maintaining a safe and healthy workplace for all employees and visitors and to do all that is reasonably practical to safeguard them from physical injury, fire and work related health problems and to comply with the appropriate safety standards and relevant legislation.

Table 7-9: Human Resources of Alumex Group Staff Category Number of Employees Management and Professional 60 Operational 150 Technical 14 Technical Officers/Clerical 79 Unskilled Workforce 112 Total 415


Alumex Group places a high importance in training the staff which requires development of skills and competences that have been the springboard in enhancing performance. The training calendar is designed annually by the HR division, using the training and development requirements of each division and matched against the projects in hand and future projects envisaged, with the skills and knowledge required for optimum performance. In addition, team members are given the opportunity to actively participate in relevant external seminars, workshops and training programmes both local and overseas to sharpen their respective skills.

Being a knowledge based entity, Alumex Group continuously strives to contribute to creating a knowledge gaining and sharing culture by encouraging team members to pursue higher studies and professional qualifications, which the Company sponsors, as it adds value to the pool of knowledge available within the Company for it to draw upon. Alumex Group periodically reviews staff welfare services in order to uplift the quality of work life of its human resource. The dedicated first aid treatment centre, death donation scheme, employee loan schemes such as distress loan, nutritious meals at a subsidised rate and donation of school items to the children of the employees are some of the welfare facilities available to the employees and their families. Also Company believes on employee engagement and therefore family get-togethers, pirith ceremonies and staff cricket matches are organised annually.

As at December 31, 2013 the total staff strength of Alumex Group amounted to 415 employees under the following categorisation.

Alumex currently has a branch union of ‘Free Trade Zone and General Services Employee Union’ and there are no significant agreements entered into between the Company and labour union.

7.17 Corporate Social Responsibility

Responsibility and commitment towards community remain an integral feature within the Corporate Social Responsibility (CSR) framework of Alumex Group.

Health and Safety Policy

Alumex is committed to providing and maintaining a safe and healthy workplace for all employees and visitors and to do all that is reasonably practical to safeguard them from physical injury, fire and work related health problems and to comply with the appropriate safety standards and relevant legislation.

Table 7-9: Human Resources of Alumex Group Staff Category Number of Employees Management and Professional 60 Operational 150 Technical 14 Technical Officers/Clerical 79 Unskilled Workforce 112 Total 415



Environmental Policy

Alumex Limited is committed to providing a quality product through systems and processes that ensure a safe and healthy workplace for employees and minimises the potential impact on the environment. The Company operates in compliance with all relevant environmental standards and relevant legislation and strives to use pollution prevention and environmental best practices.

Quality Management Systems (QMS)

All QMS functions at Alumex Group are based on ISO 9001: 2008 Quality Management Systems. It manufactures its products in line with national and international product certification schemes.

Sustainability Policy

Alumex Limited is committed to promoting sustainability. The concern for the environment and promoting a broader sustainability agenda are integral to the professional activities and the management of the Company. Alumex Limited aims to follow and to promote good sustainability practices, to reduce the environmental impacts of all activities and to help clients and partners to do the same.

Alumex Sustainability Policy is based upon the following principles:

- To comply with, and exceed where practicable, all applicable legislation, regulations and codes of practice

- To integrate sustainability considerations into all our business decisions

- To ensure that all staff are fully aware of Sustainability Policy and are committed to implementing and improving it

- To make clients and suppliers aware of its Sustainability Policy, and encourage them to adopt sound sustainable management practices

- To review, annually report, and to continually strive to improve sustainability performance

Some of the on-going CSR projects are:

- Distribution of School Books

Alumex Group provides stationery, school books and bags to children of all staff members in December every year since 2000.

- Distribution of white canes for Deaf and Blind Societies

Alumex Group distributes 1,000 white canes per annum, turned out at its plant, for people at Deaf and Blind Schools/Societies since 2012.

- Welfare development activities in collaboration with temples and Government bodies in the area

In addition, it engages in providing training as listed below. There are different types of programmes that the Alumex Group conducts for different customer segments.

- Training School

Alumex Group conducts fabricator training courses in its fully equipped training school in order to propagate the usage of aluminium in building construction work. These courses are conducted by well experienced staff who are fully conversant with the trade, and are carried out almost free of charge to help the industry in Sri Lanka.


There are three types of Fabricator courses/ programmes:

- For school leavers (18-25 years), conducted in collaboration with National Apprentice and Industrial Training Authority of Sri Lanka (NAITA). This is a national certificate level program.

- For those who are in the trade and wish to enhance their knowledge on estimation, fabrications, identification of profiles, correct usage of profiles etc. Usually this course is conducted on Saturdays and Sundays over four weekends at the factory premises in Sri Lanka. A nominal fee is being charged to cover the administrative costs.

- Government and non-Governmental Institutional training in Sri Lanka for the stakeholders in the industry according to the requests received. Two to three day programmes are being conducted Island wide free of charge.

Alumex Group has trained over 10,000 fabricators/technocrats since 1998. Moreover, it has conducted island wide workshops during the last 15 years and at present they have exclusively signed up with Vocational Training Institute (VTI) to conduct the National Vocational Qualification (NVQ) Level 3 Fabricator Training Programme in five centres in Northern Province (Jaffna, Vavuniya, Killinochchi, Mannar and Mullativu), Galle, Ratnapura, Kurunegala and Ratmalana.

Alumex Group is actively engaged in developing NVQ Level 04 Fabricator Advancement Programme with VTA at present.

7.18 Future Direction of Alumex Group

Local Markets

According to the 2014 budget proposal, planned infrastructure development projects and private sector investments including BOI approved projects in Sri Lanka, a substantial amount of funds are expected to come in to the building and construction related industry over the next five years. A substantial number of commercial buildings constructed now extensively use aluminium extrusions for their interior and exterior walls, windows, doors and partitioning, etc. It can be predicted that the aluminium extrusion market will grow above the expected GDP growth rate during the next five years. By focusing on these developments, Alumex Group has set its objectives and strategies to meet this demand over the next five years.

Apart from the above, the recent boom in property development, people are moving away from using timber and converting to use the only sustainable green product, aluminium. The usage of aluminium in the construction industry as well as in modern interior decorating has increased overtime. The use of aluminium in building construction has been recommended by most architects as modern techniques could be applied at a lower cost while giving existing buildings a modern appearance. With the government initiative to promote tourism industry and target to achieve 2.5 million tourist arrivals by 2016 and expected economic growth rate of 7.5% to 8% during the period of 2014 to 2016, will boost the requirement for aluminium extrusions and components to a greater extent. This will utilise the balance production capacity of 60% available with the Alumex Group in time to come without major capital infusion.



(i) Existing Products and Existing Markets

With the available products, Alumex Group plans to further penetrate in to the existing market and it is considered to be the most economical way of increasing sales volume. It intends to increase the distribution, by appointing new dealers and opening warehouses as part of the marketing objectives. Alumex Group identifies that it is vital to train fabricators to increase the usage of architectural profiles in many instances where hardware profiles (pipes and angles) are being used in doors and windows due to lack of knowledge about the usage of the architectural profiles by the fabricators.

(ii) New Product Development

The Company intends to invest further on new product developments in order to address customer requirements, environments and the standards set by regulators such as Institute for Construction Training and Development (ICTAD) and Sri Lanka Standards Institution (SLS).

Some of the new designs to be introduced to the Alumex Window and Door System are as follows.

- Sliding series with better water drain system, safety, with provision for mosquito net, and option for double glaze

- New casement series with double glaze option, provision for mosquito net

- Swing door series with option for double glaze and provision for 12mm glaze

- Products to meet the requirement of Industrial and Aluminium Component markets and new value added markets namely;

• Solar panels

• Brackets

• Hinges

• Heat sinks

• Rollers

• Ladders

• Rods

• Component to support cladding market

• Advertising industry

(iii) Alumex Tested System

Alumex Group plans to introduce an internationally recognised “tested windows and door system” which will be,

- tested against water penetration and air tightness

- tested against wind pressure and

- used specially designed accessories for the system.

It has become vital that Alumex introduces an in-house tested system in addition to its two world renowned brands of aluminium products, “AluK” from Italy and “Fletcher Aluminium” from New Zealand. Tested systems will gain additional strength by obtaining accreditations such as Qualicoat/Qualanode in additions to SLS certification to get international recognition and attention.


(iv) Alumex Concept and Design Centres (AC’s and DC’s)

With end users rapidly moving from timber to aluminium, it is necessary to display all the latest Alumex fabricated product samples with recommended accessories in one location to give access to the customers to touch and feel the final product they intend to use. Therefore it is proposed to establish minimum of 10 such state of the art display centres in selected major cities of the country. At present, customers have little knowledge about selecting a suitable design and options available to them with aluminium windows and doors.

Additionally, it is suggested to have a support service to customers through this design centre to provide shop drawings, give details of fabrications, BOQs and recommend fabricators.

Some of the areas selected for the proposed design centres are Nawala, Kandy, Matara, Nittambuwa, Galle, Jaffna, Ratnapura, Batticaloa, Negombo and Kurunagala.

Export Markets

With this strategic direction to manufacture Aluminium Proprietary system designs under license, Alumex Group expects to enter the global aluminium extrusion market. Alumex Group has received orders from Australia, Republic of Maldives, Bangladesh and India to export the products.

In 2012, Alumex Group initiated contacts with two aluminium profile distributors in Cochin and Calicut in India. The two dealers enabled Alumex to establish direct contacts with the Architects and Project Managers to specify the Alumex range of products in the projects and was successful in securing the first wood finish architectural profile order for 10 metric Tons in 2013.

The main objective is to move in to the overseas markets in Indian subcontinent and further penetrate in to the South Indian markets and Maldives to utilise the excess production capacity and increase the sales volume in order to reduce the cost of production and thereby increase the turnover and the margins of the Alumex Group.

7.19 Major Assumptions Relating to Future Plans of Alumex Group

- Alumex Group expects the macroeconomic environment of the country to be favourable to its businesses. The Company expects GoSL as well as private sector investments in infrastructure development sector to grow at an increasing rate with the accelerated economic development of the country.

- Alumex Group expects the demand for construction and property development sector to continue to grow in the future.

- Alumex Group expects the GoSL to encourage investments in the leisure and hotel industry.

- Alumex Group expects the global aluminium prices to remain favourable and Alumex Group will be able to pass any price increase to the customers.

- Alumex Group expects to penetrate the regional markets through dealerships.



8.0 CORPORATE STRUCTURE

8.1 The Board of Directors of Alumex Limited

As at the date of the Prospectus, the Board of Directors of Alumex Limited comprised of nine (09) Directors consisting of three (03) Executive Directors and six (06) Non-Executive Directors. From and out of the six (06) Non-Executive Directors, two (02) are Independent Non-Executive Directors. Additionally, there are two (02) Alternate Directors representing two (02) Non-Executive Directors.

Table 8-1: Board of Directors of Alumex Limited Name Address Mr. Abeyakumar Mohan Pandithage No. 119, Kynsey Road, Colombo 08 Mr. Rohan Palitha Peris No. 5A, Wimala Estate Road, Gangodawila, Nugegoda Mr. Dediwela Widanaarachchilage Pramuk Nishantha Dediwela

No. 259/4B, Hospital Road, Kiribathgoda

Mr. Sarath Clement Ganegoda No. 28, Campbell Place, Dehiwela Mr. Ranil Prasad Pathirana No. 243/5, Lake Gardens, Lake Drive, Rajagiriya Mr. Ali Asghar Akbarally No. 90, Layards Road, Colombo 05 Mr. Huzaifa Hamzaally Abdulhusein No. 28, 27th Lane, Colombo 03 Dr. Harsha Cabral, PC No. 114/8, Horton Place, Colombo 07 Mr. Somasiri Munaweera No. 113/9, Sri Soratha Mawatha, Gangodawila, Nugegoda

Table 8-2: Alternate Directors of Alumex Limited Name Address Mr. Aroon Janak Hirdaramani (Alternate to Mr. R. P. Pathirana)

No. 61, Barnes Place, Colombo 07

Mr. Tyeabally Akbarally (Alternate to Mr. A. A. Akbarally)

No. 16/15, Albert Crescent, Colombo 07

8.2 Profiles of the Board of Directors

Mr. Abeyakumar Mohan Pandithage – Chairman/Chief Executive

Mr. Pandithage was appointed to the Board of Alumex Limited in November 2010. He joined Hayleys Group in 1969 and serves as the Chairman and Chief Executive of Hayleys PLC since July 2009. He is the Honorary Consul of the United Mexican States (Mexico) to Sri Lanka.

Mr. Pandithage is a Fellow of the Chartered Institute of Logistics and Transport and a Member of the Presidential Committee on Maritime Matters. He is also a Committee Member of the Ceylon Chamber of Commerce, Council Member of the Employers’ Federation of Ceylon and a Member of the Monetary Policy Consultative Committee of the Central Bank of Sri Lanka. He serves as a Board Director of Diesel & Motor Engineering Company PLC, the Delmege Group and Sri Lanka Port Management and Consultancy Services Limited and is on the Boards of several other local and foreign companies.



8.0 CORPORATE STRUCTURE

8.1 The Board of Directors of Alumex Limited

As at the date of the Prospectus, the Board of Directors of Alumex Limited comprised of nine (09) Directors consisting of three (03) Executive Directors and six (06) Non-Executive Directors. From and out of the six (06) Non-Executive Directors, two (02) are Independent Non-Executive Directors. Additionally, there are two (02) Alternate Directors representing two (02) Non-Executive Directors.

Table 8-1: Board of Directors of Alumex Limited Name Address Mr. Abeyakumar Mohan Pandithage No. 119, Kynsey Road, Colombo 08 Mr. Rohan Palitha Peris No. 5A, Wimala Estate Road, Gangodawila, Nugegoda Mr. Dediwela Widanaarachchilage Pramuk Nishantha Dediwela

No. 259/4B, Hospital Road, Kiribathgoda

Mr. Sarath Clement Ganegoda No. 28, Campbell Place, Dehiwela Mr. Ranil Prasad Pathirana No. 243/5, Lake Gardens, Lake Drive, Rajagiriya Mr. Ali Asghar Akbarally No. 90, Layards Road, Colombo 05 Mr. Huzaifa Hamzaally Abdulhusein No. 28, 27th Lane, Colombo 03 Dr. Harsha Cabral, PC No. 114/8, Horton Place, Colombo 07 Mr. Somasiri Munaweera No. 113/9, Sri Soratha Mawatha, Gangodawila, Nugegoda

Table 8-2: Alternate Directors of Alumex Limited Name Address Mr. Aroon Janak Hirdaramani (Alternate to Mr. R. P. Pathirana)

No. 61, Barnes Place, Colombo 07


No. 16/15, Albert Crescent, Colombo 07

8.2 Profiles of the Board of Directors

Mr. Abeyakumar Mohan Pandithage – Chairman/Chief Executive

Mr. Pandithage was appointed to the Board of Alumex Limited in November 2010. He joined Hayleys Group in 1969 and serves as the Chairman and Chief Executive of Hayleys PLC since July 2009. He is the Honorary Consul of the United Mexican States (Mexico) to Sri Lanka.

Mr. Pandithage is a Fellow of the Chartered Institute of Logistics and Transport and a Member of the Presidential Committee on Maritime Matters. He is also a Committee Member of the Ceylon Chamber of Commerce, Council Member of the Employers’ Federation of Ceylon and a Member of the Monetary Policy Consultative Committee of the Central Bank of Sri Lanka. He serves as a Board Director of Diesel & Motor Engineering Company PLC, the Delmege Group and Sri Lanka Port Management and Consultancy Services Limited and is on the Boards of several other local and foreign companies.


Mr. Rohan Palitha Peris – Managing Director

Mr. Peris joined Alumex Limited in May 2012 as its Managing Director. He has over 28 years of experience in manufacturing at Haycarb PLC where he functioned as the Director with overall responsibility for both local and overseas manufacturing operations. Mr. Peris holds a B.Sc. Honours Degree in Industrial Engineering from Hatfield Polytechnic in the UK.

Mr. Dediwela Widanaarachchilage Pramuk Nishantha Dediwela – Executive Director

Mr. Dediwela joined Alumex Group in January 1989 and has over 25 years of experience covering the fields of marketing and sales, material and logistics, finance, production and administration/human resources. He was appointed as an Executive Director of the Alumex Limited and its subsidiaries, Alco Industries (Private) Limited, Avro Enterprises (Private) Limited, in December 2010.

Mr. Dediwela is a Chartered Marketer/Financial Economist and holds a Master of Arts in Financial Economics (University of Colombo), Master of Business Administration (University of Southern Queensland), Post-Graduate Diploma in Business and Financial Administration (Institute of Chartered Accountants Sri Lanka/Cranfield - UK), Post-Graduate Diploma in Marketing (Chartered Institute of Marketing - UK) and Diploma in Management (Open University of Sri Lanka).

Mr. Dediwela is a member of the Advisory Committee on Light Engineering of the Sri Lanka Export Development Board and holds memberships of the Chartered Institute of Marketing (UK) and Sri Lanka Economic Association.

Mr. Sarath Clement Ganegoda – Non-Executive Director

Mr. Ganegoda was appointed to the Board of Alumex Limited in November 2010. He has worked for Hayleys Group and Diesel and Motor Engineering Company PLC between 1987 and 2002, ultimately as an Executive Director of the latter. Subsequently, he held several senior management positions in large private sector entities in Sri Lanka and overseas. He re-joined Hayleys Group in March 2007 and was appointed to the Group Management Committee in July 2007.

Mr. Ganegoda is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka and a Member of Institute of Certified Management Accountants of Australia. He holds a Master of Business Administration from the Postgraduate Institute of Management, University of Sri Jayewardenepura.

Mr. Ranil Prasad Pathirana – Non-Executive Director

Mr. Pathirana was appointed to the Board of Alumex Limited in November 2010. He is the Finance Director of the Hirdaramani Group and is a Director of Hirdaramani Apparel Holdings (Private) Limited, Hirdaramani Leisure Holdings (Private) Limited and Hirdaramani Investments Holding (Private) Limited which are the holding companies of the Hirdaramani Group. He is also a Director of Star Packaging (Private) Limited and Windforce (Private) Limited and a Non-Executive Director of Hayleys PLC, Sampath Bank PLC and Nirmalapura Wind Power (Private) Limited.

Mr. Pathirana is a Fellow Member of the Chartered Institute of Management Accountants, UK (FCMA - UK) and holds a Bachelor of Commerce Degree from the University of Sri Jayewardenepura.

Mr. Ali Asghar Akbarally – Non-Executive Director

Mr. Akbarally was appointed to the Board of Alumex Limited in November 2010. He serves as an Executive Director of the Akbar Brothers Group of Companies for the past 32 years. He is the past president of the Rotary Club of Colombo. Mr. Akbarally holds a Degree in Industrial Engineering from the University of California and is a Fellow of the Institute of Certified Professional Managers.



Mr. Huzaifa Hamzaally Abdulhusein – Non-Executive Director

Mr. Abdulhusein was appointed to the Board of Alumex Limited in November 2010 as an Alternate Director and appointed to the Board as a Director in November 2011. With over 30 years of business experience, he is an entrepreneur and investor in the corporate sector in Sri Lanka and India.

Mr. Abdulhusein is the Managing Director of Star Packaging (Private) Limited and the Chairman/Managing Director of Star Boxes India (Private) Limited.

Dr. Harsha Cabral, PC – Independent Non-Executive Director

Dr. Cabral was appointed to the Board of Alumex Limited in January 2014. He is a President’s Counsel with 25 years of experience in the field of Company Law, Intellectual Property Law, International Trade Law and Commercial Arbitration. He holds a Doctorate in Corporate Law from the University of Canberra, Australia.

Dr. Cabral is a Member of the Law Commission of Sri Lanka, Member of the Advisory Commission on Company Law in Sri Lanka, Member of the Council of the University of Colombo, Member of the Board of Studies of the Council of Legal Education and a Member of the Academic Board of Studies of the Institute of Chartered Accountants of Sri Lanka. He is one of the architects of the new Companies Act of Sri Lanka. Dr. Cabral serves as Independent Non-Executive Director on the Boards of Diesel & Motor Engineering PLC, Union Bank PLC, Tokyo Cement Company (Lanka) PLC, Richard Pieris Distributors Limited, Lanka ORIX Finance PLC, Tokyo Super Cement Company Lanka (Private) Limited, Fuji Cement (Lanka) Private Limited, Commercial Leasing & Finance Limited, Tokyo Power (Lanka) Private Limited and Hambana Petrochemicals Limited. He serves on several Audit Committees, Nomination Committees and Remuneration Committees, chairing some of them. Dr. Cabral is the author of several books on Corporate Law and Intellectual Property Law.

Mr. Somasiri Munaweera – Independent Non-Executive Director

Mr. Munaweera was appointed to Alumex Board in January 2014. He counts over 30 years of experience in mercantile and audit sector. Mr. Munaweera is the Precedent Partner of S. Munaweera & Company, Chartered Accountants and also serves as the Managing Director of Southern Management and Corporate Services (Private) Limited. He holds a Bachelor of Commerce (Special) Degree from the University of Colombo and a Master of Business Administration from the University of Sri Jayewardenepura. Mr. Munaweera is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka (FCA) and the Institute of Certified Management Accountants of Sri Lanka (FCMA).

Mr. Aroon Janak Hirdaramani (Alternate to Mr. R. P. Pathirana) – Non-Executive Director

Mr. Hirdaramani was appointed to the Board of Alumex Limited in November 2010. He holds a Bachelor's Degree in Business Economics from Brown University in 2001. After graduation, he worked as an analyst in investment banking at Credit Suisse in New York. Mr. Hirdaramani has been a Director of the Hirdaramani Group since 2003. He is a Member of the Young Presidents' Organization, where he serves as the Education Chair for the Sri Lanka Chapter and as Membership Chair for the Global Apparel Network. He is also the Deputy Chairman of the Sri Lanka Apparel Exporters Association.



Mr. Huzaifa Hamzaally Abdulhusein – Non-Executive Director

Mr. Abdulhusein was appointed to the Board of Alumex Limited in November 2010 as an Alternate Director and appointed to the Board as a Director in November 2011. With over 30 years of business experience, he is an entrepreneur and investor in the corporate sector in Sri Lanka and India.

Mr. Abdulhusein is the Managing Director of Star Packaging (Private) Limited and the Chairman/Managing Director of Star Boxes India (Private) Limited.

Dr. Harsha Cabral, PC – Independent Non-Executive Director

Dr. Cabral was appointed to the Board of Alumex Limited in January 2014. He is a President’s Counsel with 25 years of experience in the field of Company Law, Intellectual Property Law, International Trade Law and Commercial Arbitration. He holds a Doctorate in Corporate Law from the University of Canberra, Australia.

Dr. Cabral is a Member of the Law Commission of Sri Lanka, Member of the Advisory Commission on Company Law in Sri Lanka, Member of the Council of the University of Colombo, Member of the Board of Studies of the Council of Legal Education and a Member of the Academic Board of Studies of the Institute of Chartered Accountants of Sri Lanka. He is one of the architects of the new Companies Act of Sri Lanka. Dr. Cabral serves as Independent Non-Executive Director on the Boards of Diesel & Motor Engineering PLC, Union Bank PLC, Tokyo Cement Company (Lanka) PLC, Richard Pieris Distributors Limited, Lanka ORIX Finance PLC, Tokyo Super Cement Company Lanka (Private) Limited, Fuji Cement (Lanka) Private Limited, Commercial Leasing & Finance Limited, Tokyo Power (Lanka) Private Limited and Hambana Petrochemicals Limited. He serves on several Audit Committees, Nomination Committees and Remuneration Committees, chairing some of them. Dr. Cabral is the author of several books on Corporate Law and Intellectual Property Law.

Mr. Somasiri Munaweera – Independent Non-Executive Director

Mr. Munaweera was appointed to Alumex Board in January 2014. He counts over 30 years of experience in mercantile and audit sector. Mr. Munaweera is the Precedent Partner of S. Munaweera & Company, Chartered Accountants and also serves as the Managing Director of Southern Management and Corporate Services (Private) Limited. He holds a Bachelor of Commerce (Special) Degree from the University of Colombo and a Master of Business Administration from the University of Sri Jayewardenepura. Mr. Munaweera is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka (FCA) and the Institute of Certified Management Accountants of Sri Lanka (FCMA).

Mr. Aroon Janak Hirdaramani (Alternate to Mr. R. P. Pathirana) – Non-Executive Director

Mr. Hirdaramani was appointed to the Board of Alumex Limited in November 2010. He holds a Bachelor's Degree in Business Economics from Brown University in 2001. After graduation, he worked as an analyst in investment banking at Credit Suisse in New York. Mr. Hirdaramani has been a Director of the Hirdaramani Group since 2003. He is a Member of the Young Presidents' Organization, where he serves as the Education Chair for the Sri Lanka Chapter and as Membership Chair for the Global Apparel Network. He is also the Deputy Chairman of the Sri Lanka Apparel Exporters Association.


Mr. Tyeabally Akbarally (Alternate to Mr. A. A. Akbarally) – Non-Executive Director

Mr. Akbarally was appointed to the Board of Alumex Limited in November 2010. He has been a Director of the Akbar Brothers Group of Companies since 1979. Mr. Akbarally is actively engaged in the tea and commodity export trade. He was a past Chairman of the Colombo Tea Traders Association and Spices and Allied Products Producers’ and Traders’ Association. He is also a Director of Amana Bank Limited and the Chairman of Amana Takaful PLC, and is on the Board of several other companies.

8.3 Other Directorships Held by the Board of Directors

Set below are the other directorships held by the Board of Directors of Alumex Limited.

Table 8-3: Other Directorships Held by Board of Directors of Alumex Limited Name Other Directorships Held Mr. Abeyakumar Mohan Pandithage

AES Kelanitissa (Private) Limited Agility Logistics (Private) Limited Agro Technica Limited Air Global (Private) Limited Alco Industries (Private) Limited Amaya Leisure PLC Avro Enterprises (Private) Limited Bhagya Hydro (Private) Limited Blue Mountain Tea Exports (Private) Limited Bonterra Lanka Limited Carbotels (Private) Limited Ceylon Ocean Lines Limited Chas P. Hayley & Company (Private) Limited Civaro International Limited Civaro Lanka (Private) Limited Clarion Shipping (Private) Limited CMA-CGM Lanka (Private) Limited CMA-CGM Logistics Lanka (Private) Limited Connaisance Air Travels (Private) Limited Creative Polymats (Private) Limited Culture Club Resorts (Private) Limited D P L Plantations (Private) Limited Dean Foster (Private) Limited Delmege Coir (Private) Limited Delmege Forsyth & Company (Exports) (Private) Limited Delmege Forsyth & Company (Shipping) Limited Delmege Freight Services (Private) Limited Delmegeair Services (Private) Limited Diesel & Motor Engineering Company PLC Dipped Products PLC Eastern Hotels (Private) Limited Expelogix (Private) Limited Feltex (Private) Limited Grossart (Private) Limited H J S Condiments Limited Hanwella Rubber Products Limited Haycarb PLC Haycarb Value Added Product (Private) Limited Haycolour (Private) Limited




Haydea Business Solutions (Private) Limited Hayeys Business Solutions International (Private) Limited Hayleylines Limited Hayleys Advantis Limited Hayleys Agriculture Holdings Limited Hayleys Agro Biotech (Private) Limited Hayleys Agro Farms (Private) Limited Hayleys Agro Fertilizers (Private) Limited Hayleys Consumer Products Limited Hayleys Electronics Lighting (Private) Limited Hayleys Energy Services Lanka (Private) Limited Hayleys Fibre PLC Hayleys Foundation (Guarantee) Limited Hayleys Global Beverages (Private) Limited Hayleys Group Services (Private) Limited Hayleys Hydro Energy (Private) Limited Hayleys Industrial Solutions (Private) Limited Hayleys Leisure Holdings (Private) Limited Hayleys Lifesciences (Private) Limited Hayleys MGT Knitting Mills PLC Hayleys Neluwa Hydro Power (Private) Limited Hayleys Plantation Services (Private) Limited Hayleys PLC Hayleys Power Limited Hayleys Travels & Tours (Private) Limited Haymat (Private) Limited Home For Every Plantation Worker Foundation(Guarantee) Limited Hunas Falls Hotels PLC International Consumer Brands Limited Kandyan Resorts (Private) Limited Kelani Valley Instant Tea (Private) Limited Kelani Valley Plantations PLC Lakdiyatha (Private) Limited Lanka Orient Express Lines Limited Lewis Brown Air Services (Private) Limited Lewis Shipping (Private) Limited Lignocell (Private) Limited Logistics International Limited Logiventures (Private) Limited Logiwiz Limited Logiwiz N W (Private) Limited Mabroc Teas (Private) Limited Maritime Agencies (Private) Limited Millennium Transportation (Private) Limited MIT Cargo (Private) Limited Moceti International (Private) Limited Moceti Lanka (Private) Limited Mountain Hawk (Private) Limited Mountain Hawk Express (Private) Limited N.Y.K. Line Lanka (Private) Limited



Neluwa Cascade Hydro Power (Private) Limited Neoprex (Private) Limited Nirmalapura Wind Power (Private) Limited North South Lines (Private) Limited O E Techniques Limited Palma Limited Power Engineering Solutions (Private) Limited Puritas (Private) Limited Quality Seed Company (Private) Limited Ravi Industries Limited Recogen (Private) Limited Rileys (Private) Limited Sri Lanka Port Management Consultancy Services Limited Sunfrost (Private) Limited T T E L Hydro Power Company (Private) Limited T T E L Somerset Hydro Power (Private) Limited Talawakelle Tea Estates PLC Texnil (Private) Limited The Beach Resorts Limited The Kingsbury PLC The Queensbury (Private) Limited Toyo Cushion Lanka (Private) Limited Ultracarb (Private) Limited Venigros (Private) Limited Volanka (Private) Limited Volanka Exports Limited Volanka Insurance Brokers (Private) Yusen Logistics & Kusuhara Lanka (Private) Limited Foreign Companies Carbokarn Company Limited Charles Fibres (Private) Limited Civaro Freight India (Private) Limited CK Regen Systems Company Limited Dipped Products (Thailand) Limited Eurocarb Products Limited Haycarb Holdings Australia (Pty) Limited Haycarb Holdings Bitung Limited Haychem (Bangladesh) Limited Haylex USA Haylex B V Haylex Limited (UK) Haymark Limited Ico Guanti Spa Logiwiz Logistics India (Private) Limited Mabroc Japan Company Limited PT Mapalus Makawanua Charcoal Industry Shizuka Company Limited



Table 8-3: Other Directorships Held by Board of Directors of Alumex Limited Name Other Directorships Held Mr. Rohan Palitha Peris

Alco Industries (Private) Limited Avro Enterprises (Private) Limited

Mr. Dediwela Widanaarachchilage Pramuk Nishantha Dediwela

Alco Industries (Private) Limited Avro Enterprises (Private) Limited

Mr. Sarath Clement Ganegoda

Agro Technica Limited Air Global (Private) Limited Alco Industries (Private) Limited Avro Enterprises (Private) Limited Carbotels (Private) Limited D P L Plantations (Private) Limited Dean Foster (Private) Limited Delmege Insurance Brokers (Private) Limited Delmege Risk Solutions (Private) Limited Dipped Products PLC Eastern Hotels (Private) Limited Feltex (Private) Limited Grossart (Private) Limited Haycarb PLC Haycolour (Private) Limited Haydea Business Solutions (Private) Limited Hayeys Business Solutions International (Private) Limited Hayleys Advantis Limited Hayleys Agriculture Holdings Limited Hayleys Agro Fertilizers (Private) Limited Hayleys Consumer Products Limited Hayleys Electronics Lighting (Private) Limited Hayleys Fibre PLC Hayleys Foundation (Guarantee) Limited Hayleys Group Services (Private) Limited Hayleys Hydro Energy (Private) Limited Hayleys Industrial Solutions (Private) Limited Hayleys Leisure Holdings (Private) Limited Hayleys Lifesciences (Private) Limited Hayleys Photoprint Limited Hayleys Plantation Services (Private) Limited Hayleys PLC Hayleys Travels & Tours (Private) Limited Hayleys-MGT Knitting Mills PLC Hunas Falls Hotels PLC Kelani Valley Plantations PLC Kinetics (Private) Limited Lignocell (Private) Limited Logiventures (Private) Limited Maritime Agencies (Private) Limited Millennium Transportation (Private) Limited MIT Cargo (Private) Limited Neoprex (Private) Limited Nirmalapura Wind Power (Private) Limited North South Lines (Private) Limited


Table 8-3: Other Directorships Held by Board of Directors of Alumex Limited Name Other Directorships Held Mr. Sarath Clement Ganegoda

Palma Limited Ravi Industries Limited Rileys (Private) Limited Texnil (Private) Limited The Kingsbury PLC Toyo Cushions Lanka (Private) Limited Venigros (Private) Limited Volanka (Private) Limited Volanka Insurance Brokers (Private) Limited Foreign Companies Charles Fibres (Private) Limited Haylex Limited (UK) Haylex B V Dipped Products (Thailand) Limited Haychem (Bangladesh) Limited PT Mapalus Makawanua

Mr. Ranil Prasad Pathirana

Alco Industries (Private) Limited Avro Enterprises (Private) Limited Ceylon Knit Trend (Private) Limited CKT Apparel (Private) Limited Hayleys MGT Knitting Mills PLC Hayleys PLC Hi Fashion Holdings (Private) Limited Hirdaramani (Private) Limited Hirdaramani Apparel Holdings (Private) Limited Hirdaramani Garments Katunayake (Private) Limited Hirdaramani Industries (Private) Limited Hirdaramani International Exports (Private) Limited Hirdaramani Investment Holdings (Private) Limited Hirdaramani Leisure Holdings (Private) Limited Hirdaramani Mercury Apparel (Private) Limited Nirmalapura Wind Power (Private) Limited Rosewood (Private) Limited Sampath Bank PLC Star Packaging (Private) Limited Union Residencies (Private) Limited Windforce (Private) Limited

Mr. Ali Asghar Akbarally

A.B. Developments (Private) Limited A.B. Properties (Private) Limited Akbar Brothers (Private) Limited Akbar Brothers Exports (Private) Limited Akbar Pharmaceuticals (Private) Limited Alco Industries (Private) Limited Avro Enterprises (Private) Limited Buluthota Energy (Private) Limited Cleanco Lanka (Private) Limited Energy Reclamation (Private) Limited Esna Power Limited



Table 8-3: Other Directorships Held by Board of Directors of Alumex Limited Name Other Directorships Held Mr. Ali Asghar Akbarally

Falcon Apparels (Private) Limited Falcon Trading (Private) Limited Flexiprint (Private) Limited Hermitage Resort (Private) Limited Kokawita Terraqua (Private) Limited Land & Building Limited Nirmalapura Windpower (Private) Limited Powergen Lanka (Private) Limited Quick Tea (Private) Limited Seguwantivu Wind Power (Private) Limited Tea House (Private) Limited Terra Aqua (Private) Limited Vidatamuni Wind Power (Private) Limited Vidul Madugeta (Private)Limited Windforce (Private) Limited

Mr. Huzaifa Hamzaally Abdulhusein

Alco Industries (Private) Limited Avro Enterprises (Private) Limited Crimson CS (Private) Limited Star Boxes India (Private) Limited Star Leisure (Private) Limited Star Pack Investments (Private) Limited Star Packaging (Private) Limited

Dr. Harsha Cabral, PC

Commercial Leasing and Finance PLC Diesel & Motor Engineering Company PLC Fuji Cement Lanka (Private) Limited Hambana Petrochemicals Limited Hayleys PLC Lanka Orix Finance PLC Richard Pieris Distributors Limited Tokyo Power Lanka (Private) Limited Tokyo Cement Company (Lanka) PLC Tokyo Super Cement Lanka (Private) Limited Union Bank PLC

Mr. Somasiri Munaweera

S M Bentley Corporate Services (Private) Limited S Munaweera & Company - Precedent Partner Southern Management and Corporate Services (Private) Limited Sterling Leasing and Investment Limited

Mr. Aroon Janak Hirdaramani (Alternate to Mr. R. P. Pathirana)

Chatham Holdings (Private) Limited Ecotels (Private) Limited H One (Private) Limited H-Connect (Private) Limited Hirdaramani (Private) Limited Hirdaramani Apparel Holdings (Private) Limited Hirdaramani Garments Katunayake (Private) Limited Hirdaramani Industries (Private) Limited Hirdaramani International Exports (Private) Limited



Table 8-3: Other Directorships Held by Board of Directors of Alumex Limited Name Other Directorships Held Mr. Aroon Janak Hirdaramani (Alternate to Mr. R. P. Pathirana)

Hirdaramani Investment Holdings (Private) Limited Hirdaramani Leisure Holdings (Private) Limited Hirdaramani Mercury Apparel (Private) Limited Hirdaramani Power (Private) Limited Hirdaramani Properties (Private) Limited Long Island Clothing Company (Private) Limited Rosewood (Private) Limited Sithro Garments Finishing Company Limited Sovereign Reality (Private) Limited Union Residencies (Private) Limited Your Style Lab (Private) Limited Zenith Insurance Brokers (Private) Limited


A.B Developments (Private) Limited A.B Properties (Private) Limited Akbar Brothers (Private) Limited Akbar Brothers Exports (Private) Limited Akbar Pharmaceuticals (Private) Limited Alco Industries (Private) Limited (Alternate) Amana Asset Management Limited Amana Bank Limited Amana Capital (Private) Limited Amana Global Limited Amana Investments Limited Amana Takaful PLC Avro Enterprises(Private) Limited (Alternate) Energy Reclamation (Private) Limited Falcon Apparels (Private) Limited Falcon Trading (Private) Limited Flexiprint (Private) Limited Land and Buildings Limited Quick Tea (Private) Limited Zahra Exports (Private) Limited



8.4 Board of Directors of the Subsidiary Companies

The Board of Directors of the two subsidiary companies, Avro Enterprises (Private) Limited and Alco Industries (Private) Limited consists of the following personnel.

Table 8-4: Board of Directors of Avro Enterprises (Private) Limited and Alco Industries (Private) Limited Name Designation Mr. Abeyakumar Mohan Pandithage Chairman/Chief Executive Mr. Rohan Palitha Peris Managing Director Mr. Dediwela Widanaarachchilage Pramuk Nishantha Dediwela Executive Director

Mr. Sarath Clement Ganegoda Non-Executive Director Mr. Ranil Prasad Pathirana Non-Executive Director Mr. Ali Asghar Akbarally Non-Executive Director Mr. Huzaifa Hamzaally Abdulhusein Non-Executive Director Mr. Tyeabally Akbarally (Alternate to Mr. A. A. Akbarally) Non-Executive Director

8.5 Directors’ Interest in Shares

8.5.1 Directors’ Direct Shareholdings in the Company

The Directors’ shareholdings in the Company as at January 23, 2014 (i.e. date of Initial Listing Application) are given below.

Table 8-5: Directors’ Direct Shareholding in Alumex Limited Name of Director Number of

Shares Held Percentage of Shareholding

Mr. Abeyakumar Mohan Pandithage Note 1 - - Mr. Rohan Palitha Peris - - Mr. Dediwela Widanaarachchilage Pramuk Nishantha Dediwela

10,669,200 3.79%

Mr. Sarath Clement Ganegoda Note 1 - - Mr. Ranil Prasad Pathirana Note 1/Note 2 - - Mr. Ali Asghar Akbarally Note 3 - - Mr. Huzaifa Hamzaally Abdulhusein Note 4 - - Dr. Harsha Cabral, PC - - Mr. Somasiri Munaweera - - Mr. Aroon Janak Hirdaramani (Alternate to Mr. R. P. Pathirana)

Note 2 - -


Note 5 - -



8.4 Board of Directors of the Subsidiary Companies

The Board of Directors of the two subsidiary companies, Avro Enterprises (Private) Limited and Alco Industries (Private) Limited consists of the following personnel.

Table 8-4: Board of Directors of Avro Enterprises (Private) Limited and Alco Industries (Private) Limited Name Designation Mr. Abeyakumar Mohan Pandithage Chairman/Chief Executive Mr. Rohan Palitha Peris Managing Director Mr. Dediwela Widanaarachchilage Pramuk Nishantha Dediwela Executive Director

Mr. Sarath Clement Ganegoda Non-Executive Director Mr. Ranil Prasad Pathirana Non-Executive Director Mr. Ali Asghar Akbarally Non-Executive Director Mr. Huzaifa Hamzaally Abdulhusein Non-Executive Director Mr. Tyeabally Akbarally (Alternate to Mr. A. A. Akbarally) Non-Executive Director

8.5 Directors’ Interest in Shares

8.5.1 Directors’ Direct Shareholdings in the Company

The Directors’ shareholdings in the Company as at January 23, 2014 (i.e. date of Initial Listing Application) are given below.

Table 8-5: Directors’ Direct Shareholding in Alumex Limited Name of Director Number of

Shares Held Percentage of Shareholding

Mr. Abeyakumar Mohan Pandithage Note 1 - - Mr. Rohan Palitha Peris - - Mr. Dediwela Widanaarachchilage Pramuk Nishantha Dediwela

10,669,200 3.79%

Mr. Sarath Clement Ganegoda Note 1 - - Mr. Ranil Prasad Pathirana Note 1/Note 2 - - Mr. Ali Asghar Akbarally Note 3 - - Mr. Huzaifa Hamzaally Abdulhusein Note 4 - - Dr. Harsha Cabral, PC - - Mr. Somasiri Munaweera - - Mr. Aroon Janak Hirdaramani (Alternate to Mr. R. P. Pathirana)

Note 2 - -


Note 5 - -


Note 1 Hayleys PLC holds 171,332,200 (60.88%) Ordinary Voting Shares of Alumex Limited. Mr. Abeyakumar Mohan Pandithage holds 2,338 ordinary voting shares of Hayleys PLC and is the Executive Chairman and Chief Executive of Hayleys PLC. Mr. Sarath Clement Ganegoda holds 2,000 ordinary voting shares and is an Executive Director of Hayleys PLC. Mr. Ranil Prasad Pathirana holds 2,000 ordinary voting shares and is a Non-Executive Independent Director of Hayleys PLC.

Note 2 Rosewood (Private) Limited holds 38,500,000 (13.68%) Ordinary Voting Shares of Alumex Limited. Mr. Ranil Prasad Pathirana and Mr. Aroon Janak Hirdaramani are both Executive Directors of Rosewood (Private) Limited.

Note 3 Akbar Brothers (Private) Limited holds 38,500,000 (13.68%) Ordinary Voting Shares of Alumex Limited. Mr. Ali Asghar Akbarally holds 24,548 (9.90%) ordinary voting shares of Akbar Brothers (Private) Limited and is an Executive Director of Akbar Brothers (Private) Limited.

Note 4 Star Pack Investments (Private) Limited holds 21,000,000 (7.46%) Ordinary Voting Shares of Alumex Limited. Mr. Huzaifa Hamzaally Abdulhusein holds 15,000,000 (50.00%) ordinary voting shares of Star Pack Investments (Private) Limited and is the Managing Director of Star Pack Investments (Private) Limited.

Note 5 Akbar Brothers (Private) Limited holds 38,500,000 (13.68%) Ordinary Voting Shares of Alumex Limited. Mr. Tyeabally Akbarally holds 24,173 (9.75%) ordinary voting shares of Akbar Brothers (Private) Limited and is an Executive Director of Akbar Brothers (Private) Limited.

8.5.2 Sale and Purchase of Shares by Directors

Share transactions made by Directors during the one year period preceding the date of the Prospectus are tabulated below.

Table 8-6: Share Transactions of Directors in Alumex Limited Name of Director Date Transaction Number of

Shares Sold Price Per

Share Mr. Dediwela

Widanaarachchilage Pramuk Nishantha Dediwela

December 31, 2013

Sale of shares to Hayleys PLC

3,330,800 Rs.14/-

Apart from those details mentioned in Table 8-6, no Director of the Company has sold or purchased Shares of Alumex Limited during the year immediately preceding the date of the Prospectus.

8.6 Directors’ Emoluments

Aggregate emoluments paid in the form of salaries, bonuses and/or profit sharing payments to the Directors including the Managing Director during the FY 2012/13 amounted to Rs. 15,957,674/-. The estimated aggregate emoluments payable by Alumex Limited to the Directors including the Managing Director during the FY 2013/14 is estimated at approximately Rs. 19,475,021/-.

8.7 Directors’ Interests in Assets

A motor vehicle was acquired from Haycarb PLC in September 2012 for a consideration of Rs. 5,775,048/-. Messrs. Abeyakumar Mohan Pandithage and Sarath Clement Ganegoda, are Directors of Haycarb PLC.

Other than the aforementioned transfer of a motor vehicle, the Directors of Alumex Limited have no interest in assets acquired, disposed or leased by the Company during the two (02) years preceding the date of this Prospectus.

Furthermore, it is not proposed that the Directors will hold any interest in assets to be acquired, disposed, or leased by the Company in the two (02) years subsequent to the Offering.



8.8 Directors’ Interests in Contracts

There are no contracts or arrangements in force as at the date of the Initial Listing Application in which the Directors of Alumex Limited are materially interested in relation to the business of the Company.

8.9 Statement – Board of Directors

No Director or a person nominated to become a Director of the Company has been involved in any of the following:

• A petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer; and

• Conviction for fraud, misappropriation or breach of trust or any other similar offence which the CSE considers a disqualification

8.10 Corporate Governance Practices

Alumex Limited has a policy of complying with established best practices in Corporate Governance. The Board of Directors of Alumex Limited has adopted core values and standards which set out the conduct of staff in their dealings with the shareholders, colleagues, customers and other stakeholders which ensure positive workplace management, marketplace responsibility, environmental stewardship, community engagement, and sustained financial performance. This involves the maintenance of

• An efficient organizational structure

• Systems for internal compliance and risk

• Transparent internal and external reporting

The Company understands, supports and has applied the core concepts that underlie enterprise governance and ensures that its standards remain in compliance with the regulatory requirement of the CSE Listing Rules.

8.10.1 Audit Committee

The Audit Committee consists of two (02) Independent Non-Executive Directors. Members of the Audit Committee are Dr. Harsha Cabral, Chairman of the Committee, and Mr. Somasiri Munaweera.

The Audit Committee’s authority, responsibilities and specific duties have been formalised through an Audit Committee Charter. As such, the responsibilities of the Audit Committee are:

• Review the financial reporting process of Alumex Group, in order to monitor the integrity of the financial statements of the Company, its annual report, accounts and quarterly reports prepared for disclosure and the significant financial reporting judgments contained therein.

• Review the effectiveness of the Company’s internal control system, discuss the scope of internal and external auditor’s review of internal control systems, review the significant findings and recommendations of external/internal auditors, together with the management responses and review systems and controls and service level agreements.


• Review the adequacy of the scope, functions and resources of the internal audit department in relation to the functions to be performed, review the internal audit programs proposed for the ensuing year, together with any intermediate or long term audit plans, recommend appointment or termination of Head of Internal Audit and out-sourced service providers to the internal audit functions and review the conflict of interest program, ensure that the internal audit function is independent of the activities it audits and that it is performed with impartiality, proficiency and with due professional care.

• Recommend to the Board the appointment or continuing engagement of the external auditors, approve the terms of engagement of the external auditors, review the scope and procedures to be used in their audit, review the independence of the external auditors, review their report of the Company’s financial position and their management letter, review and discuss for possible corrective action any discrepancies or recommendations noted in their report, and management’s response to them, inquire as to the Company environment (cooperation, limitations, restrictions etc.) within which their audit was conducted and consider the views of the external auditor concerning the adequacy of the Company’s internal controls and internal audit function and discuss the scope of, and plans for, future internal audits, review the fees paid to the external auditors and meet privately with the external auditors at least annually.

• Reviews the effectiveness of the system for monitoring compliance with laws and regulations, results of management’s investigation and follow-up of any instances of non-compliance, review arrangements by which employees of the Group may, in confidence, raise concerns about possible irregularities in financial reporting, internal control weaknesses, misappropriations or any other matters.

• Report to the Board its findings based on the reports of the external auditor, the internal auditor and members of management, together with any recommendations for action, which it may consider appropriate, provide a communication link between internal audit, external auditors and the Board of Directors, report annually to shareholders, as to how the responsibilities of the audit committee were discharged.

• Other responsibilities include discuss with the management the major policies in place with respect to risk assessment and risk management, discuss with the management and assign task masters who can be held responsible for different aspects, review as appropriate with the external auditor, the internal auditor and the Managing Director or his delegates, the overall adequacy of the Company’s programs, systems and procedures for compliance with legal and regulatory requirements and for assurance that the management and affairs of the Company are conducted with all due regard for ethical and legal norms and standards, review summaries of executive expense reports, review closed and pending litigation, and review retirement benefit funding, perform other activities as directed by the Board of Directors and review the adequacy of the committee charter periodically, requesting Board approval for proposed changes.

8.10.2 Remuneration Committee

The Remuneration Committee of Alumex Limited consists of two (02) Independent Non-Executive Directors namely Dr. Harsha Cabral, Chairman of the Committee, and Mr. Somasiri Munaweera. Meetings of the Remunerations Committee are held as and when necessary.



With the objective of attracting and retaining high calibre individuals, in a competitive environment, having regard to the business performance and stakeholder expectations, the Remuneration Committee shall be responsible,

• After taking into consideration the current industrial norms to lay down guidelines and parameters for the compensation structure of the Managing Director, Executive Directors and other Key Managerial Staff, keeping in line with the overall Hayleys PLC group remuneration policies.

• To set goals and targets for the Managing Director, Executive Directors and Key Management Personnel.

• To monitor and review the performance of the Managing Director, Executive Directors and other Key Management Personnel

• To evaluate the performance of the Managing Director, Executive Directors and other Key Management Personnel against the set targets and goals periodically and determine the basis for revising remuneration, benefits and other payments of performance based incentives.

8.11 Corporate Management of Alumex Limited

Brief profiles of the corporate management of Alumex Limited are provided below.

Mr. Rohan Palitha Peris– Managing Director

Please refer Section 8.2 for profile.



Dr. Chandika Wickramatillake – Deputy General Manager (Production)

Dr. Wickramatillake joined Alumex Limited in September 2012 after having studied and worked overseas for 18 years in countries such as UK, Netherlands, Australia and USA. Dr. Wickramatillake holds a Degree in Manufacturing Systems Engineering from the University of Hertfordshire in UK. He obtained his PhD in 2000 from the same University in the field of Material Science with extensive aluminium based research work performed in collaboration with Airbus, 3M and Defence Evaluation Research Agency (Farnborough, UK). His publications to date include subjects in the field of Modification of Aluminium Surfaces, Supply Chain, Enterprise Resource Planning and Project Management. He is a Member of the Institute of Materials (UK), Institute of Physics (UK) and Institute of Electrical Engineers (UK).

Mr. Nilruk Jeevaratne – Deputy General Manager (Marketing)

Mr. Jeevaratne joined Alumex Group in November 2011. He has over 26 years of experience in the aluminium industry. Prior to joining Alumex Limited, he worked as the National Sales Manager for SGI Architectural, Australia where he was in charge of distributing a range of Aluminium facade products to the Australian market. He was the General Manager of PD Keells Limited/Kelsey Aluminium Limited before migrating to Australia.


Mr. Prageeth Rajapaksha – Chief Financial Officer

Mr. Rajapaksha joined Alumex Limited in March 2012 as the Chief Financial Officer. He has 14 years of experience in varied industries of audit, telecommunication and manufacturing. Mr. Rajapaksha holds a Bachelor of Business Administration Degree from the University of Colombo and a Diploma in Information Systems Security Control and Audit from the Institute of Chartered Accountants of Sri Lanka. He is an Associate Member of Institute of Chartered Accountants of Sri Lanka as well as the Institute of Certified Management Accountants of Sri Lanka.

8.12 Corporate Management’s Emoluments

Total emoluments paid to the corporate management excluding Executive Directors during the FY 2012/13 amounted to Rs. 8,059,502/-. The estimated aggregate remuneration to be paid for FY 2013/14, to the corporate management of Alumex Limited excluding Executive Directors is expected to be approximately Rs. 15,607,645/- .

8.13 Statement – Chairman/Chief Executive

The Chairman/ Chief Executive of Alumex Limited has not been involved in any of the following:

• A petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer;

• Conviction for fraud, misappropriation or breach of trust or any other similar offence which the CSE considers a disqualification.



With the objective of attracting and retaining high calibre individuals, in a competitive environment, having regard to the business performance and stakeholder expectations, the Remuneration Committee shall be responsible,

• After taking into consideration the current industrial norms to lay down guidelines and parameters for the compensation structure of the Managing Director, Executive Directors and other Key Managerial Staff, keeping in line with the overall Hayleys PLC group remuneration policies.

• To set goals and targets for the Managing Director, Executive Directors and Key Management Personnel.

• To monitor and review the performance of the Managing Director, Executive Directors and other Key Management Personnel

• To evaluate the performance of the Managing Director, Executive Directors and other Key Management Personnel against the set targets and goals periodically and determine the basis for revising remuneration, benefits and other payments of performance based incentives.

8.11 Corporate Management of Alumex Limited

Brief profiles of the corporate management of Alumex Limited are provided below.

Mr. Rohan Palitha Peris– Managing Director




Dr. Chandika Wickramatillake – Deputy General Manager (Production)

Dr. Wickramatillake joined Alumex Limited in September 2012 after having studied and worked overseas for 18 years in countries such as UK, Netherlands, Australia and USA. Dr. Wickramatillake holds a Degree in Manufacturing Systems Engineering from the University of Hertfordshire in UK. He obtained his PhD in 2000 from the same University in the field of Material Science with extensive aluminium based research work performed in collaboration with Airbus, 3M and Defence Evaluation Research Agency (Farnborough, UK). His publications to date include subjects in the field of Modification of Aluminium Surfaces, Supply Chain, Enterprise Resource Planning and Project Management. He is a Member of the Institute of Materials (UK), Institute of Physics (UK) and Institute of Electrical Engineers (UK).

Mr. Nilruk Jeevaratne – Deputy General Manager (Marketing)

Mr. Jeevaratne joined Alumex Group in November 2011. He has over 26 years of experience in the aluminium industry. Prior to joining Alumex Limited, he worked as the National Sales Manager for SGI Architectural, Australia where he was in charge of distributing a range of Aluminium facade products to the Australian market. He was the General Manager of PD Keells Limited/Kelsey Aluminium Limited before migrating to Australia.


Mr. Prageeth Rajapaksha – Chief Financial Officer

Mr. Rajapaksha joined Alumex Limited in March 2012 as the Chief Financial Officer. He has 14 years of experience in varied industries of audit, telecommunication and manufacturing. Mr. Rajapaksha holds a Bachelor of Business Administration Degree from the University of Colombo and a Diploma in Information Systems Security Control and Audit from the Institute of Chartered Accountants of Sri Lanka. He is an Associate Member of Institute of Chartered Accountants of Sri Lanka as well as the Institute of Certified Management Accountants of Sri Lanka.

8.12 Corporate Management’s Emoluments

Total emoluments paid to the corporate management excluding Executive Directors during the FY 2012/13 amounted to Rs. 8,059,502/-. The estimated aggregate remuneration to be paid for FY 2013/14, to the corporate management of Alumex Limited excluding Executive Directors is expected to be approximately Rs. 15,607,645/- .

8.13 Statement – Chairman/Chief Executive

The Chairman/ Chief Executive of Alumex Limited has not been involved in any of the following:

• A petition under any bankruptcy laws filed against such person or any partnership in which he was a partner or any corporation of which he was an executive officer;

• Conviction for fraud, misappropriation or breach of trust or any other similar offence which the CSE considers a disqualification.



9.0 OTHER COMPANY INFORMATION

9.1 Relationship with Key Customers and Suppliers of Alumex Limited

Customers

Alumex Group capitalises on its 57 dealers to distribute its products throughout the country. As such, there is no dependency on any single customer that would affect the performance of the Alumex Group.

Suppliers

Alumex Group sources a majority of its requirement of aluminium billet logs and ingots through Dubai Aluminium (DUBAL), one of the largest aluminium manufacturers in the world. The main reasons for the selection of a DUBAL as the main supplier are as follows;

• Considering the quantities imported by the Alumex Group, which is small compared to global volumes, sourcing from many suppliers would not be economical.

• Being a commodity, there would not be a significant price differentiation between the global suppliers of aluminium.

• Alumex Group has been sourcing aluminium from DUBAL for 22 year and has built a good relationship with the supplier.

However, it should be noted that there is no significant dependency on DUBAL for the supplies of aluminium as there are other suppliers in the world for procurement of aluminium, with some of whom the Company has already established a good relationship over the years.

9.2 Dividend Policy

The declaration and payment of dividends will be based on a number of factors, including but not limited to the Company’s earnings, cash flow position, future capital investments, overall financial conditions and any other factors which the Board of Directors may deem relevant. Each Share of the Company confers on the holder thereof the right to an equal share in dividends paid by the Company.

Details of dividends declared during the preceding financial years have been stated under “Dividends” in the “Accountants’ Report” presented in Section 16.1 of the Prospectus.


9.3 Details of Material Indebtedness

Particulars of loans of Alumex Group as at December 31, 2013 are given below

Table 9-1: Loans of Alumex Group as at December 31, 2013

Company Bank/Financial Institution

Facility Limit (Rs.)

Outstanding Balance as at

December 31, 2013 (Rs.)

Amount Repayable

Within 1 Year (Rs.)

Amount Repayable

After 1 Year (Rs.)

Alumex Limited Commercial Bank of Ceylon PLC

130,800,000 47,299,622 35,049,702 12,249,920

Lanka Orix Leasing Company PLC

37,500,000 15,104,913 6,250,008 8,854,905

Avro Enterprises (Private) Limited - - - - -

Alco Industries (Private) Limited - - - - -

Total 168,300,000 62,404,535 41,299,710 21,104,825

Details of Leasing, Lease Purchase and Hire Purchase commitments of Alumex Limited as at December 31, 2013 are given below.

Other than the commitments referred to in Table 9-2 above, there are no leasing, lease purchase or hire purchase commitments of the Company or Alumex Group as at December 31, 2013.

Alumex Limited has made the following capital commitments as at December 31, 2013.

Table 9-3: Capital Commitments as at December 31, 2013 Nature of Transaction Capital Commitment (Rs.)

Purchase of automated die polishing system 17,190,024 Purchase of hydraulic pump 4,035,988 Purchase of powder coatings plant and equipment 105,249,600 Purchase of powder sieving equipment 535,135 ERP system developments 2,212,696

9.4 Working Capital

The Board is of the opinion that the working capital is sufficient for the purpose of carrying out day to day operations of the Company.

Table 9-2: Leasing and Hire Purchase Commitments of Alumex Limited as at December 31, 2013 Lessor Leasehold

Property

Period of Lease (Years)

Outstanding Balance (Rs)

Commercial Bank of Ceylon PLC Motor vehicle 4 218,964

Lanka Orix Leasing Company PLC Motor vehicle 4 1,992,856



9.5 Litigation, Disputes and Contingent Liabilities

There are no material legal, arbitration or mediation proceedings pending against the Company that would materially affect the financial position of future operations or profits of the Company. The Company was not involved in any legal, arbitration or mediation proceedings in the recent past, which has any significant effects on the Company’s financial position or profitability.

As at December 31, 2013, there are no penalties imposed by any regulatory or state authority against the Company.

The contingent liabilities as at December 31, 2013 on guarantees given by Alumex Limited and its subsidiaries to third parties amounted to Rs. 6,888,885/- (2012 – Rs. 4,192,385/-).

Company has received a claim from the Department of Labour for surcharge payments on the grounds of delayed EPF contributions made to the Central Bank of Sri Lanka 9 years before, for a value of Rs. 2,149,551/- and it is still being discussed with the Department of Labour and the Central Bank of Sri Lanka. The abovementioned delayed EPF contribution occurred prior to Hayleys PLC’s acquisition of the Alumex Group.

There are no material contingent liabilities, except the above mentioned items, that would affect the current and future profits of the Company as at December 31, 2013.

9.6 Mortgages and Charges on Assets

Details pertaining to mortgages and charges on assets of Alumex are disclosed in Note 28 of the financial statements for the nine months ended December 31, 2013 presented in Section 16.4 of this Prospectus.

9.7 Material Contracts

Hayleys PLC, the parent company charges, rent and allocation expenses to Alumex Limited and its subsidiaries for the provision of services including sharing of information technology resources, secretarial, corporate, tax and financial advisory, treasury, management audit, human resource management, security, legal, corporate communication and for the deployment of Managing Director to manage the Group. The estimated costs are invoiced and paid on monthly basis and actual expenses are settled annually.

Aggregate payments made for the above services during the FY 2012/13 amounted to Rs. 15,191,241/- and it is expected to be paid for similar services during the FY 2013/14 to an approximate extent of Rs. 38,945,000/-.

Other than abovementioned, there are no other material contracts, except for those contracts entered into in the ordinary course of business by Alumex.

9.8 Details of Commissions Paid

No commission has been paid in the two (02) years preceding the Offering or payable for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for any Shares of the Company.

9.9 Details of Benefits Paid to Promoters

No benefit has been paid or given within the two (02) years preceding the Offering and there are no benefit intended to be paid or given to any promoter.


10.0 CAPITAL STRUCTURE As at the date of this Prospectus, the Stated Capital of the Company is Sri Lanka Rupees Thirty Three Million Seven Hundred Thirty Four Thousand Six Hundred (Rs. 33,734,600/-).

10.1 An Overview of the Stated Capital

An overview of the Stated Capital of the Company for the two (02) years ended March 31, 2013, nine (09) months ended December 31, 2013 and subsequent to the IPO upon full subscription of the Offer for Subscription tranche of the Offering is set forth below.

Table 10-1: Stated Capital of Alumex Limited

As at

March 31, 2011

As at March 31,

2012

As at March 31,

2013

As at December 31,

2013

Subsequent to the IPO

Consideration for the issue of Fully Paid Ordinary Shares (Rs.)

20,000,100 33,734,600 33,734,600 33,734,600

283,735,400

Number of Ordinary Shares in Issue

2,000,010 2,010,326 2,010,326 281,445,640

299,302,840

Table 10-2: Changes in Stated Capital of Alumex Limited

Number of

Shares Rs.

Balance as at April 01, 2011 2,000,010 20,000,100 Issue of Shares on March 02, 2012 @ Rs.1,331.38 per Share (Issue of one (01) new Share for every sixty three (63) existing Shares of Alutec Extrusions (Private) Limited by way of a share swap in relation to the consolidation of operations indicated in Section 7.13)

10,316 13,734,500

Balance as at March 31, 2012 2,010,326 33,734,600

Issue of Shares During the Year - - Balance as at March 31, 2013 2,010,326 33,734,600 Sub-division of one (01) existing Ordinary Share into one hundred and forty (140) Ordinary Shares on December 06, 2013 (Section 10.2)

281,445,640 33,734,600

Balance as at December 31, 2013 281,445,640 33,734,600 Issue of Shares @ Rs. 14/- per Share under the Offer for Subscription tranche of the Offering contemplated through this Prospectus

17,857,200

250,000,800

Balance immediately subsequent to the IPO 299,302,840 283,735,400



10.2 Share Split

The Board decided to sub-divide one (01) existing Ordinary Share into one hundred and forty (140) Ordinary Shares on December 06, 2013 in order to increase the number of Shares with a view to improve the liquidity.

10.3 Transfer of Shares of Alumex Limited

The Share transfers that were effected within the period of twelve (12) months preceding the date of the Initial Listing Application are presented below,

Table 10-3: Transfer of Shares by Shareholders

Name of Transferor Name of Transferee Date of Transfer Number of

Shares

Price Per Share

(Rs.) Unifab Trading (Private) Limited

Mr.Thirimanna Hettige Don Ignatius Upali Thirimanne

June 06, 2013 7,936*

(prior to split) 1,331.27

Mr. D. W. P. N. Dediwela

Hayleys PLC December 31,

2013 3,330,800

(post split) 14.00

∗ The 7,936 shares referred to above as transferred to Mr. T. H. D. I. U. Thirimanne is prior to the share split which took place on December 06, 2013 as mentioned in Section 10.2. Subsequent to the share split, Mr. Thirimanne’s holding is 1,111,040 Shares.

The Shares that were acquired by the Shareholders by way of transfers as detailed in Table 10.3 above are subject to a lock-in period as morefully described in Section 10.5 of this Prospectus. Apart from those details mentioned in Table 10-3, no shares have been acquired by way of transfer during the period of twelve (12) months immediately preceding the date on which the Initial Listing Application was submitted to the CSE (i.e. January 23, 2014).

10.4 Shareholders of Alumex Limited

Tabulated below are the shareholders of the Company as at the date of the Prospectus and subsequent to the Offering, assuming full subscription.

Table 10-4: Shareholders of Alumex Limited Prior to IPO Subsequent to IPO

Name of the Shareholder Number of

Shares Percentage of Shareholding

Number of Shares

Percentage of Shareholding

Hayleys PLC 171,332,200 60.88% 152,644,500 51.00% Rosewood (Private) Limited 38,500,000 13.68% 29,340,300 9.80% Akbar Brothers (Private) Limited 38,500,000 13.68% 29,340,300 9.80% Star Pack Investments (Private) Limited 21,000,000 7.46% 16,003,700 5.35%

Mr. D.W.P.N. Dediwela 10,669,200 3.79% 10,669,200 3.56% Mr. T.H.D.I.U. Thirimanne 1,111,040 0.39% 1,111,040 0.37% Mr. J.M. Iqbal 222,180 0.08% 222,180 0.07% Roshan Trading Company (Private) Limited 111,020 0.04% 111,020 0.04%

IPO Investors 59,860,600 20.00% Total 281,445,640 100.00% 299,302,840 100.00%


10.5 Details Pertaining to the locked-in Shares

Details pertaining to the locked-in Shares constituting the public and non-public holding are given in Table 10-5 below.

Table 10-5: Locked in Shareholders of Alumex Limited

Category of Shareholder (Pre Listing)

Date of Acquisition

Locked-in Shares

The Time Period After which the Shares will

be Available for Trading

Number of Shares

Number of Shares as a

Percentage of Total Number

of Shares in Issue

Non Public

Prior to January,

2011

Locked-in Shares

6 months from the date of listing 234,667,200 78.40%

December 31, 2013

Locked-in Shares

12 months from the date of acquisition

(i.e. December 31, 2014) 3,330,800 1.11%

Public June 06, 2013

Locked-in Shares

6 months from the date of listing

1,111,040 0.37%

Public

March 02, 2012

Not Locked-in Shares

(Pre IPO Shares) Not Applicable 333,200 0.11%

Not Locked-in

Shares (Offered Shares)

Not Applicable 59,860,600 20.00%

Total 299,302,840 100.00%

The Company confirms that the information furnished herewith shall remain unchanged until the date of listing.

In terms of CSE Listing Rule 2.1.1 (d) (i), the Shares continued to be held by the existing “Non Public” shareholders, as defined in Section 10.9, amounting to 234,667,200 Shares as shown in Table 10-5 of this Prospectus, would be subject to a locked-in for a period of six (06) months as specified in the said table from the date of listing, and as such these Shares would not be available for secondary market trading on the CSE.

In terms of the CSE Listing Rule 2.1.1(d) (iii), the 7,936 Shares acquired by way of transfer on June 06, 2013 (which post-split amounts to 1,111,040 Shares) as morefully described in Section 10.3, and continued to be held by a public shareholder would be locked-in for a period of six (06) months from the date of Listing, and as such these Shares would not be available for secondary market trading on the CSE.

In terms of the CSE Listing Rule 2.1.1(d) (iii), the 3,330,800 Shares acquired by way of transfer on December 31, 2013, as morefully described in Section 10.3, and continued to be held by the “Non Public” shareholder would be locked-in for a period of twelve (12) months from the date of acquisition of such Shares, and as such these Shares would not be available for secondary market trading on the CSE.


10.5 Details Pertaining to the locked-in Shares

Details pertaining to the locked-in Shares constituting the public and non-public holding are given in Table 10-5 below.

Table 10-5: Locked in Shareholders of Alumex Limited

Category of Shareholder (Pre Listing)

Date of Acquisition

Locked-in Shares

The Time Period After which the Shares will

be Available for Trading

Number of Shares

Number of Shares as a

Percentage of Total Number

of Shares in Issue

Non Public

Prior to January,

2011

Locked-in Shares

6 months from the date of listing 234,667,200 78.40%

December 31, 2013

Locked-in Shares

12 months from the date of acquisition

(i.e. December 31, 2014) 3,330,800 1.11%

Public June 06, 2013

Locked-in Shares

6 months from the date of listing

1,111,040 0.37%

Public

March 02, 2012

Not Locked-in Shares

(Pre IPO Shares) Not Applicable 333,200 0.11%

Not Locked-in

Shares (Offered Shares)

Not Applicable 59,860,600 20.00%

Total 299,302,840 100.00%

The Company confirms that the information furnished herewith shall remain unchanged until the date of listing.

In terms of CSE Listing Rule 2.1.1 (d) (i), the Shares continued to be held by the existing “Non Public” shareholders, as defined in Section 10.9, amounting to 234,667,200 Shares as shown in Table 10-5 of this Prospectus, would be subject to a locked-in for a period of six (06) months as specified in the said table from the date of listing, and as such these Shares would not be available for secondary market trading on the CSE.

In terms of the CSE Listing Rule 2.1.1(d) (iii), the 7,936 Shares acquired by way of transfer on June 06, 2013 (which post-split amounts to 1,111,040 Shares) as morefully described in Section 10.3, and continued to be held by a public shareholder would be locked-in for a period of six (06) months from the date of Listing, and as such these Shares would not be available for secondary market trading on the CSE.

In terms of the CSE Listing Rule 2.1.1(d) (iii), the 3,330,800 Shares acquired by way of transfer on December 31, 2013, as morefully described in Section 10.3, and continued to be held by the “Non Public” shareholder would be locked-in for a period of twelve (12) months from the date of acquisition of such Shares, and as such these Shares would not be available for secondary market trading on the CSE.



In terms of CSE Listing Rules 2.1.1(d) (ii), the Shares continued to be held by all existing public shareholders [subject to CSE Listing Rule 2.1.1(d) (iii)], as defined in Section 10.9, namely the 333,200 Shares as shown in Table 10-5 of this Prospectus, would not be subject to a lock-in period. As such, these Shares together with the Offered Shares aggregating to 20.11% of the overall Shares would be available for secondary market trading on the CSE upon Alumex Limited obtaining the listing of its Shares subsequent to the IPO contemplated via this Prospectus.

10.6 Details of Other Changes to Stated Capital

The Company has not carried out any redemption or repurchase of Shares or any reduction of Stated Capital in the last two (02) years preceding the date of this Prospectus.

10.7 Details of Convertible Debt Securities

The Company has no outstanding convertible debt securities as at the date of this Prospectus.

10.8 Details of Shares Sold Privately in Conjunction with the Offering

No Shares are being offered privately in conjunction with this Offering.

10.9 Free Transferability of Shares

In accordance with CSE Listing Rules 2.1.1(d): in the event of an Offer for Subscription (i) Subject to (iii) and (iv) below, shares held by Non Public Shareholders prior to the date of the

Initial Listing Application shall be locked-in for a period of six (06) months from the Date of Listing the shares of the Entity.

(ii) Subject to (iii) and (iv) below, shares held by Public Shareholders prior to the date of the Initial Listing Application shall not be locked-in.

(iii) Shares acquired by way of a transfer by Non Public Shareholders or Public Shareholders during the period of twelve (12) months prior to the date of the Initial Listing Application shall be locked in for a minimum period of six (06) months from the Date of Listing the shares of the Entity or twelve (12) months from the date of acquisition of such shares, whichever is longer.

(iv) Shares allotted to Non Public Shareholders or Public Shareholders during the period of twelve (12) months prior to the date of the Initial Listing Application shall be dealt with according to the discretion vested in the SEC in terms of Section 28A of the SEC Act.

In accordance with CSE Listing Rules 2.1.1(e): in the event of an Offer for Sale; (i) the shareholders who intend to divest their shareholding through the Initial Public Offering

should have held such shares for a minimum period of eighteen (18) months prior to the date of the Initial Listing Application.

(ii) Subject to (iv) and (v) below, shares held by Non Public Shareholders prior to the date of the Initial Listing Application, which have not been divested through the Initial Public Offering, shall be locked-in for a period of six (06) months from the Date of Listing the shares of the Entity.

(iii) Subject to (iv) and (v) below, shares held by Public Shareholders prior to the date of the Initial Listing Application shall not be locked-in.

(iv) shares acquired by way of a transfer by Non Public Shareholders or Public Shareholders during the period of twelve (12) months prior to the date of the Initial Listing Application shall be locked-in for a minimum period of six (06) months from the Date of Listing the shares of the Entity or twelve (12) months from the date of acquisition of such shares, whichever is longer.


(v) shares allotted to Non Public Shareholders or Public Shareholders during the period of twelve (12) months prior to date of the Initial Listing Application shall be dealt with according to the discretion vested in the SEC in terms of Section 28A of the SEC Act.

For the purpose of imposition of lock-in periods only, “Non Public” shareholders shall mean the following parties who hold, directly or indirectly, shares of the company;

a. its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company;

b. its directors who are holding office as directors of the entity and their close family members; c. Chief Executive Officer, his/her close family members; d. Key Management Personnel and their close family members; e. Any party acting in concert with the parties set out in a), b), c) or d) above; or f. Any individual or company holding jointly or severally 5% or more of the share of the Company

‘Close Family Member’ shall mean the spouse or a financially dependent child.

‘Key Management Personnel’ shall mean those persons having authority and responsibility for planning, directing and controlling the activities of the applicant Entity, directly or indirectly, including any director (whether executive or otherwise) of that Entity.

Public shareholders shall mean any party who hold shares of the company other than the parties identified as “Non Public” shareholders’ abovementioned.

The details of the lock-in periods for the Shares are mentioned in Table 10-5, and the Shares that will be subject to a lock-in will not be available for trading.

Shares listed on the CSE shall be freely transferable and registration of the transfer of such listed Shares shall not be subject to any restriction, save and except to the disclosure above and to the extent required for compliance with statutory requirements.

10.10 Take-over Offers

There have been no take-over offers by third parties in respect of the Company’s Shares during the past two (02) years, preceding the date of this Prospectus.

The Company has not made any take-over offers in respect of Shares of a third party during the past two (02) years preceding the date of this Prospectus except for the shares acquired as part of the consolidation of operations of the Alumex Group as morefully described in Section 7.13.


(v) shares allotted to Non Public Shareholders or Public Shareholders during the period of twelve (12) months prior to date of the Initial Listing Application shall be dealt with according to the discretion vested in the SEC in terms of Section 28A of the SEC Act.

For the purpose of imposition of lock-in periods only, “Non Public” shareholders shall mean the following parties who hold, directly or indirectly, shares of the company;

a. its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company;

b. its directors who are holding office as directors of the entity and their close family members; c. Chief Executive Officer, his/her close family members; d. Key Management Personnel and their close family members; e. Any party acting in concert with the parties set out in a), b), c) or d) above; or f. Any individual or company holding jointly or severally 5% or more of the share of the Company

‘Close Family Member’ shall mean the spouse or a financially dependent child.

‘Key Management Personnel’ shall mean those persons having authority and responsibility for planning, directing and controlling the activities of the applicant Entity, directly or indirectly, including any director (whether executive or otherwise) of that Entity.

Public shareholders shall mean any party who hold shares of the company other than the parties identified as “Non Public” shareholders’ abovementioned.

The details of the lock-in periods for the Shares are mentioned in Table 10-5, and the Shares that will be subject to a lock-in will not be available for trading.

Shares listed on the CSE shall be freely transferable and registration of the transfer of such listed Shares shall not be subject to any restriction, save and except to the disclosure above and to the extent required for compliance with statutory requirements.

10.10 Take-over Offers

There have been no take-over offers by third parties in respect of the Company’s Shares during the past two (02) years, preceding the date of this Prospectus.

The Company has not made any take-over offers in respect of Shares of a third party during the past two (02) years preceding the date of this Prospectus except for the shares acquired as part of the consolidation of operations of the Alumex Group as morefully described in Section 7.13.



11.0 MANAGEMENT DISCUSSION AND ANALYSIS

11.1 Summarised Financial Statements of Alumex Group for the Five Years Ended March 31, 2013

As mentioned in Section 7.13, the Alumex Group comprised of six companies up to 2011. However, with the consolidation strategy initiated in 2012, the group structure was simplified to three companies comprising of a holding company and two fully owned subsidiaries in 2013.

Salient extracts from the Audited Income Statements and Statements of Financial Position of Alumex Group for the five year period ended March 31, 2013 are presented below.

Table 11-1: Summarised Audited Income Statements of Alumex Group All Figures in Rs. millions

For the Year Ended March 31, 2009 2010 2011 2012 2013

Restated Restated Restated Revenue 1,859 1,593 2,280 2,190 2,430 Gross Profit 375 263 356 391 670 Operating Profit 275 107 91* 178 416 Profit Before Tax 224 65 59 111 378 Profit After Tax 171 32 37 115 306

EPS (Rs.)** 0.61 0.11 0.13 0.41 1.09 DPS (Rs.)** 0.18 0.36 0.06 0.06 0.36

*After writing off Goodwill created through acquisition of United Ceylon Insurance Company Limited amounting to LKR 83mn.

**EPS and DPS are calculated based on the number of shares subsequent to the share split as described in Section 10.2.

Table 11-2: Summarised Audited Statements of Financial Position of Alumex Group All Figures in Rs. millions

As at March 31, 2009 2010 2011 2012 2013

Restated Restated Restated Non-Current Assets 386 396 858 883 969 Current Assets 633 557 753 687 731 Total Assets 1,019 953 1,610 1,570 1,700

Equity 307 262 610 708 984 Non-Current Liabilities 105 124 248 205 186 Current Liabilities 607 567 752 656 530 Total Equity and Liabilities 1,019 953 1,610 1,570 1,700


Figure 11-3: Revenue Mix Figure 11-4: Volume Mix

11.2 Performance of Alumex Group for the Five Years Ended March 31, 2013

11.2.1 Revenue

The following figures illustrate the revenue and the sales volume for the five year period ended March 31, 2013

Over the last 5 years, Alumex Group has recorded a CAGR of 7% in its revenue. In FY 2010/11, subsequent to the acquisition by Hayleys PLC, Alumex Group recorded a substantial increase in its revenue due to the favourable economic conditions with the cession of conflict in Sri Lanka. Marginal reduction in revenue in FY 2011/12 was mainly due the global aluminium price reduction which was negated up to a greater extent through increased volumes. Alumex Group started focusing on value added products in FY 2012/13 which resulted in a Year-on-Year (YOY) revenue increase of 11%. Further, the agreements with internationally renowned fabricators such as AluK and Fletcher Aluminium played a significant role in the increase of Alumex Group’s revenue in the recent years.

The following figures illustrate the revenue and the volume mix of Alumex for the five year period ended March 31, 2013.

Extrusion, anodizing, powder coating and wood coating are the major revenue segments of the Alumex Group. The aluminium industry in Sri Lanka has experienced a shift in demand towards value added products such as powder coated and wood coated products from anodized products, mainly due to their durability and superior finish. Alumex capitalised on this shift in demand and has been focusing on the value added products significantly in the recent past. As a result, Alumex Group recorded a continuous increase in both revenue and volume growth of powder coating and wood coating products.

Figure 11-1: Total Revenue

Figure 11-2: Total Sales Volume



11.2.2 Profitability

The following figures illustrate the gross and net profits of Alumex Group along with the margins for the five year period ended March 31, 2013.

Alumex Group has been able to achieve a much steeper increase in its profit margins since 2011, mainly due to the improvement in operational efficiencies including efficient working capital management. This was also facilitated by the consolidation of operations together with the establishment of new management team by Hayleys PLC and the focus on value added products. Moreover, in the Financial Year 2012/13, a significant improvement in gross margin was recorded compared to Financial Year 2011/12, mainly due to the decline in global aluminium prices and the shift towards value added products as described in Section 11.2.1.

The Group maintained a relatively strong cash position and a better working capital management during the period which resulted in a reduction of borrowings, further improving the net profit margins.

11.3 Recent Performance of Alumex Group

Salient extracts from Income Statement and Statement of Financial Position of Alumex Group (reviewed by auditors) for the 9 month period ended December 31, 2013 along with the comparable figures for the corresponding period in the Financial Year 2012/13 are presented below.

Table 11-3: Summarised Income Statements of Alumex Group All figures in Rs. millions

For the Nine Months Ended December 31, 2012 2013 Revenue 1,772 1,984 Gross Profit 483 548 Operating Profit 301 358 Profit Before Tax 266 348 Profit After Tax 217 283

Table 11-4: Summarised Statements of Financial Position of Alumex Group

All figures in Rs. millions As at Mar 31, 2013 Dec 31, 2013 Non-Current Assets 969 944 Current Assets 731 954 Total Assets 1,700 1,898

Equity 984 1,110

Non-Current Liabilities 186 158 Current Liability 530 630 Total Equity and Liabilities 1,700 1,898

Figure 11-5: Gross Profit and Margin

Figure 11-6: Net Profit and Margin




The following figures illustrate the gross and net profits of Alumex Group along with the margins for the five year period ended March 31, 2013.

Alumex Group has been able to achieve a much steeper increase in its profit margins since 2011, mainly due to the improvement in operational efficiencies including efficient working capital management. This was also facilitated by the consolidation of operations together with the establishment of new management team by Hayleys PLC and the focus on value added products. Moreover, in the Financial Year 2012/13, a significant improvement in gross margin was recorded compared to Financial Year 2011/12, mainly due to the decline in global aluminium prices and the shift towards value added products as described in Section 11.2.1.

The Group maintained a relatively strong cash position and a better working capital management during the period which resulted in a reduction of borrowings, further improving the net profit margins.

11.3 Recent Performance of Alumex Group

Salient extracts from Income Statement and Statement of Financial Position of Alumex Group (reviewed by auditors) for the 9 month period ended December 31, 2013 along with the comparable figures for the corresponding period in the Financial Year 2012/13 are presented below.

Table 11-3: Summarised Income Statements of Alumex Group All figures in Rs. millions

For the Nine Months Ended December 31, 2012 2013 Revenue 1,772 1,984 Gross Profit 483 548 Operating Profit 301 358 Profit Before Tax 266 348 Profit After Tax 217 283

Table 11-4: Summarised Statements of Financial Position of Alumex Group

All figures in Rs. millions As at Mar 31, 2013 Dec 31, 2013 Non-Current Assets 969 944 Current Assets 731 954 Total Assets 1,700 1,898

Equity 984 1,110

Non-Current Liabilities 186 158 Current Liability 530 630 Total Equity and Liabilities 1,700 1,898

Figure 11-5: Gross Profit and Margin

Figure 11-6: Net Profit and Margin

11.3.1 Revenue

Alumex Group has recorded a substantial revenue growth by continuously capitalising on value added products, during the 9 month period ended December 31, 2013. Dominant market position, construction industry boom and confidence in the macroeconomic growth of the country were few amongst the several macro factors which influenced the growth in the revenue. Approximately 12% revenue growth from last year’s comparable period shows the growth potential of Alumex Group and increasing demand for its products.

The volume growth for power coated and wood coated products indicates the shift in demand for the value added products as in recent years, which resulted in an increase in revenue growth for the 9 month period ended December 31, 2013.


The following figures illustrate the gross and net profits of Alumex Group along with the margins for the 9 month period ended December 31, 2013.

In comparison to the 9 months of the previous Financial Year, an exponential increase in gross profit and net profit during the 9 months period ended December 31, 2013 has been recorded, resulting from the increase in value added product sales as described above.

Figure 11-7: Revenue for Nine Months Ended December 31, 2012 and 2013

Figure 11-8: Volume for Nine Months Ended December 31, 2012 and 2013

Figure 11-9: Gross Profit for Nine Months Ended December 31, 2012 and 2013

Figure 11-10: Net Profit for Nine Months Ended December 31, 2012 and 2013



11.3.3 Gearing

Alumex Group currently has a strong balance sheet with low gearing. Lower gearing would enhance its capacity to borrow if required, facilitating further expansions in the future.

11.3.4 Asset Turnover

High non-current assets turnover ratio and asset turnover ratio demonstrate the efficient utilisation of the assets by Alumex Group. Non-current asset turnover ratio of around 2.1 for the 9 month period ended December 31, 2013 illustrates a healthy asset utilisation of Alumex Group in the recent past.

11.3.5 Key Financial Ratios

* Annualised

Table 11-5: Key Financial Ratios

FY 2012/13 2014 9M

Gross Profit Margin 27.56% 27.59% Net Profit Margin 12.61% 14.26% Return on Equity 36.20% 36.04%* Return on Assets 18.74% 20.98%* Current Ratio 1.38 1.51 Gearing (LTL/TA) 23.06% 15.43%



11.3.3 Gearing

Alumex Group currently has a strong balance sheet with low gearing. Lower gearing would enhance its capacity to borrow if required, facilitating further expansions in the future.

11.3.4 Asset Turnover

High non-current assets turnover ratio and asset turnover ratio demonstrate the efficient utilisation of the assets by Alumex Group. Non-current asset turnover ratio of around 2.1 for the 9 month period ended December 31, 2013 illustrates a healthy asset utilisation of Alumex Group in the recent past.

11.3.5 Key Financial Ratios

* Annualised

Table 11-5: Key Financial Ratios

FY 2012/13 2014 9M

Gross Profit Margin 27.56% 27.59% Net Profit Margin 12.61% 14.26% Return on Equity 36.20% 36.04%* Return on Assets 18.74% 20.98%* Current Ratio 1.38 1.51 Gearing (LTL/TA) 23.06% 15.43%


12.0 INVESTMENT CONSIDERATION AND ASSOCIATED RISKS

Prior to investing in the Shares Offered, prospective investors should pay particular attention to the fact that Alumex Group is exposed to a number of risk factors, some of which are within and others beyond the control of the management.

The risk factors which are discussed in this section may be considered material to investors in making an informed judgment on the Company. Alumex Group operates in the aluminium extrusion sector catering mainly to the construction sector. Therefore, the discussion below is focused on risks related to these sectors. If any of the considerations and uncertainties given below develop into actual events, business, financial conditions or results of operations and prospects of the Alumex Group could be materially affected. Such an adverse effect will invariably lead to an adverse impact on the value of the Shares.

12.1 Risks Relating to Macro-Environmental Factors

12.1.1 Adverse Global Aluminium Price Movements

Unexpected increases in aluminium prices can affect the demand for products. Decreases in prices can affect the pricing of existing stocks and can reduce the margins. Alumex Group has a highly skilled and experienced staff who continuously monitors the developments in the industry and assists the Group in anticipating adverse price fluctuations. These developments are in turn considered in the pricing of products, generally by all the players in the Sri Lankan market, hence, the risk of reducing profit margins through adverse movement in global aluminium prices are limited.

12.1.2 Unfavourable Political and Economic Changes in Sri Lanka

Government exerts a substantial influence on many aspects of the economy. Business and financial performance of Alumex Group could be affected by political instability of the country and the region. Since the prospects of the construction sector is closely linked to Government policy on infrastructure development and closely follows the fluctuations in economic conditions of the country, an unstable political environment and adverse economic conditions may dampen the demand for services provided by the Group. However, Sri Lanka has started reaping the benefits of the current peaceful political environment conducive for higher future economic growth. Further, the Government policy favours infrastructure development projects and it has been witnessed through the launch of various aggressive infrastructure development programs with the assistance of foreign governments and other donor agencies since the end of the war. Hence, Alumex Group is well poised to benefit from the improved political and economic conditions in the country with its exposure to the construction sector.

12.1.3 Exposure to Increased Competition in the Future

Alumex Group faces competition mainly from the local competitors in the industry. In addition, the Group also faces competition from aluminium imports to the country. Alumex has a strong brand and is the market leader for over a decade with a proven track record which would enable the Company to withstand competitor pressure.

12.1.4 Adverse Changes to the Tax Regulations

Alumex enjoys a concessionary tax rate for its exports whilst its subsidiary, Alco enjoys a concessionary tax rate on its profits till FY 2017/18 (refer Section 13.1). Any changes to these tax regulations would affect the profitability of Alumex Group.



The Company also expects to receive the tax concession offered by the GoSL for entities obtaining a listing on the CSE at the reduced rate of 50% corporate tax for the year of assessment in which the shares of the Company are listed and for another two years in terms of Section 59(D) of the Inland Revenue Act No. 10 of 2006 as amended by Act No. 18 of 2013, (available to companies listed on the CSE prior to April 01, 2014). Any negative changes to this tax regulation and/or the inability of the Company to meet the required conditions would lead to a reduction in the profitability of the Company for the three years including the current financial year which otherwise would be at a higher level.

12.1.5 Exchange Rate Risk

Sri Lankan rupee depreciation might influence the prices of Alumex products. Since Alumex operates with forward booking of raw materials, the rupee equivalent of raw material price might change based on the rupee depreciation. Depreciation of Sri Lankan rupee leads to exchange losses and may reduce the profitability, if unable to pass on the cost of increase to the end consumers.

However, Alumex Group has experienced staff who continuously monitors the Sri Lankan rupee depreciation and assists the Group in anticipating price fluctuations, when fixing the prices for raw material.

12.2 Risks Relating to the Existing Businesses of Alumex Group

12.2.1 Uncertainties with the Procurement of Raw Material

Operations of Alumex Group is heavily dependent on the supply of its key raw material, aluminium. At present, Alumex Group sources majority of its aluminium requirement from the DUBAL Group, a global player in the aluminium industry. Delays and other disruptions in the supply of raw material would lead to production delays by Alumex Group and may even lead to loss of key customers. This may have a significant impact on the profitability of the Group. However, considering the fact that Alumex sources its raw material through a reliable supplier, DUBAL, the risk of delays and other disruptions are reduced. In the event of any disruption to DUBAL’s operations, Alumex maintains over a month’s supply of its raw material and is in a position to source its supply through another supplier minimising the impact on its operations.

12.2.2 Natural Perils

Natural disasters such as earthquakes, floods and tsunamis may delay and/or damage the manufacturing process of the Alumex Group. Despite the necessary precautionary measures taken by the Group, to minimise the damage from such conditions, vulnerability to such risks of natural disasters is inevitable. However, the Group has obtained sufficient insurance covers in order to reduce the risk of such damages and potential interruptions to the business operations, thus ensuring business continuity with minimal delays.

12.2.3 Loss of Key Employees

The team of skilled and highly experienced professionals is a key competitive advantage of the Group in providing a superior quality product and service to its customers. Loss of key staff to competitors may lead to future loss of business and decline in quality of products and services. However, most of the key employees have been with Alumex Group for almost the entirety of their careers indicating a high level of loyalty. Most of the manufacturing processes do not require significant skill levels and the possible impact on the profitability of Alumex due to this risk is minimal.


12.2.4 Operational Risks and Hazards to Staff

Due to the hazards inherent in the manufacturing facilities, such as risk of equipment failure, collision, work accidents, fire or explosion etc., the workforce is exposed to hazards. Alumex Group mitigates safety risks to the workforce by providing training on safety and adhering to the practices on safety.

12.2.5 Regulatory Environment

The facility and operations of Alumex Group are subject to environmental regulations. However, Alumex Group minimises this risk by treating all its affluent before disposal in according with the environmental standards. In addition, Alumex being located within an industrial zone also reduces any potential risk from the neighbourhood with regard to environmental aspects of the operations of the Alumex Group.

12.3 Risks Relating to Future Plans

12.3.1 Competition

Alumex Group might have to confront with stiff competition from other local aluminium profile manufacturers, if competitors reduce the selling prices to penetrate the local market. Further, the competitors might shrink their operational margins and also can operate with losses to increase their market shares.

Quality and long lasting products by Alumex Group exerts a significant control over its market share. Furthermore, the low price competitors couldn’t penetrate into Alumex Group’s market in the past (with the latest entrant entering the industry way back in year 2000) since, Alumex profiles were considered to be superior and recommended by the renowned fabricators.

12.3.2 Risk with New Design

Global aluminium price fluctuations might impact the pricing of Alumex Group’s products. Significant price hikes will reduce the gross profit of the Group and result in lower return to the investors.

However, Alumex Group usually identifies the customer requirements in designing the new products. Furthermore, through design centres and concept centres located at important locations around the country will give the feel of exact customer requirement to the Alumex Group. In addition, the strong marketing team is capable of maximising the sales whilst the island wide dealers are expected to give access to a wider consumer base to sell its products.

12.3.3 Penetration of Regional Markets

In addition to its strong hold in the local market, Alumex Group presently operates with dealers in India and Maldives, and plans to expand their business through a network of regional dealerships. Therefore, the group has to compete with the existing players in the Indian and other regional markets. Further, due to economics of scale and fierce competition in the Indian market, it might be difficult for the Alumex Group to penetrate this segment easily and achieve satisfactory results in the short to medium term.

However, without compromising its quality and creativity, Alumex Group plans to create a niche market for its products and services which will mitigate the risk of stiff competition in the lower end of the market. Furthermore, the presence of AluK and Fletcher Aluminium will support Alumex Group in capturing contracts for large scale projects.



In addition, Alumex Group is presently negotiating with dealers who are well established in the regional markets and will positively contribute to the increase in its regional sales.

12.4 Capital Market Related Risks

12.4.1 No Prior Market Exists for the Shares

Prior to the Offering, there has been no public market for the Company’s Shares. There can be no assurance that an active trading market for Shares will develop or if developed, will be sustained, or that the market price of Shares shall not decline below the Share Offer Price. The Share Offer Price may not be an indicative of the market price for the Company’s Ordinary Shares after completion of the Offering.

12.4.2 Price Volatility in the Secondary Market

The price of the Shares may fluctuate due to and not limited to the following: variations in operating results, changes in operating environment and transitions in the regulatory front, technological advancements/obsolescence, macroeconomic factors and external events. Price of Ordinary Shares may follow general investor sentiment prevalent in the market at a given time. In addition, the price of Shares in the market will fluctuate as a result of share trading volumes.

12.4.3 Shares May Not be a Suitable Investment for All Investors

Each potential investor in Shares must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:

• have sufficient knowledge and experience to evaluate Shares, the merits and risks of investing in Shares and the information contained or incorporated by reference in this Prospectus;

• have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in Shares and the impact the Shares will have on its overall investment portfolio;

• have sufficient financial resources and liquidity to bear all of the risks of an investment in Shares, including where the settlement currency is different from the currency in which such investor’s principal financial activities are denominated;

• understand thoroughly the terms of Shares and be familiar with any relevant indices and financial markets; and

• be able to evaluate (either alone or with the help of a financial advisor) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.


13.0 TAXATION AND EXCHANGE CONTROL

The following information is an overview of selected taxation and other regulations that may be relevant to Alumex Group and potential investors with regard to their investment and share transactions in Sri Lanka. The discussion does not claim to be a comprehensive explanation of applicable taxation regulations and considerations that pertain to Alumex Group and/or to the purchase, ownership and disposition the Shares on Offer. Investors are advised to consult their own advisors prior to investing in the Company and engaging in transactions related to the Offering.

13.1 Corporate Taxation

Alumex Limited

In accordance with the provisions of the Inland Revenue Act No. 10 of 2006 and subsequent amendments, Alumex Limited is liable to corporate income tax at the rate of twelve per centum (12%) of profits generated through qualified export sales, ten per centum (10%) of profits from qualified undertaking and twenty eight per centum (28%) of profits generated through local sales and other income.

In accordance with the provisions of the Inland Revenue Act No. 10 of 2006 section 17(a), profits from qualified undertaking are exempted from tax for a period of five (05) years reckoned from the commencement of the year of assessment in which the undertaking commences to make profits or any year of assessment not later than two years reckoned from the date on which the undertaking commences to carry on commercial operations, whichever is earlier. The five year tax exemptions received by Alumex Limited expired in FY 2011/12, and as such the profits from this undertaking will be taxed at ten per centum (10%) in FY 2013/14 and fifteen per centum (15%) in FY 2014/15. Subsequently, profits from this qualified undertaking will be taxed at the normal corporate tax rate prevailing in the respective years.

Alco Industries (Private) Limited

Pursuant to the agreement dated July 15, 2010 under Section 17 (2) of the Board of Investments Law No. 04 of 1978, entered in to with the BOI, Alco Industries (Private) Limited is eligible for a tax exemption period of five (05) years of profits of the company. The tax exemption period commenced from the year of assessment of FY 2010/11 and would expire in FY 2014/15.

A concessionary tax rate of ten per centum (10%) would be applicable on profits for two (02) years immediately succeeding the last date of the tax exemption period. Thereafter, twenty per centum (20%) tax rate is applicable on profits.

Avro Enterprises (Private) Limited

Avro Enterprises (Private) Limited is liable to pay corporate income tax at the normal rate of twenty eight per centum (28%) of its profits.

13.2 Economic Service Charge

In accordance with the Economic Service Charge Act No. 13 of 2006, as amended, Alco Industries (Private) Limited is liable to pay Economic Service Charge (ESC) at the rate of zero decimal two five per centum (0.25%) on income. Both Alumex Limited and Avro Enterprises (Private) Limited are not liable for ESC.



13.3 Value Added Tax

Alumex Limited and its subsidiary, Alco Industries (Private) Limited are liable to pay Value Added Tax (VAT) on their revenue at the rate of twelve per centum (12%). Avro Enterprises (Private) Limited is liable at the rate of twelve per centum (12%) only on the import and sale revenue under the Value Added Tax Act No. 14 of 2002 and its subsequent amendments.

13.4 Nation Building Tax

In line with the Nation Building Tax Act No. 9 of 2009, Alumex Limited and its subsidiary, Alco Industries (Private) Limited are liable to pay Nation Building Tax (NBT) at the rate of two per centum (2%) on their revenue. Avro Enterprises (Private) Limited is not liable for NBT.

13.5 Withholding Tax on Dividends

In general, dividends distributed by resident companies out of taxable income to resident or non-resident shareholders are subject to Withholding Tax (WHT) at the rate of ten per centum (10%). The respective entities are required to deduct dividend tax at source and remit the same to the Department of Inland Revenue. Alumex Limited and its subsidiaries are liable to WHT at rate of ten per centum (10%). In the event, Alumex Limited pays a portion of its dividends out of the dividend income received from its subsidiaries, the said WHT will not be deducted from that portion of the dividends.

Other than the WHT referred to above, dividends paid to the shareholders of the Company will not be subject to any other Sri Lankan tax.

13.6 Stamp Duty

Alumex Limited and its subsidiaries are liable to pay stamp duty at the rate of Rupees twenty five (Rs. 25/-) for every Rupees twenty five thousand (Rs. 25,000/-) of receipts on credit sales and salary payments.

The Company is also liable to pay stamp duty at the rate of Rupees five (Rs. 5/-) for every Rupees thousand (Rs. 1,000/-) or part thereof of the aggregate value of the Shares, in respect of the Offering contemplated through this Prospectus and on any new Shares that may be issued in the future in line with current stamp duty regulations.

13.7 Share Transaction Levy

A transaction levy at the rate of zero decimal three per centum (0.3%) on the sales and purchases of all share transactions is charged from both the buyer and the seller. This tax is part of the transaction cost charged when trading shares on the CSE. Any profits from the sale of any share on which this tax has been paid is exempt from income tax.

13.8 Exchange Control

The purchase and transfer of shares of a company incorporated in Sri Lanka by a person resident outside Sri Lanka is governed by the Exchange Control Act No. 24 of 1953. Under permission granted by the Controller of Exchange, a person resident outside of Sri Lanka may purchase or transfer up to 100% of the shares of a company subject to certain restrictions and conditions. In terms of the restrictions, the purchase and transfer of shares of companies carrying on certain businesses are prohibited (e.g. pawn broking, money lending) and permitted only up to a certain percentage of shares in other businesses (e.g. shipping agents, freight forwarders).


Such restrictions do not apply to the business carried on by the Company. It is a condition however that a non-resident must remit the payment for Shares through a SIA.

Payment for Shares may also be made through a FCBU account and through a RGFCA/RGRCA-Investors by non-resident Sri Lankan citizens and/or foreign citizens resident in Sri Lanka in terms of the applicable exchange control laws.

The operations of SIA, RGFCA and RGRCA-Investors are governed by the rules and regulations formulated under the Exchange Control Act. In addition, RGFCA/ RGRCA-Investors is subject to the regulations of CBSL and the Department of Immigration and Emigration.

Dividends and proceeds from the sale of shares can be remitted without exchange control permission if the funds for purchase of the said shares have been affected through a SIA. However, if the funds for purchase of the shares have been affected through a RGFCA/RGRCA-Investors, an approval from the Controller of Exchange is required to remit the dividends and proceeds from the sale of shares.

All funds for purchase cost, brokering and bank charges including inward remittances and repatriation of dividends and all credits, sales proceeds and dividend proceeds should be channelled through the SIA. Remittances to SIA should be backed by documentary evidence of the transaction, giving rise to the said remittance (i.e. dividend warrant, contract note). Such documentation should be produced to the LCB at which the respective SIA is held. A tax clearance certificate from the Department of Inland Revenue is not required for remittances in respect of remittance of dividends and sales proceeds of shares held in listed companies.



14.0 THE COLOMBO STOCK EXCHANGE The information presented in this section has been extracted from or based on publicly available documents/sources which have not been prepared or independently verified in connection with the Offering. The information is included for the convenience of investors and is not intended to be a complete description of the Sri Lankan capital market.

14.1 Governance

The CSE is a duly incorporated legal entity in the form of a company limited by guarantee and is licensed by SEC to operate as a Stock Exchange. The board of directors of the exchange is the main policy making body and consists of nine (09) directors out of which five (05) directors are elected by broker firms of the CSE and the other four (04) directors appointed by the Minister of Finance.

The CSE is structured as a self-regulatory organisation and is a member of the World Federation of Exchanges (WFE) and the South Asian Federation of Exchanges. The CSE provides the infrastructure and the regulatory framework required for the trading of listed securities in Sri Lanka.

The CSE, a mutualised exchange has fifteen (15) members and thirteen (13) trading members at present. Each member and trading member is licensed by the SEC to perform the duties of a stockbroker. All members and trading members are corporate entities and in some cases, subsidiaries of large financial conglomerates such as merchant, commercial and investment banks.

14.2 Branches of the CSE

The CSE at present operates with a network of seven branches in Matara, Kandy, Kurunegala, Negombo, Jaffna, Anuradhapura and Ratnapura in addition to the Head Office in Colombo.

14.3 Stock Market Indices

The CSE currently maintains two price indices, All Share Index (ASI) and Standard & Poor's Sri Lanka 20 Index (S&P SL20), two total returns indices and 20 sector indices. The ASI tracks the movement of all listed securities with a base index of 100 set in 1985. The S&P SL20, introduced in 2012, tracks price changes of 20 listed securities, selected based on size as measured by float adjusted market capitalization, liquidity as measured by the last six month daily average turnover and the number of days traded, in addition to financial viability.

In January 2004, the CSE also launched total return indices designed to reflect both price changes and dividend income. The ASI calculated on a total returns basis results in the All Share Total Return Index (ASTRI). The recently launched S&P SL20 is also calculated and published on a total returns basis.

14.4 Trading on the CSE

The CSE operates as an order driven market using a fully automated screen based trading system and a fully automated clearing and settlement system. Facilities for clearing and settlement of securities are provided by the CDS which is a wholly owned subsidiary of the CSE. All parties wishing to trade on the CSE must have CDS accounts.

14.5 Trading Sessions

Trading takes place in the CSE from 9.30 a.m. to 2.30 p.m. from Monday to Friday, except for public and bank holidays. The trading session is divided into the following sessions.



14.0 THE COLOMBO STOCK EXCHANGE The information presented in this section has been extracted from or based on publicly available documents/sources which have not been prepared or independently verified in connection with the Offering. The information is included for the convenience of investors and is not intended to be a complete description of the Sri Lankan capital market.

14.1 Governance

The CSE is a duly incorporated legal entity in the form of a company limited by guarantee and is licensed by SEC to operate as a Stock Exchange. The board of directors of the exchange is the main policy making body and consists of nine (09) directors out of which five (05) directors are elected by broker firms of the CSE and the other four (04) directors appointed by the Minister of Finance.

The CSE is structured as a self-regulatory organisation and is a member of the World Federation of Exchanges (WFE) and the South Asian Federation of Exchanges. The CSE provides the infrastructure and the regulatory framework required for the trading of listed securities in Sri Lanka.

The CSE, a mutualised exchange has fifteen (15) members and thirteen (13) trading members at present. Each member and trading member is licensed by the SEC to perform the duties of a stockbroker. All members and trading members are corporate entities and in some cases, subsidiaries of large financial conglomerates such as merchant, commercial and investment banks.

14.2 Branches of the CSE

The CSE at present operates with a network of seven branches in Matara, Kandy, Kurunegala, Negombo, Jaffna, Anuradhapura and Ratnapura in addition to the Head Office in Colombo.

14.3 Stock Market Indices

The CSE currently maintains two price indices, All Share Index (ASI) and Standard & Poor's Sri Lanka 20 Index (S&P SL20), two total returns indices and 20 sector indices. The ASI tracks the movement of all listed securities with a base index of 100 set in 1985. The S&P SL20, introduced in 2012, tracks price changes of 20 listed securities, selected based on size as measured by float adjusted market capitalization, liquidity as measured by the last six month daily average turnover and the number of days traded, in addition to financial viability.

In January 2004, the CSE also launched total return indices designed to reflect both price changes and dividend income. The ASI calculated on a total returns basis results in the All Share Total Return Index (ASTRI). The recently launched S&P SL20 is also calculated and published on a total returns basis.

14.4 Trading on the CSE

The CSE operates as an order driven market using a fully automated screen based trading system and a fully automated clearing and settlement system. Facilities for clearing and settlement of securities are provided by the CDS which is a wholly owned subsidiary of the CSE. All parties wishing to trade on the CSE must have CDS accounts.

14.5 Trading Sessions

Trading takes place in the CSE from 9.30 a.m. to 2.30 p.m. from Monday to Friday, except for public and bank holidays. The trading session is divided into the following sessions.


Pre-Open

During pre-open session (9.00 a.m. to 9.30 a.m.), the system accepts orders. These orders can be amended and cancelled during pre-open. However, no trades take place during this session. Orders during this period are held in the Automated Trading System (ATS) and will be forwarded to the execution engine at the beginning of the open auction session.

Open Auction

During the open auction session (9.30 a.m.), the system temporarily closes the order book and starts matching orders. It establishes the opening prices of securities and determines the orders to be executed according to the ATS rules applicable for the open auction period.

Regular Trading

During regular trading session (9.30 a.m. to 2.30 p.m.), new orders are continually matched to existing orders in the order book. If an order cannot be executed, it may be stored in the order book, depending on the type of the order.

14.6 Settlement Procedure

Equity transactions must be settled within three days from the trade date (T+3) for both the buyers and sellers.

14.7 Transaction Costs

Transaction cost breakup of the CSE is depicted below.

Table 14-1: Transaction Costs

On Transactions

Up to Rs. 50 million On Transactions

Over Rs. 50 million

Brokerage Fees 0.6400% Negotiable subject to

a minimum of 0.2000% SEC Cess 0.0720% 0.0450% CSE Fees 0.0840% 0.0525% CDS Fees 0.0240% 0.0150% Share Transaction Levy 0.3000% 0.3000% Total 1.1200% 0.6125%*

*Based on the minimum Brokerage Fees

Note that the transaction fee due to the broker, CSE, CDS and SEC on intra day trades, where a client buys and sells or sells and buys the same security on the same day, through the same broker will not be charged on one side of the transaction involving lower of the value.



14.8 Recent Performance

Post War Developments

After the cessation of the three decade long war in May 2009, the country stepped into a new era of economic development. The capital market too bounced back strongly following a tranquil period in the previous couple of years, mainly due to renewed investor confidence on business prospects as well as discouraged fixed income investments following the reduction in interest rates. The CSE experienced some volatility during the first four months of the year 2009 as the war was at its height. However, the indices began to surge from May 2009 marking positive sentiments in many indices in the CSE. ASI rose by a record 125% in 2009 in comparison to a decline of 41% and 7% in 2008 and 2007 respectively. Further, the market capitalisation more than doubled and crossed the Rs. 1 trillion mark, closing the year 2009 at Rs. 1,092 billion in comparison with Rs. 489 billion reported at the end of 2008, highlighting positive investor sentiment.

Further, in year 2009, the CSE achieved the highest turnover for a given year by recording Rs. 142 billion in year 2009, compared to its previously recorded highest of Rs. 114.6 billion in 2005 marking aggressive investor appetite in the Colombo bourse. The trailing market PER which was 5.4 at the end of 2008 moved up to 16.6 at the end of year 2009 indicating the constructive outlook of the equity market. The above robust performance of the equity market was mainly attributable to the containment of domestic inflationary pressures, a lower interest rate environment, and a regaining economy. Subsequent to these commendable performances cited in year 2009, the CSE was acknowledged as the “second best performing stock market in the world” by Bloomberg News.

According to the market highlights published by WFE, the CSE ranked first among the top ten performing broad market indices in the first-half of 2010, recording a growth of 89.7%, in comparison to the corresponding period in 2009. Both ASI and MPI indices continued on its upward momentum and surpassed the 7,000 notch for the first time in the history of the capital market on October 01, 2010. Year 2010 witnessed, the highest in terms of turnover and cumulative trades recorded for a year amongst other statistics whilst the market capitalisation too recording its highest surpassing the record figures reported in year 2009. At the end of 2010, the benchmark ASI recorded a growth of 96.01% while MPI grew by 83.44% closing out ASI and MPI at 6,635.87 and 7,061.46 respectively. Eight IPOs were introduced to the market with a total of approximately Rs. 4.3 billion being raised from new issues signifying the willingness of new companies to establish their presence in the CSE.

2011

Several rules and regulations were imposed in 2011 to clamp down on the use of excessive credit when applying for IPOs and the exposure of the country’s financial system to the equity market. This was enacted through a Directive issued by CBSL to all banks where limitations were imposed on the issue of granting guarantees for the purpose of applying for IPOs. Furthermore, the SEC issued another Directive on March 10, 2011 specifying a minimum allocation of 40% of the shares of an IPO to retail individual investors (individual investors who subscribe for a maximum of 3,000 shares or Rs. 100,000 in a particular share class, whichever is higher) and 10% to unit trusts. The above regulations, whilst disciplining the entire market led to lacklustre investor behaviour resulting in continuously declining indices. The ASI, which recorded its highest ever value of 7,811.82 on February 14, 2011, started its decline signalling a much awaited market correction.


Several other prominent factors which contributed to the gradual decline in the indices were the spate of IPOs, which drew significant amounts of liquidity away from the secondary market, and also the plethora of rights issues which attracted significant amounts of funds from the investors. The rights issues carried out by the banking sector, whilst being significant in size, were an absolute necessity in the light of the significant growth rates recorded in their respective loan books and hence, gave rise to the need to recapitalise. In August 2011, the SEC, at the request of stockbroker firms, made a decision to permit licensed stockbroker firms to grant credit based on their liquid asset holdings, subject to meeting certain prudential requirements. The market viewed this as a progressive step by the regulator and reacted positively.

On September 14, 2011, the SEC brought in a new Directive to ensure that entities that make an Initial Listing Application of a particular share class, a minimum allotment of 40% of the offered shares or shares to the maximum value of Rs. 1.5 billion whichever is lower, are to be initially made available for allotment to Retail Individual Investor Category. With a view to facilitate fair allotment of shares to the Retail Individual Investor Category in large scale IPOs, the definition of Retail Individual Investors was revised to accommodate subscription up to a value of Rs. 200,000/- in case of IPOs with a value of Rs. 3 billion or above. Further, as per the above Directive, smaller subscribers within the Retail Individual Investor Category are to be given priority in determining the basis of allotment in an IPO.

2012

The MPI was discontinued at the dawn of 2012 with the CSE and S&P Dow Jones Indices jointly launching the S&P SL20 Index, a transparent and robust index conforming to global best practices. The index, now representing a larger portion of the market than its predecessor, was lauded by both domestic and global investors as a credible and investible index. With the SEC’s decision to relax credit rules much to the delight of stockbrokers, market watchers began the year optimistically, hopeful of a turnaround in the markets prospects. However, CBSL’s decision to shift from a fixed exchange rate to a managed exchange rate regime resulted in a sharp depreciation of the Rupee which was mirrored by the ASI sharply looming to 5,000 levels.

On March 02, 2012, SEC issued a directive introducing additional conditions to the general listing requirements. Barring application received before March 31, 2012, listing through introduction was eliminated as a method of listing on the CSE. Lock-in rules for shareholders of companies at the time of listing was also introduced for the first time via the aforementioned directive in order to safeguard the interests of the IPO investors. The first IPO for 2012 took place towards the latter part of the first quarter amidst dull sentiment among equity investors. The interest witnessed in the IPO and the credible performance of the stock during its opening week however was surprisingly contrary to such sentiments. A further five companies debuted on the CSE in 2012, raising a total of Rs. 1.7 billion whilst eleven companies listed equity via introductions and Rs. 11.1 billion was raised through rights issues.



Negative market events led to the SEC introducing more stringent trading measures for market insiders. Further, CBSL’s decision to maintain elevated policy rates to limit excessive credit growth lured investors towards more attractive and stable fixed income securities. The resultant effect of such actions saw the ASI falling to its lowest level of 4738 in 2012. In September 2012, the ASI managed to regain some of its momentum seen previously with increased activity pushing the index above the 5,900 levels. With the outbreak of several positive news during the year i.e. SEC’s decision to relax several regulations, including lifting the 20% upper price limit on off market deals set previously during the year as well as lifting the revised 10% price band imposed on all listed securities, coupled with an encouraging budget proposal offering several concessions for the development of the capital markets and CBSL’s decision to reduce policy rates by 25 basis points, the ASI closed at 5,643 reducing its loss to 7.1%.

2013

2013 was seen as the minor yet noteworthy revival of the local debt market. Tax concessions offered by the GoSL resulted in an influx of debenture issues raising funds of Rs. 68.3 billion. Despite liquidity being drawn away from the equity market, the ASPI and S&P SL20 recorded returns of 4.8% and 5.8% respectively. Throughout the year, market activity was dominated by the high net worth, institutional and foreign investors. The lack of retail investor participation however led to reduced turnover and activity levels. CBSL remained aggressive in 2013, reducing policy rates by an aggregate 125 basis points. The anticipated dip in treasury yields however did not materialize, having an adverse effect on the equity market.

Through a directive issued by the SEC on October 11, 2013, public holding requirement on the Diri Savi Board was amended to have a minimum public holding of 10% of the total number of shares at the time of listing to be held by a minimum 200 shareholders. SEC maintained its firm grip as regulator of the CSE by way of issuing such directives, including modifications to the lock-in requirements introduced in 2012. Listing on the CSE by way of introduction was reintroduced by SEC following public and stakeholder consultation. Under the new directive issued on October 11, 2013, the eligibility criteria for entities seeking a listing on the Diri Savi Board by way of introduction to reflect that, not more than 50% of the shares in the hands of the public shareholders at the time of listing should be held by the three largest public shareholders. The directive issued further elaborated on tighter lock-in periods for shares held prior to a listing via introduction.

In view of offering investors island wide better education and investment opportunities in shares and corporate debt, the CSE expanded its reach to seven locations by opening two branches in Anuradhapura and Ratnapura in 2013. CSE witnessed only one IPO during the year amounting to Rs 494 million. Conversely, the largest rights issue in the country amounting to Rs. 23.1 billion took place during the year making significant strides in the market. Market PE and PBV stood at 15.92x and 1.96x respectively, while CSE remained relatively undervalued compared to several of its regional counterparts.

With positive returns witnessed in 2013 and the abovementioned undervaluation of the market, it is noteworthy that the companies listed on the CSE have recorded extremely strong growth and reported healthy financial performance and stability. Therefore, given the strong macroeconomic fundamentals and the favourable business environment, the market is poised to tread into a new phase of sustainable growth in the long run. This in turn would facilitate a solid platform for new companies to enter into the capital market to fulfil their funding needs.


The table below provides market related statistics for the 2009 to 2013.

Table 14-2: Stock Market Statistics 2009 – 2013

Period (Year) 2009 2010 2011 2012 2013

Cumulative Turnover (Rs. Mn) 142,463 570,327 546,256 213,827 200,468

Average Daily Turnover (Rs. Mn) 594 2,396 2,286 884 828

Cumulative Trades 1,266,299 3,355,126 4,579,352 1,857,384 1,421,303

Listed Companies 231 241 272 287 289

Foreign Turnover as Percentage of Total Turnover (%)

31 19 11 25 36

Net Foreign Flow (Rs. Mn) (789) (26,335) (19,039) 38,660 22,734

Cumulative Foreign Purchases (Rs. Mn) 43,057 92,426 49,777 72,614 83,607

Cumulative Foreign Sales (Rs. Mn) 43,846 118,761 68,816 33,954 60,873

CSE All Share Index 3,386 6,636 6,074 5,643 5,913

CSE Milanka Price Index 3,849 7,061 5,229 5,119 -

CSE S&P SL20 Price Index - - - 3,085 3,264

Market Capitalisation (Rs. Bn) 1,092 2,210 2,214 2,168 2,460

Trailing Market Price Earnings Ratio (x) 16.6 25.2 15.8 15.9 15.9

Market Dividend Yield (%) 3.0 1.2 1.8 2.4 2.9

Number of IPOs 2 8 13 6 1



15.0 STATUTORY DECLARATIONS

15.1 Signing of Prospectus and Statutory Declaration by the Directors

We the undersigned, who are named in the Prospectus as Directors of Alumex, hereby declare and confirm that we have read the provisions of the CSE Listing Rules and of the Companies Act No. 07 of 2007 and any amendments to it relating to the issue of this Prospectus and those provisions have been complied with.

This Prospectus has been seen, read 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 enquires 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 Alumex have been given in the Prospectus, such representations have been made after due and careful enquiry of the information available to Alumex and making assumptions that are considered to be reasonable at the present point in time in our best judgement.

Name Designation Date Place Signature

Mr.Abeyakumar Mohan Pandithage

Chairman/ Chief Executive

February 11, 2014 Colombo Sgd.

Mr. Rohan Palitha Peris Managing Director/ Executive Director


Mr. Dediwela Widanaaracchilage Pramuk Nishantha Dediwela

Executive Director February 11, 2014 Colombo Sgd.

Mr. Sarath Clement Ganegoda Non-Executive Director February 11, 2014 Colombo Sgd.

Mr. Ranil Prasad Pathirana Non-Executive Director February 11, 2014 Colombo Sgd.

Mr. Ali Asghar Akbarally Non-Executive Director February 11, 2014 Colombo Sgd.


Non-Executive Director February 11, 2014 Colombo Sgd.

Dr. Harsha Cabral, PC Independent Non-Executive Director






15.0 STATUTORY DECLARATIONS

15.1 Signing of Prospectus and Statutory Declaration by the Directors

We the undersigned, who are named in the Prospectus as Directors of Alumex, hereby declare and confirm that we have read the provisions of the CSE Listing Rules and of the Companies Act No. 07 of 2007 and any amendments to it relating to the issue of this Prospectus and those provisions have been complied with.

This Prospectus has been seen, read 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 enquires 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 Alumex have been given in the Prospectus, such representations have been made after due and careful enquiry of the information available to Alumex and making assumptions that are considered to be reasonable at the present point in time in our best judgement.

Name Designation Date Place Signature

Mr.Abeyakumar Mohan Pandithage

Chairman/ Chief Executive


Mr. Rohan Palitha Peris Managing Director/ Executive Director


Mr. Dediwela Widanaaracchilage Pramuk Nishantha Dediwela

Executive Director February 11, 2014 Colombo Sgd.

Mr. Sarath Clement Ganegoda Non-Executive Director February 11, 2014 Colombo Sgd.

Mr. Ranil Prasad Pathirana Non-Executive Director February 11, 2014 Colombo Sgd.

Mr. Ali Asghar Akbarally Non-Executive Director February 11, 2014 Colombo Sgd.


Non-Executive Director February 11, 2014 Colombo Sgd.

Dr. Harsha Cabral, PC Independent Non-Executive Director





15.2 Statutory Declaration by Financial Advisors and Managers to the Offering

February 11, 2014

We, NDB Investment Bank Limited, of No. 40, Navam Mawatha, Colombo 02 being the Financial Advisors and Managers to the Offering of Alumex, hereby declare and confirm to the best of our knowledge and belief, based on the information provided to us by the Company, the Prospectus constitutes full and true disclosure of all material facts about the Offering and Alumex, whose Ordinary Voting Shares are being issued.

The Common Seal of NDB Investment Bank Limited of Sri Lanka affixed on this 11th day of February 2014 at Colombo in the presence of two Directors.

Sgd. Sgd. Director Director

15.3 Statutory Declaration by the Company

February 11, 2014

An application has been made to the CSE for permission to deal in and for a listing for all of the Ordinary Voting Shares issued by the Company and those Ordinary Voting Shares which are the subject of this Offering. Such permission will be granted when Shares are listed on the CSE. The CSE assumes no responsibility for the correctness of any of the statements made or opinions expressed or reports included in this Prospectus. Listing on the CSE is not to be taken as an indication of the merits of the Company or of the Shares issued.

The Common Seal of Alumex of Sri Lanka affixed on this 11th day February of 2014 at Colombo in the presence of two Directors.

Sgd. Sgd.

Director Director