abans limited debenture issue 2013

Transcription

ABANS LIMITED
DEBENTURE ISSUE 2013
PROSPECTUS
04 December 2013
Financial Advisers and Managers to the Issue
ABANS LIMITED
PROSPECTUS
AN INITIAL ISSUE OF TEN MILLION (10,000,000) RATED, SENIOR, LISTED, UNSECURED,
REDEEMABLE DEBENTURES AT A FACE VALUE OF SRI LANKA RUPEES ONE HUNDRED
(100) PER DEBENTURE TO RAISE SRI LANKA RUPEES ONE BILLION (1,000,000,000)
OPTION TO ISSUE UPTO A FURTHER TEN MILLION (10,000,000) OF THE SAID
DEBENTURES TO RAISE UPTO SRI LANKA RUPEES ONE BILLION (1,000,000,000) AT THE
DISCRETION OF THE ISSUER IN THE EVENT OF AN OVERSUBSCRIPTION OF THE INITIAL
ISSUE
TO BE LISTED ON THE MAIN BOARD OF THE COLOMBO STOCK EXCHANGE
RATED A- (LKA) BY FITCH RATINGS LANKA LIMITED
ISSUE OPENS ON 13 DECEMBER 2013
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Responsibility for the content of the Prospectus
This Prospectus has been prepared from information provided by Abans Limited (hereinafter
referred to as “Abans”, “Company” or the “Issuer”) 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 provided and confirm that
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 Abans have been given in this
Prospectus, such representations have been made after due and careful enquiry of the information
available to Abans and making assumptions that are considered to be reasonable at the present
point in time in their best judgment.
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.
The delivery of this Prospectus will 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.
Registration of the Prospectus
A copy of the Prospectus has been delivered to the Registrar of Companies for registration in
compliance with the provisions of Section 40 of the Companies Act No. 7 of 2007. The following
are the documents attached to the copy of the Prospectus delivered to the Registrar of Companies
for registration pursuant to Section 40 (1) of the Companies Act.
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
The written consent of the Auditors and Reporting Accountants for the inclusion of their
name in the Prospectus as Auditors and Reporting Accountants to the Issue and to the
Company.
The written consent of the Lawyers to the Issue for the inclusion of their name in the
Prospectus as Lawyers to the Issue.
The written consent of the Trustee to the Issue for the inclusion of their name in the
Prospectus as Trustee to the Issue.
The written consent of the Bankers to the Issue for the inclusion of their name in the
Prospectus as Bankers to the Issue.
The written consent of the Company Secretary for the inclusion of their name in the
Prospectus as Company Secretary to the Company.
The written consent of the Financial Advisors and the Managers to the Issue for the
inclusion of their name in the Prospectus as Financial Advisors and the Managers to the
Issue.
The written consent of the Registrars to the Issue for the inclusion of their name in the
Prospectus as Registrars to the Issue.
The declaration made and subscribed to, by each of the Directors of the Company herein
named as a Director, jointly and severally confirming that each of them have read the
provisions of the Companies Act and the CSE Listing Rules relating to the Issue of the
Prospectus and that those provisions have been complied with.
The said Auditors and Reporting Accountants to the Company and to the Issue, Lawyers to the
Issue, Trustee to the Issue, Bankers to the Issue, Company Secretary, Financial Advisors and the
Managers to the Issue and Registrars to the Issue have not, before the delivery of a copy of the
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Prospectus for registration with the Registrar General of Companies in Sri Lanka withdrawn such
consent.
Registrations of the Prospectus in jurisdictions outside 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.
Representation
The Debentures are issued solely on the basis of the information contained and representations
made in this Prospectus. No dealer, sales person or any other person has been authorised to give
any information or to make any representations in connection with the Issue other than the
information and representations contained in this Prospectus, and if given or made, such
information or representations 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. All statements pertaining to expected financial position, business strategy, plans and
prospects of the Company are classified as Forward Looking Statements.
Forward Looking Statements, by their nature, address matters that are, to different degrees,
uncertain. Such factors include but are not limited to regulatory changes in the sectors in which the
Company operates and its ability to respond to them, economic and political environment of Sri
Lanka, global macroeconomic conditions, 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. These uncertainties may cause the Company’s actual future results
to be materially different from those expressed in the Forward Looking Statements.
Given the risks and uncertainties that may cause the Company’s actual future performance to
materially differ from that expressed or implied by Forward Looking Statements in this Prospectus,
investors are advised not to place sole reliance on such statements.
CSE disclaimer
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. Moreover the CSE
does not regulate the pricing of the Debentures, which is decided solely by the Company/Issuer.
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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KEY INFORMATION
Issuer
Instrument
Listing
Number of
Debentures
to be issued
Amount to be
Raised
Issuer Rating
Issue Rating
Issue Price
Face Value
Types of
Debentures
Abans Limited
Rated, Senior, Listed, Unsecured, Redeemable Debentures
On the Main Board of the Colombo Stock Exchange
An initial Issue of Ten Million (10,000,000) Debentures with an option to
issue up to a further Ten Million (10,000,000) of said Debentures, at the
discretion of the Issuer, in the event of an oversubscription of the initial
Issue
Sri Lanka Rupees One Billion (LKR 1,000,000,000/-) with an option to raise
up to a further Sri Lanka Rupees One Billion (LKR 1,000,000,000/-) at the
discretion of the Issuer in the event of an oversubscription of the initial Issue
A- (lka) by Fitch Ratings Lanka Limited
A- (lka) by Fitch Ratings Lanka Limited
LKR 100 per Debenture
LKR 100 per Debenture
Types of
Debentures
Type A
Type B
Type C
Number of
Debentures
to be Subscribed
Interest Payment
Date(s)
Mode of Payment
of Principal Sum
and Interest
Issue Opening
Date
Closure Date of
the
Subscription List
Date of Allotment
Basis of Allotment
Interest rate (per
annum) payable
semi annually
14.00%
14.25%
14.50%
Effective
annual rate
per annum
14.49%
14.76%
15.03%
Redemption (from the
date of allotment)
36 months (3 years)
48 months (4 years)
60 months (5 years)
Applicants are allowed to invest in either
I.
Type A; and/or
II.
Type B; and/or
III.
Type C
subject to the minimum subscription under each type of Debentures;
A minimum of One Hundred (100) Debentures (LKR 10,000/-) and in
multiples of One Hundred (100) Debentures (LKR 10,000/-) thereafter
30th of June and 31st of December of each year from the Date of Allotment
until the Date of Redemption and includes the Date of Redemption.
Interest would be paid not later than Three (03) Working Days from each
Interest Payment Date
By cheque marked "ACCOUNT PAYEE ONLY" or through electronic fund
transfer mechanism recognised by the banking system of Sri Lanka such
as SLIPS and RTGS
13 December 2013
03 January 2014 or such earlier date on which;
 The maximum of 20,000,000 Debentures are fully subscribed; or
 The Board decides to close the Issue upon the initial issue of
between 10,000,000 and 20,000,000 Debentures becoming fully
subscribed
The date on which the Debentures will be allotted by the Company to
Investors subscribing thereto
In the event of an oversubscription, the Board of Directors will endeavour
to decide the basis of allotment of the Debentures in a fair manner as soon
as practicable
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TABLE OF CONTENTS
1.
2.
3.
4.
CORPORATE INFORMATION ................................................................................................ 1
PARTIES TO THE ISSUE ........................................................................................................ 2
PRINCIPAL FEATURES OF THE ISSUE ................................................................................ 3
3.1
Invitation to Subscribe ...................................................................................................... 3
3.2
Subscription List ............................................................................................................... 3
3.3
Objectives of the Issue...................................................................................................... 3
3.4
Types of the Debentures................................................................................................... 4
3.5
Rating of the Debentures .................................................................................................. 4
3.6
Interest ............................................................................................................................. 4
3.7
Date of Redemption .......................................................................................................... 5
3.8
Early Redemption ............................................................................................................. 5
3.9
Payment of Interest and Principal ..................................................................................... 5
3.10
Rights and Obligations of a Debenture Holder .................................................................. 6
3.11
Benefits of Investing in the Debentures............................................................................. 6
3.12
Risks of Investing in the Debentures ................................................................................. 6
3.13
Transfer of the Debentures ............................................................................................... 7
3.14
Trustees to the Debentures .............................................................................................. 8
3.15
Listing ............................................................................................................................... 8
3.16
Cost of the Issue ............................................................................................................... 8
3.17
Brokerage Fee .................................................................................................................. 8
3.18
Underwriting ..................................................................................................................... 8
PROCEDURE FOR APPLICATION ......................................................................................... 9
4.1
Inspection of Documents .................................................................................................. 9
4.2
Eligible Applicants............................................................................................................. 9
4.3
How to Apply .................................................................................................................... 9
4.4
Submission of Applications ............................................................................................. 11
4.5
Number of Debentures to be Subscribed ........................................................................ 12
4.6
Mode of Payment............................................................................................................ 12
4.6.1 Amount ........................................................................................................................... 12
4.6.2 Payment of Amounts Smaller Than LKR 100,000,000 .................................................... 12
4.6.3 Payment of Amounts Greater Than and Inclusive of LKR100,000,000............................ 12
4.6.4 Payment By Check Or Bank Draft ................................................................................... 12
4.6.5 Payment by Bank Guarantee .......................................................................................... 13
4.6.6 Payment By RTGS ......................................................................................................... 13
4.6.7 Payments By Non Citizens ............................................................................................. 13
4.7
Banking of Payments ...................................................................................................... 13
4.8
Rejection of Applications................................................................................................. 13
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5.
6.
7.
8.
4.9
Basis of Allotment of Debentures .................................................................................... 14
4.10
Refunds .......................................................................................................................... 14
4.11
CDS Accounts and Secondary Market Trading ............................................................... 14
COMPANY PROFILE ............................................................................................................ 16
5.1
Background of the Company .......................................................................................... 16
5.2
Corporate Vision and Mission ......................................................................................... 16
5.3
Business Overview ......................................................................................................... 16
5.4
Strategic Plans ............................................................................................................... 18
5.5
Risks Associated with the Future Strategies ................................................................... 19
5.6
Degree of Dependence on Key Customers and Suppliers .............................................. 20
5.7
Human Resources .......................................................................................................... 20
5.8
Shareholder Information ................................................................................................. 21
COMPANY ANALYSIS .......................................................................................................... 22
6.1
Management Discussion and Analysis............................................................................ 22
6.2
Key Financial Ratios ....................................................................................................... 27
6.3
Particulars of Debt and Loan Capital............................................................................... 28
6.4
Shares in Issue and Stated Capital ................................................................................. 29
6.5
Dividend Policy ............................................................................................................... 29
6.6
Taxation .......................................................................................................................... 29
6.7
Future Capital Commitment ............................................................................................ 29
6.8
Litigation, Disputes and Contingent Liabilities ................................................................. 29
6.9
Details of Penalties Imposed by Regulatory and State Authorities .................................. 29
6.10
Contingent Assets of the Company ................................................................................. 29
6.11
Related Party Transactions ............................................................................................. 29
6.12
Details of Material Contracts of the Company ................................................................. 29
CORPORATE GOVERNANCE .............................................................................................. 30
7.1
Corporate Governance Overview .................................................................................... 30
7.2
Profiles of the Directors................................................................................................... 30
7.3
Directors’ Statement ....................................................................................................... 33
7.4
Directors’ Interest in Assets ............................................................................................ 34
7.5
Directors’ Interest in Contracts or Arrangements............................................................. 34
7.6
Directors’ Emoluments .................................................................................................... 34
7.7
Details of Commissions Paid .......................................................................................... 34
7.8
Details of the Benefits Paid to Promoters ........................................................................ 34
7.9
Transaction Related to Property ..................................................................................... 34
KEY MANAGEMENT PERSONNEL ...................................................................................... 35
8.1
Profiles of the Senior Management ................................................................................. 35
8.2
Emoluments of the Senior Management ......................................................................... 36
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9.
STATUTORY DECLARATIONS ............................................................................................ 37
9.1
Statutory Declaration by the Directors............................................................................. 37
9.2
Statutory Declaration by Financial Advisors and Managers to the Issue ......................... 37
9.3
Statutory Declaration by the Company............................................................................ 38
10.
AUDITOR’S REPORT AND FIVE YEAR SUMMARY OF FINANCIAL STATEMENTS ....... 39
11.
AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31ST MARCH
2013 50
12.
LIST OF ABBREVIATIONS ...............................................................................................114
13.
GLOSSARY OF TERMS ...................................................................................................115
ANNEXURE I: RATING REPORT ................................................................................................117
ANNEXURE II: INTERIM FINANCIALS........................................................................................120
ANNEXURE III: CUSTODIAN BANKS .........................................................................................129
ANNEXURE IV: COLLECTION POINTS ......................................................................................130
ANNEXURE V: APPLICATION FORM .........................................................................................134
vii
1.
CORPORATE INFORMATION
Issuer
Legal Status
Abans Limited
A limited liability company incorporated in Sri Lanka under the Companies
Ordinance of 1938 on 17th December, 1981 and reregistered under the
Companies Act No. 07 of 2007 on 17th December 2007
Company
Number
PV 5301 PB
Registered
Address
Abans Limited, 498, Galle Road, Colombo 03, Sri Lanka
Tel: +94 11 2370777
Fax: +94 11 2370777
Varners International (Pvt.) Limited, Level 14, World Trade Centre, Colombo 01,
Sri Lanka
Tel: +94 11 2394 350-2
Fax: +94 11 2394353
Fitch Ratings Lanka Limited, 15-04, East Tower, World Trade Centre, Colombo
01, Sri Lanka
Tel: +94 11 2 541 900
Fax: +94 11 2 501 903
M/s Ernst & Young, Chartered Accountants, 201, De Saram Place, Colombo 10,
Sri Lanka
Tel: +94 11 2463500
Fax: +94 11 2697369
 Amana Bank, 480, Galle Road, Colombo 03
 Axis Bank, No.356, Galle Road, Colombo 03
 Bank of Ceylon, 01, BOC Square, Bank of Ceylon Mawatha, Colombo 01
 Commercial Bank of Ceylon, Commercial House, 21, Sir Razik Fareed
Mawatha, P.O. Box 856, Colombo 01
 Hatton National Bank, 479, T. B. Jayah Mawatha, P.O.Box 837, Colombo 10
 ICICI Bank, 58, Dharmapala Mawatha, Colombo 07
 MCB Bank, 8, Leyden Bastian Road,Colombo 01
 NDB Bank, 40, Navam Mawatha, Colombo 02
 Pan Asia Banking Corporation, 450, Galle Road, Colombo 03
 People’s Bank, 75, Sir Chittampalam A. Gardiner Mawatha, Colombo 02
 Sampath Bank, 110,Sir James Peris Mawatha,Colombo 02
 Seylan Bank, Seylan Towers, 90, Galle Rd, Colombo 03
 The Hongkong and Shanghai Banking Corporation, 38, 3rd Floor, Galle Road,
Colombo 06
 The Standard Chartered Bank, 37 York Street, Colombo 01
 Mrs. Aban Pestonjee (Chairperson)
 Mr. P.N. Pestonjee (Director)
 Mr. Behman Pestonjee (Director)
 Mr. Rusi Pestonjee (Director)
 Mrs. Saroshi Dubash (Director)
 Mr. Chitral Amaratunga (Independent Director)
 Mr. Clive A. Fernando (Director)
 Mr. Alan Raffell (Director)
 Mr. Hiran Embuldeniya (Independent Director)
Company
Secretary
Ratings Agency
Auditors and
Reporting
Accountants
Bankers
Board of
Directors
1
2.
PARTIES TO THE ISSUE
Financial Advisors
and
Managers to the
Issue
Lawyers to the Issue
Registrars to the
Issue
Bankers to the Issue
Trustee to the Issue
Auditors and
Reporting
Accountants to the
Issue
York Street Partners (Pvt) Limited, 116 Havelock Road, Colombo 05, Sri
Lanka
Tel: +94 11 2055210
Fax: +94 11 2055210
Capital Alliance Partners Limited, Level 5, Millennium House, 46/58
Navam Mawatha, Colombo 02, Sri Lanka
Tel: +94 11 2317777
Fax: +94 11 2317788
Nithya Partners, 97A, Galle Road, Colombo 03, Sri Lanka
Tel: +94 11 4712625
Fax: +94 11 2328817
SSP Corporate Services, 546, Galle Road, Colombo 03, Sri Lanka
Tel: +94 11 2573485
Fax: +94 11 2573037
Sampath Bank, 110 Sir James Peiris Mawatha, Colombo 02, Sri Lanka
Deutsche Bank AG, Colombo Branch, 86, Galle Road, Colombo 03, Sri
Lanka
Tel: +94 11 2447062
Fax: +94 11 2447067
M/s Ernst & Young, Chartered Accountants, 201, De Saram Place,
Colombo 10, Sri Lanka
Tel: +94 11 2463500
Fax: +94 11 2697369
2
3.
PRINCIPAL FEATURES OF THE ISSUE
3.1
INVITATION TO SUBSCRIBE
Board of Directors of Abans Limited (hereinafter also referred to as the “Board”) by resolution dated
November 22nd, 2013 resolved to raise a sum of Sri Lanka Rupees One Billion (LKR
1,000,000,000) by an initial issue of Ten Million (10,000,000) Debentures each with a Face Value
of LKR 100 and to raise up to a further sum of Sri Lanka Rupees One Billion (LKR 1,000,000,000)
by an issue of up to a further Ten Million (10,000,000) of said Debentures, in the event of an
oversubscription of the initial Issue.
As such, a maximum amount of Sri Lanka Rupees Two Billion (LKR 2,000,000,000) would be
raised by the issue of a maximum of Twenty Million (20,000,000) Debentures each with the Face
Value of LKR 100.
Abans invites Applications for Debentures of Type A and/or; Debentures of Type B and/or;
Debentures of Type C which will rank equal and pari passu with each other without any preference
or priority of any one or more than over the others except for the Rate of Interest and the Date of
Redemption of the Debentures, as further described in Section 3.6 and Section 3.7 respectively in
this Prospectus.
It is the intention of the Company to list the Debentures on the Main Board of the Colombo Stock
Exchange. The CSE has given its in-principle approval for the listing of the Debentures on the
CSE.
3.2
SUBSCRIPTION LIST
Subject to the provisions contained below, the subscription list for the Debentures will open at 9.30
a.m. on 13 December 2013 and will remain open for fourteen (14) Market Days including the Issue
Opening Date until closure at 4.30 p.m. on 03 January 2014. However, the subscription list will be
closed on an earlier date at 4.30 p.m. with the notification to the CSE on the occurrence of the
following;


The maximum of 20,000,000 Debentures are fully subscribed; or
The Board decides to close the Issue upon the initial issue of between 10,000,000 and
20,000,000 Debentures becoming fully subscribed
Applications can be made in the manner set out in Section 4.
3.3
OBJECTIVES OF THE ISSUE
The Company proposes to utilise the funds raised through this Issue for the purpose of re-financing
part of the short-term borrowings and restructuring the debt portfolio of the Company.
Details of the short-term borrowings to be refinanced are:
Type of Borrowing
Commercial Paper
Quantum of Debt to be Retired
(LKR ‘000)
1,000,000 – 2,000,000
Weighted Average Borrowing
Cost
15.05%
3
3.4
TYPES OF THE DEBENTURES
The Issue consists of three types of Debentures, namely Debentures of Type A, Debentures of
Type B and Debentures of Type C, each with a Face Value of Rupees One Hundred (LKR 100).
Investors may apply for Debentures issued under Debentures of Type A; and/or Debentures of
Type B; and/or Debentures of Type C.
3.5
RATING OF THE DEBENTURES
Fitch Ratings Lanka Limited has assigned a credit rating of A- (lka) to the Debentures.
The rating definition provided by Fitch is as follows:
'A' National Ratings denote expectations of low default risk. The capacity for payment of financial
commitments is considered strong. This capacity may, nevertheless, be more vulnerable to
adverse business or economic conditions than is the case for higher ratings. "+" or "-" may be
appended to a credit rating to denote relative status within a major rating category.
A copy of the rating certificate is given in Annexure I of the Prospectus.
3.6
INTEREST
The Debentures will carry fixed Rates of Interest below.
Type of
Debenture
Rate of Interest (per annum)
Annual Effective
(per annum)
Type A
Fourteen per centum (14.00%)
14.49%
Type B
Fourteen decimal Twenty Five per centum (14.25%)
14.76%
Type C
Fourteen decimal Fifty per centum (14.50%)
15.03%
Rate
Interest on the Debentures accruing on a daily basis on the outstanding Principal Sum and will be
paid semi-annually in each year on 30th of June and 31st of December of each year from the Date
of Allotment until the Date of Redemption and including the Date of Redemption (“Interest Payment
Dates”).
The Interest due on the Debentures for a particular Interest Period will be calculated based on the
actual number of days in such Interest Period and will be paid not later than Three (03) Working
Days from each Interest Payment Date.
Payment of the Interest on the Debentures will be made after deducting any taxes and charges
thereon (if any) in Sri Lanka Rupees as per the applicable law prevalent at the time of Interest
payment to the Debenture Holders.
As per Section 9(o) of the Inland Revenue (Amendment) Act No. 18 of 2013, the interest income
from any investment made on or after the January 1, 2013 in corporate debt securities (i.e.
debentures), quoted in any stock exchange licensed by the SEC is exempt from withholding tax.
Furthermore, in terms of Section 13 (xxxxxxx) of the same Act, the profits and income earned from
any such investment have also been exempted from income tax.
4
3.7
DATE OF REDEMPTION
Redemption of the Debentures will take place on the respective Dates of Redemption as described
in the table below in accordance with the provisions of the Trust Deed. The Principal Sum and
unpaid and accrued Interest (if any) payable on the Redemption of Debentures will be paid not
later than Three (03) Working Days from the Date of Redemption.
Type A
Type B
Type C
The date on which a period of Thirty Six (36) months from the Date of
Allotment expires or if such date on which a period of Thirty Six (36)
months from the Date of Allotment expires is not a Market Day, the Market
Day immediately succeeding such date.
The date on which a period of Forty Eight (48) months from the Date of
Allotment expires or if such date on which a period of Forty Eight (48)
months from the Date of Allotment expires is not a Market Day, the Market
Day immediately succeeding such date.
The date on which a period of Sixty (60) months from the Date of Allotment
expires or if such date on which a period of Sixty (60) months from the
Date of Allotment expires is not a Market Day, the Market Day immediately
succeeding such date.
These Debentures shall not be subject to Redemption by the Company prior to the Date of
Redemption other than in the circumstances set out in Section 3.8 below and in the Trust Deed.
3.8
EARLY REDEMPTION
The Debenture holders will not have any rights or option to call for redemption of the Debenture
before the Date of Redemption, except in the circumstances where the debentures have become
immediately payable in terms of Clause 10 in the Trust Deed.
3.9
PAYMENT OF INTEREST AND PRINCIPAL
The Company will redeem the Debentures on the respective Date of Redemption as specified in
Section 3.7 and the Interest payments will be made as specified in Section 3.6.
The payment of Principal Sum and Interest will either be made by cheque/s marked “ACCOUNT
PAYEE ONLY" dispatched to the address provided by the Debenture Holders to the CDS at the
risk of the Debenture Holders or through electronic fund transfer mechanism recognised by the
banking system of Sri Lanka to a bank account provided to the CDS by the Applicant, such as
SLIPS and RTGS.
However, in the event such payment is over the maximum amount that can be accommodated
through electronic fund transfer mechanism recognised by the banking system of Sri Lanka or if the
Debenture Holder has not provided accurate and correct details of his/her bank account to the
CDS for the payment of Principal Sum and Interest, such payment to the Debenture Holder will be
made by way of a cheque/s marked “Account Payee Only” and sent by post to the address
provided by the Debenture Holder at the risk of the Debenture Holder.
In order to accommodate the debenture interest cycles in the Automated Trading System of the
CSE, the payment of Principal Sum and Interest will be made to Debenture Holders holding
Debentures in the CDS as of the Entitlement Date. In the case of joint Debenture Holders, the
payment of Principal Sum and Interest will be made to the one whose name stands first in the
register of Debenture Holders.
5
3.10 RIGHTS AND OBLIGATIONS OF A DEBENTURE HOLDER
I.



Debenture Holders are entitled to the following rights:
Receiving semi-annual interest at the Rate of Interest as set out in Section 3.6 and Principal
Sum at the Date of Redemption as set out in Sections 3.7
Ranking equal and pari passu with unsecured creditors in the event of liquidation and
above the preference shareholders and ordinary shareholders
Calling and attending meetings of Debenture Holders as set out in the Trust Deed
II.



Debenture Holders do not have the following rights:
Attending and voting at meetings of holders of shares and other debentures
Sharing in the profits of the Company
Participating in any surplus in the event of liquidation
III.
Each Debenture Holder must ensure that information in the securities account maintained
with the CDS is up to date and accurate. Each Debenture Holder shall absolve the
Company from any responsibility or liability in respect of any error or inaccuracy or absence
of necessary changes in the information recorded with the CDS. Further, the Debenture
Holder shall absolve the CSE and the CDS from any responsibility or liability in respect of
any error or inaccuracy or absence of necessary changes in the information recorded with
the CDS, where such errors or inaccuracies or absence of changes are attributable to any
act or omission of the Debenture Holders.
3.11 BENEFITS OF INVESTING IN THE DEBENTURES
I.
II.
III.
IV.
V.
VI.
Opportunity to invest in a leading Sri Lankan corporate
Diversify the investor’s portfolio
Regular cash inflow of semi-annual interest payments
Being listed on the CSE, the Debentures will have a secondary market, thus providing the
investor with an opportunity to exit at the prevailing market price at the time of divestiture
The Debentures may be used as collateral to obtain credit facilities from banks and financial
institutions
As per Section 9(o) of the Inland Revenue (Amendment) Act No. 18 of 2013, the interest
income from any investment made on or after the January 1, 2013 in corporate debt
securities (i.e. debentures), quoted in any stock exchange licensed by the SEC is exempt
from income tax. Furthermore, in terms of Section 13 (xxxxxxx) of the same Act, the profits
and income earned from any such investment have also been exempted from income tax
3.12 RISKS OF INVESTING IN THE DEBENTURES
Subscribers to the Debentures could be exposed to the following risks:
I.
Interest Rate Risk
Provided all other factors are equal, the market price of the debentures will generally fluctuate in
the opposite direction to market interest rates. Thus, interest rate risk could be identified as the
reduction in the market price of Debentures resulting from a rise in interest rates.
II.
Reinvestment Risk
Interest on Debentures are payable semi-annually. An investor may decide to reinvest this interest
payment and earn interest from that point onwards. Returns earned on reinvesting such interest
are based on the prevailing interest rate environment. The risk of returns generated by reinvesting
such interest received being higher or lower than the return offered by the Debentures is known as
reinvestment risk.
6
III.
Call Risk
The uncertainty to the debenture holder when the issuer has the option of redeeming the
debentures before maturity, thus being called upon to terminate the investment early is known as
"Call Risk". However, these Debentures do not carry this risk as call options are not embedded with
these Debentures other than as provided in Section 3.8.
IV.
Credit Risk
Credit Risk is also referred to as default risk. This is the risk that the issuer of a debenture may
default, i.e. the issuer will not be able to pay interest and principal payments on a timely basis. This
risk is gauged in terms of a rating assigned by different rating agencies. Fitch Ratings Lanka
Limited has assigned a National Long-term Rating of A-(lka) to these Debentures and will
periodically review this rating.
V.
Liquidity Risk
Liquidity risk is associated with the ease with which an investment can be sold after the initial
placement. In order to reduce the liquidity risk of the Debentures, the Company has applied for a
listing of these Debentures on the CSE and has received in-principle approval for such listing. Thus
Debenture Holders will be able to sell the Debentures through the CSE in order to convert the
Debentures to cash and exit from the investment.
VI.
Duration Risk
Duration is a measure of the price sensitivity of fixed income investments to a change in interest
rates, based on the time to maturity of principal and coupon payment. The higher the duration, the
greater the price volatility or duration risk and the lower the duration the lower the duration risk.
VII.
Regulatory Risk
The regulatory risk refers to the risk that a change in laws and regulations will materially impact a
security, business, sector or market. A change in laws or regulations made by the government or a
regulatory body (e.g. an imposition of withholding tax on interest) can reduce the attractiveness of
investment or create additional costs for the Debenture Holders.
3.13 TRANSFER OF THE DEBENTURES
The Debentures will be transferable and transmittable in the manner set out in the Trust Deed ,
which is reproduced below. No change of ownership in contravention to these conditions will be
recognised by the Company.
I.
These Debentures shall be freely transferable and the registration of such transfer shall not
be subject to any restriction, except to the extent required for compliance with statutory
requirements.
II.
The Debentures shall be transferable and transmittable through the CDS as long as the
Debentures are listed in the CSE. Subject to the provisions contained herein, the Company
may register without assuming any liability, any transfer of Debentures in accordance with
the statutory requirements and rules and regulations in force for the time being as laid down
by the CSE, SEC and the CDS.
III.
In the case of death of a Debenture Holder; only the following persons will be recognized by
the Company as having title to his/her Debentures:

When the deceased was a joint holder, the survivor;

The executors or administrators of the deceased or where the administration of the estate
of the deceased is in law not compulsory the heirs of the deceased where such Debenture
7
Holder was the sole or only surviving holder; shall be the only persons recognized by the
Company as having any title to his/her Debentures.
IV.
Any person becoming entitled to any Debenture in consequence of bankruptcy or winding
up of any Debenture Holder, upon producing proper evidence of his/her title as determined
by the Board of the Company, subject to the applicable laws, rules and regulations of the
Company, CDS, CSE and SEC.
3.14 TRUSTEES TO THE DEBENTURES
Deutsche Bank AG, Colombo Branch has agreed to act as the Trustee to the Debenture Holders.
The Company has entered into an agreement with the Trustee (hereinafter referred to as the "Trust
Deed"). Debenture Holders in their Application Forms for subscription will be required to authorise
the Trustee to act as their agent in entering into such deeds, writings, and instruments with the
Company and to act as the agent and Trustee for the Debenture Holders.
The rights and obligations of the Trustee are set out in the Trust Deed and the Debentures will be
subject to the terms and conditions incorporated in the said Trust Deed.
The fee payable to the Trustee will be LKR 30,000 per month inclusive of statutory levies and
taxes. The Trustee has no conflict of Interest with the Company, except that the Trustee is one of
the banks rendering banking services to the Company.
3.15 LISTING
An application has been made to the CSE for permission to obtain a listing for the Debentures and
the CSE has granted its approval in-principle for the same. It is the intention of the Company to list
the Debentures on the Main Board of the Colombo Stock Exchange upon the allotment thereof.
The CSE however, assumes no responsibility for the correctness of the statements made or
opinions expressed or reports included in this Prospectus. Admission to the official list is not to be
taken as an indication of the merits of the Company or of its Debentures.
3.16 COST OF THE ISSUE
Directors estimate that the total cost of the Issue including fees to professionals, printing,
advertising and other costs connected with the Issue will be approximately LKR 32 Million. Such
costs will be financed by the internally generated funds of the Company.
3.17 BROKERAGE FEE
Brokerage fee at the rate of 0.25% of the investment value of the Debentures shall be paid in
respect of the number of Debentures allotted on Applications bearing the original seal of any bank
operating in Sri Lanka or a member/trading member of the CSE or any other intermediary
appointed by the Company and/or Managers to the Issue involved in the marketing of the Issue.
3.18 UNDERWRITING
This Issue is not underwritten.
The offering is not conditional to any minimum amount to be raised through this Issue. In the event
of an under subscription, the Company is confident that any short fall in the funds required to meet
the objectives of the Issue can be financed through internally generated funds and other credit
facilities.
8
4.
PROCEDURE FOR APPLICATION
4.1
INSPECTION OF DOCUMENTS
The following documents would be made available for inspection by the public seven (07) market
days before the opening of the issue, during normal working hours at the registered office of the
Company, 498, Galle Road, Colombo 03, Sri Lanka until the Date of Redemption of the
Debentures.
 Articles of Association;
 Trust Deed;
 Auditors’ Reports and Audited Financial Statements for the five (05) financial years ended
31 Mar 2013 (i.e. the five (05) financial years immediately preceding the date of this
Prospectus);
 All other documents referred to in Rule 3.2.16 (a) of the CSE Listing Rules, including
material contracts and management agreements entered into by the Company (if any)
The Prospectus, the Trust Deed and Articles of Association of the Company will be available on the
websites of CSE, www.cse.lk and website of the Company, www.abansgroup.com from the date of
opening of the subscription list until the Date of Redemption of the Debenture as stipulated in Rule
3.2.16 (b) of the CSE Listing Rules. Furthermore, the copies of the Prospectus and Application
Forms will be made available free of charge from the collection points as set out in Annexure IV.
4.2
ELIGIBLE APPLICANTS
Applications are invited for the subscription of Debentures from the following categories of
applicants:
I.
II.
III.
IV.
V.
VI.
VII.
Citizens of Sri Lanka, resident in Sri Lanka and above 18 years of age; or
Companies, corporations or institutions incorporated or established in Sri Lanka; or
Approved Unit Trusts licensed by SEC;
Approved
provident
funds
and
contributory
pension
schemes
registered/incorporated/established in Sri Lanka and authorised to invest in Debentures. In
the case of approved provident funds and approved contributory pension schemes, the
Application should be in the name of the trustee/board of management; or
Foreign citizens above 18 years of age (irrespective of whether they are resident in Sri
Lanka or overseas; or
Corporate bodies incorporated or established outside of Sri Lanka; or
Global, regional and country funds approved by the SEC.
Applications will not be accepted from sole proprietorships, partnerships or unincorporated trusts.
4.3
HOW TO APPLY
a) Availability of Applications: Applications should be made on the Application Forms in Annexure
V. Applications are issued free of charge by the parties listed in Annexure IV and can be
downloaded from the website of CSE (www.cse.lk), the website of Abans Limited
(www.abansgroup.com) and the website of Financial Advisors and Managers to the Issue
(www.yorkstreetpartners.com and www.capitalalliance.lk) from the date of opening of the
subscription list until the Closure Date. Exact size photocopies of Application Forms will also be
accepted.
b) Instructions for Completing Applications: Applications which do not strictly conform to
9
instructions and the other conditions set out herein or which are incomplete or illegible may be
rejected. Once an Application Form has been submitted it cannot be amended
I.
One Application Form should be submitted for each Type of Debenture (i.e. either Type A
or Type B or Type C Debentures).
II.
In the event an Applicant wishes to apply for more than one Type of Debentures, separate
Application Forms should be used.
III.
If the ownership of the Debentures 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.
IV.
An Applicant of a joint Application will not be eligible to apply through a separate
Application Form either individually or jointly for the same Type of Debenture. In the case of
joint Applications, the refunds (if any), Interest payment and the Redemption amount will be
remitted in favour of the first Applicant as identified in the Application Form. The Company
shall not be bound to register more than three (03) natural persons as joint holders of any
Debentures (except in the case of executors, administrators or heirs of a deceased
member). Joint Applicants should note that all parties should either be residents of Sri
Lanka or Non-Residents.
V.
Applications by companies, corporate bodies, societies, approved provident funds, trust
funds and approved contributory pension schemes registered/incorporated/established in
Sri Lanka should be in the manner provided by their articles of association or such other
constitutional documents or as per the statutes governing them. In the case of approved
provident funds, trust funds and approved contributory pension schemes, the Applications
should be in the name of the Trustees / Board of Management.
VI.
All Applicants should indicate their CDS account number in the Application for Debentures.
In the event the name, address or NIC number/passport number/company number of the
Applicant mentioned in the Application Form differ from the name, address or NIC
number/passport number/company number as per the CDS records, the name, address or
NIC number/passport number/company number as per the CDS records will prevail.
Application Forms stating third party CDS accounts, instead of Applicants’ own CDS
account numbers, except in the case of margin trading, will be rejected.
VII.
Applicants who wish to apply through their margin trading accounts should submit the
Application Forms in the name of the “Margin Provider/Applicant’s name” signed by the
margin provider, requesting a direct deposit of the Debentures to the Applicant’s margin
trading account in CDS. The margin provider should indicate the relevant CDS account
number relating to the margin trading account in the Application Form. A photocopy of the
margin trading agreement must be submitted along with the Application.
Margin providers can apply under their own name and such Applications will not be
construed as multiple Applications.
VIII.
Application Forms may be signed by third party on behalf of the Applicant(s) provided that
such person holds the Power of Attorney (POA) of the Applicant(s). A copy of such POA
certified by a Notary Public as “True Copy” should be attached with the Application Form.
Original of the POA should not be attached.
10
Funds for the investments in Debentures and the payment for Debentures by NonResidents should be made only out of funds received as inward remittances or available to
the credit of “Securities Investment Account” (SIA) of the Non-Residents opened and
maintained in a licensed commercial bank in Sri Lanka in accordance with directions given
by the Controller of Exchange in that regard to commercial banks.
An Application Form submitted by a Non-Resident person should be accompanied by a
letter of confirmation from a licensed commercial bank which maintains the SIA that the
payment which is being made or the guarantee which is being provided has been made out
of funds available in the SIA.
The Company will comply with the Exchange Control Act and all regulations published
thereunder including those contained in Government Gazette Extraordinary No 1681/11
dated 22nd November, 2010 and Government Gazette Extraordinary No 1733/19 dated
22nd November, 2011 when issuing Debentures to Non- Residents
Foreign Institutional Investors (FIIs) who wish to carry out their foreign exchange
conversion at a bank which is different from the bank at which they maintain the SIA have
been granted permission to route their funds through an account maintained by a NonResident Intermediary. FIIs who wish to make use of this procedure should comply with the
Exchange Control Direction under Reference No. 06/04/18/2013 dated 12th June 2013.
IX.
Non-Residents are responsible for complying with the laws relevant to the jurisdiction of
their residence and of Sri Lanka.
All applicants should indicate in the application for debentures, their CDS A/C no.
Applicants who do not have a CDS Account are advised to open a CDS account prior to
making the application, in order to facilitate the uploading of allotted debentures to the CDS.
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 debentures allotted shall
be directly uploaded to the CDS.
PLEASE NOTE THAT UPON THE ALLOTMENT OF DEBENTURES UNDER THIS ISSUE
THE ALLOTED DEBENTURES WOULD BE CREDITED TO THE APPLICANT’S CDS
ACCOUNT SO INDICATED.
PLEASE NOTE THAT DEBENTURE CERTIFICATES SHALL NOT BE ISSUED
APPLICATIONS WHICH DO NOT CARRY THE CDS ACCOUNT NUMBER, WHICH IS
NOT OPENED AT THE TIME OF THE CLOSURE OF THE SUBSCRIPTION LIST OR
WHICH INDICATE AN INCORRECT/INACCURATE CDS ACCOUNT NUMBER SHALL BE
REJECTED, AND NO ALLOTMENT WILL BE MADE.
You can open a CDS A/C through any Member/Trading Member of the CSE as set out in
Annex IV or through any Custodian Banks set out in Annex II of this Prospectus
4.4
SUBMISSION OF APPLICATIONS
Application Forms together with the remittance for the full amount payable for the application
should be enclosed in an envelope marked “ABANS LIMITED – DEBENTURE ISSUE 2013” on the
top left hand corner in capital letters and dispatched by post or courier or delivered by hand to
11
Registrars to the Issue by 4:30pm on the Closure Date. Applications may also be handed over to
the Mangers to the Issue, Bankers to the Issue or to any collection point set out in Annexure IV.
Applications sent by post or courier or delivered to any collection point set out in Annexure IV
should reach the office of the Registrars to the Issue, by 4.30p.m. on the Closure Date.
Applications received after the said period will be rejected even though they have been delivered to
any of the said collection points prior to the Closure Date or carry a postmark dated prior to the
Closure Date.
4.5
NUMBER OF DEBENTURES TO BE SUBSCRIBED
Applicants are allowed to invest in either;



Debentures of Type A; and/or
Debentures of Type B; and/or
Debentures of Type C
subject to a minimum of One Hundred (100) Debentures (LKR 10,000) and in multiples of One
Hundred (100) Debentures (LKR 10,000) thereafter for each type of Debentures.
4.6
MODE OF PAYMENT
4.6.1 AMOUNT
The amount payable should be calculated by multiplying the number of Debentures applied for
under a particular Type by the Face Value (LKR 100/-). If there is a discrepancy in the amount
payable and the amount specified in the cheque/bank draft or bank guarantee, the Application
will be rejected.
Payment in full for the total value of Debentures applied for should be made separately in
respect of each Application in accordance with the details stated in Section 4.6.
4.6.2 PAYMENT OF AMOUNTS SMALLER THAN LKR 100,000,000
Payments should be supported by a cheque or bank draft
Only one cheque or bank draft and should be issued for the full amount indicated in the
Application Form.
4.6.3 PAYMENT OF AMOUNTS GREATER THAN AND INCLUSIVE OF
LKR100,000,000
Payments should be supported by either



Multiple cheques or bank drafts; or
A bank guarantee issued; or
RTGS transfer
4.6.4 PAYMENT BY CHECK OR BANK DRAFT
Cheques or bank drafts should be made payable to "ABANS LIMITED – DEBENTURE ISSUE
ACCOUNT 2013” and crossed “Account Payee Only.” Each cheque or bank draft should be of
a value less than LKR 100,000,000.
12
All cheques/bank drafts received in respect of the Applications for Debentures will be banked
commencing from the Business Day immediately following the Closure Date.
Cheques must be honoured on first presentation to the bank for the Application to be valid. In
the event that cheques are not realised prior to the date of deciding the basis of allotment, the
monies will be refunded and no allotment of Debentures will be made.
4.6.5 PAYMENT BY BANK GUARANTEE
Bank guarantees should be issued by a licensed commercial bank in Sri Lanka in favour of
“ABANS LIMITED – DEBENTURE ISSUE ACCOUNT 2013”, and be valid for a minimum of one
(01) month from the Issue Opening Date (i.e. 13 December 2013).
For the avoidance of doubt, Abans will not bear any costs or fees associated with bank
guarantees.
4.6.6 PAYMENT BY RTGS
RTGS transfers should be made to the credit of “ABANS LIMITED – DEBENTURE ISSUE
ACCOUNT 2013” bearing the account number 002930024689 at Sampath Bank PLC with
value on the issue Opening Date (i.e. the funds to be made available to the above account on
the Issue Opening Date). The Applications should obtain confirmation from the Applicant’s bank
to the effect that arrangements have been made to transfer the payment in full for the total
value of Debenture applied and this confirmation should be attached to the Application Form.
Applicants are entitled to an Interest at the rate of the money market rate as of the Issue
Opening Date as provided by Sampath Bank PLC from the date of such transfers up to the
Date of Allotment. However, no Interest will be paid if the RTGS transfers are not realised
before the end of the Closure Date. Furthermore, even if such RTGS transfers are effected
prior to the Issue Opening Date, no Interest will be paid for the period prior to the Issue
Opening Date.
4.6.7 PAYMENTS BY NON CITIZENS
Payment for the Debentures by Non-Residents should be made through a “Securities
Investment Account” (SIA) maintained with any licensed commercial bank in Sri Lanka in
accordance with directions given by the Controller of Exchange in that be regard to commercial
banks.
4.7
BANKING OF PAYMENTS
All cheques or bank drafts or bank guarantees received in respect of Applications will not be
banked or called on until the Business Day immediately after the Closure Date as set out in Section
2.4, in terms of the CSE Listing Rules.
4.8
REJECTION OF APPLICATIONS
Applications which are incomplete or illegible or do not conform with the terms set out in Section 4
of this Prospectus will be rejected at the sole discretion of Abans Limited.
13
4.9
BASIS OF ALLOTMENT OF DEBENTURES
In the event of an oversubscription, the Board of Directors of the Company will endeavour to
decide and announce to the CSE the basis of allotments within seven (7) Market Days from the
Closure Date. Further, the Board reserves the right to allocate up to 50% of the debentures issued
on a preferential basis, to investor/s of strategic importance with who they might partner with in
future endeavours.
The number of Debentures to be issued under Debentures of Type A, Debentures of Type B and
Debentures of Type C shall be in accordance with the basis of allotment which shall be decided at
the discretion of the Board of Directors of Abans Limited in a fair manner in the event of an
oversubscription.
The Company reserves the right to refuse any Application or to accept any Application in part only,
without assigning any reason thereto.
A written confirmation informing successful Applicants on their allotment of Debentures will be
dispatched within ten (10) Market Days from the Closure Date as required by the CSE.
4.10 REFUNDS
Monies will be refunded where;
 an Application is rejected for reasons given in Section 4.8
 the Application is accepted only in part.
If the Applicant has provided accurate and complete details of his bank account in the Application,
the Bankers to the Issue will make refund payments up to and inclusive of Rupees Five Million
(LKR 5,000,000/-) to the bank account specified by the Applicant, through SLIPS and a payment
advice will be sent.
In the event of refunds over Rupees Five Million (LKR 5,000,000/-) or if the Applicant has not
provided accurate and correct details of his bank account in the Application Form, the bank will
make such refund payment to the Applicant by way of a cheque and send it by post at the risk of
the Applicant.
In the case of joint Application, the cheques will be drawn in favour of the Applicant’s name
appearing first in the Application Form.
Applicants can obtain details on bank and branch codes required for providing instructions on SLIP
transfers at the following website; www.lankaclear.com
Refunds on Applications rejected or partly allotted Debentures would be made within ten (10)
Market Days excluding the Closure Date. Applicants would be entitled to receive Interest at the rate
of last quoted Average Weighted Prime Lending Rate (AWPLR) published in the immediately
preceding week by the CBSL or any other authority (in the event that the CBSL ceases to publish
the AWPLR) plus five per centum (5.00%) for the delayed period on any refunds not made within
this period.
4.11 CDS ACCOUNTS AND SECONDARY MARKET TRADING
Debentures allotted will be directly deposited to the respective CDS accounts given in the
Application Forms before the expiry of eighteen (18) Market Days, from the Closure Date. A written
confirmation of the credit will be sent to the Applicant within two (02) Market Days of crediting the
CDS account, by ordinary post to the address provided by each Applicant.
14
The Company will submit to the CSE a 'Declaration' on direct upload to CDS on the Market Day
immediately following the day on which the Applicants’ CDS accounts are credited with the
Debentures.
Trading of Debentures 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.
15
5.
COMPANY PROFILE
5.1
BACKGROUND OF THE COMPANY
Abans Limited commenced business in 1968 as a small corner store modifying, repairing and
selling pre-owned household appliances with a warranty during the closed economy era of the
Seventies. With the opening of the economy in 1977, Mrs. Pestonjee, the founder and the current
chairperson, was quick to utilise her market knowledge and the conveniences sought by a busy
house wife to acquire the agency and distributor rights for the well-known and internationally
established and popular brands such as Electrolux, Hoover and Mitsubishi Electric, despite stiff
competition from established companies who had been hither to enjoying the agency rights for
these brands over decades.
Since then Abans has accelerated its growth acquiring the agency and distribution rights for
Goldstar in 1987 which was then a little known manufacturer of small appliances and black and
white TVs from Korea. Goldstar was rebranded LG in 1996, giving the consumer durables business
of Abans a boost. Aggressive sales and marketing strategies coupled with an efficient and trusted
after sales service enabled Abans to capture substantial market share from the competition.
Today, Abans is a privately held group of companies with revenues in excess of LKR 24 billion and
over 2,000 employees. It is one of the market leaders in core areas of retailing consumer durables
and electronics and represents several brands as sole distributors and service agents including
LG, Toshiba, Mitsubishi Electric and Haier. Abans has one of the largest retail networks in Sri
Lanka with over 370 owned sales outlets and 1,640 approved dealers across the country. It has
also developed a significant presence in the North and East of the country since 2009. Abans is
rated A- (lka) by Fitch Ratings
Over the past four decades, the success of Abans Group has been built on the legacy of trust and
leadership of one of Sri Lanka’s most successful female entrepreneurs. The hallmark of this has
been a focus on high quality customer service and after sales service.
5.2
CORPORATE VISION AND MISSION
Vision
To attract and retain our customers for life
Mission
Adding value to our most precious asset – our customers by bestowing a novel range of worldclass products and services that reflect value, comfort, convenience & quality in the home and at
work or leisure.
5.3
BUSINESS OVERVIEW
Core business activities
Abans Limited operates in 5 main business areas
I.
Consumer durables retailing
Abans is one of the leading retailers of TVs, refrigerators, air conditioners, washing machines,
computers, electronics and other household appliances and offers a range of international brands
including LG, Panasonic, Haier, Huawei, Toshiba and Phillips. It has strong relationships with its
suppliers, many of which have been built over more than 30 years. The consumer durables
16
business is supported by a large retail network which comprises uniquely designed stores that
suite different customer segments. These retail channels include;
■
Retail showrooms and dealers - Abans Limited has a network of over 370 showrooms
island wide. The main showroom is located on the main thoroughfare in the heart of
Colombo and spread across three floors. These showrooms are equipped with modern
facilities on par with global standards. Abans also has more than 1,640 authorized dealers
in the rural areas bringing their products within reach of every family across the country.
■
Elite Showrooms - Abans launched its first Elite channel in 2000. These showrooms target
consumer with above average income levels and are designed to create a memorable
shopping experience: they have larger store space, carry a wide range of premium products
and are staffed by trained sales executives who have expert knowledge on home
appliances and electronics. Abans has 21 Elite showrooms located in highly populated
areas including in Colopetty, Rajagiriya, Mt. Lavinia and Kandy.
■
Duty Free Shop - Abans Duty Free Shop in the arrivals terminal of the Bandaranaike
International Airport is one of the largest and most popular sales outlets for internationally
renowned and globally acclaimed brands of household appliances.
■
Buy Abans - Buy Abans is the online distribution channel of Abans that provides the
convenience of selecting, purchasing and reserving goods without visiting a store.
II.
Department Stores
Abstract, Abans’ department store, offers a range of international and local branded clothing,
sarees, lingerie, perfumes, cosmetics and jewellery. Abstract was first established in 2007 in
Welisara and is the largest single level department store in Sri Lanka, occupying an area of 55,000
sqft. A second store was opened in Kandy in 2011 and more stores are planned for the future.
III.
Financial Services
Abans Finance PLC is a licensed, publicly listed, financial services company that was established
in 2005. Abans Finance’s principal lines of business include acceptance of time and savings
deposits, finance leasing, hire purchase, mortgage loans, personal loans, real estate development
and capital market operations. It has branches in eight provinces of the country and focuses on
specific niche markets. Abans Finance has built a loyal customer base over the years and is poised
to see rapid grow with its introduction of “Hero Leasing” which is tailored for the motorcycle market.
Despite its ongoing expansion, Abans Finance maintains a healthy capital adequacy ratio of 16%
which is well above the requirement of the Central Bank.
IV.
Consumer Durable Manufacturing operations
Abans Electricals PLC was established in 1981 and is a publicly listed manufacturing company that
seeks to be the leading supplier of innovative and high quality electrical goods including washing
machines, refrigerators and air conditioners. The production plant is located in Ratmalana and has
a well-integrated quality control process, which ensures trouble free functioning of its products. Key
customer segments are corporate clients such as hotels, offices and factories.
V.
Industrial Air-Conditioning
Abans Engineering Division, the industrial air-conditioning segment of Abans, is the market leader
with ~50% market share as estimated by management. The company has a 14 year track record
and has recorded strong revenue growth over the last few years driven by the growing construction
sector. Abans Engineering has been a contractor for several large scale projects including airports,
supermarkets, factories and hospitals and is poised to see further growth in line with the economy.
17
VI.
Real Estate Development
Abans has entered into a partnership with the leading hospitality group SilverNeedle Hospitality,
Singapore to construct a mixed development project consisting of a lifestyle mall, business hotel
and apartment complex. The project will be located in the heart of Colombo by the Beira Lake and
will be one of the few mixed development project coming up in Sri Lanka on par with international
supermalls.
Investments in subsidiaries
Group Structure
Abans Limited
(Parent)
Abans Finance PLC
(84.31%)
Abans Retail (Pvt) Ltd
(100%)
AB Technologies
(Pvt) Ltd (100%)
Abans Lanka (Pvt) Ltd
(56.87%)
Abans Electricals PLC
(42.95%)
SCICOM Lanka (Pvt)
Ltd (30%)
Subsidiaries
Associates l
5.4
STRATEGIC PLANS
Sri Lanka’s per capita income has grown at a CAGR of 6.4%1 during the last 5 years, while
household income has grown by 12.7%.2 GDP growth is likely to remain strong, with consensus
estimates for 2014 GDP growth at ~8%.3 As such, GDP per capita is expected to reach ~$4,800 in
2016.4 Consequently, the demand for consumer durable items has grown as expenditure on nonfood items grew from 58% of total expenditure in 2010 to 62% in 2012.5 Based on regional peers
with GDP per capita of $4,000-$5,000, this ratio is likely further increase to ~65-70% in the next
few years.6
Due to the rapidly rising income level and growing preference for luxury and technology-oriented
lifestyles, Abans expects the demand for its products to increase steadily over the next 5 years. In
1
2
3
4
5
6
GDP at constant factor prices 2007-2012, Central Bank of Sri Lanka
Household income and expenditure survey, 2012
Central Bank of Sri Lanka
Household income and expenditure survey, 2012
International Monetary Fund, Eurostat, YSP analysis
18
order to meet this demand Abans is expanding its retail network across the island, introducing new
product categories and brands and expanding its manufacturing operations.
Abans is also planning to replicate the Abstract department store in Colombo and other parts of the
country. The stores, currently located in Welisara and Kandy, have recorded strong revenue
growth over the past three years.
Abans Finance is growing its lending and leasing portfolio by penetrating into the North and East.
The company has planned to open a number of branches over the next 2 years and expects to
introduce a new leasing scheme which specifically targets small and medium scale entrepreneurs.
Further, Abans Finance is well-positioned to attain benefits from the increasing demand in motor
bicycle finance from the introduction of Hero motor bicycles in Sri Lanka.
In addition to the consumer durables and financial services businesses, Abans Industrial Air
Conditioning has several large scale projects in the pipeline and is poised to grow in line with Sri
Lanka’s booming construction sector. Upcoming projects include several large scale factories, five
star hotels, national universities and hospitals.
5.5
RISKS ASSOCIATED WITH THE FUTURE STRATEGIES
The future plans of Abans are based on the assumption that several macroeconomic variables will
remain stable within an estimated range. However, understanding and managing risk is an integral
part of the strategy formulation process of Abans’ business. The senior management team
dedicate a significant proportion of their time to identifying sources of risk, their likelihood of
occurrence and impact and then developing a comprehensive framework to address them. The
following are some of the risks pertaining to Abans strategies;
Investment risk
Abans’ strategic investment choices determine the long-term growth and profits of the business.
Successful execution of the selected investment plans, including the Lifestyle mall and store
expansion are key to delivering its intended business benefits subject to economic cycles. Although
investments are carefully evaluated and selected by the Board, the deviation of expected returns
arising due to the macro economic factors is possible.
Market risk
Market risk encompasses all the risks related to the demand and profitability of the business.
Among the key factors that affect the demand and the profit margins are competition, new entrants,
change of consumer behaviour and/or economic cycles. This risk is mitigated by broad-basing the
customer portfolio and serving as many market segments as possible. It should be noted that the
Group caters to households (both urban and rural), corporate clients and niche market segments.
In addition, developing a strong awareness of the Abans brand has helped capture market share
and compete effectively.
Information Technology risk
Information security is key to the uninterrupted functioning of the business. Hence reliable IT
systems have become vital. Abans continuously evaluate the developments required to meet the
changing environmental conditions and identify the potential issues with the IT systems and
information security systems.
Business Partner risk
The success of the Group depends on the sustainable relationships with business partners and
principal suppliers. Losing key agents/ partners due to global mergers and acquisitions or
competition is low. This is mitigated by reducing concentration risk to any one principal or supplier.
Abans currently has manages 44 brands and therefore business partnership risk is mitigated to a
19
great extent. Also, Abans continues to build relationships with new suppliers and business
partners, which further enables diversifying its business partner portfolio.
Foreign Exchange risk
As most of the goods Abans procures are imported, it is exposed to some foreign exchange rate
fluctuations. A depreciation of the exchange rate is likely to increase the import expenses for the
consumer retail businesses of the Group. Passing on part of this price increase to consumers as
well as finding lower cost alternatives for manufacturing and supply has helped mitigate some of
the foreign exchange risks.
Interest Rate Risk
The Company is exposed to market interest rate fluctuations on its floating rate debt. Increases in
benchmark interest rates could increase the interest cost of the floating rate debt and increase the
cost of future borrowings. This is mitigated by having a good mix between short and long term
borrowings with fixed and floating rates. In addition Abans is evaluating the option of obtaining a
share of its borrowings from low interest foreign currency loans.
Liquidity risk
The liquidity risk is centred on the ability to settle short-term obligations. Since Abans Group has
long standing relationships with suppliers and customers, it has been able to negotiate favourable
credit terms that enable them to maintain a short working capital cycle.
Human resources risk
A skilled employee base is vital for the continued success of the business. Attracting the right
employees to the organisation as well as retaining key talent are important challenges associated
with human resource management. To mitigate this risk Abans ensures that a rigorous recruitment
procedure is carried out and career development opportunities are provided to the employees
along with training and development. Abans has been successful in retaining many of its senior
management who have all been with the firm for over 10 years.
5.6
DEGREE OF DEPENDENCE ON KEY CUSTOMERS AND SUPPLIERS
Abans is the exclusive agent for several brands, thus reducing customers’ bargaining power. In
addition, given its strong brand name, high quality after sales services and complete shopping
solution, there are few substitutes to Abans from a customer’s perspective.
The bargaining power of the suppliers remains limited due to the large suite of brands that Abans
Group carries and the strength of their distribution network and after-sales service which cannot be
easily replicated.
5.7
HUMAN RESOURCES
Company
Nonexecutive
Other
executive
Middle
Management
Senior
Management
Total
328
1,507
291
30
2,156
Abans Limited
The employees of Abans are not engaged in any labour union activities and there are no labour
unions or any significant agreements entered into between the Company and labour unions.
20
5.8
SHAREHOLDER INFORMATION
No
Name of the
shareholder
1
Mrs. Aban Pestonjee
2
Mrs. Saroshi Dubash
Mr. Behman
Pestonjee
Mr. Rusi Pestonjee
Mr. Peston Nadirshah
Pestonjee
TOTAL
3
4
5
Number of shares held as of 31
Oct 2013
Class B
Ordinary
Ordinary
shares
Management
Non-Voting
756,000
5,000
Percentage of shares held
Class B
Ordinary
Ordinary shares
Management
Non-Voting
35%
20%
432,000
5,000
20%
20%
432,000
5,000
20%
20%
432,000
5,000
20%
20%
108,000
5,000
5%
20%
2,160,000
25,000
100%
100%
21
6.
COMPANY ANALYSIS
6.1
MANAGEMENT DISCUSSION AND ANALYSIS
Spotlight on long-term growth prospects
Abans is the leading Sri Lankan consumer durables retailer and, supported by the performance of
the Sri Lankan economy and increased affordability of consumer durables it has sustained strong
revenue growth over the last 10 years. Sri Lanka has witnessed an annual average per capita GDP
growth of ~6.4%7 over the past five years and household income has doubled almost every five
years. In line with this rapid growth, discretionary spending has risen as indicated by the increase
in the non-food expenditure ratio over the last two decades (refer Figure 1).
Figure 1: Household income, expenditure and non-food ratio
Source: Department of Census and Statistics, YSP analysis
Note: The non-food ratio (i.e. non-food expenditure as a percentage of total consumer expenditure) for countries with GDP per capital
above USD5,000 remains ~70%
At the same time, according to the Ceylon Chamber of Commerce8, rapidly changing technology
and shift of production to low cost destinations like China and India has resulted in a significant
decline in prices in the consumer electronic items over the years and has made them affordable to
middle and low income earners in developing countries like Sri Lanka. This has supported strong
growth in the consumer durables industry.
Interestingly, the penetration level of the consumer durables among households remain below 51%
for many consumer durables (refer Figure 2). The washing machine and personal computer
ownership is ~13% among households while the cookers and refrigerators ownership is ~40%. The
ownership levels for televisions indicate conventional CRT television ownership whereas the
LCD/LED television ownership is at a much lower ~10%. Thus, there is a large potential for the
retailers to tap the consumer durables market especially by expanding their distribution network
outside Colombo.
The trend of increasing discretionary spending, affordability and low penetration levels indicates
attractive long-term growth prospects for the consumer durables segment going forward.
7
8
GDP at constant factor prices 2007-2012, Central Bank of Sri Lanka
The Sunday Times, Mar 2013
22
Figure 2: Penetration levels for consumer durables
Source: Central Bank of Sri Lanka, YSP analysis
Abans’ revenues are generated from three sources – trading/retail, engineering services and
financial services (refer Figure 3). Trading/retail remains the largest segment which accounts for
92% of the revenues.
Figure 3: Revenues and assets of Abans Group9 by segment
Source: Company financials, YSP analysis
In FY13, Abans’ revenues grew by 8%, reaching LKR 24.3bn (refer Figure 4). However, the
revenue growth rates declined compared to 28% in FY12, as higher inflation, which reached 7.6%
during the second half of 2012 from 6.7%10 in the beginning of the year, adversely affected the
demand for consumer durables. Inflation has now begun to moderate and Abans has seen a pickup in consumer durables sales through August 2013, with a faster annualised growth. Engineering
services saw rapid growth in revenues during FY13, with 66% expansion primarily driven by the
strong performance of the construction sector which grew by ~22%11 in 2012.
9
Revenues are for the Group as the segmental breakdown is available only for the Group. The difference between the Group and the
company revenues is marginal and accounts for only 1.6% of the Group revenues. The rest of the Management Discussion and Analysis
is focused on the Company.
10
11
Board of Investments Sri Lanka
23
Figure 4: Top line growth of Abans over 10 years
Abans continued to expand its retail network and has a strong presence in the North and the East
with 50 stores covering the two provinces. Abans is now the largest consumer durables retailer
with 390 stores compared to its closest peer (refer Figure 5).
Figure 5: Store comparison – Abans and its peer
Source: Abans management, company financials, YSP analysis
Note: The stores include only the comparable stores as of Dec 2012 and exclude auto and furniture shops
24
Profitability sustained amidst challenging market conditions
FY13 was a challenging year for consumer durable industry and Abans was no exception.
According to Ceylon Chamber of Commerce12, the sharp fall in the rupee, ceiling on credit growth
and increased borrowing costs affected the value and quantity of the electronic products imported
in 2012. Nonetheless, despite the inflation, high interest rates and depreciating exchange rates,
Abans managed to sustain its profitability in FY13.
The second half of 2012 was challenging as depreciating exchange rates, led to a tightening of
profit margins as consumer retailers, who import the vast majority of their products, were unable to
pass on the increased costs to consumers. However, leveraging its strong brand, Abans was able
to sustain and slightly improve its gross margins while the other consumer retailers witnessed a
decline (refer Figure 6).
Figure 6: Profit margins for the consumer durables industry
The EBITDA margin indicated only a marginal drop to 8% in FY13 from 9% in FY12 as higher
inflation levels led to increased operating costs.
Abans’ net margins declined to 2% in FY13 from 4% in FY12 due to the increase in the finance
costs, which was driven by higher borrowings and increased interest rates. Abans invested in new
capacity expansion and real estate development during the year and this required the company to
incur additional borrowing. In addition, market interest rates saw a sharp increase during the latter
part of 2012 where the average weighted lending rate increased to from 13% at end 2011 to 16%
as of end 201213 resulting in higher borrowing costs for companies. This trend was particularly
pronounced in the short term end of the curve which saw a sharp increase as the treasury bill rates
increased to 12% as of end 2012 from 9% as of end 201114 (refer Figure 7).
12
13
14
The Sunday Times, Mar 2013
25
Figure 7: Treasury bill rates
Source: Central Bank of Sri Lanka, YSP analysis
In combination, higher inflation and increased borrowings costs led to a decline in Abans’ Return
on Equity (ROE) to 10% in FY13, which is nonetheless in line with the sector average of 10.5%
although lower than the 26% achieved in FY12.
Strategy focused on improving the debt profile
The majority of Abans’ long term borrowings matured and were paid off during FY13, which
resulted in a decline in long-term borrowings by 38% to Rs.612m in FY13 from Rs.987m in FY12.
In addition, the employee benefits liabilities were also paid off during the year which resulted in a
further decline of total non-current liabilities by 29% in FY13. Due to the high interest rate
environment, the company opted to re-finance its borrowings through short-term liabilities mainly
comprising of commercial papers, which increased to Rs.2,137m in FY13 from Rs.775m in FY12
(refer Figure 8). However, through this debenture issue, Abans will improve its debt profile by
replacing some of its short-term borrowings with long-term debt. Due to the increase in borrowings,
Abans’ debt to equity ratio increased to 2.2x in FY13 from 1.9x in FY12. This is in line with the
consumer retail industry and Abans’ close competitors also had debt to equity levels above 2.0x in
FY13.
26
Figure 8: Composition of debt
Given its established history and strong credit profile, Abans has been able to borrow at prime
rates achieving an average cost of borrowing of 13.7% FY13 in line with average AWPLR of 13.8%
over the same period.
In addition, Abans has a well-matched maturity profile, with current liabilities accounting for 74% of
the total equity and liabilities and current assets accounting for 90% of the total assets.
Conclusion
In summary, the long-term growth prospects for the industry look positive and Abans is wellpositioned to capitalise on this opportunity, strengthened by its market leading position and
extensive retail network. FY13 was a challenging year for the consumer durables industry which
caused the profit margins of many consumer retailers to decline. Nonetheless, Abans remained
profitable in FY13, even increasing its gross margin while competitors saw declines.
6.2
KEY FINANCIAL RATIOS
30/09/201315
Ratios (Group)
Interest cover16
31/03/2013
31/03/2012
31/03/2011
1.18
1.56
4.40
3.45
Net debt/EBITDA
5.43
4.90
3.24
2.38
Debt/Equity
1.82
1.72
1.50
1.03
17
15
16
17
Year to date basis
(Profit before tax + interest expense)/Interest expense
(Debt – cash)/annualized EBITDA
27
6.3
PARTICULARS OF DEBT AND LOAN CAPITAL
Interest bearing loans and borrowings
Facility
Balance as of 31 Oct 2013 (LKR)
Amount payable
Amount payable
within one year
after one year
1,566,964
1,651,857
3,218,821
3,116,5852,126
-
3,116,5852,126
1,398,106,534
381,153,209
1,779,259,744
Finance leases
Import financing loans
Bank loans
Bank overdrafts
Commercial papers
Debenture
TOTAL
Total
659,539,264
659,539,264
4,385,155,337
4,385,155,337
277,761,622
42,761,622
320,523,243
10,021,301,667
667,128,530
10,688,430,197
Details of the debentures issued
Features of the Debentures
Senior, rated, unsecured,
unlisted, Redeemable
TOTAL
Original
Tenor
(yrs)
Issue Date
Redemption Interest
Date
Rate
Balance as of
31 Oct 2013
3
31/03/2011
31/03/2014
12.00%
100,000,000
3
06/06/2011
06/06/2014
12.00%
100,000,000
3
06/06/2011
06/06/2014
12.00%
25,000,000
3
06/06/2011
06/06/2014
12.00%
25,000,000
3
06/06/2011
06/06/2014
12.00%
25,000,000
4
01/03/2012
20/02/2016
13.50%
25,000,000
4
02/03/2012
01/03/2016
13.50%
15,000,000
315,000,000
Details of the convertible debt securities issued
The company does not have any convertible debt securities issued as of the date of the
Prospectus
28
6.4
SHARES IN ISSUE AND STATED CAPITAL
Stated capital
30/10/2013
31/03/2013
31/03/2012
Balance in LKR
218,500,000
218,500,000
218,500,000
2,185,000
2,185,000
2,185,000
Number of shares
6.5
DIVIDEND POLICY
The Board of Directors adopts a policy of declaring 15% of net income as dividends to the
shareholders based on several factors including the Company’s earnings, capital requirements and
the country’s underlying overall macro financial conditions.
Details of dividends paid during the five financial years immediately preceding the date of this
Prospectus have been stated under Section 10 of the Prospectus.
6.6
TAXATION
The Company does not enjoy any tax benefits as at the Date of the Prospectus.
6.7
FUTURE CAPITAL COMMITMENT
Abans has entered into a Joint Venture with Silver Needle Hospitality Pte Ltd to develop a mixed
development project. Abans holds a 42% stake of the Project, for which the Company is required to
make a total investment of LKR2.275 billion. The Company has already invested LKR1.3 billion as
at March 31st, 2013. The balance will be invested in the project over the project period of three
years with funds generated from the cash flows of the Company. The project is expected to begin
construction in early 2014. Funds from this debenture issue will not be used to finance the
Company’s commitments under this Joint Venture.
6.8
LITIGATION, DISPUTES AND CONTINGENT LIABILITIES
There are no material legal, arbitration, or mediation proceedings, which may have or have had in
the recent past, affected the financial performance of the Company.
6.9
DETAILS OF PENALTIES IMPOSED BY REGULATORY AND STATE
AUTHORITIES
There are no penalties imposed by Regulatory and State authorities on the company.
6.10 CONTINGENT ASSETS OF THE COMPANY
The company does not have any contingent assets as of the date of the Prospectus.
6.11 RELATED PARTY TRANSACTIONS
There are no Related Party Transactions other than what has been disclosed under Note 6 in the
Unaudited Financial Statements for the nine months ended 30th September 2013 of Abans Limited
6.12 DETAILS OF MATERIAL CONTRACTS OF THE COMPANY
The Company has not entered into any material contracts, as defined in the Sri Lanka Company
Act No. 7 of 2007, as at 31st March 2013 other than those contracts entered into in the ordinary
course of business.
29
7.
CORPORATE GOVERNANCE
7.1
CORPORATE GOVERNANCE OVERVIEW
At Abans, corporate governance is key to the sustainability and success of our business. It is the
driver behind creating a positive workplace, while ensuring marketplace responsibility,
environmental stewardship, community engagement, and sustained financial performance.
To ensure steady stewardship of Abans corporate vision, it has appointed two qualified
independent directors
 Mr. C. Amarathunga
 Mr. H. Embuldeniya
For active execution of board practices, Abans has established two sub committees – the Audit
and Remuneration Committee.
By March 31st, 2014, Abans will comply with Section 7.10 of the CSE Listing Rules with regard to
Corporate Governance by appointing an additional independent director to both the Audit and
Remuneration Committees.
Audit Committee
The Audit Committee is required to establish formal and transparent arrangements for considering
how they should select and apply accounting policies, financial reporting and internal control
principles. In doing so, they help the Group achieve a balance between performance and
compliance. They are also responsible for maintaining an appropriate relationship with the external
auditors. The committee is comprised the following members;
 Mr. H. Embuldeniya
 Ms. S Dubash
 Mr. R Pestonjee
Remuneration Committee
The Remuneration Committee decides on the remuneration of the Directors/Deputy Directors and
sets guidelines for the remuneration of the management staff within the Group. The committee is
comprised of the following members;



Mr. C. Amaratunga
Mrs. S. Dubhash
Ms. Champika Sumanadasa
7.2
PROFILES OF THE DIRECTORS
Mrs. Aban Pestonjee - Chairperson
No.206, Lake Drive, Colombo 8.
A resourceful and self-taught entrepreneur, Mrs. Pestonjee has come to exemplify the Abans’s
creed of “finding a need and fulfilling it”. Her passion, drive and courage, especially as a South
Asian woman in a then male dominated business world has inspired successive generations of Sri
Lankan business women and has won her the praise of many others. She continues in the role of
the Chairperson of Abans Group of Companies. Mrs. Pestonjee has been awarded; SAARC
Women’s Association, Sri Lanka Chapter’s “Award of Excellence for Woman Achievers for
Outstanding Achievement, 2000”, “The Bronze Award” for the Large Business Category by
Women’s Chamber of Industry & Commerce at year 2000 “Women Entrepreneurs of the Year”
30
Award Ceremony and “KOTRA Plaque of Appreciation, 2005” for forging strategic foreign
economic ties between Korea & Sri Lanka. Culminating in 2006, she received international
recognition for winning the “Leading Women Entrepreneur of the World” award. Mrs. Pestonjee
was awarded the prize by the princess of Thailand.
Mrs. Pestonjee also holds directorships at Abans Electricals PLC, Abans Environmental Services
(Pvt) Ltd, Abans Construction (Pvt) Ltd, Abans Lanka (Pvt) Ltd, Abans Tours (Pvt) Ltd, Abans
Tourist Hotel (Pvt) Ltd, ABS Gardner Dixon Hall International (Pvt) Ltd, Abans Investments (Pvt)
Ltd, Add Outdoor (Pvt) Ltd, Abans Graphics (Pvt) Ltd, Abans Marketing (Pvt) Ltd, Abans
Consolidated (Pvt) Ltd, Abans Warehousing (Pvt) Ltd, Crown City Developers (Pvt) Ltd, AB
Technologies (Pvt) Ltd, Abans Development (Pvt) Ltd, Abans Auto (Pvt) Ltd and Abans Office
Automation (Pvt) Ltd.
Mr. Peston Nadirshah Pestonjee – Director
No. 18-04 Royal Park, Lake Drive, Rajagiriya
An able facilitator, Mr Peston Pestonjee’s networking skills have been a large boon to the
Company, giving the Company leverage in critical areas. Never leaving any stone unturned in his
quest for excellence, he was the forerunner to laying down the foundation of a workforce armed for
the advent of the knowledge age. He was a proponent of women's empowerment, well before it
became a popular catch phrase. Always finding out what needs to be done and doing it, his
contribution to the Group is invaluable and his business synergy with his wife, Mrs. Aban
Pestonjee, impeccable. Always on the pulse of innovation, Mr. Pestonjee has spearheaded
innovative projects such as the establishment of the Central Air Conditioning Division, Abans
Graphics (Pvt) Ltd., and the growing of vegetables hydroponically for the use of Abans Restaurant
Systems.
In addition to his directorship at Abans Limited, Mr. Pestonjee serves as director at Abans Lanka
(Pvt) Ltd, Abans Tours (Pvt) Ltd, Abans Tourist Hotel (Pvt) Ltd, Abans Investments (Pvt) Ltd,
Absgro (Pvt) Ltd, Abans Marketing (Pvt) Ltd, Abans Retail (Pvt) Ltd, Crown City Developers (Pvt)
Ltd, P.N.P Logistics (Pvt) Ltd, AB Technologies (Pvt) Ltd, Abans Exports (Pvt) Ltd, Abans
Development (Pvt) Ltd, ABS Courier Services (Pvt) Ltd, and AB Transport (Pvt) Ltd.
Mr. B. (Tito) Pestonjee – Director
No 40C, Lake Gardens, Off Lake Drive, Rajagiriya
Mr. Tito Pestonjee has been part of Abans Limited since its inception in 1968 and has been
instrumental in building the business. His dynamic leadership for the Operations Division has been
a key motivator for the rapid success of the company. He oversees the most of the critical functions
of the organization including Sourcing, Marketing & Sales. He manages most of the important
relationships such as LG and has overseen the growth of the retail network from a single store to
over 300 stores today. He is an inspiring leader with a unique management style based on a
pragmatism and execution. He is also qualified as a Marine Engineer Class 1 (D.O.T. London).
Mr. B Pestonjee also holds directorships at Abans Electricals PLC, Abans Environmental Services
(Pvt) Ltd, Abans Construction (Pvt) Ltd, Abans Lanka (Pvt) Ltd, ABS Gardner Dixon Hall
International (Pvt) Ltd, Abans Investments (Pvt) Ltd, Add Outdoor (Pvt) Ltd, Abans Restaurant
Systems (Pvt) Ltd, Absgro (Pvt) Ltd, Abans Graphics (Pvt) Ltd, Abans Market (Pvt) Ltd, AB Leisure
(Pvt) Ltd, Abans Consolidated (Pvt) Ltd, Abans Retail (Pvt) Ltd, Colombo City Centre Partners (Pvt)
Ltd, Crown City Developers (Pvt) Ltd, Sirius Technologies (Pvt) Ltd, Abans Exports (Pvt) Ltd,
Abans Development (Pvt) Ltd, Abans Auto (Pvt) Ltd, and Abans Office Automation (Pvt) Ltd.
31
Mrs. S. Dubash – Director
No. 180 Lake Drive, Colombo 08
Mrs. Dubash holds an honours degree in Chemistry (London), MBA (USA), Phd. She is a member
of representative Committee of Women’s Chamber of Commerce and Industry of the Ceylon
Chamber of Commerce and a Director of Abans Limited and other Group Companies. Within the
Group, Mrs. Dubash is mainly involved in administering the supply chain functions of import
purchasing, wharf clearance, warehousing, inventory control, distribution, and information systems.
Retail Accounts and Hire Purchase Departments also come under her purview. Flexible, hard working employees have long been Mrs. Dubash's main aides and as a result, she oversees the
Training Department to ensure the continuous training and development of Abans employees. Her
major projects currently include sourcing a 3PL partner, introducing an ERP system for Abans
channels and spearheading other e-commerce initiatives, most recent of which is buyabans.com,
the online retail arm of Abans. She is supported by a network of an excellent, hard-working senior
administrative staff.
Mrs. Dubash also holds directorships in Abans Electricals PLC, Abans Construction (Pvt) Ltd,
Abans Tours (Pvt) Ltd, Abans Investments (Pvt) Ltd, Abans Graphics (Pvt) Ltd, Abans Marketing
(Pvt) Ltd, Abans Financials Services Ltd, Abans Retail (Pvt) Ltd, Crown City Developers (Pvt) Ltd,
P.N.P Logistics (Pvt) Ltd, AB Technologies (Pvt) Ltd, Abans Development (Pvt) Ltd, Abans Auto
(Pvt) Ltd, Abans Office Automation (Pvt) Ltd,
Mr. R. Pestonjee – Director
No. 206/8 Lake Drive, Colombo 08
Mr. Rusi Pestonjee has had several important leadership roles within the company. He currently
leads the Finance, HR and Administration functions within the company and has been instrumental
in several of the new strategic growth initiatives of the company. He also supports relationship
building with key international partners. As part of his leadership roles within the Abans Limited, Mr.
Rusi Pestonjee is also involved in the management and oversight of Abans Tours, Abans
Environmental Services, Abans Restaurants and Abans Finance. He is an alumnus of the
executive management programs at the Indian School of Business focusing on strategy and
managing family businesses. He is a member of the Sri Lanka Institute of Directors and American
Chamber of Commerce.
Mr. R Pestonjee also holds directorships at Abans Environmental Services (Pvt) Ltd, Abans
Electricals PLC, Abans Tours (Pvt) Ltd, Abans Investments (Pvt) Ltd, Abans Restaurant Systems
(Pvt) Ltd, Absgro (Pvt) Ltd, Abans Graphics (Pvt) Ltd, Abans Marketing (Pvt) Ltd, Abans Financial
Services Limited, AB Leisure (Pvt) Ltd, AB Real Estate (Pvt) Ltd, Abans Warehousing (Pvt) Ltd,
Abans Retail (Pvt) Ltd, Colombo City Centre Partners (Pvt) Ltd, Crown City Developers (Pvt) Ltd,
Sirius Technologies (Pvt) Ltd, AB Technologies (Pvt) Ltd, Abans Development (Pvt) Ltd, ABS
Courier Services (Pvt) Ltd, AB Logistics (Pvt) Ltd, AB Transport (Pvt) Ltd, Abans Office Automation
(Pvt) Ltd and Logirite (Pvt) Ltd.
Mr. C. A. Fernando – Director
No. 883/31 Ethulkotte Road, Kotte
Mr. Fernando is responsible for Abans Electricals PLC which is the manufacturing and assembly
unit of Abans. Clive helped set up Abans Electricals in 1987 to manufacture and assemble specific
lines of home appliances. Today he continues to be responsible for the company which has since
evolved to focus on manufacture and assembly of refrigerators, washing machines, televisions, air
conditioners and water heaters. In 2004, Clive was also appointed to lead the Central Air
Conditioning & Engineering which is a specialized company to supply, install, commission and
maintain Central Air Conditioning Systems for large projects such as the airport, hospitals, hotels,
32
apartment buildings, shopping malls and office complexes. He holds a Master degree in
Mechanical Engineering, State University of Moscow.
In addition to his directorship at Abans Limited, Mr. Fernando also holds directorships at Abans
Electricals PLC, Abans Marketing (Pvt) Ltd, Cleantech (Pvt) Ltd, and Crown City Developers (Pvt)
Ltd.
Mr. A. Raffel – Director
No. 53/4 4th Lane, Edirisinghe Road, Mirihana, Nugegoda
Working closely with the senior management of Abans from the inception of the company, Mr.
Raffel leads the Service department of the Company. The broad recognition of the Abans warranty
has been a hallmark of the success of the Abans brand and Mr. Raffel’s department has been
critical in building this reputation. Under his leadership, Abans has built a network of service and
repair centres across the country that are owned and operated by Abans and provide excellent
customer service. His ability to cope with pressure has served him well in managing the very
challenging area of this department. The decentralized structure and outsourcing business model
of the Service and Repair Centres of Abans are two areas currently under his purview.
Mr. Raffel is also director at Abans Electricals PLC, Cleantech (Pvt) Ltd, and Crown City
Developers (Pvt) Ltd.
Mr. C. Amaratunga – Independent Non-Executive Director
No. 540/1 Amarathunga Gardens, Kurunduwatta, Averiwatta Road, Wattala
Attorney-at-law and Notary Public, Mr. Amaratunga was called to the Bar on 7/2/1967. He is a
senior Partner of the legal firm M/s Dissanayake Amaratunga Associates Attorneys-at-Law,
Solicitors and Notaries Public.
As an Attorney-at-law he has experience of over 40 years in practicing in all civil branches of the
law including Commercial and Corporate Law, Litigation and Conveyancing. He serves on several
Boards of both Private and Public companies as Director.
Mr. H. Embuldeniya - Independent Non-Executive Director
No. 165/1 Polhengoda Road, Colombo 05
Mr. Embuldeniya is currently a Director of York Street Partners (YSP), a specialist financial
advisory firm based in Sri Lanka. Prior to joining YSP, he has had 10 years of experience working
with Goldman Sachs and McKinsey & Company. During his time with these firms he has lead
teams in developing and executing the corporate strategy for some of the leading banks and
industrial companies in Europe, Middle East and South Asia. Mr. Embuldeniya has also been
involved in several billion dollars’ worth of M&A transactions across the European Industrials sector
including automotive, metals & mining and general industrials. He has received an MBA from
Harvard Business School and a MEng (Hons) in Engineering, Economics and Management from
Brasenose College, University of Oxford.
7.3
DIRECTORS’ STATEMENT
Neither the Chairperson nor any Director of the Company has been or is involved in the following
events:
 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;
 Convicted for fraud, misappropriation or breach of trust or any other similar offence which
the CSE considers a disqualification.
33
7.4
DIRECTORS’ INTEREST IN ASSETS
During the succeeding 2 years, the Company has no plans to acquire/dispose/lease any assets
with Director’s Interest during the 2 years succeeding the Issue.
During the preceding 2 years, the Company has not acquired/disposed/leased any assets in which
Directors have an interest.
7.5
DIRECTORS’ INTEREST IN CONTRACTS OR ARRANGEMENTS
Directors’ Interest in shares of the company as of October 31st, 2013.
Director
Number of shares held
(voting)
Shareholding (%)
Mrs. Aban Pestonjee
35%
756,000
Mrs. Saroshi Dubash
20%
432,000
Mr. Behman Pestonjee
20%
432,000
Mr. Rusi Pestonjee
20%
432,000
5%
108,000
100%
2,160,000
Mr. Peston Nadirshah Pestonjee
TOTAL
7.6
DIRECTORS’ EMOLUMENTS
The aggregate emoluments paid to Directors including Chairperson, in the financial year ended
March 31st, 2013 amounted to LKR 7.65 million. The aggregate emoluments expected to be paid to
Directors, including the Chairperson in the financial year ended March 31st, 2014 is LKR 25.2
million.
7.7
DETAILS OF COMMISSIONS PAID
No commission or benefits were payable, paid, given or intended to be paid or given in the two
years preceding for subscribing or agreeing to subscribe or procuring or agreeing to procure or
agreeing to promote, subscriptions for any shares or debentures of the Company.
7.8
DETAILS OF THE BENEFITS PAID TO PROMOTERS
No benefit has been paid or given by the Company to the promoters within the two years preceding
the Issue other than the dividends paid to the shareholders and compensation paid to the Directors
disclosed in Section 7.6
7.9
TRANSACTION RELATED TO PROPERTY
There are no transactions relating to property that have taken place within the two preceding years
in which any vendor of the property to the Company or any person who is or was at the time of the
transaction, a promoter, a director or proposed director of the Company who had any Interest,
direct or indirect.
34
8.
KEY MANAGEMENT PERSONNEL
8.1
PROFILES OF THE SENIOR MANAGEMENT
Mr. Channa Pathirana
Deputy Director – Retail Operations
Mr. Pathirana joined Abans Pvt Ltd in 2002 and is a Deputy Director of Retail Operations.
Under his astute leadership, the retail operations of Abans have grown from approximately 30
stores to over 300. In that same period the revenues of the business have also increased almost
10 fold.
He counts 20 years of experience in sales, marketing, leasing and hire purchase at multinational
/local organizations prior to joining Abans Group.
He is currently reading for a Master of Business Administration from the University of Wales having
qualified as a Marketer from the Chartered Institute of Marketing (UK).
Mr. Dinesh Perera
Deputy Director – Brand Marketing
Mr. Perera joined Abans Pvt Ltd in 2004 and is a Deputy Director in charge of Brand Marketing.
He is responsible for managing several of the important supplier relationships of the company and
continues to expand the range of product categories and brands under the Abans portfolio. His
current portfolio includes world class brands such as LG, Toshiba, JVC, Sanyo, Panasonic, Philips,
Sharp, Harman Kardon, Canon, Fuji and Apple. He also handles supplier negotiations and pricing
of contracts.
In the past, Mr. Perera has been responsible for driving several important product categories. Most
recently he was responsible for developing the television and audio visual product categories,
making it the number one product category in Sri Lanka and positioning LG as the market leader
since 2008. Other activities that Mr. Perera is involved in include planning, budgeting, advertising
and developing market intelligence.
Mr. Perera graduated from the State University of West Georgia (USA) with a specialization in
Marketing. He has also completed the 1st stage in CIM and holds a Diploma in Business
Management (UK).
Mr. Buddhika Dharmawardena
Deputy Director – Brand Marketing
Mr. Dharmawardena Joined Abans Group in 1999 as an Assistant Brand Manager and was soon
promoted to the position of a Brand Manager in 2001. Mr. Dharmawardena has over 20 years of
managerial experience and was appointed as a Deputy Director in 2011.
Mr. Dharmawardena holds an MBA from Cardiff Metropolitan University of Wales and has a Higher
National Diploma in Business Administration. In addition he is partly qualified in Chartered Institute
of Marketing (CIM) (UK).
35
Mr. M. K. Nambiyarooran
General Manager – Abans Finance PLC/Head of Group Treasury
Mr. Nambiyarooran joined Abans Pvt Ltd in 2010 as the General Manager for Abans Finance and
the Head of Abans Group Treasury.
He is responsible for all the treasury operations of the Group including the financing arrangements
for the lease and hire purchase portfolios. He also oversees the management and operations of
Abans Finance which has principal lines of business in deposits, finance leasing, hire purchase,
mortgages and personal loans.
Prior to joining Abans, Mr. Nambiyarooran has a long and distinguished career in the Financial
Services industry. His expertise includes finance operations, commercial and corporate credit,
corporate planning, financial accounting and treasury management.
He holds a Masters in Business Administration (MBA) degree from the University of Sri
Jayewardenepura, Sri Lanka. He also holds a Masters in Financial Economics from the University
of Colombo. He is a Fellow Member of The Chartered Institute of Management Accountants (UK),
Fellow of the Certified Practicing Accountants (Australia) and Fellow of the Institute of Bankers.
8.2
EMOLUMENTS OF THE SENIOR MANAGEMENT
The aggregate emoluments including bonus payments made to the Senior Management Team for
the financial year ended March 31, 2013 was LKR 12.6 million. The aggregate emoluments,
including bonus payment, expected to be paid to the Senior Management Team for the financial
year ended March 31, 2014 is estimated at LKR14.0 million.
36
9.
STATUTORY DECLARATIONS
9.1
STATUTORY DECLARATION BY THE DIRECTORS
November 21st, 2013
We, the undersigned who are named herein as Directors of Abans Limited hereby declare and
confirm that we have read the provisions of CSE Listing Rules and of the Companies Act No. 7 of
2007 and any amendments thereto relating to the issue of the Prospectus and those provisions
have been complied with.
This Prospectus has been seen and approved by us and we collectively and individually accept full
responsibility for the accuracy of the information given and confirm that after making all reasonable
enquiries and to the best of our knowledge and belief, there are no other facts the omission of
which would make any statement herein misleading or inaccurate. Where representations
regarding the future performance of the Company have been given in the Prospectus, such
representations have been made after due and careful enquiry of the information available to the
Company and making assumptions that are considered to be reasonable at the present point in
time in our best judgment.
Name
Designation
Mrs. Aban Pestonjee
Mr. P.N.Pestonjee
Mr. Behman Pestonjee
Mr. Rusi Pestonjee
Mrs. Saroshi Dubash
Mr. Chitral Ameratunge
Mr. Clive A Fernando
Mr. Alen Raffell
Mr. Hiran Embuldeniya
9.2
Place
Chairperson
Colombo
Director
Colombo
Director
Director
Director
Independent
Director
Director
Director
Independent
Director
Colombo
Colombo
Colombo
Colombo
Colombo
Colombo
Colombo
Signature
Signed
Signed
Signed
Signed
Signed
Signed
Signed
Signed
Signed
STATUTORY DECLARATION BY FINANCIAL ADVISORS AND MANAGERS
TO THE ISSUE
We, York Street Partners (Pvt) Limited of 116 Havelock Road, Colombo 05 being the Financial
Advisors and Managers to the Issue of Abans Limited, hereby declare and confirm that 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 Issue and Abans
Limited whose Debentures are being issued.
The Common Seal of York Street Partners (Pvt) Limited affixed on the 28th day of November 2013
in Colombo in the presence of two Directors.
Signed
Sujendra Mather
Managing Director
Signed
Nayana Mawilmada
Managing Director
37
We Capital Alliance Partners Limited, of Level 5, Millennium House, 46/58, Navam Mawatha,
Colombo 02, being the Managers to the Issue of Abans Limited, hereby declare and confirm to the
best of our knowledge and belief that the Prospectus constitutes full and true disclosure of all
material facts about the Issue and about Abans Limited, whose Debentures are being listed.
Signed by two director of Capital Alliance Partners Limited. Being duly authorised thereto, in
Colombo on this 20th day of November 2013.
Signed
W. A. T. Fernando
Director
9.3
Signed
B.A. West
Chief Executive Offier/Director
STATUTORY DECLARATION BY THE COMPANY
An application has been made to the CSE for permission to deal in and for a listing for Debentures
issued by the Company and those Debentures which are the subject of this Issue.
Such permission will be granted when Debentures 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 Debentures issued.
The Common Seal of, Abans Limited affixed on the 21st day of November 2013 at Colombo in the
presence of two Directors.
Signed
Director
Signed
Director
38
10. AUDITOR’S REPORT AND FIVE YEAR SUMMARY OF FINANCIAL
STATEMENTS
39
40
41
42
43
44
45
46
47
48
49
11. AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR
ENDED 31ST MARCH 2013
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
12.
LIST OF ABBREVIATIONS
AER
Annual Effective Rate
ATS
Automated Trading System of the Colombo Stock
Exchange
CBSL
CDS
Central Depository Systems (Private) Limited
CSE
Colombo Stock Exchange
NIC
National Identity Card
POA
Power of Attorney
RTGS
Real Time Gross Settlements
SEC
Securities and Exchange Commission of Sri Lanka
SIA
Securities Investment Account
SLIPS
Sri Lanka Inter Bank Payment System
114
13.
GLOSSARY OF TERMS
Applicant
Application
Form/Application
Business Day
dClosure Date
Any person who submits an Application Form under this
Prospectus
The application form that constitutes part of this Prospectus
through which an Applicant may apply for the Debentures in
Issue
A day (other than a Saturday or a Sunday or any statutory
holiday) on which licensed commercial banks are open for
business in Sri Lanka
03 January 2014 or such earlier date on which;
The maximum of 20,000,000 Debentures are fully subscribed;
or Board of Directors of the Company decides to close the Issue
upon the initial Issue of 10,000,000 Debentures becoming fully
subscribed or such other higher amount less than the maximum
amount referred to above becoming fully subscribed
Company/SFLP/Issuer
Abans Limited
Date of Allotment
The date on which the Debentures will be allotted by the
Company to Applicants subscribing thereto
Date of Redemption
The date on which Redemption of the Debentures will take
place as referred to in Section 3.7 of this Prospectus
Debentures
Rated, Senior, Listed, Unsecured, Redeemable Debentures to
be issued pursuant to this Prospectus
Debenture Holder(s)
Entitlement Date
Face Value
Any person who is for the time being the holder of the
Debentures and includes his/her respective successors in title
The Market Day immediately preceding the respective Interest
Payment Date or Date of Redemption on which a Debenture
Holder would need to be recorded as being a Debenture Holder
on the list of Debenture Holders provided by the CDS to the
Company in order to qualify for the payment of any Interest or
any redemption proceeds
LKR 100/- per each Debenture
30th June and 31st December of each year from the Date of
Allotment until the Date of Redemption and includes the Date of
Interest Payment Date(s) Redemption
Interest would be paid not later than Three (03) Working Days
from each Interest Payment Date
The six month period commencing from the date immediately
succeeding a particular Interest Payment Date and ending on
the next Interest Payment Date (inclusive of the aforementioned
commencement date and end date) and shall include the period
commencing from the Date of Allotment and ending on the first
Interest Period
Interest Payment Date (inclusive of the aforementioned
commencement date and end date) and the period from the
date immediately succeeding the last Interest Payment Date
before the Date of Redemption and ending on the date
immediately preceding the Date of Redemption (inclusive of the
aforementioned commencement date and end date).
115
Issue
The offer of Debentures pursuant to this Prospectus
Market Day
Any day on which trading takes place at CSE
Non-Residents
Foreign institutional investors, corporate bodies incorporated
outside Sri Lanka, individuals resident outside Sri Lanka and Sri
Lankans resident outside Sri Lanka
Principal Sum
The product of the number of Debentures allotted and the Face
Value
Prospectus
Redemption
Trust Deed
Unsecured
This Prospectus is dated 04 December 2013
Repayment of the Face Value and unpaid and accrued interest
(if any) with regards to a Debenture to a Debenture Holder by
the Company
Trust Deed executed between Abans Limited and Deutsche
Bank AG Colombo Branch on 28 November 2013
Repayment of the Principal Sum and payment of Interest on the
Debentures are not secured by a charge on the assets of Abans
Limited
116
ANNEXURE I: RATING REPORT
117
Fitch Rates Abans's Debentures Final 'A-(lka)'
Fitch Ratings-Colombo-02 December 2013: Fitch Ratings has assigned Abans Limited's issue of up
to LKR2bn of senior unsecured redeemable debentures a final National Long-Term Rating of 'A(lka)'.
The final rating is the same as the expected rating assigned on 23 September (see 'Fitch Rates
Abans's Debentures 'A-(lka)(EXP)' on www.fitchratings.com), and follows receipt of final
documents conforming to information previously received.
The proposed debentures are rated in line with the Sri Lanka-based retailer's National LongTerm Rating of 'A-(lka)', as they will rank equally with the company's other senior unsecured
creditors in the event of liquidation.
KEY RATING DRIVERS
Higher Leverage: The Negative Outlook on Abans' National Long-Term Rating reflects
expectations that a slowing economy may affect the company's ability to reduce net leverage
(lease-adjusted net debt/operating EBITDAR, excluding Abans Finance PLC) to below 4.5x, the
level at which negative rating action may be considered, by the end of March 2014 and maintain
it below that level. Fitch expects slower revenue growth in the financial year ending March
2014 (FY14), and hence lower profitability in the company's cyclical core consumer durable
business.
Strong Market Share: Abans is a leading retailer of consumer durables, with an extensive
distribution network of 1,059 outlets, including 439 of its own stores. Portfolio concentration
has declined as LG's revenue share reduced over the last three to four years in favour of other
brands including HP, Haier, Toshiba, Philips, Whirlpool, and Sanyo.
Moderate Refinancing Risk: As at the end of FY13, Abans had LKR459m and LKR1.6bn of cash
and unutilized credit facilities, respectively against LKR2.3bn of debt maturing in FY14. Fitch
expects free cash flow (defined as operating cash after dividends and capex) to remain negative
in FY14 due to the working capital-intensive nature of the retail business, which will require a
further increase in borrowings. These risks are mitigated by the strength of Abans's core
business and its access to domestic banks.
RATING SENSITIVITIES
Negative: Future developments that may, individually or collectively, lead to a negative rating
action include:
-Leverage being sustained above 4.5x at the end of FY14 and beyond
-Fixed charge coverage (measured as EBITDAR/Interest expense and rent) falling below 1.25x on
a sustained basis (FY13:1.53x)
-Material deviation in its real estate project from current expectations resulting in further cash
injections from Abans
-A material weakening of the credit profile of Abans Finance PLC
Positive: No positive rating action is expected given that the rating is on a Negative Outlook.
However, future developments that may individually or collectively lead to the Outlook being
revised to Stable include:
-Leverage falling below 4.5x on a sustained basis
-Smooth progress of its real estate project, which will limit Abans' financial liability to the
initial investment value.
118
Contacts:
Primary Analyst
Shyamila Serasinghe
Analyst
+941 1254 1900
Fitch Ratings Lanka Limited
15-04, East Tower, World Trade Center
Colombo 01, Sri Lanka
Secondary Analyst
Kanishka De Silva
Analyst
+941 1254 1900
Committee Chairperson
Vicky Melbourne
Senior Director
+61 2 8256 0325
Media
Relations: Bindu
Menon,
bindu.menon@fitchratings.com.
Mumbai,
Tel:
+91
22
4000
1727,
Email:
Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated
entities in countries with relatively low international sovereign ratings and where there is
demand for such ratings. The best risk within a country is rated 'AAA' and other credits are
rated only relative to this risk. National ratings are designed for use mainly by local investors in
local markets and are signified by the addition of an identifier for the country concerned, such
as 'AAA(lka)' for National ratings in Sri Lanka. Specific letter grades are not therefore
internationally comparable.
Additional information is available on www.fitchratings.com.
Applicable criteria, 'Corporate Rating Methodology: Including Short-Term Ratings and Parent
and Subsidiary Linkage', dated 5 August 2013, and 'National Scale Ratings Criteria', dated 30
October 2013, are available on www.fitchratings.com.
Additional Disclosure
Solicitation Status
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE
READ
THESE
LIMITATIONS
AND
DISCLAIMERS
BY
FOLLOWING
THIS
LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS.
IN
ADDITION,
RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC
WEBSITE
'WWW.FITCHRATINGS.COM'.
PUBLISHED
RATINGS,
CRITERIA
AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT,
CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER
RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT'
SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE
RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR
WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE
ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.
119
ANNEXURE II: INTERIM FINANCIALS
120
121
122
123
124
125
126
127
ABANS LIMITED & IT'S SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
Period Ended 30 September 2013
7 Directors Shareholding
The shareholding of the Directors as at 30th September 2013 is given below.
Shareholding
Name of the Director
Mrs Aban Pestonjee
Mr P N Pestonjee
Mrs Saroshi Dubash
Mr Behman Pestonjee
Mr Rusi Pestonjee
Mr Clive Fernando
Mr Allen Raffel
Mr. Hiran Embuldeniya
Mr. Chithral Amarathunga
Ordinary Voting
Shares
Number
756,000
108,000
432,000
432,000
432,000
NIL
NIL
NIL
NIL
2,160,000
Ordinary Non
Voting Management
%
35.00
5.00
20.00
20.00
20.00
100
Number
5,000
5,000
5,000
5,000
5,000
NIL
NIL
NIL
NIL
25,000
Number
756,000
108,000
432,000
432,000
432,000
2,160,000
%
35
5
20
20
20
100
%
20
20
20
20
20
100
Total Ordinary
Shares (Voting &
Non Voting)
Number
761,000
113,000
437,000
437,000
437,000
NIL
NIL
NIL
NIL
2,185,000
%
34.83
5.17
20.00
20.00
20.00
100
Twenty Largest Shareholders
Mrs Aban Pestonjee
Mr P N Pestonjee
Mrs Saroshi Dubash
Mr Behman Pestonjee
Mr Rusi Pestonjee
Public Holding
Total number of shares issued
No of shares held by the Public
Percentage of shares held by the Public
2,160,000
NIL
NIL
Market Value Per Share
Market Value is not available since the shares of the company is not publicly traded.
128
Abans Ltd. / Page (7)
ANNEXURE III: CUSTODIAN BANKS
Bank of Ceylon
Head Office,11th Floor, 04, Bank of Ceylon
Mawatha, Colombo 01
Tel: 011 2317777, 011 2448348, 011 2338742/55,
011 2544333
Citi Bank, N A
65 C, Dharmapala Mawatha, P.O. Box 888,
Colombo 07
Tel: 011 2447316/8, 011 2447318, 011 2449061,
011 2328526, 011 4794700
Commercial Bank of Ceylon PLC
Commercial House, 21, Bristol Street,
P.O. Box 853, Colombo 01
Tel: 011 2445010-15, 011 238193-5, 011 430420,
011 336700
Deutsche Bank AG
P.O. Box 314,
86, Galle Road,
Colombo 03
Tel: 011 2447062, 011 2438057
Hatton National Bank PLC
HNB Towers, 479, T. B. Jayah Mawatha,
Colombo 10
Tel: 011 2664664
The Hong Kong and Shanghai Banking
Corporation Limited
24, Sir Baron Jayathilake Mawatha, Colombo 01
Tel: 011 2325435, 011 2446591, 011 2446303, 011
2346422
Peopole’s Bank
Head Office, 5th Floor, Sir Chittampalam A Gardiner
Mawatha, Colombo 02
Tel: 011 2781481, 011 237841-9, 011 2446315/6,
011 2430561
Standard Chartered Bank
37, York Street, P. O. Box 112,
Colombo 01
Tel: 011 4794400, 011 2480000
Sampath Bank PLC
110, Sir James Peiris Mawatha, Colombo 02
Tel: 011 5331441
State Bank of India
16, Sir Baron Jayathilake Mawatha, Colombo 01
Tel: 011 2326133-5, 011 2439405-6, 011 2447166,
011 2472097
Seylan Bank PLC
Level 8, Ceylinco Seylan Towers, 90, Galle Road,
Colombo 03
Tel: 011 2456789, 011 4701812, 011 4701819, 011
4701829
Union Bank of Colombo Limited
15A, Alfred Place,
Colombo 03
Tel: 011 2370870
Nations Trust Bank PLC
256, Sri Ramanathan Mawatha, Colombo 15
Tel: 011 4313131
National Savings Bank
255, Galle Road, Colombo 03
Tel: 011 2573008-15
Pan Asia Banking Corporation PLC
Head Office, 450, Galle Road,
Colombo 03
Tel: 011 2565565
Public Bank Berhard
340, R.A De Mel Mawatha, Colombo 03
Tel: 011 2576 289
129
ANNEXURE IV: COLLECTION POINTS
Copies of the Prospectus and the Application Form can be obtained free of charge from the
following collection points.
Financial Advisors and Registrars to the Issue
Managers to the Issue
York Street Partners
SSP Corporate Services
116 Havelock Road
101, Inner Flower Road,
Colombo 05
Colombo 03.
Tel: +94 112055210
Tel : 2573894
Fax : 2573609
Bankers to the Issue
Sampath Bank PLC
110 Sir James
Mawatha,
Colombo 02
Peiris
Tel: +94 11 2300260
Capital Alliance
Level 5, Millennium House,
46/58 Navam Mawatha,
Colombo 02
Tel: +94-11-2317777
Fax : +94-11-2317788
Members of the CSE
Acuity Stockbrokers (Private) Limited
Level 6, Acuity House
53, Dharmapala Mawatha
Colombo 03
Asha Phillip Securities Limited
10, Prince Alfred Towers
2nd Floor, Alfred House Gardens
Colombo 03
Tel: +94 11 2 206 206
Fax: +94 11 2 206 298-9
E-mail: sales@acuitystockbrokers.com
Tel: +94 11 2 429 100
Fax: +94 11 2 429 199
E-mail: apsl@ashaphillip.net
Asia Securities (Private) Limited
Level 21, West Tower
World Trade Centre
Echelon Square
Colombo 01
Assetline Securities (Private) Limited
120, 120A, Pannipitiya Road
Battaramulla
Tel: +94 11 2 423 905, +94 11 5 320 000
Fax: +94 11 2 336 018
E-mail: enquiry@asiacapital.lk
Tel: +94 11 4 700 111, +94 11 2 307 366
Fax: +94 11 4 700 112
E-mail: colombo.dpglobal@dpmcfs.com
Bartleet Religare Securities (Private)
Limited
Level “G”, “Bartleet House”
65, Braybrooke Place
Colombo 02
Capital TRUST Securities (Private)
Limited
42, Sir Mohamed Macan Markar Mawatha
Colombo 03
Tel: +94 11 5 220 200
Fax: +94 11 2 434 985
E-mail: info@bartleetstock.com
Tel: +94 11 2 174 174
Fax: +94 11 2 174 173
E-mail: inquiries@capitaltrust.lk
130
CT Smith Stockbrokers (Private) Limited
4-14, Majestic City
10, Station Road
Colombo 04
D N H Financial (Private) Limited
World Trade Centre
Echelon Square
Colombo 01
Tel: +94 11 2 552 290-4
Fax: +94 11 2 552 289
E-mail: ctssales@sltnet.lk
Tel: +94 11 5 700 777
Fax: +94 11 5 736 264
E-mail: info@dnhfinancial.com
J B Securities (Private) Limited
150, St. Joseph Street
Colombo 14
John Keells Stockbrokers (Private)
Limited
130, Glennie Street
Colombo 02
Tel: +94 11 2 490 900, +94 77 2 490 900-1
Fax: +94 11 2 430 070
E-mail: jbs@jb.lk
Tel: +94 11 2 306 250, +94 11 2 338 066-7
Fax: +94 11 2 342 068
E-mail: jkstock@keells.com
Lanka Securities (Private) Limited
228/2, Galle Road
Colombo 04
Nation Lanka Equities (Private) Limited
44, Guildford Crescent
Colombo 07
Tel: +94 11 4 706 757, +94 11 2 554 942
Fax: +94 11 4 706 767
E-mail: lankasec@sltnet.lk
Tel: +94 11 4 714 300, +94 11 4 714 388-9,
+94 77 3 421 821
Fax: +94 11 2 387 228
E-mail: info@nlequities.com
NDB Stockbrokers (Private) Limited
5th Floor, NDB Building
40, Nawam Mawatha
Colombo 02
S C Securities (Private) Limited
55, D. R. Wijewardena Mawatha, 2nd Floor,
Colombo 10
Tel: +94 11 2 314 170-8
Fax: +94 11 2 314 180
E-mail: mail@ndbs.lk
Tel: +94 11 4 711 000
Fax: +94 11 2 394 405
E-mail: ceo@sampathsecurities.lk
Somerville Stockbrokers (Private)
Limited
137, Vauxhall Street
Colombo 02
Tel: +94 11 2 329 201-5, +94 11 2 332 827,
+94 11 2 338 292-3
Fax: +94 11 2 338 291
E-mail: ssb-web@sltnet.lk
131
Trading Members
Softlogic Stockbrokers (Private) Limited
Level 23, East Tower
World Trade Centre
Echelon Square
Colombo 01
Tel: +94 11 7 277 000-98
Fax: +94 11 7 277 099
Email: info@equity.softlogic.lk
Claridge Stockbrokers (Private) Limited
10, Gnanartha Pradeepa Mawatha
Colombo 08
Tel: +94 11 2 697 974
Fax: +94 11 2 689 250
E-mail: csb@mackwoods.com
Capital Alliance Securities (Private)
Limited
Level 5, "Millennium House"
46/58, Nawam Mawatha
Colombo 02
Tel: +94 11 2 317 777
Fax: +94 11 2 317 788
Email: general@capitalalliance.lk
First Guardian Equities (Private) Limited
32nd Floor, East Tower
World Trade Centre
Echelon Square
Colombo 01
Tel: +94 11 5 884 400
Fax: +94 11 5 884 401
E-mail: info@firstguardianequities.com
Heraymila Securities Limited
Level 8, South Wing
Millennium House
46/58, Nawam Mawatha
Colombo 02
IIFL Securities Ceylon (Private) Limited
27th Floor, East Tower
World Trade Centre
Echelon Square
Colombo 01
Tel: +94 11 2 359 100
Fax: +94 11 2 305 522
E-mail: info-hasl@heraymila.com
Tel: +94 11 2 333 000
Fax: +94 11 2 333 383
E-mail: info.ceylon@iiflcap.com
LOLC Securities (Private) Limited
World Trade Centre
Echelon Square
Colombo 01
New World Securities (Private) Ltd
2nd Floor, 45/2, Braybrooke Street
Colombo 02
Tel: +94 11 7 880 880
Fax: +94 11 2 434 771
Tel: +94 11 2 358 700-20
Fax: +94 11 2 358 701
E-mail: viraj@nws.lk
SMB Securities (Private) Limited
47, Dharmapala Mawatha
Colombo 03
Serendib Stock Brokers (Private) Limited
35/1, Alwis Place
Colombo 03
Tel: +94 11 5 232 091
Fax: +94 11 2 339 292
E-mail: admin@smbsecurities.lk
Tel: +94 11 2 344 444
Fax: +94 11 2 434 198
E-mail: info@skmlankaholdings.com
132
Taprobane Securities (Private) Limited
2nd Floor
10, Gothami Road
Colombo 08
TKS Securities (Private) Limited
19-01, East Tower
World Trade Centre
Echelon Square
Colombo 01
Tel: +94 11 5 328 200
Fax: +94 11 5 328 277
E-mail: info@taprobane.lk
Tel: +94 11 7 857 799
Fax: +94 11 7 857 857
E-mail: info@tks.lk
Richard Pieris Securities (Pvt) Ltd
69, Hyde Park Corner
Colombo 02
First Capital Markets Limited
No.02, Deal Place
Colombo 03
Tel: +94 11 7 448 900
Fax: +94 11 2 675 064
E-mail: jayantha@rpsecurities.com
Tel: +94 11 2 639 898, +94 11 2 681 888
Fax: +94 11 2 639 899, +94 11 2 681 460
E-Mail: info@firstcapital.lk
133
ANNEXURE V: APPLICATION FORM
134
PLEASE ATTACH THE CHEQUE/BANK DRAFT HERE
BANKER’S/ STOCKBROKER’S
SEAL
ABANS LIMITED – DEBENTURE ISSUE 2013
MASTER SERIAL NUMBER
(FOR OFFICE USE ONLY)
A limited liability company incorporated in Sri Lanka under the Companies Ordinance
as a private limited company and re-registered under the Companies Act No. 7
of 2007 as a public limited company.
Company registration No: PV 5301 PB
Issue opens
1
3
1
2
2
0
1
3
Issue closes
0
3
0
1
2
0
1
4
Earliest closing
1
3
1
2
2
0
1
3
APPLICATION FORM
Date
D
D
M
M
Y
Y
Y
Y
INITIAL ISSUE OF TEN MILLION (10,000,000) RATED, SENIOR, LISTED, UNSECURED, REDEEMABLE DEBENTURES OF Rs. 100/- EACH WITH AN OPTION
TO ISSUE UP TO A FURTHER TEN MILLION (10,000,000) OF SAID DEBENTURES IN THE EVENT OF AN OVERSUBSCRIPTION OF THE INITIAL ISSUE,
TOTALLING UP TO A MAXIMUM OF TWENTY MILLION (20,000,000) DEBENTURES PAYABLE IN FULL ON APPLICATION.
To: The Board of Directors – Abans Limited, 498, Galle Road, Colombo 03, Sri Lanka
I/We, the undersigned hereby apply for and request you to allot me/us the number of Debentures stated below as per the Prospe ctus dated 04 December 2013. The
amount payable on Application is attached herewith. I/We, hereby agree to accept the Debentures applied for or such smaller n umber as may be allotted to me/us,
subject to the terms and conditions contained in the Prospectus. I/We irrevocably give my/ our authority and consent to Deutsche Bank AG, Colombo Branch to act as
my/our trustee subject to the terms and conditions stipulated in the Trust Deed dated 28 November 2013 entered into between Abans Limited and the said trustee.
I/We authorise you to procure my/our name(s) to be placed in the register of the holders of the above mentioned Debentures for such number of Debentures that may
be allotted on the basis of acceptance by Abans Limited.
TICK THE TYPE OF DEBENTURE YOU WISH TO APPLY FOR. ONE APPLICATION CAN BE USED TO APPLY FOR ONE TYPE OF DEBENTURES ONLY.
Debenture Type
Interest rate (per annum)
Tenor
Interest payable
Type A
Type B
Type C
14.00%
14.25%
14.50%
36 Months (3 Years)
48 Months (4 Years)
60 Months (5 Years)
Semi-annually
Semi-annually
Semi-annually
NUMBER OF DEBENTURES
PRICE (Rs.)
(Minimum of 100 Debentures and in multiples of 100 thereafter)
Annual Effective Rate
(AER)
14.49%
14.76%
15.03%
TOTAL AMOUNT TO BE PAID (Rs.)
100/-
MODE OF PAYMENT (tick as appropriate)
Cheque
Bank
draft
Name of the Bank
Bank
guarantee
CDS account number
Name of the Branch
Cheque/ Bank draft/ Bank guarantee number
-
-
-
IMPORTANT: THE ALLOTTED DEBENTURE PROCEEDS WILL BE CREDITED TO THE CDS ACCOUNT PROVIDED ABOVE
JOINT APPLICANT(S)
SOLE/ FIRST APPLICANT
APPLICANT 1
APPLICANT 2
Status (Mr./Mrs./Ms./Other)
Surname with initials/
Name of the Corporate Body
Address
Contact number
National Identity Card No./ Company
Reg. No./ Passport No.
Nationality (tick as appropriate)
Sri
Lankan
Other
Sri Lankan
Other
Sri
Lankan
Other
Residency (tick as appropriate)
Resident
Nonresident
Resident
Nonresident
Resident
Nonresident
Name , address and signature of the
financier (MARGIN TRADING ONLY)
Refund payment instructions
(tick as appropriate)
BANK CODE
Direct transfers via SLIPS
BRANCH CODE
Cheque sent by ordinary mail to the address indicated above
ACCOUNT NUMBER
DECLERATION IN TERMS OF THE PROVISIONS OF THE EXCHANGE CONTROL ACT (tick one box only)
For Sri Lankan Citizens resident in Sri Lanka, and Corporate Bodies Incorporated in Sri Lanka in terms of the provisions of the Exchange Control Act
I/We, the Applicant(s) of the above mentioned Debentures hereby declare that I am/we are a citizen(s) of and resident in Sri Lanka and I am/we are not
acting as nominee(s) of any person(s) resident outside Sri Lanka
For Non-Resident and Non-Citizens in terms of the provisions of the Exchange Control Act
I/We, the Applicant(s) of the above mentioned Debentures hereby declare that, I am/we are resident outside of Sri Lanka and that, I/we have made the
remittance as stipulated by the Controller of Exchange. A confirmation/endorsement from my/our bank to such effect is attached to this Application
SOLE/ FIRST APPLICANT
JOINT APPLICANT 1
JOINT APPLICANT 2
SIGNATURES OF APPLICANT(S)
135
INSTRUCTIONS





All Applicants should indicate their respective CDS account number in the Application Form
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 Applications which indicate an inaccurate/incorrect CDS account number will be rejected and no allotment will be made
If you wish to open a CDS account, you may do so prior to making the Application through any Member/Trading Member of the CSE or through any Custodian
Bank as set out in Annex III of the Prospectus
The allotted Debentures would only be credited to the Applicant’s CDS account
NO DEBENTURE CERTIFICATE WILL BE ISSUED
A.
APPLICATION FORM
1.
2.
The Application Form must be completed in FULL, in BLOCK CAPITALS.
Tick (√) in the boxes appropriate to you; in the event a particular section is not
applicable, please indicate “N/A” in the relevant section.
All Applicants should meet the eligibility criteria set out under Section 4.2 in the
Prospectus.
Applications should be made on the Application Forms issued with the Prospectus.
Applications are issued free of charge by the parties listed in Annexure IV of the
Prospectus and can be downloaded from the website of CSE (www.cse.lk), the
website of Abans Limited (www.abansgroup.com) and the website of Financial
Advisors and Managers to the Issue (www.yorkstreetpartners.com and
www.capitalalliance.lk) from the date of opening of the subscription list until the
Closure Date. Exact size photocopies of Application Forms will also be
accepted. Instructions given in the Application Form should be carefully
followed when completing the Application Form.
One Application Form should be submitted for each Type of Debenture (i.e. either
Type A or Type B or Type C Debentures). In the event an Applicant wishes to
apply for more than one Type of Debentures, separate Application Forms
should be used.
Applicants should subscribe to a minimum of One Hundred (100) Debentures (Rs.
10,000/-) and in multiples of One Hundred (100) Debentures (Rs. 10,000) thereafter.
Applications which do not strictly conform to instructions and the other conditions set
out herein or which are incomplete or illegible may be rejected. Once an Application
Form has been submitted it cannot be amended
If the ownership of the Debentures 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.
An Applicant of a joint Application will not be eligible to apply through a separate
Application Form either individually or jointly for the same type of debenture. In the
case of joint Applications, the refunds (if any), Interest payment and the Redemption
amount will be remitted in favour of the first Applicant as identified in the Application
Form. The Company shall not be bound to register more than three (03) natural
persons as joint holders of any Debentures (except in the case of executors,
administrators or heirs of a deceased member). Joint Applicants should note that all
parties should either be residents of Sri Lanka or Non-Residents.
Applications by companies, corporate bodies, societies, approved provident funds,
trust
funds
and
approved
contributory
pension
schemes
registered/incorporated/established in Sri Lanka should be in the manner provided
by their articles of association or such other constitutional documents or as per the
statutes governing them. In the case of approved provident funds, trust funds and
approved contributory pension schemes, the Applications should be in the name of
the Trustees / Board of Management.
All Applicants should indicate their CDS account number in the Application for
Debentures.
In the event the name, address or NIC number/passport number/company number
of the Applicant mentioned in the Application Form differ from the name, address or
NIC number/passport number/company number as per the CDS records, the name,
address or NIC number/passport number/company number as per the CDS records
will prevail. Application Forms stating third party CDS accounts, instead of
Applicants’ own CDS account numbers, except in the case of margin trading, will be
rejected.
Applicants who wish to apply through their margin trading accounts should submit
the Application Forms in the name of the “Margin Provider/Applicant’s name” signed
by the margin provider, requesting a direct deposit of the Debentures to the
Applicant’s margin trading account in CDS. The margin provider should indicate the
relevant CDS account number relating to the margin trading account in the
Application Form. A photocopy of the margin trading agreement must be submitted
along with the Application. Margin providers can apply under their own name and
such Applications will not be construed as multiple Applications.
Application Forms may be signed by third party on behalf of the Applicant(s) provided
that such person holds the Power of Attorney (POA) of the Applicant(s). A copy of
such POA certified by a Notary Public as “True Copy” should be attached with the
Application Form. Original of the POA should not be attached.
Funds for the investments in Debentures and the payment for Debentures by NonResidents should be made only out of funds received as inward remittances or
available to the credit of “Securities Investment Account” (SIA) of the Non-Residents
opened and maintained in a licensed commercial bank in Sri Lanka in accordance
with directions given by the Controller of Exchange in that regard to commercial
banks.
An endorsement by way of a letter by the licensed commercial bank in Sri
Lanka in which the Applicant maintains the SIA, should be attached to the
Application Form to the effect that such payment through bank draft/bank
guarantee/RTGS has been made out of the funds available in the SIA.
Non-Residents are responsible for complying with the laws relevant to the jurisdiction
of their residence and of Sri Lanka.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
B.
SUBMISSION OF APPLICATIONS
Application Forms together with the remittance for the full amount payable for the
application should be enclosed in an envelope marked “ABANS LIMITED –
DEBENTURE ISSUE 2013” on the top left hand corner in capital letters and dispatched
by post or courier or delivered by hand to Registrars to the Issue by 4:30pm on the
Closure Date. Applications may also be handed over to the Mangers to the Issue,
Bankers to the Issue or to any collection point set out in Annexure IV.
Applications sent by post or courier or delivered to any collection point set out in
Annexure IV should reach the office of the Registrars to the Issue, by 4.30 p.m. on the
Closure Date. Applications received after the said period will be rejected even though
they have been delivered to any of the said collection points prior to the Closure Date
or carry a postmark dated prior to the Closure Date.
C.
MODE OF PAYMENT
1.
The amount payable should be calculated by multiplying the number of Debentures
applied for under a particular Type by the Face Value (LKR 100/-). If there is a
discrepancy in the amount payable and the amount specified in the cheque/bank draft
or bank guarantee, the Application will be rejected.
Payment in full for the total value of Debentures applied for should be made separately
in respect of each Application in accordance with the details stated in Section 4.6.
Payments for Applications for values smaller than Sri Lanka Rupees One Hundred
Million (LKR 100,000,000/-) should be supported by a cheque or bank draft. Only one
cheque or bank draft should be issued for the full amount indicated in the Application
Form.
Payments for Applications for values above and inclusive of Sri Lanka Rupees One
Hundred Million (LKR 100,000,000/-) should be supported by either a

Multiple cheques or bank drafts; or

A bank guarantee issued; or

RTGS transfer
CHEQUES OR BANK DRAFTS should be made payable to "ABANS LIMITED –
DEBENTURE ISSUE ACCOUNT 2013” and crossed “Account Payee Only.” Each
cheque or bank draft should be of a value less than LKR 100,000,000. All
cheques/bank drafts received in respect of the Applications for Debentures will be
banked commencing from the Business Day immediately following the Closure Date.
Cheques must be honoured on first presentation to the bank for the Application to be
valid. In the event that cheques are not realised prior to the date of deciding the basis
of allotment, the monies will be refunded and no allotment of Debentures will be made.
BANK GUARANTEES should be issued by a licensed commercial bank in Sri Lanka
in favour of “ABANS LIMITED – DEBENTURE ISSUE ACCOUNT 2013”, and be valid
for a minimum of one (01) month from the Issue Opening Date (i.e. 13 December
2013). For the avoidance of doubt, Abans will not bear any costs or fees associated
with bank guarantees.
RTGS TRANSFERS should be made to the credit of “ABANS LIMITED –
DEBENTURE ISSUE ACCOUNT 2013” bearing the account number 002930024689
at Sampath Bank PLC with value on the issue Opening Date (i.e. the funds to be made
available to the above account on the Issue Opening Date). The Applications should
obtain confirmation from the Applicant’s bank to the effect that arrangements have
been made to transfer the payment in full for the total value of Debenture applied and
this confirmation should be attached to the Application Form.
Applicants are entitled to an Interest at the rate of the money market rate as of the
Issue Opening Date provided by Sampath Bank from the date of such transfers up to
the Date of Allotment. However, no Interest will be paid if the RTGS transfers are not
realized before the end of the Closure Date. Furthermore, even if such RTGS transfers
are effected prior to the Issue Opening Date, no Interest will be paid for the period prior
to the Issue Opening Date.
Payment for the Debentures by Non-Residents should be made through a “Securities
Investment Account” (SIA) maintained with any licensed commercial bank in Sri Lanka
in accordance with directions given by the Controller of Exchange in that be regard to
commercial banks.
All cheques or bank drafts or bank guarantees received in respect of Applications will
not be banked or called on until the Business Day immediately after the Closure Date
as set out in Section 5.2, in terms of the CSE Listing Rules.
2.
3.
4.
5.
6.
7.
8.
9.
D.
REFUNDS ON APPLICATIONS
If the Applicant has provided accurate and complete details of his bank account in the
Application, the Bankers to the Issue will make refund payments up to and inclusive of
Rupees Five Million (LKR 5,000,000/-) to the bank account specified by the Applicant,
through SLIPS and a payment advice will be sent. In the event of refunds over Rupees
Five Million (LKR 5,000,000/-) or if the Applicant has not provided accurate and correct
details of his bank account in the Application Form, the bank will make such refund
payment to the Applicant by way of a cheque and send it by post at the risk of the
Applicant.
Refunds on Applications rejected or partly allotted Debentures would be made within
ten (10) Market Days excluding the Closure Date.
Please refer Section 4.10 of the Prospectus for further details.
136

abans limited debenture issue 2013

Transcription

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