Prospectus of IPO - Chittagong Stock Exchange
Prospectus of IPO - Chittagong Stock Exchange
Prospectus of IPO - Chittagong Stock Exchange
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Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
“If you have any query about this document, you may consult issuer, issue manager and underwriter”<br />
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ProsPectus<br />
For Public <strong>of</strong>fering <strong>of</strong> 20,000,000 ordinary shares <strong>of</strong> tk. 60/- each including<br />
a premium <strong>of</strong> tk. 50/- per share totaling tk. 1,200,000,000/- <strong>of</strong><br />
BArAKAtuLLAH eLectro DYNAMIcs LIMIteD<br />
Opening Date for Subscription: 6 March 2011 Closing Date for Subscription: 10 March 2011<br />
For Non-Resident Bangladeshi Quota Subscription Closes on: 19 March 2011<br />
MANAGer to tHe Issue<br />
�<br />
Prime Finance capital Management Limited<br />
63 Dilkusha C/A (3rd Floor), Dhaka-1000, Phone: 9563883 Fax: 9563692<br />
E-mail: info@primefincap.com ; Website: www.primefincap.com<br />
Bangladesh Mutual securities Limited<br />
Shareef Mansion (7th Floor), 56-57, Motijheel C/A Dhaka-1000<br />
ec securities Limited<br />
Nafi Tower (6th Floor), Plot No. 53, Gulshan South C/A, Gulshan-1,<br />
Dhaka-1212<br />
IcB capital Management Limited<br />
BDBL Bhaban (14th Floor), 8 D.I.T Avenue, Dhaka-1000<br />
LankaBangla Finance Limited<br />
Safura Tower (Level 11), 20 Kemal Ataturk Avenue, Banani, Dhaka-1213<br />
Prime Bank Investment Limited<br />
Peoples Insurance Bhaban (11th Floor), 36 Dilkusha C/A, Dhaka-1000<br />
southeast Bank Limited<br />
Eunoos Centre (Level 2), 52-53 Dilkusha C/A, Dhaka-1000<br />
union capital Limited<br />
Noor Tower (5th Floor), 73 Sonargaon Road, Dhaka-1205<br />
Investment Corporation <strong>of</strong> Bangladesh (ICB)<br />
Bank Asia Limited<br />
Dhaka Bank Limited<br />
First Security Islami Bank Limited<br />
One Bank Limited<br />
uNDerWrIters<br />
BANKers to tHe Issue<br />
creDIt rAtING<br />
Bank Asia Limited<br />
Tea Board Building (1st Floor), 111-113, Motijheel C/A, Dhaka-1000<br />
Grameen capital Management Limited<br />
Grameen Bank Bhaban (10th Floor), Mirpur-2, Dhaka-1216<br />
IDLc Finance Limited<br />
Eunoos Trade Center (Level 21), 52-53 Dilkusha C/A, Dhaka-1000<br />
Mercantile securities Limited<br />
Paramount Heights (13th Floor), 65/2/1 Box Culvert Road<br />
Purana Paltan, Dhaka-1000<br />
Prime Finance capital Management Limited<br />
63, Dilkusha C/A (3rd Floor), Dhaka-1000<br />
swadesh Investment Management Limited<br />
Unique Trade Center (Level 11), Suit No. 01, 8 Panthapath<br />
Kawran Bazar, Dhaka-1215<br />
uttara Finance and Investments Limited<br />
Jiban Bima Tower (6th Floor), 10 Dilkusha C/A, Dhaka-1000<br />
BRAC Bank Limited<br />
Shahjalal Islami Bank Limited<br />
Southeast Bank Limited<br />
Standard Chartered Bank<br />
Trust Bank Limited<br />
credit rating by: Credit Rating Agency <strong>of</strong> Bangladesh Limited (CRAB)<br />
rating: Long term AA 2<br />
Date <strong>of</strong> <strong>Prospectus</strong>: 1 February 2011<br />
the issue shall be placed in “N” category<br />
“SECURITIES UNDER THE SECURITIES AND EXCHANGE ORDINANCE, 1969, AND THE SECURITIES AND EXCHANGE COMMISSION (PUBLIC ISSUE) RULES,<br />
2006. IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS CONSENT THE COMMISSION DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL<br />
SOUNDNESS OF THE ISSUER COMPANY, ANY OF ITS PROJECTS OR THE ISSUE PRICE OF ITS SECURITIES OR FOR THE CORRECTNESS OF ANY OF THE<br />
STATEMENTS MADE OR OPINION EXPRESSED WITH REGARD TO THEM. SUCH RESPONSIBILITY LIES WITH THE ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE<br />
OFFICER/CHIEF FINANCIAL OFFICER, ISSUE MANAGER, UNDERWRITER AND/OR AUDITOR”<br />
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Barakatullah electro Dynamics Limited<br />
(AN Iso 9001:2008 certIFIeD coMPANY)<br />
REGISTERED OFFICE<br />
102-Azadi, Mirboxtola, Sylhet-3100<br />
Phone: 0821-2832117 ; Fax : 0821-2830282<br />
E-mail: info@bedlbd.com<br />
Website: www.bedlbd.com<br />
CORPORATE OFFICE<br />
6/A/1 (2nd Floor), Segunbagicha, Ramna, Dhaka-1000<br />
Phone: 02-9572305, 02-9560339 ; Fax : 02-9559015<br />
E-mail: info@bedlbd.com<br />
Website: www.bedlbd.com<br />
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PROSPECTUS<br />
ELEBARATION OF ABBREVIATED TERMS<br />
BEDL/The Company Barakatullah Electro Dynamics Limited<br />
BSA Bangladesh Standards on Auditing<br />
BPDB Bangladesh Power Development Board<br />
BOO Build-Own-Operate<br />
BAS Bangladesh Accounting Standards<br />
BO Account Beneficiary Owners Account<br />
CSE <strong>Chittagong</strong> <strong>Stock</strong> <strong>Exchange</strong> Limited<br />
CDBL Central Depository Bangladesh Limited<br />
CIB Credit Information Bureau<br />
DSE Dhaka <strong>Stock</strong> <strong>Exchange</strong> Limited<br />
GOB Government <strong>of</strong> Bangladesh<br />
IAS International Accounting Standards<br />
ICAB Institute <strong>of</strong> Chartered Accountants <strong>of</strong> Bangladesh<br />
IDCOL Infrastructure Development Company Limited<br />
IIDFC Industrial & Infrastructure Development Finance Company Limited<br />
JGTDSL Jalalabad Gas Transmission and Distribution System Ltd<br />
NRB Non Resident Bangladeshi<br />
NAV Net Asset Value<br />
O&M Operation & Maintenance<br />
PPA Power Purchase Agreement<br />
GEN SET Generator<br />
PLANT FACTOR Generation capacity (KWH) proportionate to the Rendering capacity (KWH)<br />
MICR Magnetic Ink Character Recognition<br />
FC Account Foreign Currency Account
AVAILABILITY OF PROSPECTUS<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
<strong>Prospectus</strong> <strong>of</strong> Barakatullah Electro Dynamics Limited may be obtained from the Issuer Company, Issue Manager,<br />
Underwriters and the <strong>Stock</strong> <strong>Exchange</strong>s as follows:<br />
company contact Person telephone Number<br />
Barakatullah electro Dynamics Limited<br />
Registered Office: 102-Azadi, Mirboxtola, Sylhet-3100<br />
Corporate Office: 6/A/1 (2nd Floor), Segunbagicha<br />
Ramna, Dhaka-1000<br />
Monoj Das Gupta<br />
Assistant Manager<br />
Nasirul Islam (Kazol)<br />
Assistant Manager<br />
+880-821-2832117,<br />
+880-2-9572305,<br />
+880-2-9560339<br />
Manager to the issue contact Person telephone Number<br />
Prime Finance capital Management Limited<br />
63, Dilkusha C/A (3rd Floor)<br />
Dhaka-1000<br />
M. Mosharraf Hossain PhD, FcA<br />
Managing Director & CEO<br />
9563883<br />
underwriters contact Person telephone Number<br />
Bangladesh Mutual securities Limited<br />
Shareef Mansion (7th Floor), 56-57, Motijheel C/A<br />
Dhaka-1000<br />
Bank Asia Limited<br />
Tea Board Building (1st Floor) , 111-113, Motijheel C/A,<br />
Dhaka-1000<br />
ec securities Limited<br />
Nafi Tower (6th Floor), Plot No. 53, Gulshan South C/A,<br />
Gulshan-1, Dhaka-1212<br />
Grameen capital Management Limited<br />
Grameen Bank Bhaban (10th Floor), Mirpur-2<br />
Dhaka-1216<br />
IcB capital Management Limited<br />
BDBL Bhaban (14th Floor), 8 D.I.T Avenue<br />
Dhaka-1000<br />
IDLc Finance Limited<br />
Eunoos Trade Center (Level 21), 52-53 Dilkusha C/A<br />
Dhaka-1000<br />
LankaBangla Finance Limited<br />
A-A Bhaban (Level 6), 23 Motijheel C/A<br />
Dhaka-1000<br />
Mercantile securities Limited<br />
Paramount Heights (13th Floor), 65/2/1 Box Culvert Road,<br />
Purana Paltan, Dhaka-1000<br />
Prime Bank Investment Limited<br />
Peoples Insurance Bhaban (11th Floor), 36 Dilkusha C/A,<br />
Dhaka-1000<br />
Prime Finance capital Management Limited<br />
63, Dilkusha C/A (3rd Floor)<br />
Dhaka-1000<br />
southeast Bank Limited<br />
Eunoos Centre (Level 2), 52-53 Dilkusha C/A<br />
Dhaka-1000<br />
swadesh Investment Management Limited<br />
Unique Trade Center (Level 11), Suit No. 01, 8 Panthapath,<br />
Kawran Bazar, Dhaka-1215<br />
union capital Limited<br />
Noor Tower (5th Floor), 73 Sonargaon Road<br />
Dhaka-1205<br />
uttara Finance and Investments Limited<br />
Jiban Bima Tower (6th Floor), 10 Dilkusha C/A<br />
Dhaka-1000<br />
suman chandra Modak<br />
Assistant Vice President<br />
Md. Ashrafuddin Ahmed<br />
Senior Vice President<br />
Mohammad Khurshid Alam<br />
Head <strong>of</strong> Monitoring &<br />
Settlement<br />
shieadul Morsalin<br />
Head <strong>of</strong> Merchant Banking<br />
Md. Abdur rouf<br />
Chief Executive Officer<br />
Md. Moniruzzaman<br />
Head <strong>of</strong> Merchant Banking<br />
M. shakil Islam Bhuiyan<br />
Head <strong>of</strong> Merchant Banking<br />
Must<strong>of</strong>a Kamal<br />
Chief Executive Officer<br />
sheikh Mortuza Ahmed<br />
Chief Executive Officer<br />
M. Mosharraf Hossain PhD, FcA<br />
Managing Director & CEO<br />
Farjana Akter sadi<br />
Assistant Vice President<br />
Mamun Ahmed<br />
Managing Director<br />
Abul Munim Khan<br />
Executive Vice President &<br />
Head <strong>of</strong> Business<br />
Mohammad shahinur rahman<br />
Principal Officer,<br />
Merchant Banking<br />
7169428<br />
7177031-32<br />
8818108-9<br />
9005257-69<br />
7160326-7<br />
9571170<br />
9561238<br />
7119654<br />
9555674<br />
9563883<br />
9571115<br />
8158166<br />
9662888<br />
9568207<br />
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PROSPECTUS<br />
stock exchanges Available At telephone Number<br />
Dhaka stock exchange Ltd.<br />
9/F Motijheel C/A<br />
Dhaka–1000<br />
chittagong stock exchange Ltd.<br />
1080 Sheikh Mujib Road, Agrabad<br />
<strong>Chittagong</strong>–4100<br />
DSE Library 9564601-7<br />
CSE Library<br />
(031) 714632-3<br />
(031) 720871-3<br />
<strong>Prospectus</strong> is also available on these web sites www.secbd.org, www.primefincap.com, www.bedlbd.<br />
com, www.dsebd.org, www.csebd.com and public reference room <strong>of</strong> the Securities and <strong>Exchange</strong><br />
Commission (SEC) for reading and study.<br />
CORPORATE DIRECTORY<br />
reGIstereD reGIstereD oFFIce corPorAte oFFIce PLANt<br />
102-Azadi, Mirboxtola 6/A/1 (2nd Floor), Segunbagicha, Ramna Fenchugonj<br />
Sylhet-3100, Bangladesh Dhaka-1000, Bangladesh Sylhet, Bangladesh<br />
Tel: +880-821-2832117 Tel: +880-2-9572305, 9560339<br />
Fax: +880-821-2830282 Fax: +880-2-9559015<br />
E-mail: info@bedlbd.com<br />
Web Site: www.bedlbd.com<br />
AUDITOR<br />
HAQue sHAHALAM MANsur & co.<br />
Chartered Accountants<br />
27- Bijoy Nagar, Shaj Bhaban (6th Floor), B-11<br />
Dhaka-1000, Bangladesh<br />
Tel: +880-2-8311197, 9358787<br />
Fax: +880-2-9362649<br />
E-mail: abdullaalmahmud@yahoo.com
TABLE OF CONTENTS<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Item Page No.<br />
Disclosure in respect <strong>of</strong> issuance <strong>of</strong> securities in demat form 7<br />
conditions under section 2cc <strong>of</strong> the securities and exchange ordinance, 1969 7<br />
General information 11<br />
Declarations and due diligence certificates 12<br />
Declaration about the responsibility <strong>of</strong> the Directors including the CEO <strong>of</strong> the Company in respect <strong>of</strong> the prospectus 12<br />
Consent <strong>of</strong> the Director(s) to Serve a Director(s) 13<br />
Declaration about filing <strong>of</strong> prospectus with the Registrar <strong>of</strong> Joint <strong>Stock</strong> Companies & Firms 13<br />
Due Diligence Certificate <strong>of</strong> Manager to the Issue 14<br />
Due Diligence Certificates <strong>of</strong> the Underwriter(s) 15<br />
risk factors & management perceptions about the risks 16<br />
capital structure 18<br />
use <strong>of</strong> IPo proceeds 18<br />
Description <strong>of</strong> business 19<br />
Company at a glance 19<br />
Important dates 19<br />
Nature <strong>of</strong> business 19<br />
Principal products and services 19<br />
Market for products and services 19<br />
Relative contribution <strong>of</strong> the product/service that account for more than 10% <strong>of</strong> the total revenue 19<br />
Associate, subsidiary/related holding company 19<br />
Distribution <strong>of</strong> products/services 19<br />
Competitive condition in business 20<br />
Sources and availability <strong>of</strong> raw materials and the name <strong>of</strong> principal suppliers 20<br />
Sources <strong>of</strong>, and requirement for power, gas and water or any other utilities 20<br />
Customer providing 10% or more revenues 20<br />
Description <strong>of</strong> contract(s) with principal suppliers/customers 20<br />
Material patents, trademarks, licenses or royalty agreements 21<br />
Number <strong>of</strong> employees 21<br />
Production or service rendering capacity and current utilization 22<br />
Description <strong>of</strong> property 23<br />
Plan <strong>of</strong> operation and discussion <strong>of</strong> financial condition 23<br />
Internal and external sources <strong>of</strong> cash 23<br />
Material commitment for capital expenditure 24<br />
Causes for material changes from period to period 24<br />
Seasonal aspect <strong>of</strong> the company’s business 24<br />
Known trends, events or uncertainties 24<br />
Changes in the assets <strong>of</strong> the company used to pay <strong>of</strong>f any liabilities 24<br />
Loan taken from holding/parent company or subsidiary company 24<br />
Loan given to holding/parent company or subsidiary company 24<br />
Future contractual liabilities 24<br />
Future capital expenditure 24<br />
VAT, income tax, customs duty or other tax liability 25<br />
Operating lease during the last five years 25<br />
Financial lease commitment 25<br />
Personnel related scheme 25<br />
Breakdown <strong>of</strong> issue expenses 26<br />
Revaluation <strong>of</strong> assets 27<br />
Transactions with subsidiary/holding company or associate companies 27<br />
Auditors’ special report regarding allotment <strong>of</strong> shares for consideration other than for cash 27<br />
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PROSPECTUS<br />
Material information which is likely to have an impact 27<br />
Directors and <strong>of</strong>ficers 28<br />
Information regarding directorship 28<br />
Directors’ involvement in other organization 29<br />
Family relationship among directors and top five <strong>of</strong>ficers 30<br />
Short bio-data <strong>of</strong> the directors 31<br />
Credit Information Bureau (CIB) report 31<br />
Description <strong>of</strong> senior executives and departmental heads 34<br />
Involvement <strong>of</strong> Directors and <strong>of</strong>ficers in certain legal proceedings 34<br />
certain relationships and related transactions 35<br />
Transaction with related parties 35<br />
Directors’ facilities 35<br />
executive compensation 36<br />
Remuneration paid to top five salaried <strong>of</strong>ficers 36<br />
Aggregate amount <strong>of</strong> remuneration paid to directors and <strong>of</strong>ficers 36<br />
Future compensation 36<br />
Pay increase intention 36<br />
Options granted to Directors, <strong>of</strong>ficers and employees 36<br />
transaction with the Directors and subscribers to the Memorandum 36<br />
tangible assets per share 38<br />
ownership <strong>of</strong> the company’s securities 39<br />
Shareholding structure 39<br />
Securities owned by the <strong>of</strong>ficers 39<br />
Determination <strong>of</strong> <strong>of</strong>fering price 40<br />
Market for the securities being <strong>of</strong>fered 45<br />
Description <strong>of</strong> securities outstanding or being <strong>of</strong>fered 45<br />
Dividend, voting, pre-emption rights 45<br />
Conversion and liquidation rights 45<br />
Dividend policy 45<br />
Other rights <strong>of</strong> stockholders 46<br />
Debt securities 46<br />
Lock-in on sponsors’ shares 46<br />
refund <strong>of</strong> subscription money 53<br />
Subscription by and refund to non-resident Bangladeshi (NRB) 54<br />
Availability <strong>of</strong> securities 54<br />
Offer 54<br />
Application for subscription 54<br />
Allotment 57<br />
underwriting <strong>of</strong> shares 57<br />
Principal terms and conditions <strong>of</strong> underwriting agreement 58<br />
Financial statements 59<br />
Auditors’ report to the shareholders 60<br />
Selected ratios 84<br />
Auditors’ report in pursuance <strong>of</strong> Section 135(1) under Para 24(1) <strong>of</strong> Part II <strong>of</strong> Third Schedule <strong>of</strong> the Companies Act, 1994 85<br />
credit rating report 88<br />
Application forms 114<br />
Additional disclosure by the auditor 118<br />
Additional disclosure by the management as required by the Dse 119<br />
Additional disclosure by the management 120
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
DISCLOSURE IN RESPECT OF ISSUANCE OF SECURITY IN DEMAT FORM<br />
As per provision <strong>of</strong> the Depository Act, 1999 and regulations made thereunder, shares will only be issued in dematerialized<br />
condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh Ltd. (CDBL) system<br />
and any further issuance <strong>of</strong> shares (right/bonus) will be issued in dematerialized form only.<br />
1.<br />
2.<br />
3.<br />
4.<br />
5.<br />
CONDITIONS UNDER SECTION 2CC OF THE SECURITIES AND EXCHANGE<br />
ORDINANCE, 1969<br />
PART A<br />
The company shall go for Initial Public Offer (<strong>IPO</strong>) for 2,00,00,000 ordinary shares <strong>of</strong> Tk 60 each including a<br />
premium <strong>of</strong> Tk. 50 per share totaling Tk 120,00,00,000 (One hundred twenty crore) following the Securities and<br />
<strong>Exchange</strong> Commission (Public Issue) Rules, 2006, the Depository Act, 1999 and regulations made there under.<br />
The abridged version <strong>of</strong> the prospectus, as approved by the Commission, shall be published by the issuer in 4 (four)<br />
national daily newspapers (two in Bangla and two in English), within 03 (three) working days <strong>of</strong> issuance <strong>of</strong> the<br />
consent letter. The issuer shall post the full prospectus, vetted by the Securities and <strong>Exchange</strong> Commission in the<br />
issuer’s website and shall also put on the websites <strong>of</strong> the Commission, <strong>Stock</strong> <strong>Exchange</strong>s, and the Issue Manager<br />
within 03 (three) working days from the date <strong>of</strong> issuance <strong>of</strong> this letter and shall remain posted till the closure <strong>of</strong> the<br />
subscription list. The issuer shall submit to SEC, the <strong>Stock</strong> <strong>Exchange</strong>s and the Issue Manager a diskette containing the<br />
text <strong>of</strong> the vetted prospectus in “MS-Word” format.<br />
Sufficient copies <strong>of</strong> prospectus shall be made available by the issuer so that any person requesting a copy may<br />
receive one. A notice shall be placed on the front <strong>of</strong> the application form distributed in connection with the <strong>of</strong>fering,<br />
informing that interested persons are entitled to a prospectus, if they so desire, and that copies <strong>of</strong> prospectus may<br />
be obtained from the issuer and the issue managers. The subscription application shall indicate in bold type that<br />
no sale <strong>of</strong> securities shall be made, nor shall any money be taken from any person, in connection with such sale<br />
until twenty five days after the prospectus has been published.<br />
The company shall submit 40 (forty) copies <strong>of</strong> the printed prospectus to the Securities and <strong>Exchange</strong> Commission for<br />
<strong>of</strong>ficial record within 5 (Five) working days from the date <strong>of</strong> publication <strong>of</strong> the abridged version <strong>of</strong> the prospectus<br />
in the newspaper.<br />
The issuer company and the issue manager shall ensure transmission <strong>of</strong> the prospectus, abridged version <strong>of</strong> the<br />
prospectus and relevant application forms for NRBs through e-mail, simultaneously with publication <strong>of</strong> the abridged<br />
version <strong>of</strong> the prospectus, to the Bangladesh Embassies and Missions abroad and shall also ensure sending <strong>of</strong> the<br />
printed copies <strong>of</strong> abridged version <strong>of</strong> the prospectus and application forms to the said Embassies and Missions<br />
within 5 (five) working days <strong>of</strong> the publication date by Express Mail Service (EMS) <strong>of</strong> the postal department. A<br />
compliance report shall be submitted in this respect to the SEC jointly by the issuer and the issue manger within 2<br />
(two) working days from the date <strong>of</strong> said dispatch <strong>of</strong> the prospectus & the forms.<br />
6. The paper clipping <strong>of</strong> the published abridged version <strong>of</strong> the prospectus, as mentioned at condition no.2 above,<br />
shall be submitted to the Commission within 24 hours <strong>of</strong> the publication there<strong>of</strong>.<br />
7.<br />
8.<br />
The company shall maintain separate bank account(s) for collecting proceeds <strong>of</strong> the Initial Public Offering and shall<br />
also open Foreign Currency (FC) account(s) to deposit the application money <strong>of</strong> the Non-Resident Bangladeshis<br />
(NRBs) for <strong>IPO</strong> purpose, and shall incorporate full particulars <strong>of</strong> said FC account(s) in the prospectus. The<br />
company shall open the above-mentioned accounts for <strong>IPO</strong> purpose; and close these accounts after refund <strong>of</strong><br />
over-subscription money. Non-Resident Bangladeshi (NRB) means Bangladeshi citizens staying abroad including<br />
all those who have dual citizenship (provided they have a valid Bangladeshi passport) or those, whose foreign<br />
passport bear a stamp from the concerned Bangladesh Embassy to the effect that no visa is required to travel to<br />
Bangladesh.<br />
The issuer company shall apply to all the stock exchanges in Bangladesh for listing within 07(Seven) working days<br />
from the date <strong>of</strong> issuance <strong>of</strong> this letter and shall simultaneously submit the vetted prospectus with all exhibits, as<br />
submitted to SEC, to the stock exchanges.<br />
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PROSPECTUS<br />
9.<br />
The following declaration shall be made by the company in the prospectus, namely:-<br />
“Declaration about Listing <strong>of</strong> Shares with the <strong>Stock</strong> <strong>Exchange</strong>(s):<br />
None <strong>of</strong> the stock exchange(s), if for any reason, grants listing within 75 (Seventy Five) days from the closure <strong>of</strong><br />
subscription, any allotment in terms <strong>of</strong> this prospectus shall be void and the company shall refund the subscription<br />
money within 15 (Fifteen) days from the date <strong>of</strong> refusal for listing by the stock exchanges, or from the date <strong>of</strong><br />
expiry <strong>of</strong> the said 75 (Seventy Five) days, as the case may be.<br />
In case <strong>of</strong> non-refund <strong>of</strong> the subscription money within the aforesaid fifteen days, the Directors <strong>of</strong> the Company, in<br />
addition to the issuer company, shall be collectively and severally liable for refund <strong>of</strong> the subscription money, with<br />
interest at the rate <strong>of</strong> 2% (Two Percent) per month above the bank rate, to the subscribers concerned.<br />
The issue managers, in addition to the issuer company, shall ensure due compliance <strong>of</strong> the above mentioned<br />
conditions and shall submit compliance report thereon to the Commission within 7 (seven) days <strong>of</strong> expiry <strong>of</strong> the<br />
aforesaid fifteen days time period allowed for refund <strong>of</strong> the subscription money.”<br />
10. The subscription list shall be opened and the sale <strong>of</strong> securities commenced after 25 (twenty five) days <strong>of</strong> the<br />
publication <strong>of</strong> the abridged version <strong>of</strong> the prospectus and shall remain open for 5 (Five) consecutive banking<br />
days.<br />
11. A non-resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank payable<br />
at Dhaka, or through a nominee by paying out <strong>of</strong> foreign currency deposit account maintained in Bangladesh or<br />
in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for the value <strong>of</strong><br />
securities applied for through crossed bank cheque marking “Account Payee only”. The NRB applicants shall send<br />
applications to the issuer company within the closing date <strong>of</strong> the subscription so as to reach the same to the<br />
company by the closing date plus 9 (Nine) days. Applications received by the company after the above time period<br />
will not be considered for allotment purpose.<br />
12. The company shall apply the spot buying rate (TT clean) in US Dollar, UK Pound Sterling and Euro <strong>of</strong> Sonali Bank,<br />
which shall be mentioned in the <strong>Prospectus</strong>, as prevailed on the date <strong>of</strong> opening <strong>of</strong> the subscription for the purpose<br />
<strong>of</strong> application <strong>of</strong> the NRBs and other non-Bangladeshi persons, where applicable.<br />
13. The Company and the issue manager shall ensure prompt collection/clearance <strong>of</strong> the foreign remittances <strong>of</strong> NRBs<br />
and other non-Bangladeshis, if applicable, for allotment <strong>of</strong> shares.<br />
14. Upon completion <strong>of</strong> the period <strong>of</strong> subscription for securities, the issuer and the issue manager shall jointly provide<br />
the Commission and the stock exchanges with the preliminary status <strong>of</strong> the subscription within 05 (five) working<br />
days, in respect <strong>of</strong> the following matters, namely: -<br />
(a)<br />
(b)<br />
(c)<br />
Total number <strong>of</strong> securities for which subscription has been received;<br />
Amount received from the subscription; and<br />
Amount <strong>of</strong> commission paid to the banker to the issue.<br />
15. The issuer and the issue manager shall jointly provide the Commission and the stock exchanges with the list <strong>of</strong><br />
valid and invalid applicants (i.e. final status <strong>of</strong> subscription) in electronic form in 2 (Two) CDs and final status <strong>of</strong><br />
subscription to the Commission within 3 (three) weeks after the closure <strong>of</strong> the subscription along with bank<br />
statement (original), branch-wise subscription statement. The list <strong>of</strong> valid and invalid applicants shall be finalized<br />
after examination with the CDBL in respect <strong>of</strong> BO accounts and particulars there<strong>of</strong>.<br />
16. The <strong>IPO</strong> shall stand cancelled and the application money shall be refunded immediately (but not later than 5 (Five)<br />
weeks from the date <strong>of</strong> the subscription closure), if any <strong>of</strong> the following events occur:<br />
(a)<br />
(b)<br />
Upon closing <strong>of</strong> the subscription list it is found that the total number <strong>of</strong> valid applications (in case <strong>of</strong><br />
under subscription including the number <strong>of</strong> the underwriter) is less than the minimum requirement<br />
as specified in the listing regulations <strong>of</strong> the stock exchange(s) concerned; or<br />
At least 50% <strong>of</strong> the <strong>IPO</strong> is not subscribed.<br />
17. 10% <strong>of</strong> total public <strong>of</strong>fering shall be reserved for non-resident Bangladeshi (NRB) and 10% for mutual funds<br />
and collective investment schemes registered with the Commission, and the remaining 80% shall be open for<br />
subscription by the general public. In case <strong>of</strong> under-subscription under any <strong>of</strong> the 10% categories mentioned<br />
above, the unsubscribed portion shall be added to the general public category and, if after such addition, there is<br />
over subscription in the general public category, the issuer and the managers to the issue shall jointly conduct an<br />
open lottery <strong>of</strong> all the applicants added together.
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
18. All the applicants shall first be treated as applied for one minimum market lot <strong>of</strong> 200 shares worth tk. 12,000/-<br />
(taka twelve thousand only). If, on this basis, there is over subscription, then lottery shall be held amongst<br />
the applicants allocating one identification number for each application, irrespective <strong>of</strong> the application money. In<br />
case <strong>of</strong> over-subscription under any <strong>of</strong> the categories mentioned hereinabove, the issuer and the issue manager<br />
shall jointly conduct an open lottery <strong>of</strong> all the applications received under each category separately in presence <strong>of</strong><br />
representatives from the issuer, the stock exchanges and the applicants, if there be any.<br />
19. An applicant can not submit more than two applications, one in his/her own name and another<br />
jointly with another person. In case an applicant makes more than two applications, all applications<br />
will be treated as invalid and will not be considered for allotment purpose. In addition, whole or part<br />
<strong>of</strong> application money may be forfeited by the commission.<br />
20. the applicant shall provide the same bank account number in the application form as it is in the Bo<br />
account <strong>of</strong> the application. otherwise the application will be considered invalid and the subscription<br />
money may be forfeited.<br />
21. Lottery (if applicable) shall be held within 4 (four) weeks from closure <strong>of</strong> the subscription date.<br />
22. The company shall issue share allotment letters to all successful applicants within 5 (five) weeks from the date <strong>of</strong><br />
the subscription closing. Within the same time, refund to the unsuccessful applicants shall be made in the currency<br />
in which the value <strong>of</strong> securities was paid for by the applicants without any interest, through direct deposit to the<br />
applicant’s bank account as far as possible/Account Payee Cheque/refund warrants with bank account number,<br />
bank’s name and branch as indicated in the securities application forms payable at Dhaka/<strong>Chittagong</strong>/Khulna/<br />
Rajshahi/Barisal/Sylhet/ Bogra, as the case may be subject to condition 19 above.<br />
Refund money <strong>of</strong> the unsuccessful applicants shall be credited directly to their respective bank accounts, who have<br />
closen the option in the <strong>IPO</strong> application forms, as maintained in with the bankers to the issue or any other banks<br />
mentioned in the application.<br />
A compliance report in this regard shall be submitted to the Commission within 7(Seven) weeks from the date <strong>of</strong><br />
closure <strong>of</strong> subscription.<br />
23. The company shall furnish the List <strong>of</strong> Allotees to the Commission and the stock exchange(s) simultaneously in<br />
which the shares will be listed, within 24 (Twenty Four) hours <strong>of</strong> allotment.<br />
24. In the event <strong>of</strong> under-subscription <strong>of</strong> the public <strong>of</strong>fering, the unsubscribed portion <strong>of</strong> securities shall be taken up by the<br />
underwriter(s) (subject to para -16 above). The issuer must notify the underwriter to take up the underwritten shares<br />
within 10 (Ten) days <strong>of</strong> the subscription closing date on full payment <strong>of</strong> the share money within 15 (Fifteen) days <strong>of</strong> the<br />
issuer’s notice. The underwriter shall not share any underwriting fee with the issue manager, other underwriters, issuer<br />
or the sponsor group.<br />
25. All issued shares <strong>of</strong> the issuer except the institutional bidders shares, at the time <strong>of</strong> according this consent shall<br />
be subject to a lock- in period <strong>of</strong> three years from the date <strong>of</strong> issuance <strong>of</strong> prospectus or commercial operation,<br />
whichever comes later.<br />
Provided that the persons (other than Directors and those who hold 5% or more shares in the company), who have<br />
subscribed to the shares <strong>of</strong> the company within immediately preceding two years <strong>of</strong> according consent shall be<br />
subject to a lock-in period <strong>of</strong> 1 (one) year from the date <strong>of</strong> issuance <strong>of</strong> prospectus or commercial operation,<br />
whichever comes later.<br />
26. In respect <strong>of</strong> shares <strong>of</strong> Sponsor/Directors/Promoters (if in paper format) shall be handed over to security custodian<br />
bank registered with SEC and shall remain till completion <strong>of</strong> lock in and the name the name and branch <strong>of</strong> the<br />
bank shall be furnished to the Commission jointly by the issuer and issue managers, along with a confirmation<br />
there<strong>of</strong> from the custodian bank, within one week <strong>of</strong> listing <strong>of</strong> the shares with the stock exchange(s). Or they<br />
(shares <strong>of</strong> Sponsor/ Directors/ Promoters) can be demated and will remain in lock-in under CDBL system and<br />
issuer will submit a dematerialization confirmation report generated by CDBL and attested by Managing Director<br />
<strong>of</strong> the company along with lock-in confirmation with SEC within one week <strong>of</strong> listing <strong>of</strong> the shares with the stock<br />
exchange(s). In respect <strong>of</strong> shares other than Sponsor/Directors/Promoters the issuer will ensure their lock-in <strong>of</strong><br />
those shares and submit a statement to this effect to SEC.<br />
The company shall apply to the stock exchanges for listing within<br />
27. 7(seven) working days <strong>of</strong> issuance <strong>of</strong> this<br />
letter and shall simultaneously submit to the Commission attested copies <strong>of</strong> the application filed with the stock<br />
exchanges.<br />
����<br />
9
10<br />
����<br />
PROSPECTUS<br />
PART B<br />
1. Prime Finance & Investment Limited, the Issue Manager, shall ensure that the abridged version <strong>of</strong> the<br />
prospectus and the full prospectus is published correctly and in strict conformity with the conditions <strong>of</strong> this letter<br />
without any error/omission, as vetted by the Securities and <strong>Exchange</strong> Commission.<br />
2.<br />
3.<br />
4.<br />
The issue manager shall carefully examine and compare the published abridged version <strong>of</strong> prospectus on the date<br />
<strong>of</strong> publication with the copy vetted by SEC. If any discrepancy/inconsistency is found, both the issuer and the<br />
issue manager shall jointly publish a corrigendum immediately in the same newspapers concerned, simultaneously<br />
endorsing copies there<strong>of</strong> to SEC and the stock exchange(s) concerned, correcting the discrepancy/inconsistency<br />
as required under ‘Due Diligence Certificates’ provided with SEC.<br />
Both the issuer company and the issue manager shall, immediately after publication <strong>of</strong> the prospectus and its<br />
abridged version, jointly inform the Commission in writing that the published prospectus and its abridged version<br />
are verbatim copies <strong>of</strong> the same as vetted by the Commission.<br />
The fund collected through Public Offering shall not be utilized prior to listing with stock exchanges and that<br />
utilization <strong>of</strong> the said fund shall be effected through banking channel, i.e. through account payee cheque, pay<br />
order or bank drafts etc.<br />
5. The company shall furnish report to the Commission on utilization <strong>of</strong> Public Offering proceeds within 15 (Fifteen)<br />
days <strong>of</strong> the closing <strong>of</strong> each quarter until such fund is fully utilized, as mentioned in the schedule contained in<br />
the prospectus, and in the event <strong>of</strong> any irregularity or inconsistency, the Commission may employ or engage any<br />
person, at issuer’s cost, to examine whether the issuer has utilized the proceeds for the purpose disclosed in the<br />
prospectus.<br />
6.<br />
7.<br />
8.<br />
1.<br />
2.<br />
1.<br />
2.<br />
3.<br />
All transactions, excluding petty cash expenses, shall be effected through the company’s bank account(s).<br />
Proceeds <strong>of</strong> the Public Offering shall not be used for any purpose other than those specified in the prospectus. Any<br />
deviation in this respect must have prior approval <strong>of</strong> the shareholders in the shareholders Meeting under intimation<br />
to SEC and stock exchange(s).<br />
Directors on the Company’s Board will be in accordance with the applicable laws, rules and regulations.<br />
PART C<br />
All the above conditions imposed under Section 2CC <strong>of</strong> the Securities and <strong>Exchange</strong> Ordinance, 1969 shall be incorporated<br />
in the prospectus immediately after the page <strong>of</strong> the table <strong>of</strong> contents, with a reference in the table <strong>of</strong> contents, prior to<br />
its publication.<br />
The Commission may impose further conditions/restrictions etc. from time to time as and when considered<br />
necessary, which shall also be binding upon the issuer company.<br />
PART D<br />
As per provision <strong>of</strong> the Depository Act, 1999 and regulations made there under, shares will only be issued in<br />
dematerialized condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh<br />
Ltd. (CDBL) system and any further issuance <strong>of</strong> shares (Including right/bonus) will be issued in dematerialized<br />
form only.<br />
An applicant (including NRB) shall not be able to apply for allotment <strong>of</strong> shares without Beneficial Owners (BO) account .<br />
The company shall deposit 3% tax to the Government Treasury on the share premium <strong>of</strong> the <strong>IPO</strong> and submit<br />
authenticated copy <strong>of</strong> ‘treasury Chalan’ to the Commission, among others, to obtain consent for holding <strong>of</strong> lottery<br />
in line with the NBR’s Order No. Rviv‡ev/AvqKi ev‡RU/2010/97 dated 30.06.2010 dated 06.07.2010.<br />
The company along with the issue manager shall also ensure due compliance <strong>of</strong> all above condition and the<br />
Securities & <strong>Exchange</strong> Commission (Public Issue) Rules, 2006.
GENERAL INFORMATION<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
The <strong>Prospectus</strong> has been prepared by Prime Finance capital Management Limited from<br />
information supplied by Barakatullah electro Dynamics Limited (the Company) and also<br />
several discussions with the Managing Director and related executives <strong>of</strong> the Company which is<br />
publicly available. The Board <strong>of</strong> Directors <strong>of</strong> Barakatullah electro Dynamics Limited hereby<br />
confirms that to the best <strong>of</strong> their knowledge and belief the information contained herein is true<br />
and correct in all material respects and that there are no other material facts the omission <strong>of</strong> which<br />
would make any statement herein misleading.<br />
No person is authorized to give any information or to make any representation not contained in this<br />
<strong>Prospectus</strong> and if given or made, any such information or representation must not be relied upon as<br />
having been authorized by the Company or the Issue Manager.<br />
The Issue, as contemplated in this document, is made in Bangladesh and is subject to the exclusive<br />
jurisdiction <strong>of</strong> the Courts <strong>of</strong> Bangladesh. Forwarding this <strong>Prospectus</strong> to any person residing outside<br />
Bangladesh in no way implies that the issue is made in accordance with the laws <strong>of</strong> that country<br />
or is subject to the jurisdiction <strong>of</strong> the laws <strong>of</strong> that country.<br />
����<br />
11
12<br />
����<br />
PROSPECTUS<br />
DECLARATIONS AND DUE DILIGENCE CERTIFICATES<br />
Declaration about the Responsibility <strong>of</strong> the Directors, including the CEO <strong>of</strong> the<br />
Company “Barakatullah Electro Dynamics Limited” in Respect <strong>of</strong> the <strong>Prospectus</strong><br />
This prospectus has been prepared, seen and approved by us, and we, individually and collectively, accept full responsibility<br />
for the authenticity and accuracy <strong>of</strong> the statements made, information given in the prospectus, documents, financial<br />
statements, exhibits, annexes, papers submitted to the Commission in support there<strong>of</strong>, and confirm, after making all<br />
reasonable inquiries that all conditions concerning this public issue and prospectus have been met and that there are<br />
no other information or documents the omission <strong>of</strong> which make any information or statements therein misleading for<br />
which the Commission may take any civil, criminal or administrative action against any or all <strong>of</strong> us as it may deem fit.<br />
We also confirm that full and fair disclosure has been made in this prospectus to enable the investors to make a well<br />
informed decision for investment.<br />
Sd/-<br />
Faisal Ahmed chowdhury<br />
Chairman<br />
Sd/-<br />
Nayem Ahmed chowdhury<br />
Director<br />
Sd/-<br />
Nanu Kazi Mohammed Miah<br />
Director<br />
Sd/-<br />
Kazi Mohammed Angur Miah<br />
Director<br />
Sd/-<br />
Manzur Ashraf Khan<br />
Director<br />
Sd/-<br />
Monsur Alam chowdhury<br />
Director<br />
Sd/-<br />
Md. Ahsanul Kabir<br />
Vice Chairman<br />
Sd/-<br />
Fahim Ahmed chowdhury<br />
Director<br />
Sd/-<br />
Md. shirajul Islam<br />
Director<br />
Sd/-<br />
Abdul Mumin<br />
Director<br />
Sd/-<br />
Alimus sadat chowdhury<br />
Director<br />
Sd/-<br />
Yeahyea Murad Khan<br />
Director<br />
Sd/-<br />
Gulam rabbani chowdhury<br />
Director & Managing Director<br />
Sd/-<br />
Abdul Bari<br />
Vice Chairman<br />
Sd/robin<br />
chowdhury<br />
Director<br />
Sd/-<br />
Mohammed Abdul Ahad<br />
Director<br />
Sd/-<br />
Nasim Ahmed chowdhury<br />
Director<br />
Sd/-<br />
Afzal rashid chowdhury<br />
Director<br />
Sd/ubaydia<br />
chowdhury<br />
Director
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Consent <strong>of</strong> the director(s) to serve as director(s)<br />
We hereby agree that we have been serving as Director(s) <strong>of</strong> “Barakatullah electro Dynamics Limited” and<br />
continue to act as Director(s) <strong>of</strong> the Company.<br />
Sd/-<br />
Faisal Ahmed chowdhury<br />
Chairman<br />
Sd/-<br />
Nayem Ahmed chowdhury<br />
Director<br />
Sd/-<br />
Nanu Kazi Mohammed Miah<br />
Director<br />
Sd/-<br />
Kazi Mohammed Angur Miah<br />
Director<br />
Sd/-<br />
Manzur Ashraf Khan<br />
Director<br />
Sd/-<br />
Monsur Alam chowdhury<br />
Director<br />
Sd/-<br />
Md. Ahsanul Kabir<br />
Vice Chairman<br />
Sd/-<br />
Fahim Ahmed chowdhury<br />
Director<br />
Sd/-<br />
Md. shirajul Islam<br />
Director<br />
Sd/-<br />
Abdul Mumin<br />
Director<br />
Sd/-<br />
Alimus sadat chowdhury<br />
Director<br />
Sd/-<br />
Yeahyea Murad Khan<br />
Director<br />
Sd/-<br />
Gulam rabbani chowdhury<br />
Director & Managing Director<br />
Sd/-<br />
Abdul Bari<br />
Vice Chairman<br />
Sd/robin<br />
chowdhury<br />
Director<br />
Sd/-<br />
Mohammed Abdul Ahad<br />
Director<br />
Sd/-<br />
Nasim Ahmed chowdhury<br />
Director<br />
Sd/-<br />
Afzal rashid chowdhury<br />
Director<br />
Sd/ubaydia<br />
chowdhury<br />
Director<br />
Declaration about filing <strong>of</strong> <strong>Prospectus</strong> with the Registrar <strong>of</strong> Joint <strong>Stock</strong><br />
Companies & Firms<br />
A dated and signed copy <strong>of</strong> the <strong>Prospectus</strong> has been filed for registration with the Registrar <strong>of</strong> Joint <strong>Stock</strong> Companies<br />
& Firms, Government <strong>of</strong> the Peoples’ Republic <strong>of</strong> Bangladesh, as required under Section 138(1) <strong>of</strong> the Companies Act,<br />
1994 before Publication <strong>of</strong> the <strong>Prospectus</strong>.<br />
����<br />
13
14<br />
����<br />
PROSPECTUS<br />
Due diligence certificate <strong>of</strong> manager to the issue<br />
sub: Public <strong>of</strong>fer <strong>of</strong> 20,000,000 ordinary shares <strong>of</strong> tk. 60/- each including a premium <strong>of</strong> tk. 50/- per<br />
share totaling to tk. 1,200,000,000 <strong>of</strong> Barakatullah electro Dynamics Limited<br />
We, the under-noted Manager to the Issue to the above mentioned forthcoming issue, state as follows:<br />
1.<br />
2.<br />
We, while finalizing the draft prospectus pertaining to the said issue, have examined various documents and other<br />
materials as relevant for adequate disclosures to the investors; and<br />
On the basis <strong>of</strong> such examination and the discussions with the issuer company, it’s Directors and Officers, and<br />
other Agencies, independent verification <strong>of</strong> the statements concerning objects <strong>of</strong> the issue and the contents <strong>of</strong> the<br />
documents and other materials furnished by the issuer company.<br />
We coNFIrM tHAt:<br />
(a) the draft prospectus forwarded to the Commission is in conformity with the documents, materials and papers<br />
relevant to the issue;<br />
(b)<br />
(c)<br />
all the legal requirements connected with the said issue have been duly complied with; and<br />
the disclosures made in the draft prospectus are true, fair and adequate to enable the investors to make a well<br />
informed decision for investment in the proposed issue.<br />
For Manager to the Issue<br />
Sd/-<br />
M. Mosharraf Hossain PhD, FcA<br />
Managing Director & CEO<br />
Prime Finance Capital Management Limited<br />
Date: 01 February 2011
Due diligence certificate <strong>of</strong> the underwriter(s)<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
sub: Public <strong>of</strong>fer <strong>of</strong> 20,000,000 ordinary shares <strong>of</strong> tk. 60/- each including a premium <strong>of</strong> tk. 50/- per<br />
share totaling to tk. 1,200,000,000 <strong>of</strong> Barakatullah electro Dynamics Limited<br />
We, the under-noted Underwriter(s) to the abovementioned forthcoming issue, state individually and collectively as<br />
follows:<br />
1.<br />
2.<br />
We, while underwriting the abovementioned issue on a firm commitment basis, have examined the draft prospectus,<br />
other documents and materials as relevant to our underwriting decision; and<br />
On the basis <strong>of</strong> such examination and the discussion with the issuer company, it’s Directors and Officers, and<br />
other Agencies, independent verification <strong>of</strong> the statements concerning objects <strong>of</strong> the issue and the contents <strong>of</strong> the<br />
documents and other materials furnished by the issuer company; -<br />
We coNFIrM tHAt:<br />
(a) all information as are relevant to our underwriting decision have been received by us and the draft prospectus<br />
forwarded to the Commission has been approved by us;<br />
(b) we shall subscribe and take up the un-subscribed securities against the abovementioned public issue within<br />
15 (fifteen) days <strong>of</strong> calling up there<strong>of</strong> by the issuer; and<br />
(c) this underwriting commitment is unequivocal and irrevocable.<br />
For underwriters<br />
Sd/-<br />
Md. Golam sarwar Bhuiyan<br />
Managing Director<br />
Bangladesh Mutual Securities Limited<br />
Sd/-<br />
Md. Aliuzzaman<br />
Managing Director<br />
Grameen Capital Management Limited<br />
Sd/-<br />
Mafizuddin Sarker<br />
Managing Director<br />
LankaBangla Finance Limited<br />
Sd/-<br />
M. Mosharraf Hossain PhD, FcA<br />
Managing Director & CEO<br />
Prime Finance Capital Management<br />
Limited<br />
Sd/-<br />
Mushfiq Ul Quayoom<br />
Managing Director (Current Charge)<br />
Union Capital Limited<br />
Sd/erfanuddin<br />
Ahmed<br />
President & Managing Director<br />
Bank Asia Limited<br />
Sd/-<br />
Md. Abdur rouf<br />
Chief Executive Officer<br />
ICB Capital Management Limited<br />
Sd/-<br />
Must<strong>of</strong>a Kamal<br />
Chief Executive Officer<br />
Mercantile Securities Limited<br />
Sd/syed<br />
Imtiaz Hasib<br />
Deputy Managing Director<br />
Southeast Bank Limited<br />
Sd/-<br />
S.M. Shamsul Arefin<br />
Managing Director & CEO<br />
Uttara Finance and Investments<br />
Limited<br />
Sd/tanjil<br />
chowdhury<br />
Chief Executive Officer<br />
EC Securities Limited<br />
Sd/selim<br />
r. F. Hussain<br />
CEO & Managing Director<br />
IDLC Finance Limited<br />
Sd/sheikh<br />
Mortuza Ahmed<br />
Chief Executive Officer<br />
Prime Bank Investment Limited<br />
Sd/-<br />
Mamun Ahmed<br />
Managing Director<br />
Swadesh Investment Management<br />
Limited<br />
����<br />
15
16<br />
����<br />
PROSPECTUS<br />
RISK FACTORS & MANAGEMENT PERCEPTIONS ABOUT THE RISKS<br />
Every equity investment is associates with risks. Among those risks some can be averted, others are beyond control.<br />
Before making any investment decision, Investors should take the risk factors into consideration. Major such risk<br />
factors are described in brief as under:<br />
Interest rate risks<br />
Volatility <strong>of</strong> money market may influences the overall interest rate structure <strong>of</strong> the country. On 30 June 2010, as the<br />
company has about Tk. 140.15 crore <strong>of</strong> outstanding loans, any unfavorable change in interest rate structure may affect<br />
the company’s business adversely.<br />
Management perception<br />
Management <strong>of</strong> the company believes that rise in interest rate will not substantially affect the company.<br />
On the other hand, if interest rate falls, the company will go for alternative investment schemes to utilize<br />
its funds. Moreover, management <strong>of</strong> BEDL is planning to pay <strong>of</strong>f its term loans with the <strong>IPO</strong> proceeds.<br />
After paying <strong>of</strong>f the term loans exposure <strong>of</strong> BEDL to interest rate risk will reduce to a great extent.<br />
exchange rate risks<br />
Taka has been devalued significantly against dollar and it is very unlikely to appreciate in near future. But devaluation<br />
<strong>of</strong> local currency against major international currencies will not affect the company’s business.<br />
Management perception<br />
Since all dues relating to import <strong>of</strong> machineries and equipments from abroad has been settled, exchange<br />
rate risk is not going to hamper business <strong>of</strong> the company.<br />
Industry risks<br />
The Company is operating in an industry where there is a huge gap between demand and supply. Although power<br />
sector is a highly demanding and aggravated sector in our country, chances are there that excessive competition may<br />
hamper the company’s business.<br />
Management perception<br />
Currently there is a huge gap between demand and supply <strong>of</strong> electricity in our country. On the other<br />
hand demand for electricity is increasing drastically day by day. In this situation chance <strong>of</strong> excessive<br />
competition is almost zero. Moreover BPDB purchase 100% <strong>of</strong> the electricity produced by the company<br />
at a rate predetermined in the Power Purchase Agreement which is also adjusted as per consumer price<br />
index. Hence, the company is protected against any sort <strong>of</strong> loss due to competition or inflation.<br />
Market and technology-related risks<br />
Capacity <strong>of</strong> generating power is dependent to a great extent on the capacity <strong>of</strong> its generators. Should there be any<br />
disturbance in the technology used by the company; operation <strong>of</strong> the company may face major turbulence.<br />
Management perception<br />
The company is using state <strong>of</strong> the art technology and modern machines. The plant is comprised <strong>of</strong> 19<br />
units <strong>of</strong> generator sets from the world renowned gas fuelled reciprocating engine manufacturer GE<br />
Jenbacher, Austria. Total installed capacity <strong>of</strong> the plant is 55.138 MW where contracted capacity is<br />
51 MW <strong>of</strong> electricity. To ensure uninterrupted supply <strong>of</strong> electricity the project has 8.11% <strong>of</strong> reserve<br />
margin in production. To reduce any chance <strong>of</strong> disturbances the company has enter a spare parts supply<br />
contract for a period <strong>of</strong> 15 years with GE Jenbacher. Furthermore the management <strong>of</strong> the company is<br />
very serious about timely maintenance <strong>of</strong> the machineries.<br />
Potential or existing government regulations<br />
Although existing government rules and regulations are very favorable for the company, chances are there that the<br />
government might take any policy that may adversely affect pr<strong>of</strong>itability and operation <strong>of</strong> the company.<br />
Management perception<br />
The Government is committed for providing affordable and reliable electricity to all citizens by 2020 for<br />
economic and social development. The government has declared its vision for power sector to make the<br />
country free from load shedding beyond 2011 and to make electricity for all by year 2020.
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Hence, management <strong>of</strong> the company is confident enough that regarding government policy BEDL will<br />
not have to face any unfavorable situation.<br />
Potential changes in global or national policies<br />
Changes in government policy as well as policy <strong>of</strong> foreign countries may affect adversely the business <strong>of</strong> the company.<br />
Any structural change in power generation industry may adversely affect the business and may have negative impact<br />
on the pr<strong>of</strong>itability <strong>of</strong> the Company.<br />
Management perception<br />
Modern life is totally dependent on electricity. Without electricity modern life cannot sustain. Without<br />
uninterrupted flow <strong>of</strong> electricity development <strong>of</strong> a country is not possible. Hence, As far as national<br />
policy is concerned, power sector is not going to face any adverse effect. On the other hand, chances <strong>of</strong><br />
global policies hampering power sector <strong>of</strong> our country is very negligible.<br />
History <strong>of</strong> non-operation<br />
If a company becomes non-operative for some period in its operating life then risk <strong>of</strong> becoming non-operative in future<br />
for the same reasons or other probable reasons should be considered carefully.<br />
Management perception<br />
The Company does not have any history <strong>of</strong> non- operation so no risk has arise in this respect. Moreover<br />
the Company is trying to expand its business by installing more power plants. So, chance <strong>of</strong> becoming<br />
non-operative in future is very low.<br />
operations risks<br />
Operational risk covers the ability <strong>of</strong> the project to achieve the performance as envisaged. Technology used, fuel supply<br />
arrangement, operation & maintenance (O&M) arrangement and political condition are major sources <strong>of</strong> operational<br />
risk for the company.<br />
Management perception<br />
To mitigate fuel supply problem BEDL has signed gas supply agreement with Jalalabad Gas Transmission<br />
and Distribution Systems Ltd. (JGTDSL) on 22 June 2008 for a term <strong>of</strong> 15 years to supply gas in<br />
required quantity and specification throughout the agreement period. For O&M <strong>of</strong> the plant, BEDL<br />
has appointed local qualified engineers and technicians who have experience to work in power plants.<br />
Moreover the plant vendor GE Jenbacher GmbH & Co. will supply all necessary spare parts for a period<br />
<strong>of</strong> 15 years with 1 year warranty period from the date <strong>of</strong> delivery. During major overhaul, BEDL will<br />
engage GE Jenbacher GmbH & Co. for providing the overhaul services. As the company installed 19<br />
units <strong>of</strong> generators, electricity supply will not be hampered to a great extent even at the time <strong>of</strong><br />
scheduled maintenance or any minor problem. Power project in general has operational risk and for this<br />
project is quite high considering 15 years <strong>of</strong> operation. However technical expertise availability in the<br />
country, supply contract with the vendor as well as reserve margin <strong>of</strong> around 8.11% (installed capacity)<br />
mitigates the operational risk to a great extent.<br />
otHer rIsKs<br />
Project duration risk<br />
The company entered an agreement with Bangladesh Power Development Board (BPDB) with a condition that the<br />
agreement shall become effective upon signing and shall terminate fifteen (15) years after the commercial operations<br />
date, unless extended or earlier terminated persuante to the provisions <strong>of</strong> this agreement.<br />
Management perception<br />
Management perceive that there are no possibilities <strong>of</strong> early termination <strong>of</strong> the agreement as there<br />
are huge demand for power in our country. Government <strong>of</strong> Bangladesh is encouraging more local<br />
entrepreneur to invest in this sector to meet up demand and supply gap. Moreover, at present scarcity<br />
<strong>of</strong> power revels that the power crisis will remain in future as economy <strong>of</strong> Bangladesh is growing and<br />
demand for power and electricity is increasing. So there is scope <strong>of</strong> extension <strong>of</strong> the term <strong>of</strong> current<br />
agreement subject to approval <strong>of</strong> BPDB.<br />
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PROSPECTUS<br />
CAPITAL STRUCTURE<br />
1. Authorized capital Tk. 3,000,000,000<br />
2. capital structure prior to IPo<br />
Issued, subscribed and paid up capital<br />
total paid up capital prior to IPo<br />
Tk. 660,000,000<br />
tk. 660,000,000<br />
3. capital structure after IPo<br />
a) Issued, subscribed and paid up capital prior to <strong>IPO</strong> Tk. 660,000,000<br />
b) Initial Public Offering (<strong>IPO</strong>) without premium Tk. 200,000,000<br />
c) total paid up capital after IPo (a + b) tk. 860,000,000<br />
d) Premium from IPo tk. 1,000,000,000<br />
USE OF <strong>IPO</strong> PROCEEDS<br />
a. Barakatullah electro Dynamics Limited will utilize the net proceeds <strong>of</strong> public <strong>of</strong>fer as per following schedule:<br />
use <strong>of</strong> proceeds<br />
sl. No. Particulars Amount <strong>of</strong> taka<br />
01 Bank Loan pay <strong>of</strong>f 1,142,350,000<br />
Means <strong>of</strong> Finance<br />
total 1,142,350,000<br />
sl. No. Particulars Amount <strong>of</strong> taka<br />
01 From <strong>IPO</strong> 1,200,000,000<br />
02 Less: <strong>IPO</strong> expenses 57,650,000<br />
total 1,142,350,000<br />
sd/- sd/-<br />
(Gulam rabbani chowdhury) (Muhammed Monirul Islam)<br />
Director & Managing Director Chief Financial Officer &<br />
Company Secretary<br />
b. Implementation schedule <strong>of</strong> use <strong>of</strong> IPo proceeds<br />
sl. No. Particulars<br />
Amount <strong>of</strong><br />
taka<br />
Approximate date for<br />
payment<br />
01 Bank Loan as on 30 June 2010 1,401,515,149 -<br />
02 Payment during the period from July 2010 to November 2010 75,479,798 -<br />
03 Loan as on 30 November 2010 1,326,035,351 -<br />
04 Payment to be made 47,979,798 within February 2011<br />
05 Outstanding loan will be as on 01 March 2011 1,278,055,553<br />
06<br />
Loan pay <strong>of</strong>f by way <strong>of</strong> raising fund through <strong>IPO</strong><br />
(90% <strong>of</strong> outstanding loan)<br />
1,142,350,000<br />
Within 02 month <strong>of</strong> getting<br />
<strong>IPO</strong> proceeds (i.e. within<br />
June 2011)<br />
sd/- sd/-<br />
(Gulam rabbani chowdhury) (Muhammed Monirul Islam)<br />
Director & Managing Director Chief Financial Officer &<br />
Company Secretary<br />
c. there is no other contract on which the proceeds <strong>of</strong> IPo will be utilized.
Company at a glance<br />
DESCRIPTION OF BUSINESS<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Barakatullah Electro Dynamics Ltd. is the first private sector power producing company, developed by Non Resident<br />
Bangladeshi (NRB) investors and local entrepreneur established in 2007 with the main focus on power generation in<br />
Bangladesh. The Government <strong>of</strong> Bangladesh (GOB) recognizes that power development has to be accelerated in order<br />
to achieve overall economic development targets <strong>of</strong> the country and avoid looming power shortages. Hence, the GOB is<br />
to boost up private sector for power generation in the country for the sake <strong>of</strong> overall development. Barakatullah Electro<br />
Dynamics Ltd., Bangladesh bid a tender for 50 MW ±10% Power Plant, (build-own-operate basis) at Fenchuganj,<br />
Sylhet. Finally the company has been selected as a qualified company by Bangladesh Power Development Board<br />
(BPDB) and agreement was signed as on 28 April 2008 with BPDB. The project involves setting up <strong>of</strong> a rental power<br />
plant by Barakatullah Electro Dynamics Limited (BEDL) with a capacity <strong>of</strong> 51 MW at Fenchuganj, Sylhet and operating<br />
it on Build-Own-Operate (BOO) basis for a term <strong>of</strong> 15 years after the commercial operations date, unless extended or<br />
earlier terminated pursuant to the provisions <strong>of</strong> the agreement. The generated electricity <strong>of</strong> the project is being sold<br />
to BPDB. The plant has successfully commissioned on 10 October 2009 and started its commercial operation from 24<br />
October 2009 and supplying electricity to BPDB very reliably.<br />
Important dates<br />
Incorporation <strong>of</strong> the Company (as Private Limited) 26 June 2007<br />
Date <strong>of</strong> signing power supply agreement with BPDB 28 April 2008<br />
Date <strong>of</strong> signing gas supply agreement with JGTDSL 22 June 2008<br />
Date <strong>of</strong> signing Gen-set supply agreement with GE Jenbacher GmbH & Co, Austria 12 August 2008<br />
Date <strong>of</strong> conversion into Public Limited 25 September 2008<br />
Denomination <strong>of</strong> Face Value <strong>of</strong> Share from Tk 1000 to Tk 100 30 November 2008<br />
Denomination <strong>of</strong> Face Value <strong>of</strong> Share from Tk 100 to Tk 10 30 December 2009<br />
Date <strong>of</strong> commercial operation 24 October 2009<br />
Date <strong>of</strong> formal inauguration by Honorable Prime Minister 03 April 2010<br />
Date <strong>of</strong> ISO 9001:2008 certification for quality management system 01 September 2010<br />
Nature <strong>of</strong> business<br />
The principal activity <strong>of</strong> the company is to set up power plants for generation and supply <strong>of</strong> electricity.<br />
Principal products and services<br />
At present generating and supplying electricity is the principal product/service <strong>of</strong> the company.<br />
Market for products and services<br />
The generated electricity <strong>of</strong> the project is being sold to BPDB. The plant has successfully commissioned on 10 October 2009 and<br />
started its commercial operation from 24 October 2009 and supplying electricity to BPDB.<br />
Relative contribution <strong>of</strong> the product/service that accounts for more than 10% <strong>of</strong> total revenue<br />
Generating and supplying electricity is the principal product <strong>of</strong> the company which contributes almost 100% <strong>of</strong> its revenue.<br />
Associate, subsidiary/related holding company<br />
The company does not have any associate, subsidiary/related holding company.<br />
Distribution <strong>of</strong> products/services<br />
The company is generating electricity through its power plant located at Fenchugonj, Sylhet and supplying the electricity to National<br />
Grid.<br />
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PROSPECTUS<br />
Competitive condition in business<br />
The sector does not pause any competition due to serious dearth <strong>of</strong> reliable and adequate electricity demand. However there are few<br />
other companies are engaed <strong>of</strong> producing electricity to meet up <strong>of</strong> local demand as are main competitors <strong>of</strong> the company:<br />
sl. No. Name <strong>of</strong> competitore<br />
01 Summit Power Limited<br />
02 Khulna Power Company Limited<br />
Sources and availability <strong>of</strong> raw materials and the names <strong>of</strong> the principal suppliers<br />
The main raw material for generating electricity is natural gas. The Company has signed Gas Sales Agreement with<br />
Jalalabad Gas Transmission and Distribution System Ltd. on 22 June 2008 for supply <strong>of</strong> gas to 51 MW Fenchuganj<br />
Rental Power Plant, Sylhet shall commence on the execution date and shall continue subject to the other provisions<br />
<strong>of</strong> Gas Purchase Agreement for a period that ends on the expiry date which is the expiration date for the term <strong>of</strong> the<br />
power purchase agreement.<br />
Sources <strong>of</strong>, and requirement for power, gas and water or any other utilities<br />
Power: The power requirement is met from company’s own generation. However any disruption is met through<br />
supply from local Palli Bidyut Samity for auxiliary use only.<br />
Gas: The Company requires natural gas for generation <strong>of</strong> electricity. The required gas is supplied by Jalalabad<br />
Gas Transmission and Distribution System Ltd. The annual contract Gas usage (ACGU) during a contract<br />
year shall be 74,503,800 Sm³ per annum.<br />
Water: The Company uses close circuit cooling system for its generators and the cooling water requirement is very<br />
minimal which is supplied from deep tube well through demineralization plant.<br />
Customer providing 10% or more revenues<br />
The company has signed power supply agreement on rental basis with BPDB on 28 April 2008 for a term <strong>of</strong> 15 years<br />
to provide 51 MW net electrical power to Bangladesh Power Development Board (BPDB). Under the scope, BEDL build,<br />
own and operate the electricity generation facility on rental basis and sell electricity output to BPDB. BPDB purchases<br />
total electrical capacity and energy from Barakatullah Electro Dynamics Ltd.<br />
Description <strong>of</strong> contract(s) with principal suppliers/customers<br />
Power Purchase Agreement<br />
The company has signed power supply agreement on rental basis with Bangladesh Power Development Board on 28<br />
April 2008 for a term <strong>of</strong> 15 years to provide 51 MW net electrical power to Bangladesh Power Development Board<br />
(BPDB).<br />
This agreement shall become effective upon signing and shall terminate 15 years after Commercial Operations Date,<br />
unless extended or earlier terminated pursuant to the provisions <strong>of</strong> this Agreement.<br />
The purpose <strong>of</strong> this agreement is the supply by company to BPDB <strong>of</strong> Net Energy Output and to make available capacity<br />
and BPDB agrees to accept and pay for the Dependable Capacity & Net Energy Output under the terms and conditions<br />
provided herein. For this purpose company shall be responsible for financing, complete design, supply, inspection,<br />
testing, delivery to the site, erection, testing & commissioning, operation and maintenance including overhauling and<br />
major overhauling <strong>of</strong> the plant for the entire term. Spares consumables required for the plant for the entire term shall<br />
be supplied by the company at its own cost in accordance with this agreement.<br />
The PPA stipulates a two elements tariff. One is Rental Payment and another is Energy Payment. The Rental Payment<br />
and Energy payment payable to the company for Dependable Capacity and Net Energy output respectively for each<br />
contract year through out the term. If power plant could not achieve dependable capacity for any particular billing<br />
month due to reasons other than the default <strong>of</strong> the company, then BPDB shall pay monthly rental payment. The<br />
levalige tariff payment to BPDB is Tk 2.015 per KWH.<br />
termination clause<br />
The agreement shall become effective upon signing and shall terminate fifteen (15) years after the commercial<br />
operations date, unless extended or earlier terminated persuante to the provisions <strong>of</strong> this agreement.
Gas supply Agreement<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
The company has signed gas supply agreement with Jalalabad Gas Transmission and Distribution System Ltd. (JGTDSL)<br />
on 22 June 2008 shall continue subject to the other provisions <strong>of</strong> Gas Purchase Agreement for a period that ends on<br />
the expiry date which is the expiration date for the term <strong>of</strong> the power purchase agreement.<br />
This agreement shall become effective upon signing and shall continue subject to the other provisions <strong>of</strong> this agreement<br />
for a period that ends on the expiry date which is the expiration date for the term <strong>of</strong> the Power Purchase Agreement.<br />
Subject to the terms and condition <strong>of</strong> this agreement and availability <strong>of</strong> gas, gas seller shall sell and deliver to project<br />
company at all times all project company’s requirements for gas for the facility during the term here<strong>of</strong> to meet start-up,<br />
commissioning and operation <strong>of</strong> the facility and project company shall accept, receive and pay for gas from gas seller<br />
at a gas price set by the Government or any authority assigned by it from time to time.<br />
termination clause<br />
The agreement shall commence on the execution date and shall continue subject to the other provisions <strong>of</strong> this<br />
agreement for a period that ends on the expiry date which is the expiration date for the term <strong>of</strong> the power purchase<br />
agreement.<br />
supply contract with orient energy systems Ltd. for 19 unit <strong>of</strong> Gas engine<br />
The company has entered into a supply contract with Orient Energy Systems Ltd., local authorized distributor <strong>of</strong> GE<br />
Jenbacher GmbH & Co, Austria on 12 August 2008 for delivery <strong>of</strong> 19 units JGS 620 GS-N.L model gas engines @<br />
1,000,000 USD per engine.<br />
The warranty period for the equipment shall be 24 months from start up or 16,000 operating hours or a maximum <strong>of</strong><br />
30 months from GE Jenbacher’s written confirmation <strong>of</strong> readiness to ship from Jenbach, Austria, whichever is earlier.<br />
spare Parts Agreement<br />
The company has entered into spare parts contract with GE Jenbacher GmbH & Co. Under the contract, GE Jenbacher<br />
GmbH & Co, Austria will supply all necessary spare parts for the 19 units gas engines for a period <strong>of</strong> 15 years. All spare<br />
parts would have 1-year warranty period from the date <strong>of</strong> delivery.<br />
Material patents, trademarks, licenses or royalty agreements<br />
The Company has not entered into any such agreement.<br />
Number <strong>of</strong> employees<br />
Sylhet Dhaka Plant Total<br />
• Full-time employees<br />
6 11 67 84<br />
• Part-time employees<br />
- - - -<br />
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PROSPECTUS<br />
Production or service rendering capacity and current utilization<br />
Rendering capacity and Generation <strong>of</strong> the plant since commercial date <strong>of</strong> operation is given below:<br />
(I)<br />
Billing<br />
Month<br />
(II)<br />
Rendering Capacity<br />
(KWH)<br />
(III)<br />
Generation<br />
(KWH)<br />
(IV=III/II)<br />
Plant Factor<br />
(%)<br />
Oct-2009 29,112,864 29,037,376 99.74<br />
Nov-2009 39,699,360 27,329,100 68.84<br />
Dec-2009 41,022,672 17,919,400 43.68<br />
Jan-2010 41,022,672 24,584,600 59.93<br />
Feb-2010 37,052,736 31,947,900 86.22<br />
Mar-2010 41,022,672 39,147,900 95.43<br />
Apr-2010 39,699,360 34,357,500 86.54<br />
May-2010 41,022,672 34,642,200 84.45<br />
June-2010 39,699,360 36,144,500 91.05<br />
July-2010 41,022,672 38,966,200 94.99<br />
Aug-2010 41,022,672 38,944,100 94.93<br />
Sept-2010 39,699,360 35,658,700 89.82<br />
Oct-2010 41,022,672 36,423,200 88.79<br />
In this connection Auditor disclosure is as follows:<br />
Name <strong>of</strong> Plant<br />
License<br />
capacity<br />
(MW)<br />
Installed<br />
Capacity<br />
(MW)<br />
Plant Factor<br />
(% on Licensed capacity)<br />
Average Maximum<br />
Energy<br />
Generation<br />
(MwH)<br />
Energy Sold<br />
(MwH)<br />
Fenchuganj Sylhet 51.00 55.14 79.94 98.97 275,894.77 264,199.43
•<br />
•<br />
•<br />
•<br />
•<br />
DESCRIPTION OF PROPERTY<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
The company’s business is operated through registered <strong>of</strong>fice at 102 Azadi, Mirboxtola, Sylhet-3100, corporate<br />
<strong>of</strong>fice at 6/A/1 (2nd Floor), Segunbagicha, Ramna, Dhaka-1000 and power plant at Fenchugonj, Sylhet. The<br />
registered <strong>of</strong>fice and the corporate <strong>of</strong>fice are situated on rented premise while premise <strong>of</strong> the power plant is<br />
owned by the company.<br />
The Fixed asset schedule as per audited accounts as on 30 June 2010 as follows:<br />
sl. No. Name <strong>of</strong> Fixed Asset<br />
01 Land and Land Development<br />
02 Furniture and Fixtures<br />
03 Office and Electrical Equipment<br />
04 Office Decoration<br />
05 Motor Vehicles<br />
06 Building and Civil Construction<br />
07 Maintenance Equipment<br />
08 Plant and Machinery<br />
All the assets <strong>of</strong> the company are situated at company’s <strong>of</strong>fice premises and power plant premises. All the assets<br />
<strong>of</strong> the company are in good operating condition.<br />
The properties are purchased in brand new condition.<br />
The company itself owns the entire property and none is on lease or borrowed.<br />
st The plant & machinery and other assets <strong>of</strong> the company are mortgaged (1 charge) till 31-December-2018,<br />
to Infrastructure Development Company Limited (IDCOL), BRAC Bank Limited, Trust Bank Limited, AB Bank<br />
Limited, Janata Bank Limited & Industrial and Infrastructure Development Finance Company Limited (IIDFC) and<br />
mortgaged (2nd charge) to Prime Finance & Investment Limited till 5th August 2011 against the term loan.<br />
Mentionable here that the company has owning 5.265 acres <strong>of</strong> land <strong>of</strong> which 4.47 acres <strong>of</strong> land are given under<br />
mortgage to the above lenders against term loan.<br />
PLAN OF OPERATION AND DISCUSSION OF FINANCIAL CONDITION<br />
Internal and external sources <strong>of</strong> cash<br />
30-June-10<br />
Amount in taka<br />
(as per audited accounts)<br />
30-June-09<br />
Amount in taka<br />
30-June-08<br />
Amount in taka<br />
Internal sources <strong>of</strong> cash<br />
Share capital 600,000,000 350,000,000 15,000,000<br />
Retained earnings* 102,053,354 - -<br />
sub-total 702,053,354 350,000,000 15,000,000<br />
external sources <strong>of</strong> cash<br />
Share money deposit - 174,635,936 148,829,877<br />
Term loan-loan term portion 1,221,464,642 722,779,830 -<br />
Term loan-short term portion 180,050,507 132,088,080 -<br />
Short term loan - - 3,572,535<br />
Deferred liabilities for plant & equipment - 541,800,000 -<br />
Accounts payable 74,050,246 - -<br />
sub-total 1,475,565,395 1,571,303,846 152,402,412<br />
Grand total 2,177,618,749 1,921,303,846 167,402,412<br />
* The company started its commercial operation from 24 October 2009. So no revenue was generated previous two years.<br />
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PROSPECTUS<br />
Material commitment for capital expenditure<br />
The company has not yet made any material commitment for capital expenditure.<br />
Causes for material changes from period to period<br />
Particulars<br />
Income<br />
(as per audited accounts)<br />
Amount in taka<br />
30-Jun-10<br />
Revenue 514,542,637<br />
Cost <strong>of</strong> sales 245,353,077<br />
Gross pr<strong>of</strong>it 269,189,560<br />
General & Administrative expenses 50,514,638<br />
Operating pr<strong>of</strong>it 218,674,922<br />
Financial income 724,753<br />
219,399,675<br />
Financial expenses 111,763,872<br />
Pr<strong>of</strong>it before tax 107,635,803<br />
Provision for tax 5,582,449<br />
Pr<strong>of</strong>it for the year 102,053,354<br />
The company has started its commercial operation from 24 October 2009. During the year ended on 30 June 2010<br />
operating pr<strong>of</strong>it <strong>of</strong> the company was Tk. 21.87 crore and net pr<strong>of</strong>it after tax was Tk. 10.21 crore.<br />
Seasonal aspect <strong>of</strong> the company’s business<br />
The operation <strong>of</strong> the company is not, in general, affected by any seasonal variances.<br />
Known trends, events or uncertainties<br />
Force majeure such as political unrest, flood and other natural calamities are generally known events that may affect<br />
the business operations <strong>of</strong> the company.<br />
Changes in the assets <strong>of</strong> the company used to pay <strong>of</strong>f any liabilities<br />
No asset <strong>of</strong> the company has been disposed to pay <strong>of</strong>f the liabilities <strong>of</strong> the company.<br />
Loan taken from holding/parent company or subsidiary company<br />
The company has no holding/parent company or subsidiary company, hence has not taken any loan from such party.<br />
However the Company taken loan from Royal Homes Limited which is under common management as disclosed in note<br />
29.B. <strong>of</strong> the audited accounts as on 30 June 2010.<br />
Loan given to holding/parent company or subsidiary company<br />
The company has no holding/parent company or subsidiary company, hence has not given any loan to such party.<br />
Future contractual liabilities<br />
The company has no plan to enter into any contractual liabilities within next one year other than the normal course<br />
<strong>of</strong> business.<br />
Future capital expenditure<br />
The company does not have any plan for capital expenditure in the near future other than normal course <strong>of</strong><br />
business.
VAT, income tax, customs duty or other tax liability<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
VAt<br />
The company is not under the scope <strong>of</strong> VAT. As such, there is no outstanding VAT claim up to the year ended 30 June<br />
2010.<br />
Income tax<br />
As per section 52N <strong>of</strong> the Income Tax Ordinance, 1984 Bangladesh Power Development Board (BPDB) has been<br />
deducted tax at source @ 4% during the payment <strong>of</strong> power generation invoice which is treated as final discharge <strong>of</strong><br />
tax liability as per the said Ordinance. However, general tax rate is applicable on other incomes <strong>of</strong> BEDL.<br />
As per section 75 <strong>of</strong> the said Ordinance, the company has furnished return for the Income years 2007/08 and 2008/09,<br />
statuses <strong>of</strong> which are given below:<br />
Financial<br />
Year<br />
Assessment<br />
Year<br />
Assessed<br />
Income<br />
tax Assessed<br />
by Dct<br />
2007-2008 2008 -2009 1,170,719 439,020 439,020<br />
2008 -2009 2009 -2010 6,141,054 2,302,895 2,302,895<br />
Paid remarks<br />
Assessment completed on 09-<br />
September-2010.<br />
Assessment completed on 09-<br />
September-2010.<br />
custom duty or other liabilities<br />
There is no outstanding on account <strong>of</strong> custom duty or other tax liability. Whereas an amount <strong>of</strong><br />
Tk. 212,463,647 is considered as contingent liability out <strong>of</strong> which Tk. 101,176,307/- is related with custom duty and<br />
other liability as per audited accounts for the year ended on 30 June 2010 due to filing <strong>of</strong> petition against BPDB, NBR,<br />
Customs and other parties for taking exemption facility <strong>of</strong> import duty, VAT, Supplementary duty etc.<br />
Operating lease during the last five years<br />
The company has established its registered <strong>of</strong>fice at Sylhet and corporate <strong>of</strong>fice at Dhaka on leased/rented<br />
accommodation. Other than these rented accommodations the company did not had any operating lease during the<br />
last five years. Particulars <strong>of</strong> the leased/rented accommodations are as follows:<br />
sl.<br />
No.<br />
1.<br />
2.<br />
Branch<br />
Name<br />
Registered<br />
Office<br />
Corporate<br />
Office<br />
Location contract period<br />
102-Azadi, Mirboxtola<br />
Sylhet – 3100.<br />
6/A/1 (2nd floor), Segunbagicha<br />
Ramna, Dhaka – 1000.<br />
Financial lease commitment<br />
2 years starting<br />
from 1-11-2008<br />
10 years starting<br />
from 1-11-2009<br />
Area<br />
(sft.)<br />
There is no financial lease commitment <strong>of</strong> the company during the last five years.<br />
Personnel related scheme<br />
Monthly<br />
rent (tk.)<br />
Advance outstanding on<br />
30-06-2010 (tk.)<br />
1550 15,000 -<br />
2,015 30,000 1,00,000<br />
The company believes in supporting its employees and is <strong>of</strong>fering Festival bonus (2 festival bonuses in a year), Provident Fund as<br />
per Board <strong>of</strong> Directore meeting held on August 16, 2010 and subsequently permission granted by National Board <strong>of</strong> Revenue (NBR)<br />
dated 26 th October 2010 which was effective from 1 st July 2010.The matter also disclose in note 33.A <strong>of</strong> the audited accounts as on 30<br />
June 2010. Company also has a well-designed Compensation plan for attracting highly capable staff with higher degree <strong>of</strong> integrity.<br />
����<br />
25
26<br />
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PROSPECTUS<br />
Breakdown <strong>of</strong> issue expenses<br />
The total <strong>IPO</strong> expenses are estimated as follows:<br />
Particulars rate<br />
Issue Management Fee:<br />
Amount<br />
tk<br />
Manager to the Issue fee 0.60% or maximum Tk. 20 lac 2,000,000<br />
VAT against Issue Management fee 15% <strong>of</strong> Issue Management fee 300,000<br />
sec fee:<br />
Application fee At actual 10,000<br />
Consent fee 0.15% 1,800,000<br />
Fees related to the stock exchanges:<br />
Application fee (DSE) At actual 5,000<br />
Listing fees for stock exchanges (DSE & CSE) @ 0.25% up to Tk. 10 crore<br />
@ 0.15% above Tk. 10 crore <strong>of</strong> paid up capital<br />
subject to maximum <strong>of</strong> Tk. 20 lac each<br />
2,780,000<br />
Annual fee (DSE & CSE) As per listing regulations 190,000<br />
cDBL fees and expenses:<br />
Documentation fee At actual 2,500<br />
Initial Public Offering fee At actual 300,000<br />
Annual fee At actual 100,000<br />
commission & other expenses:<br />
Underwriting commission 0.50% 3,000,000<br />
Bankers to the Issue commission<br />
(assuming subscription <strong>of</strong> 5 times)<br />
0.10% 6,000,000<br />
Credit rating fees At Actual 312,500<br />
expenses related to printing and publications:<br />
Abridged version <strong>of</strong> prospectus Estimated 200,000<br />
Notice for subscription, lottery, refund etc. Estimated 240,000<br />
Printing <strong>of</strong> prospectus and forms Estimated 600,000<br />
Distribution and collection <strong>of</strong> forms and data processing Estimated 7,550,000<br />
Lottery related expenses including BUET fee Estimated 740,000<br />
Other expenses including MICR related expenses Estimated 1,520,000<br />
tax on share premium 3% on premium amount 30,000,000<br />
total 57,650,000
Revaluation <strong>of</strong> assets<br />
The Company has made no revaluation <strong>of</strong> any <strong>of</strong> its assets since inception.<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Transactions with subsidiary/holding company or associate companies<br />
The company has no subsidiary/holding company or associate company. Hence no transaction has taken place. However<br />
the Company taken loan from Royal Homes Limited which is under common management as disclosed in note 29.B. <strong>of</strong><br />
the audited accounts as on 30 June 2009.<br />
Auditors’ certificate regarding allotment <strong>of</strong> shares to Directors, Subscribers to the<br />
Memorandum <strong>of</strong> Association and Articles <strong>of</strong> Association or Sponsor shareholders for<br />
consideration otherwise than for cash<br />
This is to certify that Barakatullah Electro Dynamics Limited has not allotted any shares for consideration otherwise<br />
than for cash to any shareholders, including its Directors, Subscribers to the Memorandum <strong>of</strong> Association and Articles<br />
<strong>of</strong> Association and/or Sponsor shareholders, up to 30 June 2010.<br />
Sd/-<br />
HAQue sHAHALAM MANsur & co.<br />
Dated, Dhaka: 3 October 2010 Chartered Accountants<br />
Material information which is likely to have an impact<br />
There is no other material information which is likely to have an impact on the <strong>of</strong>fering or change the terms and<br />
conditions under which the <strong>of</strong>fer has been made to the public.<br />
����<br />
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28<br />
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PROSPECTUS<br />
Information regarding directorship<br />
sl. No. Name <strong>of</strong> Directors Position<br />
DIRECTORS AND OFFICERS<br />
Age<br />
(Years)<br />
Date <strong>of</strong> becoming a<br />
director for the first time<br />
Date <strong>of</strong> expiration <strong>of</strong><br />
current term<br />
1 Mr. Faisal Ahmed Chowdhury Chairman 40 10.08.2007 24.09.2013<br />
2 Mr. Md. Ahsanul Kabir Vice Chairman 50 10.08.2007 18.07.2014<br />
3 Mr. Abdul Bari Vice Chairman 66 15.07.2008 24.09.2013<br />
4 Mr. Nayem Ahmed Chowdhury Director 27 10.08.2007<br />
5 Mr. Fahim Ahmed Chowdhury Director 35 15.07.2008<br />
6 Mr. Robin Chowdhury Director 47 15.07.2008<br />
7 Mr. Nanu Kazi Mohammed Miah Director 46 15.07.2008<br />
8 Mr. Md. Shirajul Islam Director 56 15.07.2008<br />
9 Mr. Mohammed Abdul Ahad Director 35 15.07.2008<br />
10 Mr. Kazi Mohammed Angur Miah Director 52 15.07.2008<br />
11 Mr. Abdul Mumin Director 41 15.07.2008<br />
12 Mr. Nasim Ahmed Chowdhury Director 34 15.07.2008<br />
13 Mr. Manzur Ashraf Khan Director 35 15.07.2008<br />
14 Mr. Alimus Sadat Chowdhury Director 40 15.07.2008<br />
15 Mr. Afzal Rashid Chowdhury Director 40 25.04.2009<br />
16 Mr. Monsur Alam Chowdhury Director 33 19.07.2009<br />
17 Mr. Yeahyea Murad Khan Director 40 19.07.2009<br />
18 Ms. Ubaydia Chowdhury Director 34 19.07.2009<br />
19 Mr. Gulam Rabbani Chowdhury<br />
Director &<br />
Managing Director<br />
4 th AGM (to be held<br />
On 2011)<br />
3 rd AGM (to be held<br />
On 28 Dec. 2010)<br />
3 rd AGM (to be held<br />
On 28 Dec. 2010)<br />
3 rd AGM (to be held<br />
On 28 Dec. 2010)<br />
3 rd AGM (to be held<br />
On 28 Dec. 2010)<br />
3 rd AGM (to be held<br />
On 28 Dec. 2010)<br />
4 th AGM (to be held<br />
On 2011)<br />
4 th AGM (to be held<br />
On 2011)<br />
3 rd AGM (to be held<br />
On 28 Dec. 2010)<br />
4 th AGM (to be held<br />
On 2011)<br />
4 th AGM (to be held<br />
On 2011)<br />
4 th AGM (to be held<br />
On 2011)<br />
5 th AGM (to be held<br />
On 2012)<br />
5 th AGM (to be held<br />
On 2012)<br />
5 th AGM (to be held<br />
On 2012)<br />
44 10.08.2007 24.09.2013
Directors’ involvement in other organization<br />
sl. No. Name and Position<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Involvement in other organization<br />
Name <strong>of</strong> the organization Position<br />
1 Mr. Faisal Ahmed Chowdhury, Chairman Royal Homes Ltd. Chairman<br />
2 Mr. Md. Ahsanul Kabir, Vice Chairman Syltop Associates (Pvt) Ltd. Director & CEO<br />
3 Mr. Abdul Bari, Vice Chairman Woman’s Medical College & Hospital, Sylhet Director<br />
4 Mr. Nayem Ahmed Chowdhury, Director Royal Homes Ltd. Director<br />
5 Mr. Fahim Ahmed Chowdhury, Director ----- -----<br />
6 Mr. Robin Chowdhury, Director Kensington Ltd. Managing Director<br />
7<br />
Mr. Nanu Kazi Mohammed Miah,<br />
Director<br />
----- -----<br />
8 Mr. Md. Shirajul Islam, Director ----- -----<br />
9 Mr. Mohammed Abdul Ahad, Director Royal Homes Ltd. Director<br />
10<br />
Mr. Kazi Mohammed Angur Miah,<br />
Director<br />
----- -----<br />
11 Mr. Abdul Mumin, Director ----- -----<br />
12 Mr. Nasim Ahmed Chowdhury, Director ----- -----<br />
13 Mr. Manzur Ashraf Khan, Director Royal Homes Ltd. Director<br />
14<br />
15<br />
Mr. Alimus Sadat Chowdhury,<br />
Director<br />
Mr. Afzal Rashid Chowdhury,<br />
Director<br />
Alim Industries Ltd.<br />
Royal Homes Ltd.<br />
Brothers Machinery<br />
Nina-Afzal Industries Ltd.<br />
Balisera Hill Tea Co. Ltd.<br />
Abhinoy Niketon Ltd.<br />
Blue-Bird Auto Ltd.<br />
Crystal Properties<br />
Auto Diagnose Centre<br />
Chairman<br />
Director<br />
Partner<br />
Managing Director<br />
Managing Director<br />
Managing Director<br />
Chairman<br />
Managing Partner<br />
Managing Partner<br />
16 Mr. Monsur Alam Chowdhury, Director ----- -----<br />
17 Mr. Yeahyea Murad Khan, Director Royal Homes Ltd. Director<br />
18 Ms. Ubaydia Chowdhury, Director ----- -----<br />
19<br />
Mr. Gulam Rabbani Chowdhury,<br />
Director & Managing Director<br />
Alim Industries Ltd.<br />
Royal Homes Ltd.<br />
Brothers Machinery<br />
Managing Director<br />
Managing Director<br />
Partner<br />
����<br />
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30<br />
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PROSPECTUS<br />
Family relationship among Directors and top five Officers<br />
There is no family relationship among directors and top five <strong>of</strong>ficers <strong>of</strong> Barakatullah Electro Dynamics Limited except the following:<br />
sl.<br />
No.<br />
1<br />
2<br />
3<br />
4<br />
5<br />
6<br />
7<br />
8<br />
9<br />
Name Family relationship<br />
Mr. Faisal Ahmed Chowdhury<br />
Chairman<br />
Mr. Md. Ahsanul Kabir<br />
Vice Chairman<br />
Mr. Fahim Ahmed Chowdhury<br />
Director<br />
Mr. Nasim Ahmed Chowdhury<br />
Director<br />
Mr. Nayem Ahmed Chowdhury<br />
Director<br />
Mr. Monsur Alam Chowdhury<br />
Director<br />
Mr. Alimus Sadat Chowdhury<br />
Director<br />
Mr. Gulam Rabbani Chowdhury<br />
Director & Managing Director<br />
Ms. Ubaydia Chowdhury<br />
Director<br />
Elder brother <strong>of</strong> Mr. Nasim Ahmed Chowdhury, Mr. Fahim Ahmed Chowdhury<br />
and Mr. Nayem Ahmed Chowdhury;Cousin <strong>of</strong> Mr. Monsur Alam Chowdhury and<br />
Ms. Ubaydia Chowdhury;Brother in law <strong>of</strong> Mr. Md. Ahsanul Kabir and Mr. Gulam<br />
Rabbani Chowdhury.<br />
Brother in law <strong>of</strong> Mr. Faisal Ahmed Chowdhury, Mr. Nasim Ahmed Chowdhury, Mr.<br />
Fahim Ahmed Chowdhury, Mr. Nayem Ahmed Chowdhury and Mr. Monsur Alam<br />
Chowdhury.<br />
Elder brother <strong>of</strong> Mr. Nasim Ahmed Chowdhury and Mr. Nayem Ahmed<br />
Chowdhury;Younger brother <strong>of</strong> Mr. Faisal Ahmed Chowdhury;Cousin <strong>of</strong> Mr. Monsur<br />
Alam Chowdhury and Ms. Ubaydia Chowdhury;Brother in law <strong>of</strong> Mr. Md. Ahsanul<br />
Kabir and Mr. Gulam Rabbani Chowdhury.<br />
Elder brother <strong>of</strong> Mr. Nayem Ahmed Chowdhury;Younger brother <strong>of</strong> Mr. Faisal<br />
Ahmed Chowdhury and Mr. Fahim Ahmed Chowdhury;Cousin <strong>of</strong> Mr. Monsur Alam<br />
Chowdhury and Ms. Ubaydia Chowdhury;Brother in law <strong>of</strong> Mr. Md. Ahsanul Kabir<br />
and Mr. Gulam Rabbani Chowdhury.<br />
Younger brother <strong>of</strong> Mr. Faisal Ahmed Chowdhury, Mr. Fahim Ahmed Chowdhury<br />
and Mr. Nasim Ahmed Chowdhury;Cousin <strong>of</strong> Mr. Monsur Alam Chowdhury and<br />
Ms. Ubaydia Chowdhury;Brother in law <strong>of</strong> Mr. Md. Ahsanul Kabir and Mr. Gulam<br />
Rabbani Chowdhury.<br />
Cousin <strong>of</strong> Mr. Faisal Ahmed Chowdhury, Mr. Fahim Ahmed Chowdhury, Mr.<br />
Nasim Ahmed Chowdhury, Mr. Nayem Ahmed Chowdhury and Ms. Ubaydia<br />
Chowdhury;Brother in law <strong>of</strong> Mr. Md. Ahsanul Kabir and Mr. Gulam Rabbani<br />
Chowdhury.<br />
Cousin <strong>of</strong> Mr. Gulam Rabbani Chowdhury<br />
Brother in law <strong>of</strong> Mr. Faisal Ahmed Chowdhury, Mr. Nasim Ahmed Chowdhury, Mr.<br />
Fahim Ahmed Chowdhury, Mr. Nayem Ahmed Chowdhury and Mr. Monsur Alam<br />
Chowdhury;Cousin <strong>of</strong> Mr. Alimus Sadat Chowdhury<br />
Cousin <strong>of</strong> Mr. Faisal Ahmed Chowdhury, Mr. Fahim Ahmed Chowdhury, Mr.<br />
Nasim Ahmed Chowdhury, Mr. Nayem Ahmed Chowdhury and Mr. Monsur Alam<br />
Chowdhury.
Mr. Faisal Ahmed chowdhury, Chairman<br />
Short bio-data <strong>of</strong> the directors<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Mr. Faisal Ahmed Chowdhury possesses twenty years <strong>of</strong> successful leadership in the area <strong>of</strong> fiscal, strategic, and<br />
operational management. He is a dynamic and result oriented person with a strong track record <strong>of</strong> performance in<br />
a number <strong>of</strong> industrial sectors. His excellent analytical, interpersonal and motivational skills made him a successful<br />
businessman in the diverse range <strong>of</strong> businesses.<br />
After completion his graduation in mid 90’s he moved to UK and started his own business there by founding Apex<br />
Printing and Publishing Ltd. which he led to a renowned and successful business in the printing and publishing industry.<br />
Later, he established Imprint Trading Ltd. and made it successful. His strong entrepreneurial and leadership skills<br />
enabled him to encourage the NRB’s (Non Resident Bangladeshis) to invest in Bangladesh and successfully started a<br />
large real estate company in Bangladesh named Royal Homes Ltd. He is currently acting as Chairman <strong>of</strong> Royal Homes<br />
Ltd. One <strong>of</strong> the projects <strong>of</strong> Royal Homes Limited called Royal City, which is situated just outside <strong>of</strong> Sylhet town, is<br />
aimed to establish a modern independent town with all civic facilities. Along with NRB’s and local investment Mr. Faisal<br />
established Barakatullah Electro Dynamics Ltd (BEDL) in 2007 which contributes to improve national power shortage<br />
problem in Bangladesh. His unique entrepreneurial and leadership skills made BEDL fully functional and valuable within<br />
very short time.<br />
Mr. Faisal is also involved with several community and social organizations. He is an Executive Member <strong>of</strong> Bangladesh<br />
Red Crescent Society, Sylhet Unit and Mujib-Jahan Blood Bank. He has deep passion <strong>of</strong> actively participating in the<br />
various development works in the society.<br />
Mr. Faisal visited many countries such as India, China, Thailand, Singapore, Hong Kong, Malaysia, Saudi Arabia, Belgium,<br />
Germany, France, UK and USA for his business promotion and also attended business seminar and international<br />
exhibition there.<br />
Mr.Faisal Ahmed Chowdhury is also a Head <strong>of</strong> Planing and Business development <strong>of</strong> the company<br />
Mr. Md. Ahsanul Kabir, Vice Chairman<br />
Mr. Ahsanul Kabir is a Diploma-in-civil Engineering. After completion <strong>of</strong> his education, he started his career with own<br />
proprietorships business in civil planning & construction. Over the years he has acquired vast knowledge and experience in<br />
construction sector. He is the Vice-Chairman <strong>of</strong> Barakatullah Electro Dynamics Ltd. and Director & CEO <strong>of</strong> Syltop Associates<br />
(Pvt.) Ltd.<br />
Mr. Md. Ahsanul Kabir is also Head <strong>of</strong> Administration <strong>of</strong> the company.<br />
Mr. Abdul Bari, Vice Chairman<br />
Mr. Alhaj Abdul Bari is a prominent businessman. He started his business career in tourism sector in the early 70’s. Later he<br />
started Garments business and also invested in other potential project such as Sylhet Woman’s Medical College & Hospital.<br />
He has other business in U.K. where he joint as a partner <strong>of</strong> a restaurant. He is the Vice Chairman <strong>of</strong> Barakatullah Electro<br />
Dynamics Ltd.<br />
Mr. Nayem Ahmed chowdhury, Director<br />
Mr. Nayem Ahmed Chowdhury was born & brought up in a noble family in Sylhet in 1983. After completion <strong>of</strong> his graduation<br />
he engaged himself with the leading businessmen <strong>of</strong> the community and has devolved a large Real Estate Company in Sylhet<br />
named “Royal Homes Limited”, a joint venture project between NRB’s & local investors. Mr. Chowdhury has been appointed<br />
as a Director <strong>of</strong> Royal Homes Limited. He is experienced in different business sector.<br />
Mr. Fahim Ahmed chowdhury, Director<br />
Mr. Fahim Ahmed Chowdhury came from a reputed business family. After completion <strong>of</strong> his education, he started business in<br />
UK in a small face. Using his versatile business skill he has been successful. In the spirit <strong>of</strong> doing something in the motherland<br />
he returned to Bangladesh and joined BEDL as a Director.<br />
Mr. Fahim Ahmed Chowdhury is also Project Director <strong>of</strong> the company.<br />
����<br />
31
32<br />
����<br />
PROSPECTUS<br />
Mr. robin chowdhury, Director<br />
Mr. Robin Chowdhury is practicing law as a pr<strong>of</strong>essional solicitor (Lawyer) in U.K. Besides, his engagement in business is also<br />
noticeable. He is a partner <strong>of</strong> a restaurant in U. K. Despite being a success businessman in U.K, he was very much interested<br />
to invest in home country Bangladesh. Thus he accepted the proposal for being a Director <strong>of</strong> Barakatullah Electro Dynamics<br />
Ltd. He is also a Managing Director <strong>of</strong> Kensington Ltd.<br />
Mr. Nanu Kazi Mohammed Miah, Director<br />
Mr. Nanu Kazi Mohammed Miah was born in a village <strong>of</strong> Gonipur, P. O & P. S Chatak, District, Sunamgonj. At his early age,<br />
he had settled in England, where he obtained a national diploma in Business management. After completing education, he<br />
decided to devote himself in business. In 1984, he started his first restaurant business in Henley-in-Arden which became very<br />
successful. From there he has opened other restaurants and now, he has a total <strong>of</strong> 7 restaurants and other companies in<br />
England, which are up and running today.<br />
Mr. Md. shirajul Islam, Director<br />
Mr. Sirajul Islam is an NRB and having garments business in U.K. Besides he invested a potential amount in hotel business. He<br />
has the potential skills required to manage diversified business in different countries. Barakatullah Electro Dynamics Ltd. fined<br />
the qualities that match to be a Director <strong>of</strong> the company and have the honor to absorb him for the position.<br />
Mr. Mohammed Abdul Ahad, Director<br />
Mr. Mohammed Abdul Ahad is an NRB and having various businesses in UK and Bangladesh. He earns success through ensuring<br />
honesty, integrity and trust. He started his business career with departmental store, later he switched in different business.<br />
Recently he joined as a director <strong>of</strong> Barakatullah Electro Dynamics Ltd. He is also a Director <strong>of</strong> Royal Homes Limited.<br />
Mr. Kazi Mohammed Angur Miah, Director<br />
Mr. Kazi Md. Angur Miah is a successful businessman. He has started a departmental Grocery Store at early stage <strong>of</strong> his<br />
business carrier in U.K. Later he started restaurant business too. In a developed country like U.K he is running his own<br />
business efficiently. Recently Barakatullah Electro Dynamics Ltd. <strong>of</strong>fered him to join as a Director <strong>of</strong> the company and that<br />
was accepted and highly appreciated.<br />
Mr. Abdul Mumin, Director<br />
Mr. Abdul Momin was born in 1969 at renowned business family <strong>of</strong> Sylhet, Bangladesh. Now he is staying in United Kingdom<br />
and doing significantly well in his business through his honesty, integrity & innovative ideas. Recently he joined BEDL as a<br />
Director.<br />
Mr. Nasim Ahmed chowdhury, Director<br />
Mr. Nasim Ahmed started his business carrier in U.K. He won a business enterprise related to Travel and Money <strong>Exchange</strong>.<br />
He is one <strong>of</strong> the shareholders <strong>of</strong> Royal Homes Ltd. and entrusted with the responsibility <strong>of</strong> managing UK corporate <strong>of</strong>fice <strong>of</strong><br />
the Company. Recently Barakatullah Electro Dynamics Ltd. <strong>of</strong>fered him to join as a Director <strong>of</strong> the company and that was<br />
accepted and highly appreciated.<br />
Mr. Manzur Ashraf Khan, Director<br />
Mr. Manzur Ashraf Khan is an NRB and having various businesses in UK and Bangladesh. He started his business career<br />
with Travels & money exchange business. Recently he joined as a director <strong>of</strong> Barakatullah Electro Dynamics Ltd. He is also a<br />
Director <strong>of</strong> Royal Homes Limited.<br />
Mr. Alimus sadat chowdhury, Director<br />
Mr. Alimus Sadat Chowdhury born & brought up in a noble family in Sylhet in the year 1971. After completion <strong>of</strong> his education,<br />
he has taken the charge <strong>of</strong> Alim Industries Ltd. as a Chairman. He is one <strong>of</strong> the founder Directors <strong>of</strong> Royal Homed Ltd.<br />
Recently he joined as a director <strong>of</strong> Barakatullah Electro Dynamics Ltd.<br />
Mr. Alimus Sadat Chowdhury is also Head <strong>of</strong> Procurement <strong>of</strong> the Company.
Mr. Afzal rashid chowdhury, Director<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Mr. Afzal Rashid Chowdhury was born in 1969 at Sylhet, Bangladesh. By his wide range <strong>of</strong> knowledge in the field <strong>of</strong><br />
business, he expands his business activity in a vast area. Beside the directorship <strong>of</strong> the company, he is the Chairman<br />
<strong>of</strong> Blue-Bird Auto Ltd., Managing Director <strong>of</strong> Nina-Afzal Industries Ltd., Balisera Hill Tea Co. Ltd., Abhinoy Niketon Ltd.<br />
and also the Managing Partner <strong>of</strong> Crystal Properties & Auto Diagnose Center.<br />
Mr. Monsur Alam chowdhury, Director<br />
Mr. Monsur Alam Chowdhury was born in 1977 in a reputed business family <strong>of</strong> Sylhet, Bangladesh. After completion <strong>of</strong><br />
education, he started to step forward in the sector <strong>of</strong> business and is became very successful in a short span <strong>of</strong> time. He is a<br />
Director <strong>of</strong> Barakatullah Electro Dynamics Limited.<br />
Mr. Yeahyea Murad Khan, Director<br />
Successfully completing his honors and masters degree in economics from Dhaka University in 1994, he was actively involved<br />
in cultural and media sector in Bangladesh. This involvement includes writing and direction for stage and media. Introducing<br />
drama in schools like Scholastica or initiate and deliver a joint venture project with BRAC to make non-formal education<br />
interesting in Bangladesh.<br />
After moving to UK, Mr. Khan completed his degree course on ‘youth and community development’ from Luton University<br />
and started to work for Northamptonshire County Council (Local Government authorities in UK) and later moved to Dudley<br />
Borough Council. He is also the director <strong>of</strong> Royal Homes Limited.<br />
Ms. ubaydia chowdhury, Director<br />
After successfully completion <strong>of</strong> her graduation, Mrs. Chowdhury has been starting to build herself as entrepreneur.<br />
She is one <strong>of</strong> the leading entrepreneurs in Sylhet city. Recently she joined as a director <strong>of</strong> Barakatullah Electro Dynamics<br />
Ltd.<br />
Mr. Gulam rabbani chowdhury, Director & Managing Director<br />
Mr. Gulam Rabbani Chowdhury, a renowned dynamic and pioneer leading business personality among the business community<br />
in home and abroad born & brought up in a noble family in Sylhet in the year 1966. At the very beginning <strong>of</strong> his educational<br />
life he could prove his genuineness & with a high ambition he dedicated his life in business pr<strong>of</strong>ession especially in Industrial<br />
sector. With a vast knowledge <strong>of</strong> Industrial development activities in 1990 he has established Alim Industries Ltd. a<br />
President Award winning leading Agricultural Machinery manufacturer <strong>of</strong> the country in the Bengali year 1395.<br />
Under his prudent stewardship with a group <strong>of</strong> NRB investors the Royal homes Ltd.has grown steadily over the years to<br />
become the leading real estate company in Sylhet. In international communities Mr. Chowdhury has glorious reputation as<br />
a successful entrepreneur.<br />
He has 24 years <strong>of</strong> practical work experience in industrial sector such as Tea Processing Machinery, Electric Generator,<br />
Textile Machinery & Agro-Machinery production, Research, Development, Quality improvement and Marketing in domestic<br />
and overseas. He is a President <strong>of</strong> BSCIC Industrial Owners Association, Sylhet, Director <strong>of</strong> Sylhet Chamber <strong>of</strong> Commerce &<br />
Industries, President <strong>of</strong> Agricultural Machinery Manufacturers Association <strong>of</strong> Bangladesh, Member <strong>of</strong> Royal Agricultural Society<br />
<strong>of</strong> England, UK and Federation <strong>of</strong> Bangladesh Chambers <strong>of</strong> Commerce & Industries.<br />
Mr. Chowdhury has visited many countries for business promotion and also attended many business seminars and international<br />
exhibitions in India, China, Thailand, Malaysia, Denmark, Germany, France, U.K. and U.S.A.<br />
����<br />
33
34<br />
����<br />
PROSPECTUS<br />
Credit Information Bureau (CIB) report<br />
Neither the company nor any <strong>of</strong> its directors or shareholders who hold 5% or more shares in the paid- up capital <strong>of</strong> the<br />
issuer is loan defaulter in terms <strong>of</strong> the CIB Report <strong>of</strong> the Bangladesh Bank.<br />
Description <strong>of</strong> senior executives and departmental heads<br />
Name Position<br />
Mr. Gulam Rabbani<br />
Chowdhury<br />
Mr. Faisal Ahmed<br />
Chowdhury<br />
Managing Director<br />
Head <strong>of</strong> Planning &<br />
Business Development<br />
Mr. Md. Ahsanul Kabir Head <strong>of</strong> Administration<br />
Mr. Alimus Sadat<br />
Chowdhury<br />
Mr. Fahim Ahmed<br />
Chowdhury<br />
Mr. Muhammed Monirul<br />
Islam<br />
educational<br />
Qualification<br />
B. Sc (Hon.),<br />
Diploma in Metallurgy<br />
& Machinery<br />
Production<br />
Name(s) <strong>of</strong> organization(s)<br />
Date <strong>of</strong> Joining<br />
where worked during the<br />
in the company<br />
last five years<br />
01-02-2008<br />
B. A 01-02-2008<br />
Diploma-in-civil<br />
Engineering<br />
01-02-2008<br />
Head <strong>of</strong> Procurement B. A 01-12-2009<br />
Project Director B. A 01-01-2009 -<br />
Chief Financial Officer &<br />
Company Secretary<br />
Mr. Abdullah Al Saiful Islam Plant Manager<br />
Mr. Monowar Ahmed<br />
Manager-Admin &<br />
Commercial<br />
Managing Director <strong>of</strong> Alim<br />
Industries Ltd. & Royal Homes<br />
Ltd., Partner <strong>of</strong> Brothers<br />
Machinery<br />
Chairman <strong>of</strong> Royal Homes<br />
Limited<br />
Director & CEO <strong>of</strong> Syltop<br />
Associates (Pvt) Ltd.<br />
Chairman <strong>of</strong> Alim Industries<br />
Ltd., Director <strong>of</strong> Royal Homes<br />
Ltd., Partner <strong>of</strong> Brothers<br />
Machinery<br />
MBA (Finance) 01-11-2008 Summit Power Limited<br />
B. Sc Engineer<br />
(Electrical)<br />
31-01-2009 Summit Power Limited<br />
MBA 01-03-2009 Summit Power Limited<br />
INVOLVEMENT OF DIRECTORS AND OFFICERS IN CERTAIN LEGAL PROCEEDINGS<br />
No director or <strong>of</strong>ficer <strong>of</strong> the Company was involved in any <strong>of</strong> the following types <strong>of</strong> legal proceedings in the last ten<br />
years:<br />
(a)<br />
(b)<br />
Any bankruptcy petition filed by or against any company <strong>of</strong> which any <strong>of</strong>ficer or director <strong>of</strong> the issuer company<br />
filing the prospectus was a director, <strong>of</strong>ficer or partner at the time <strong>of</strong> the bankruptcy.<br />
Any conviction <strong>of</strong> director, <strong>of</strong>ficer in a criminal proceeding or any criminal proceeding pending against him.<br />
(c) Any order, judgment or decree <strong>of</strong> any court <strong>of</strong> competent jurisdiction against any director, <strong>of</strong>ficer permanently or<br />
temporarily enjoining, barring, suspending or otherwise limiting the involvement <strong>of</strong> any director or <strong>of</strong>ficer in any<br />
type <strong>of</strong> business, securities or banking activities.<br />
(d) Any order <strong>of</strong> the Securities and <strong>Exchange</strong> Commission, or other regulatory authority or foreign financial regulatory<br />
authority, suspending or otherwise limiting the involvement <strong>of</strong> any director or <strong>of</strong>ficer in any type <strong>of</strong> business,<br />
securities or banking activities.
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS<br />
Transaction with related parties<br />
Neither proposed any transaction nor had any transaction during the last two years, between the issuer and any <strong>of</strong> the<br />
following persons:<br />
(a) Any director or executive <strong>of</strong>ficer <strong>of</strong> the issuer;<br />
(b) Any director or <strong>of</strong>ficer;<br />
(c) Any person owning 5% or more <strong>of</strong> the outstanding shares <strong>of</strong> the issuer;<br />
(d) Any member <strong>of</strong> the immediate family (including spouse, parents, brothers, sisters, children, and in-laws) <strong>of</strong> any <strong>of</strong> the<br />
above persons<br />
(e) Any transaction or arrangement entered into by the issuer or its subsidiary for a person who is currently a director or in<br />
any way connected with a director <strong>of</strong> either the issuer company or any <strong>of</strong> its subsidiaries/holding company or associate<br />
concerns, or who was a director or connected in any way with a director at any time during the last three years prior<br />
to the issuance <strong>of</strong> prospectus.<br />
(f) Any loan either taken or given from or to any director or any person connected with the director, any loan taken from<br />
any such person who did not have any stake in the issuer, its holding company or its associate concerns prior to such<br />
loan.<br />
(g) Any director holding any position, apart from being a director in the issuer company, in any company, society, trust,<br />
organization, or proprietorship or partnership firm.<br />
Except the transactions disclosed in Note 29.00 and Note 31.00 <strong>of</strong> the Audited Financial Statements for the year ended June<br />
30, 2010 as follows:<br />
Name Position Period<br />
Mr. Faisal Ahmed Chowdhury<br />
Chairman, Head <strong>of</strong> Planning & Business<br />
Development<br />
Amount in<br />
tk.<br />
remarks<br />
July’09 to June’10 1,980,000 Remuneration<br />
Mr. Gulam Rabbani Chowdhury Managing Director July’09 to June’10 1,980,000 Remuneration<br />
Mr. Md. Ahsanul Kabir Vice Chairman, Head <strong>of</strong> Administration July’09 to June’10 990,000 Remuneration<br />
Mr. Fahim Ahmed Chowdhury Director, Project Director July’09 to June’10 967,500 Remuneration<br />
Mr. Nayem Ahmed Chowdhury Director, Former Head <strong>of</strong> Administration July’09 to Oct ‘09 330,000 Remuneration<br />
Mr. Alimus Sadat Chowdhury Director, Head <strong>of</strong> Procurement Dec. ‘09 to June’10 140,000 Remuneration<br />
Mr. Md. Monsur Alam Chowdhury Director, Former Asstt. Head <strong>of</strong> Procurement July’09 to Nov ‘09 348,000 Remuneration<br />
Mr. Khijir Khan Director-Technical July’09 to June’10 1,200,000 Honorarium<br />
Mr. Muhammed Monirul Islam Chief Financial Officer & Company Secretary July’09 to June’10 1,222,200 Salary<br />
Mr. Abdullah Al Saiful Islam Plant Manager July’09 to June’10 1,076,900 Salary<br />
Directors’ facilities<br />
totAL 10,234,600<br />
The Directors did not enjoy any interest or facilities, whether pecuniary or non-pecuniary excepting fee for attending<br />
in the Meetings <strong>of</strong> the Board <strong>of</strong> Directors and remuneration as disclosed in Note 7, Note 21 and Note 31.00, <strong>of</strong> the<br />
Audited Financial Statements for the year ended June 30, 2010 as follows:<br />
ref. <strong>of</strong> Notes to the Accounts Particulars Amount in taka<br />
Note 7.01 (pre-Operating expenses) Director’s Remuneration 1,011,000<br />
Note 21 (General and Administrative<br />
Expenses in continuing operation)<br />
Director’s Remuneration 5,724,500<br />
total 6,735,500<br />
Total in Note 31.A (As per requirement <strong>of</strong> Schedule XI , part II para 4 <strong>of</strong> Companies Act, 1994 6,735,500<br />
����<br />
35
36<br />
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PROSPECTUS<br />
EXECUTIVE COMPENSATION<br />
Remuneration paid to top five salaried <strong>of</strong>ficers<br />
sl. No. Name <strong>of</strong> the employee Position<br />
total remuneration paid for the<br />
year ended 30-06-2010<br />
1 Mr. Gulam Rabbani Chowdhury* Managing Director 19,80,000<br />
2 Mr. Faisal Ahmed Chowdhury* Head <strong>of</strong> Planning & Business Development 19,80,000<br />
3 Mr. Muhammed Monirul Islam Chief Financial Officer & Company Secretary 12,22,200<br />
4 Mr. Abdullah Al Saiful Islam Plant Manager 10,76,900<br />
5 Mr. Md. Ahsanul Kabir* Head <strong>of</strong> Administration 9,90,000<br />
* Mr. Gulam Rabbani Chowdhury, Mr. Faisal Ahmed Chowdhury and Mr. Md. Ahsanul Kabir also the Director <strong>of</strong> the Company.<br />
Aggregate amount <strong>of</strong> remuneration paid to directors and <strong>of</strong>ficers<br />
(as per audited accounts)<br />
Group<br />
Amount Paid for the<br />
year ended 30-06-2010<br />
Directors’ remuneration Tk. 67,35,500<br />
Salaries & allowances Tk. 1,40,47,269<br />
The company did not pay any remuneration to any director who was not an <strong>of</strong>ficer during the last accounting year.<br />
Future compensation<br />
There is no contract with any director or <strong>of</strong>ficer for future compensation.<br />
Pay increase intention<br />
Periodical review <strong>of</strong> salary and benefits <strong>of</strong> the employees may be made depending on the growth <strong>of</strong> the company’s<br />
operation.<br />
OPTIONS GRANTED TO DIRECTORS, OFFICERS AND EMPLOYEES<br />
The company has not granted any option to directors, <strong>of</strong>ficers or employees.<br />
TRANSACTION WITH THE DIRECTORS AND SUBSCRIBERS TO THE MEMORANDUM<br />
(a)<br />
Benefit received by the Directors from the Company during the last three years as follows:<br />
Name <strong>of</strong> the Directors<br />
and subscriber to the<br />
Memorandum<br />
Mr.Faisal Ahmed Chowdhury<br />
Chairman<br />
Mr.Md. Ahsanul Kabir<br />
Vice Chairman<br />
Mr.Abdul Bari<br />
Vice Chairman<br />
Mr. Gulam Rabbani Chowdhury<br />
Director & Managing Director<br />
Nature <strong>of</strong> Value received<br />
01 July 2009 to<br />
30 June 2010<br />
Amount in Taka<br />
Period<br />
01 July 2008 to<br />
30 June 2009<br />
Amount in Taka<br />
Remuneration 19,80,000 18,00,000<br />
26 June 2007 to<br />
30 June 2008<br />
Amount in Taka<br />
7,50,000<br />
(for 5 months from Feb-08 )<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration 990,000 900,000<br />
375,000<br />
(for 5 months from Feb-08 )<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration Nil Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration 1,980,000 18,00,000<br />
7,50,000<br />
(for 5 months from Feb-08 )<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil
Name <strong>of</strong> the Directors<br />
and subscriber to the<br />
Memorandum<br />
Mr. Nayem Ahmed Chowdhury<br />
Director<br />
Mr. Fahim Ahmed Chowdhury<br />
Director<br />
Mr. Robin Chowdhury<br />
Director<br />
Mr. Nanu Kazi Mohammed<br />
Miah<br />
Director<br />
Mr. Md. Shirajul Islam<br />
Director<br />
Mr. Mohammed Abdul Ahad<br />
Director<br />
Mr. Kazi Mohammed Angur<br />
Miah<br />
Director<br />
Mr. Abdul Mumin<br />
Director<br />
Mr. Nasim Ahmed Chowdhury<br />
Director<br />
Mr. Manzur Ashraf Khan<br />
Director<br />
Mr. Alimus Sadat Chowdhury<br />
Director<br />
Mr. Afzal Rashid Chowdhury<br />
Director<br />
Mr. Monsur Alam Chowdhury<br />
Director<br />
Mr. Yeahyea Murad Khan<br />
Director<br />
Ms. Ubaydia Chowdhury<br />
Director<br />
Nature <strong>of</strong> Value received<br />
Remuneration<br />
01 July 2009 to<br />
30 June 2010<br />
Amount in Taka<br />
330,000<br />
(for 4 months from July<br />
09-Oct 09)<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Period<br />
01 July 2008 to<br />
30 June 2009<br />
Amount in Taka<br />
600,000<br />
26 June 2007 to<br />
30 June 2008<br />
Amount in Taka<br />
250,000<br />
(for 5 months from Feb-08 )<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil<br />
450,000<br />
Nil<br />
Remuneration 967,500<br />
(for 6 months from<br />
Jan-09 )<br />
Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration Nil Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration Nil Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration Nil Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration Nil Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration Nil Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration Nil Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration Nil Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration Nil Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration<br />
140,000<br />
(for 7 months from Dec-09)<br />
Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration Nil Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil<br />
348,000<br />
Nil Nil<br />
Remuneration<br />
(for 5 months from<br />
July 09-Nov 09)<br />
Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration Nil Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
Remuneration Nil Nil Nil<br />
Board meeting Attendence Fees Nil Nil Nil<br />
Dividend Nil Nil Nil<br />
����<br />
37
38<br />
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PROSPECTUS<br />
The issuer also has not received any assets, services or other consideration from its Directors and Subscribers to the<br />
memorandum except :<br />
1. Fund against allotment <strong>of</strong> shares.<br />
2. Services rendered from<br />
Name <strong>of</strong> Directors status in the company<br />
Mr. Faisal Ahmed Chowdhury Chairman<br />
Mr. Md. Ahsanul Kabir Vice Chairman<br />
Mr. Gulam Rabbani Chowdhury Director<br />
Mr. Fahim Ahmed Chowdhury Director<br />
Mr. Alimus Sadat Chowdhury Director<br />
Mr. Nayem Ahmed Chowdhury* Director<br />
Mr. Md. Monsur Alam chowdhury* Director<br />
*The Company received service from the Mr. Nayem Ahmed Chowdhury upto October 2009 and Mr. Md. Monsur Alam Chowdhury<br />
upto November 2009.<br />
(b) No assets were acquired or are to be acquired from the Directors and Subscribers to the memorandum.<br />
TANGIBLE ASSETS PER SHARE AS AT 30 JUNE 2010<br />
sl. No. Particulars taka<br />
A. Assets :<br />
1 Property, Plant & Equipment 1,914,078,657<br />
2 Intangible Assets 34,667<br />
3 Pre-Operating Expenses 41,861,387<br />
4 Inventories 8,522,606<br />
5 Accounts Receivables 134,578,553<br />
6 Advances, Deposits & Pre-payments 81,501,256<br />
7 Cash & Bank Balances 11,526,877<br />
total Assets 2,192,104,003<br />
B. Liabilities :<br />
1 Term Loan-Long Term Portion 1,221,464,642<br />
2 Term Loan-Short Term Portion 180,050,507<br />
3 Liability for Expenses 14,485,254<br />
4 Accounts Payable 74,050,246<br />
total Liabilities 1,490,050,649<br />
c. Net Asset (A-B) 702,053,354<br />
D. Intangible Asset 34,667<br />
E. Net Tangible Asset (C-D) 702,018,687<br />
F. Number <strong>of</strong> Shares outstanding 60,000,000<br />
G. Net tangible assets per share (e/F) 11.70<br />
After considering 10% stock dividend Net tangible assets per share stands as Tk. 702,018,687/66,000,000 = Tk. 10.64/-
Shareholding structure<br />
OWNERSHIP OF THE COMPANY’S SECURITIES<br />
sl. No. Name status<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
No. <strong>of</strong> shares<br />
held<br />
Amount<br />
taka<br />
%<br />
Holding<br />
1 Mr. Faisal Ahmed Chowdhury Chairman 1,787,500 17,875,000 2.71<br />
2 Mr. Md. Ahsanul Kabir Vice Chairman 2,145,000 21,450,000 3.25<br />
3 Mr. Abdul Bari Vice Chairman 778,492 7,784,920 1.18<br />
4 Mr. Nasim Ahmed Chowdhury Director 919,127 9,191,270 1.39<br />
5 Mr. Nayem Ahmed Chowdhury Director 783,750 7,837,500 1.19<br />
6 Mr. Fahim Ahmed Chowdhury Director 585,574 5,855,740 0.89<br />
7 Mr. Alimus Sadat Chowdhury Director 178,750 1,787,500 0.27<br />
8 Mr. Md. Shirajul Islam Director 1,163,492 11,634,920 1.76<br />
9 Mr. Mohammed Abdul Ahad Director 668,492 6,684,920 1.01<br />
10 Mr. Abdul Mumin Director 1,063,865 10,638,650 1.61<br />
11 Mr. Robin Chowdhury Director 6,324,230 63,242,300 9.58<br />
12 Mr. Kazi Mohammed Angur Miah Director 1,163,492 11,634,920 1.76<br />
13 Mr. Nanu Kazi Mohammed Miah Director 1,346,092 13,460,920 2.04<br />
14 Mr. Yeahyea Murad Khan Director 339,174 3,391,740 0.51<br />
15 Mr. Manzur Ashraf Khan Director 270,600 2,706,000 0.41<br />
16 Ms. Ubaydia Chowdhury Director 613,492 6,134,920 0.93<br />
17 Mr. Afzal Rashid Chowdhury Director 460,119 4,601,190 0.70<br />
18 Mr. Monsur Alam Chowdhury Director 350,207 3,502,070 0.53<br />
19 Mr. Gulam Rabbani Chowdhury<br />
Director &<br />
Managing Director<br />
1,787,500 17,875,000 2.71<br />
20 All Other General Shareholders * Shareholder 43,271,052 432,710,520 65.57<br />
total 66,000,000 660,000,000 100<br />
* There are total 118 shareholders in this group and none <strong>of</strong> them holds 5% or above shares in the paid up capital <strong>of</strong><br />
Barakatullah Electro Dynamics Limited.<br />
Securities owned by the <strong>of</strong>ficers<br />
No share or security is held by any <strong>of</strong>ficer <strong>of</strong> the company except 1,787,500 shares held by Mr. Gulam Rabbani Chowdhury,<br />
the Managing Director <strong>of</strong> the Company and 671,000 shares held by Monowar Ahmed, Manager–Admin & Commercial and<br />
Mufti Abdul Mokshit Al Malum, Manager-Accounts.<br />
Moreover, six board members <strong>of</strong> the company, who are owner <strong>of</strong> total 5,830,781 Shares, have provided their services<br />
as paid executives in different positions during the last accounting year. Detail <strong>of</strong> their particulars is as follows:<br />
sl. No. Name Designation shareholding<br />
1 Mr. Faisal Ahmed Chowdhury<br />
2 Mr. Md. Ahsanul Kabir<br />
3 Mr. Nayem Ahmed Chowdhury<br />
4 Mr. Fahim Ahmed Chowdhury<br />
5 Mr. Alimus Sadat Chowdhury<br />
6 Mr. Monsur Alam Chowdhury<br />
Chairman,<br />
Head <strong>of</strong> Planning & Business Development<br />
Vice Chairman,<br />
Head <strong>of</strong> Administration<br />
Director,<br />
Former Head <strong>of</strong> Administration<br />
Director,<br />
Project Director<br />
Director,<br />
Head <strong>of</strong> Procurement<br />
Director,<br />
Former Asst. Head <strong>of</strong> Procurement<br />
1,787,500<br />
2,145,000<br />
783,750<br />
585,574<br />
178,750<br />
350,207<br />
����<br />
39
40<br />
����<br />
PROSPECTUS<br />
DETERMINATION OF OFFERING PRICE<br />
The issue price at Tk. 60 each including a premium <strong>of</strong> Tk. 50 per share is justified as detailed below:<br />
(i) Net Asset Value Per share<br />
The <strong>of</strong>fering price <strong>of</strong> the common stock <strong>of</strong> Barakatullah Electro Dynamics Limited has been determined by assessing<br />
the Net Asset Value (NAV). The financial calculations are presented form the audited accounts as at 30 June 2010.<br />
sl. No. Particulars taka<br />
A. Assets :<br />
1 Property, Plant & Equipment 1,914,078,657<br />
2 Intangible Assets 34,667<br />
3 Pre-Operating Expenses 41,861,387<br />
4 Inventories 8,522,606<br />
5 Accounts Receivables 134,578,553<br />
6 Advances, Deposits & Pre-payments 81,501,256<br />
7 Cash & Bank Balances 11,526,877<br />
total Assets 2,192,104,003<br />
B. Liabilities :<br />
1 Term Loan-Long Term Portion 1,221,464,642<br />
2 Term Loan-Short Term Portion 180,050,507<br />
3 Liability for Expenses 14,485,254<br />
4 Accounts Payable 74,050,246<br />
total Liabilities 1,490,050,649<br />
c. Net Asset Value (A-B) 702,053,354<br />
D. Number <strong>of</strong> Shares outstanding 60,000,000<br />
e. Net tangible assets per share (c/D) 11.70<br />
After considering 10% stock dividend, NAV per share stands at Tk. 702,053,354/66,000,000 = Tk. 10.64/-.<br />
(ii) earning Based Value per share<br />
For the year ended on Net pr<strong>of</strong>it after tax ePs after tax<br />
30 June 2010 Tk. 102,053,354 Tk. 1.76<br />
The company started its commercial operation from 24 October 2009. Hence, although the above EPS is mentioned in<br />
the annual accounts, it actually reveals EPS for the last 8 months <strong>of</strong> operation. If we consider market P/E ratio <strong>of</strong> 28.46 *<br />
then price <strong>of</strong> the shares <strong>of</strong> BEDL becomes Tk. 1.76 x 28.46 = Tk. 50.09 and considering sectoral P/E <strong>of</strong> Fuel & Power<br />
sector, which is 33.77 * on October 2010, price <strong>of</strong> shares <strong>of</strong> BEDL becomes Tk. 1.76 x 33.77 = Tk. 59.43.<br />
On the other hand annual EPS <strong>of</strong> the company stands at Tk. (1.76 x 12) / 8 = Tk. 2.64. If we consider the actual<br />
annualized EPS, price <strong>of</strong> the shares will become as follows:<br />
Taking market P/E = Tk. 2.64 x 28.46 = Tk. 75.13<br />
Taking sectoral P/E = Tk. 2.64 x 33.77 = Tk. 89.15<br />
From the above calculation it is clear that although as per accounting EPS <strong>of</strong> Tk.1.76 ended on 30 June 2010 based on 8<br />
months operation prices <strong>of</strong> the shares <strong>of</strong> BEDL are a bit lower than that <strong>of</strong> the <strong>of</strong>fer price, while considering the EPS <strong>of</strong> Tk<br />
2.64 (annualize) prices goes higher. Hence <strong>of</strong>fer price <strong>of</strong> Tk. 60 per share is justified.<br />
* Source: DSE monthly review, October 2010, Vol 25, No 10.<br />
(iii) Projected earning Based Value per share<br />
For the year ended on Projected ePs (tk. per share)<br />
30 June 2011 Tk. 2.55<br />
30 June 2012 Tk. 3.27<br />
30 June 2013 Tk. 3.43<br />
Average tk. 3.08<br />
Price <strong>of</strong> shares taking market P/E = Tk. 3.08 x 28.46 = Tk. 87.66<br />
Price <strong>of</strong> shares taking sectoral P/E = Tk. 3.08 x 33.77 = Tk. 104.01
(iv) Average market price <strong>of</strong> similar stocks<br />
*closing price<br />
(tk.) as on<br />
summit Power<br />
Limited<br />
Dhaka electric<br />
supply co. Ltd.<br />
Power Grid company <strong>of</strong><br />
BD Limited<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Khulna Power<br />
company Limited<br />
November, 2009 134.52 145.72 72.12 -<br />
December, 2009 121.10 150.57 72.32 -<br />
January, 2010 132.02 163.80 80.07 -<br />
February, 2010 131.40 159.35 76.10 -<br />
March, 2010 139.80 172.32 76.05 -<br />
April,2010 126.82 184.65 79.40 253.70<br />
May, 2010 138.25 202.65 87.43 201.20<br />
June, 2010 133.82 229.33 102.50 140.50<br />
July, 2010 136.50 246.93 104.48 144.90<br />
August, 2010 144.90 252.65 103.73 141.70<br />
September, 2010 143.30 304.02 107.22 136.10<br />
October, 2010 150.40 342.50 134.28 130.70<br />
Average <strong>of</strong> last one<br />
year<br />
136.07 212.87 91.31 164.11<br />
Average total 151.09<br />
* Closing price considering Tk 10 per share<br />
From the above record it is very clear that average market price <strong>of</strong> similar stocks is 151.09. So, <strong>of</strong>fer price <strong>of</strong> Tk. 60 per share <strong>of</strong><br />
BEDL is much lower than its expected market price. Hence the <strong>of</strong>fer price is quite justified.<br />
others factors<br />
(v) Projected Net Asset Value Per share<br />
Period (year) Projected NAV (tk. per share)<br />
30 June 2011 Tk. 23.17<br />
30 June 2012 Tk. 24.45<br />
30 June 2013 Tk. 25.87<br />
Average tk. 24.50<br />
Consider prevailing Price to NAV ratio <strong>of</strong> 7.98 <strong>of</strong> similar companies price <strong>of</strong> the shares <strong>of</strong> BEDL stands at Tk. 24.50 x 7.98 = Tk. 195.51<br />
calculation <strong>of</strong> Price to NAV ratio <strong>of</strong> similar stocks:<br />
Name <strong>of</strong> company Price/NAV ratio<br />
Summit Power Limited 9.60 times<br />
Dhaka Electric Supply Company Limited 7.49 times<br />
Power Grid Company <strong>of</strong> BD Limited 3.44 times<br />
Khulna Power Company Limited 11.38 times<br />
Average 7.98 times<br />
* Source: DSE monthly review, October 2010, Vol 25, No 10.<br />
Price analysis at a glance:<br />
sl. No. Method Price (tk.)<br />
1 Based on historical NAV Per Share (pre bonus issue) 11.70<br />
2 Earning Based Value per share (considering P/E <strong>of</strong> Power sector) 89.15<br />
3 Earning Based Value per share (considering P/E <strong>of</strong> market) 75.13<br />
4 Projected Earning Based Value Per Share (considering P/E <strong>of</strong> Power sector) 104.01<br />
5 Projected Earning Based Value Per Share (considering P/E <strong>of</strong> market) 87.66<br />
6 Average market price <strong>of</strong> similar stocks 151.09<br />
7 Based on Projected NAV Per Share 195.51<br />
Average 102.04<br />
From the above analysis, it appears that every method used for determining <strong>of</strong>fer price <strong>of</strong> shares <strong>of</strong> BEDL reveals a higher price than that <strong>of</strong> the<br />
<strong>of</strong>fer price. Hence, the <strong>of</strong>fer price <strong>of</strong> Tk. 60 per share including a premium <strong>of</strong> Tk. 50 each <strong>of</strong> ordinary shares <strong>of</strong> Barakatullah Electro Dynamics<br />
Limited is quite justified and reasonable.<br />
The project accounts for 2011, 2012, 2013 assessed by the Company duly certified by the auditor HAQUE SHAHALAM MANSUR & CO,<br />
Chartered Accountants with the following assumptions:<br />
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PROSPECTUS<br />
Barakatullah Electro Dynamics Limited<br />
Projected Financial Statements (Balance sheet, Income Statement and Cash Flow Statements) <strong>of</strong> Barakatullah Electro Dynamics<br />
Limited for the year ended 30 June 2011, 2012 and 2013 have been prepared and presented by the Company. The data<br />
presented in these financial statements seem to be fair and rational.<br />
A. PROJECTED BALANCE SHEET<br />
Amount in taka<br />
as at<br />
30.06.2011 30.06.2012 30.06.2013<br />
ASSETS<br />
Non-Current Assets<br />
Property, Plant & Equipment 1,851,171,875 1,788,265,093 1,725,358,311<br />
Intangible Assets 26,667 18,667 10,667<br />
Pre-Operating Expenses 38,940,825 36,020,263 33,099,701<br />
Total Non-Current Assets 1,890,139,367 1,824,304,023 1,758,468,679<br />
Current Assets<br />
Inventories 19,822,254 35,838,044 57,840,140<br />
Accounts Receivables 126,337,659 127,897,587 129,457,516<br />
Advances, Deposits & Pre-payments 81,501,256 78,645,569 55,940,177<br />
Cash & Bank Balances 145,806,905 359,711,087 514,510,719<br />
Total Current Assets 373,468,074 602,092,287 757,748,552<br />
TOTAL ASSETS 2,263,607,441 2,426,396,310 2,516,217,231<br />
EQUITY & LIABILITIES<br />
Shareholders’ Equity<br />
Share Capital 860,000,000 860,000,000 860,000,000<br />
Share Premium 1,000,000,000 1,000,000,000 1,000,000,000<br />
Retained Earnings 132,731,953 242,297,006 364,894,109<br />
Total Shareholders’ Equity 1,992,731,953 2,102,297,006 2,224,894,109<br />
Non-Current Liabilities<br />
Provision for Gratuity 700,000 1,400,000 2,100,000<br />
Term Loan - Long term Portion 101,652,901 67,600,250 33,547,598<br />
Total Non Current Liabilities 102,352,901 69,000,250 35,647,598<br />
Current Liabilities<br />
Term Loan - Short term Portion 34,052,652 34,052,652 34,052,652<br />
Liability for Expenses 7,037,890 7,100,286 7,162,684<br />
Proposed Dividend 86,000,000 172,000,000 172,000,000<br />
Accounts Payable 41,432,045 41,946,116 42,460,188<br />
Total Current Liabilities 168,522,587 255,099,054 255,675,524<br />
TOTAL EQUITY & LIABILITIES 2,263,607,441 2,426,396,310 2,516,217,231<br />
Net Asset Value Per Share (NAVPS) 23.17 24.45 25.87<br />
Sd/-<br />
HAQUE SHAHALAM MANSUR & CO.<br />
Chartered Accountants
B. PROJECTED INCOME STATEMENT<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Amount in taka<br />
for the year ended<br />
30.06.2011 30.06.2012 30.06.2013<br />
Revenue 753,309,908 762,656,646 772,003,383<br />
Cost <strong>of</strong> Sales (363,991,525) (384,076,821) (406,396,003)<br />
Gross Pr<strong>of</strong>it 389,318,383 378,579,825 365,607,380<br />
General & Administrative Expenses (49,327,156) (52,312,807) (53,010,599)<br />
Operating Pr<strong>of</strong>it 339,991,227 326,267,018 312,596,781<br />
Financial Expenses (133,180,232) (14,195,699) (10,279,644)<br />
Pr<strong>of</strong>it before Tax 206,810,995 312,071,319 302,317,137<br />
Income Tax Expenses (30,132,396) (30,506,266) (7,720,034)<br />
Pr<strong>of</strong>it for the year 176,678,599 281,565,053 294,597,103<br />
Appreciation:<br />
Current year’s pr<strong>of</strong>it 176,678,599 281,565,053 294,597,103<br />
Previous year’s pr<strong>of</strong>it 42,053,354 132,731,953 242,297,006<br />
218,731,953 414,297,006 536,894,109<br />
Proposed Dividend (86,000,000) (172,000,000) (172,000,000)<br />
Retained Earnings 132,731,953 242,297,006 364,894,109<br />
Weighted average no. <strong>of</strong> ordinary share outstanding 69,333,333 86,000,000 86,000,000<br />
Earnings per Share (EPS) 2.55 3.27 3.43<br />
C. PROJECTED CASH FLOW STATEMENTS<br />
Cash Flows from Operating Activities:<br />
Amount in taka<br />
for the year ended<br />
30.06.2011 30.06.2012 30.06.2013<br />
Cash Receipts from Customer 761,550,803 761,096,718 770,443,455<br />
Cash paid to Suppliers (428,280,948) (412,944,188) (399,311,529)<br />
Financial (Expenses)/Income (133,180,232) (14,195,699) (10,279,644)<br />
Net Cash Flow Used in Operating Activities 200,089,623 333,956,831 360,852,282<br />
Cash Flows from Investing Activities:<br />
Acquisition <strong>of</strong> Property, Plant & Equipment - - -<br />
Advances, Deposits & Pre-payments - - -<br />
Net Cash Used in Investing Activities - - -<br />
Cash Flows from Financing Activities:<br />
Share Capital 200,000,000 - -<br />
Share Premium 1,000,000,000 - -<br />
Payment <strong>of</strong> dividend - (86,000,000) (172,000,000)<br />
Payment <strong>of</strong> Term Loan (1,265,809,595) (34,052,649) (34,052,650)<br />
Net Cash Generated from Financing Activities (65,809,595) (120,052,649) (206,052,650)<br />
Net Cash Inflow/(Outflow) for the year 134,280,028 213,904,182 154,799,632<br />
Opening Cash & Bank Balances 11,526,877 145,806,905 359,711,087<br />
Closing Cash & Bank Balances 145,806,905 359,711,087 514,510,719<br />
Sd/-<br />
HAQUE SHAHALAM MANSUR & CO.<br />
Chartered Accountants<br />
����<br />
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PROSPECTUS<br />
D. BASIS OF ASSUMPTION<br />
01 Revenue<br />
Revenue is recognized as per reference Tariff multiplied by Dependable capacity <strong>of</strong> the plant. Consumer price<br />
index is taken into consideration at the time <strong>of</strong> calculating Non-Escalable rental received and Variable operating &<br />
maintenance payment (VOMP).<br />
02 Cost <strong>of</strong> Sales<br />
It is assumed that Gas, Spare parts and Lubricants are consumed at 33%, 5-10% and 3% respectively in upcoming<br />
years comparing to the consumption <strong>of</strong> previous year. Depreciation on plant is charged on straight line basis on<br />
cost over the useful life <strong>of</strong> the assets.<br />
03 General & Administrative Expenses<br />
It consists <strong>of</strong> depreciation expenses (other than plant), amortization expenses, employers’ contribution to provident<br />
fund, gratuity expenses, adjustment <strong>of</strong> prepayments and other general & administrative expenses. Depreciation on<br />
PPE & amortization expenses on Intangible assets is charged at straight line basis over the useful life <strong>of</strong> the assets.<br />
Gratuity expenses is equal to one basic <strong>of</strong> all entitled employee <strong>of</strong> the company and PF contribution is @10% <strong>of</strong><br />
basic <strong>of</strong> all employee. It is also assumed that other General & administrative expenses is 3% <strong>of</strong> revenue in future<br />
considering the data <strong>of</strong> previous year.<br />
04 Financial Expenses<br />
It is assumed that by using the <strong>IPO</strong> proceeds, the company will pay 90 % <strong>of</strong> its term loan.<br />
05 Income Tax Expenses<br />
It is assumed by the management that the tax is deducted at source @ 4% on revenue as per 52N <strong>of</strong> the Income Tax<br />
Ordinance, 1984<br />
06 Dividend<br />
The management <strong>of</strong> the company assume to propose cash dividend @ 10%, 20%, and 20% in the year 2011, 2012<br />
and 2013 respectively.<br />
07 Earnings per share<br />
Basic EPS for the year ended 30 June 2011 is calculated in the following way:<br />
Weighted Average No. <strong>of</strong> Ordinary Share Outstanding as at 30 June 2011:<br />
Date o allotment ordinary share<br />
01-07-2010 60,000,000.00<br />
28-12-2010 (Bonus) 6,000,000.00<br />
01-05-2011 (<strong>IPO</strong>) 20,000,000.00<br />
86,000,000.00<br />
Weighted<br />
no. <strong>of</strong> days<br />
-<br />
360<br />
60<br />
calculation<br />
Weighted Average<br />
No. <strong>of</strong> share<br />
- 60,000,000.00<br />
=60,00,000*360/360 6,000,000.00<br />
=2,00,00,000*60/360 3,333,333.33<br />
69,333,333.33<br />
Weighted Average No. <strong>of</strong> Ordinary Share Outstanding (a) 69,333,333<br />
Pr<strong>of</strong>it attributable to the ordinary shareholders (b) 176,678,599<br />
Basic Earnings per share (c=b/a) 2.55<br />
Sd/-<br />
Dated, Dhaka HAQUE SHAHALAM MANSUR & CO.<br />
02 December 2010 Chartered Accountants
The issuer shall apply to:<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
MARKET FOR THE SECURITIES BEING OFFERED<br />
Dhaka stock exchange Limited and chittagong stock exchange Limited<br />
9/F Motijheel C/A, CSE Building, 1080 Sk. Mujib Road<br />
Dhaka-1000 Agrabad, <strong>Chittagong</strong>-4100<br />
within 07 (seven) working days from the date <strong>of</strong> consent accorded by the Commission to issue prospectus.<br />
Declaration about listing <strong>of</strong> shares with the stock exchange(s)<br />
None <strong>of</strong> the stock exchange(s), if for any reason, grants listing within 75 days from the closure <strong>of</strong> subscription, any<br />
allotment in terms <strong>of</strong> this prospectus shall be void and the company shall refund the subscription money within fifteen<br />
days from the date <strong>of</strong> refusal for listing by the stock exchanges, or from the date <strong>of</strong> expiry <strong>of</strong> the said 75 (seventy five)<br />
days, as the case may be.<br />
In case <strong>of</strong> non-refund <strong>of</strong> the subscription money within the aforesaid fifteen days, the company directors, in addition<br />
to the issuer company, shall be collectively and severally liable for refund <strong>of</strong> the subscription money, with interest at<br />
the rate <strong>of</strong> 2% (two percent) per month above the bank rate, to the subscribers concerned.<br />
The issue manager, in addition to the issuer company, shall ensure due compliance <strong>of</strong> the above mentioned conditions<br />
and submit compliance report thereon to the Commission within seven days <strong>of</strong> expiry <strong>of</strong> the aforesaid fifteen days time<br />
period allowed for refund <strong>of</strong> the subscription money.<br />
trading and settlement<br />
Trading and settlement regulation <strong>of</strong> the stock exchanges shall apply in respect <strong>of</strong> trading and settlement <strong>of</strong> the shares<br />
<strong>of</strong> the Company.<br />
DESCRIPTION OF SECURITIES OUTSTANDING OR BEING OFFERED<br />
Dividend, voting, pre-emption rights<br />
The Share Capital <strong>of</strong> the company is divided into Ordinary Shares, carrying equal rights to vote and receive dividend<br />
in terms <strong>of</strong> the relevant provisions <strong>of</strong> the Companies Act 1994 and the Articles <strong>of</strong> Association <strong>of</strong> the company. All<br />
shareholders shall have the usual voting right voting right in person or by proxy in connection with, among others,<br />
election <strong>of</strong> Directors & Auditors and other usual agenda <strong>of</strong> General Meeting – Ordinary or Extra Ordinary. On a show<br />
<strong>of</strong> hand, every shareholder present in person and every duly authorized representative <strong>of</strong> a shareholder present at a<br />
General Meeting shall have one vote and on a poll every shareholder present in person or by proxy shall have one vote<br />
for every share held by him or her.<br />
In case <strong>of</strong> any additional issue <strong>of</strong> shares for raising further capital the existing shareholders shall be entitled to Right<br />
Issue <strong>of</strong> shares in terms <strong>of</strong> the guidelines issued by the SEC from time to time.<br />
Conversion and liquidation rights<br />
In terms <strong>of</strong> the provisions <strong>of</strong> the Companies Act 1994, Articles <strong>of</strong> Association <strong>of</strong> the Company and other relevant rules<br />
in force, the shares <strong>of</strong> the Company are freely transferable. The Company shall not charge any fee for registering<br />
transfer <strong>of</strong> shares. No transfer shall be made to a firm, an infant or person <strong>of</strong> unsound mind.<br />
Dividend policy<br />
a) The pr<strong>of</strong>it <strong>of</strong> the Company, subject to any special right relating thereto created or authorized to be created by the<br />
Memorandum <strong>of</strong> Association and subject to the provisions <strong>of</strong> the Articles <strong>of</strong> Association, shall be divisible among<br />
the members in proportion to the amount <strong>of</strong> capital paid-up on the shares held by them respectively.<br />
b) No larger dividend shall be declared than is recommended by the Directors, but the Company in its General Meeting<br />
may declare a smaller dividend. The declaration <strong>of</strong> Directors as to the amount <strong>of</strong> Net Pr<strong>of</strong>it <strong>of</strong> the Company shall<br />
be conclusive.<br />
c) No dividend shall be payable except out <strong>of</strong> the pr<strong>of</strong>its <strong>of</strong> the Company or any other undistributed pr<strong>of</strong>its. Dividend<br />
shall not carry interest as against the Company.<br />
����<br />
45
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PROSPECTUS<br />
d) The Directors may from time to time pay the members such interim dividend as in their judgment the financial<br />
position <strong>of</strong> the Company may justify.<br />
e) A transfer <strong>of</strong> shares shall not pass the right to any dividend declared thereon before the registration <strong>of</strong> transfer.<br />
f). There is no limitation on the payment dividends to the common stockholders <strong>of</strong> the Company.<br />
Other rights <strong>of</strong> stockholders<br />
In terms <strong>of</strong> the provisions <strong>of</strong> the Companies Act 1994, Articles <strong>of</strong> Association <strong>of</strong> the Company and other relevant rules<br />
in force, the shares <strong>of</strong> the Company are transferable. The Company shall not charge any fee, other than Government<br />
duties for registering transfer <strong>of</strong> shares. No transfer shall be made to a minor or person <strong>of</strong> unsound mind.<br />
The Directors shall present the financial statements as required under the law & International Accounting Standard.<br />
Financial statements will be prepared in accordance with the International Accounting Standards consistently applied<br />
throughout the subsequent periods and present with the objective <strong>of</strong> providing maximum disclosure as par law and<br />
International Accounting Standard to the shareholders regarding the financial and operational position <strong>of</strong> the company.<br />
The shareholders shall have the right to receive all periodical statement and reports, audited as well as unaudited,<br />
published by the company from time to time.<br />
The shareholder holding minimum <strong>of</strong> 10% shares <strong>of</strong> paid-up capital <strong>of</strong> the company shall have the right to requisition<br />
Extra-ordinary General Meeting <strong>of</strong> the company as provided for the section 84 <strong>of</strong> the Companies Act 1994.<br />
DEBT SECURITIES<br />
The Company has not issued or planning to issue any debt securities within six months.<br />
LOCK-IN ON SPONSORS’ SHARES<br />
All issued shares <strong>of</strong> the issuer at the time <strong>of</strong> according consent to public <strong>of</strong>fering shall be subject to a lock-in period <strong>of</strong> three years<br />
from the date <strong>of</strong> issuance <strong>of</strong> prospectus or commercial operation, whichever comes later.<br />
Provided that the persons, other than directors and those who hold 5% or more, who have subscribed to the shares <strong>of</strong> the company<br />
within immediately preceding two years <strong>of</strong> according consent, shall be subject to a lock-in period <strong>of</strong> one year from the date <strong>of</strong> issuance<br />
<strong>of</strong> prospectus or commercial operation, whichever comes later.<br />
sl.<br />
No.<br />
Name status<br />
No. <strong>of</strong> shares<br />
Hold<br />
%<br />
Holding<br />
Date <strong>of</strong><br />
Issuance <strong>of</strong><br />
<strong>Prospectus</strong><br />
Period<br />
<strong>of</strong> Lock<br />
In<br />
expire<br />
date<br />
<strong>of</strong> lock-in<br />
1 Mr. Faisal Ahmed Chowdhury Chairman 1,787,500 2.708 01 February 2011 03 years 31 January 2014<br />
2 Mr. Gulam Rabbani Chowdhury<br />
Director & Managing<br />
Director<br />
1,787,500 2.708 01 February 2011 03 years 31 January 2014<br />
3 Mr. Md. Ahsanul Kabir Vice-Chairman 2,145,000 3.250 01 February 2011 03 years 31 January 2014<br />
4 Mr. Abdul Bari Vice-Chairman 778,492 1.180 01 February 2011 03 years 31 January 2014<br />
5 Mr. Nasim Ahmed Chowdhury Director 919,127 1.393 01 February 2011 03 years 31 January 2014<br />
6 Mr. Nayem Ahmed Chowdhury Director 783,750 1.188 01 February 2011 03 years 31 January 2014<br />
7 Mr. Fahim Ahmed Chowdhury Director 585,574 0.887 01 February 2011 03 years 31 January 2014<br />
8 Mr. Alimus Sadat Chowdhury Director 178,750 0.271 01 February 2011 03 years 31 January 2014<br />
9 Mr. Md. Shirajul Islam Director 1,163,492 1.763 01 February 2011 03 years 31 January 2014<br />
10 Mr. Mohammed Abdul Ahad Director 668,492 1.013 01 February 2011 03 years 31 January 2014<br />
11 Mr. Abdul Mumin Director 1,063,865 1.612 01 February 2011 03 years 31 January 2014<br />
12 Mr. Robin Chowdhury Director 6,324,230 9.582 01 February 2011 03 years 31 January 2014<br />
13 Mr. Kazi Mohammed Angur Miah Director 1,163,492 1.763 01 February 2011 03 years 31 January 2014<br />
14 Mr. Nanu Kazi Mohammed Miah Director 1,346,092 2.040 01 February 2011 03 years 31 January 2014<br />
15 Mr. Yeahyea Murad Khan Director 339,174 0.514 01 February 2011 03 years 31 January 2014<br />
16 Mr. Manzur Ashraf Khan Director 270,600 0.410 01 February 2011 03 years 31 January 2014<br />
17 Ms. Ubaydia Chowdhury Director 613,492 0.930 01 February 2011 03 years 31 January 2014<br />
18 Mr. Afzal Rashid Choudhury Director 460,119 0.697 01 February 2011 03 years 31 January 2014<br />
19 Mr. Monsur Alam Chowdhury Director 350,207 0.531 01 February 2011 03 years 31 January 2014<br />
sub total 22,728,948 34.44
sl.<br />
No.<br />
Name status<br />
No. <strong>of</strong> shares<br />
Hold<br />
%<br />
Holding<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Allotment<br />
Date<br />
Date <strong>of</strong><br />
Issuance <strong>of</strong><br />
<strong>Prospectus</strong><br />
Period<br />
<strong>of</strong> Lock<br />
In<br />
expire<br />
date<br />
<strong>of</strong> lock-in<br />
20 Mr. Alimul Ahsan Chowdhury Shareholder 10,000 15-07-2008<br />
315,000 25-04-2009<br />
32,500 29-12-2010<br />
Sub total 357,500 0.542 01 February 2011 01 Year 31 January 2012<br />
21 Ms. Rushina Ahmed Chowdhury Shareholder 322,880<br />
25-04-2009<br />
32,288<br />
29-12-2010<br />
Sub total 355,168 0.538 01 February 2011 01 Year 31 January 2012<br />
22 Ms. Rohima Chowdhury Shareholder 10,000 15-07-2008<br />
152,500 25-04-2009<br />
16,250 29-12-2010<br />
Sub total 178,750 0.271 01 February 2011 01 Year 31 January 2012<br />
23 Ms. Momthaz Chowdhury Shareholder 286,230 25-04-2009<br />
28,623 29-12-2010<br />
Sub total 314,853 0.477 01 February 2011 01 Year 31 January 2012<br />
24 Mr. Lutfur Rahman Ali Shareholder 209,430 25-04-2009<br />
20,943 29-12-2010<br />
Sub total 230,373 0.349 01 February 2011 01 Year 31 January 2012<br />
25 Mr. Md. Moududul Haque Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
26 Ms. Mawduatun Naher Chowdhury Shareholder 81,250 25-04-2009<br />
8,125 29-12-2010<br />
Sub total 89,375 0.135 01 February 2011 01 Year 31 January 2012<br />
27 Mr. Mijanur Rahman Choudhury Shareholder 40,000 15-07-2008<br />
1,010,000 25-04-2009<br />
105,000 29-12-2010<br />
Sub total 1,155,000 1.750 01 February 2011 01 Year 31 January 2012<br />
28 Mr. M. K Safi Chowdhury Shareholder 650,000 25-04-2009<br />
65,000 29-12-2010<br />
Sub total 715,000 1.083 01 February 2011 01 Year 31 January 2012<br />
29 Mr. Gulam Mohammed Chowdhury Shareholder 20,000 15-07-2008<br />
305,000 25-04-2009<br />
32,500 29-12-2010<br />
Sub total 357,500 0.542 01 February 2011 01 Year 31 January 2012<br />
30 Mr. Nurul Haque Chowdhury Shareholder 108,330 25-04-2009<br />
10,833 29-12-2010<br />
Sub total 119,163 0.181 01 February 2011 01 Year 31 January 2012<br />
31 Mr. Touhidul Islam Shareholder 108,330 25-04-2009<br />
10,833 29-12-2010<br />
Sub total 119,163 0.181 01 February 2011 01 Year 31 January 2012<br />
32 Mr. Syed Nazrul Hossain Shareholder 11,000 15-07-2008<br />
267,860 25-04-2009<br />
27,886 29-12-2010<br />
Sub total 306,746 0.465 01 February 2011 01 Year 31 January 2012<br />
33 Mr. Md. Rafiqul Haque Shareholder 11,000 15-07-2008<br />
267,860 25-04-2009<br />
27,886 29-12-2010<br />
Sub total 306,746 0.465 01 February 2011 01 Year 31 January 2012<br />
34 Mr. Md. Abdul Kadir Shareholder 5,500 15-07-2008<br />
133,930 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
35 Mr. Md. Abdul Kalam Razu Shareholder 5,500 15-07-2008<br />
203,930 25-04-2009<br />
20,943 29-12-2010<br />
Sub total 230,373 0.349 01 February 2011 01 Year 31 January 2012<br />
36 Ms. Tupa Rahman Shareholder 5,500 15-07-2008<br />
133,930 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
����<br />
47
48<br />
����<br />
PROSPECTUS<br />
sl.<br />
No.<br />
Name status<br />
No. <strong>of</strong> shares<br />
Hold<br />
%<br />
Holding<br />
Allotment<br />
Date<br />
37 Mr. Md. Babul Miah Shareholder 5,500 15-07-2008<br />
133,930 25-04-2009<br />
13,943 29-12-2010<br />
Date <strong>of</strong><br />
Issuance <strong>of</strong><br />
<strong>Prospectus</strong><br />
Period<br />
<strong>of</strong> Lock<br />
In<br />
expire<br />
date<br />
<strong>of</strong> lock-in<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
38 Mr. Kabir A Khan Shareholder 5,500 15-07-2008<br />
133,930 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
39 Ms. Amina Begum Shareholder 5,500 15-07-2008<br />
273,930 25-04-2009<br />
27,943 29-12-2010<br />
Sub total 307,373 0.466 01 February 2011 01 Year 31 January 2012<br />
40 Mr. Nurul Huda Shareholder 454,550 25-04-2009<br />
45,455 29-12-2010<br />
Sub total 500,005 0.758 01 February 2011 01 Year 31 January 2012<br />
41 Mr. Alhaj Md. Ahmed Ali Shareholder 790,000 25-04-2009<br />
79,000 29-12-2010<br />
Sub total 869,000 1.317 01 February 2011 01 Year 31 January 2012<br />
42<br />
Ms. Nasreen Akhter (Runa) &<br />
Mr. Md. Mahmud Alam<br />
Shareholder 259,430 25-04-2009<br />
25,943 29-12-2010<br />
Sub total 285,373 0.432 01 February 2011 01 Year 31 January 2012<br />
43 Mr. Nurul Haque (Jamil) Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
44 Mr. Abdul Kader Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
45 Mr. Nazmul Karim Shareholder 227,270 25-04-2009<br />
22,727 29-12-2010<br />
Sub total 249,997 0.379 01 February 2011 01 Year 31 January 2012<br />
46 Mr. Moynul Hoque Siddiqui Shareholder 227,270 25-04-2009<br />
22,727 29-12-2010<br />
Sub total 249,997 0.379 01 February 2011 01 Year 31 January 2012<br />
47 Mr. Saydur Rahman Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
48 Mr. Md. Shahidul Islam Mamun Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
49 Mr. Masudur Rahman Shareholder 179,430 25-04-2009<br />
17,943 29-12-2010<br />
Sub total 197,373 0.299 01 February 2011 01 Year 31 January 2012<br />
50 Mr. Abu Rashed Md. Mujib Noman Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
51 Mr. Sourav Datta Chowdhury Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
52 Mr. Asrafur Rashid Jaigirdar Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
53 Mr. Kaisar Rashid Jaigirdar Shareholder 116,110 25-04-2009<br />
11,611 29-12-2010<br />
Sub total 127,721 0.194 01 February 2011 01 Year 31 January 2012<br />
54 Mr. Mohammad Ashik Miah Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
55 Ms. Sultana Begum Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012
sl.<br />
No.<br />
Name status<br />
No. <strong>of</strong> shares<br />
Hold<br />
%<br />
Holding<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Allotment<br />
Date<br />
56 Mr. Md. Jalil Miah Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Date <strong>of</strong><br />
Issuance <strong>of</strong><br />
<strong>Prospectus</strong><br />
Period<br />
<strong>of</strong> Lock<br />
In<br />
expire<br />
date<br />
<strong>of</strong> lock-in<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
57 Mr. Ahsanul Haque Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
58 Ms. Latifa Khanom Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
59 Mr. Gulam Mahmud Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
60 Mr. Md. Dilwar Hossain Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
61 Mr. Masum Ahmed Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
62 Mr. Khasru Miah Shareholder 389,430 25-04-2009<br />
38,943 29-12-2010<br />
Sub total 428,373 0.649 01 February 2011 01 Year 31 January 2012<br />
63 Mr. S<strong>of</strong>iq Uddin Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
64 Mr. Abu Zafar Enayet Rasul Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
65 Mr. Sohal Al Razi Chowdhury Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
66 Mr. Eftarul Hossain Chowdhury Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
67 Mr. Md. Zillur Rahman Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
68 Mr. Haji Md. Gousul Hossain Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
69 Mr. Jilu Miah Shareholder 209,430 25-04-2009<br />
20,943 29-12-2010<br />
Sub total 230,373 0.349 01 February 2011 01 Year 31 January 2012<br />
70 Mr. Nizam Uddin Shikder Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
71 Mr. Rashedul Hasan Khaled Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
72 Mr. Abdul Basith Tafader Shareholder 119,910 25-04-2009<br />
19,520 30-06-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
73 Mr. Zakir Hussain Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
74 Mr. Humayun Ahmed Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
����<br />
49
50<br />
����<br />
PROSPECTUS<br />
sl.<br />
No.<br />
Name status<br />
No. <strong>of</strong> shares<br />
Hold<br />
%<br />
Holding<br />
Allotment<br />
Date<br />
75 Mr. Nillur Rahman Shareholder 139,430 25-04-2009<br />
13,943 29-12-2010<br />
Date <strong>of</strong><br />
Issuance <strong>of</strong><br />
<strong>Prospectus</strong><br />
Period<br />
<strong>of</strong> Lock<br />
In<br />
expire<br />
date<br />
<strong>of</strong> lock-in<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
76 Ms. Razia Khatun Shareholder 350,000 28-06-2009<br />
150,000 30-06-2009<br />
50,000 29-12-2010<br />
Sub total 550,000 0.833 01 February 2011 01 Year 31 January 2012<br />
77 Mr. Mohammed Ziaur Rahman Shareholder 40,470 30-06-2009<br />
238,400 28-06-2009<br />
27,887 29-12-2010<br />
Sub total 306,757 0.465 01 February 2011 01 Year 31 January 2012<br />
78 Mr. Mohammed Shafiqul Haque Shareholder 139,430 30-06-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
79 Mr. Musleh Uddin Chowdhury Shareholder 139,430 28-06-2009<br />
13,943 29-12-2010<br />
Sub total 153,373 0.232 01 February 2011 01 Year 31 January 2012<br />
80 Mr. Abu Saleh Md. Shawkotul Islam Shareholder 150,000 30-06-2009<br />
15,000 29-12-2010<br />
Sub total 165,000 0.250 01 February 2011 01 Year 31 January 2012<br />
81 Mr. Abdus S. Majid Shareholder 750,000 19-07-2009<br />
75,000 29-12-2010<br />
Sub total 825,000 1.250 01 February 2011 01 Year 31 January 2012<br />
82 Mr. Abdul Rahman Shareholder 89,380 30-06-2009<br />
8,938 29-12-2010<br />
Sub total 98,318 0.149 01 February 2011 01 Year 31 January 2012<br />
83 STFE Co. Ltd., Thailand Shareholder 100,000 05-08-2008<br />
300,000 17-01-2008<br />
1,600,000 25-04-2009<br />
200,000 29-12-2010<br />
Sub total 2,200,000 3.333 01 February 2011 01 Year 31 January 2012<br />
84 Ms. Shaheda Begum Shanti Shareholder 2,740,000 19-07-2009<br />
274,000 29-12-2010<br />
Sub total 3,014,000 4.567 01 February 2011 01 Year 31 January 2012<br />
85 Mr. Abdur Rahim Shareholder 760,000 19-07-2009<br />
76,000 29-12-2010<br />
Sub total 836,000 1.267 01 February 2011 01 Year 31 January 2012<br />
86 Mr. Abdul Hannan Shareholder 2,090,000 19-07-2009<br />
209,000 29-12-2010<br />
Sub total 2,299,000 3.483 01 February 2011 01 Year 31 January 2012<br />
87 Ms. Ifrat Jahan Chowdhury Shareholder 500,000 19-07-2009<br />
50,000 29-12-2010<br />
Sub total 550,000 0.833 01 February 2011 01 Year 31 January 2012<br />
88 Mr. A T M Fokrul Islam Chowdhury Shareholder 450,000 19-07-2009<br />
45,000 29-12-2010<br />
Sub total 495,000 0.750 01 February 2011 01 Year 31 January 2012<br />
89 Ms. Mahbuba Sultana Choudhury Shareholder 250,000 19-07-2009<br />
150,000 17-09-2009<br />
40,000 29-12-2010<br />
Sub total 440,000 0.667 01 February 2011 01 Year 31 January 2012<br />
90 Ms. Tohmina Khatun Shareholder 891,720 19-07-2009<br />
89,172 29-12-2010<br />
Sub total 980,892 1.486 01 February 2011 01 Year 31 January 2012<br />
91 Mr. Jafor Kibria Shujon Shareholder 750,000 19-07-2009<br />
75,000 29-12-2010<br />
Sub total 825,000 1.250 01 February 2011 01 Year 31 January 2012<br />
92 Mr. Mamun Kibria Shumon Shareholder 750,000 19-07-2009<br />
75,000 29-12-2010<br />
Sub total 825,000 1.250 01 February 2011 01 Year 31 January 2012
sl.<br />
No.<br />
Name status<br />
No. <strong>of</strong> shares<br />
Hold<br />
%<br />
Holding<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Allotment<br />
Date<br />
93 Mr. Abdul Mannan Shareholder 250,000 19-07-2009<br />
25,000 29-12-2010<br />
Date <strong>of</strong><br />
Issuance <strong>of</strong><br />
<strong>Prospectus</strong><br />
Period<br />
<strong>of</strong> Lock<br />
In<br />
expire<br />
date<br />
<strong>of</strong> lock-in<br />
Sub total 275,000 0.417 01 February 2011 01 Year 31 January 2012<br />
94 Mr. Madhab Chandra Das Shareholder 100,000 19-07-2009<br />
10,000 29-12-2010<br />
Sub total 110,000 0.167 01 February 2011 01 Year 31 January 2012<br />
95 Mr. Md. Al Mojahid Mullick Shareholder 300,000 19-07-2009<br />
30,000 29-12-2010<br />
Sub total 330,000 0.500 01 February 2011 01 Year 31 January 2012<br />
96 Mr. Jashim Uddin Ahmed Shareholder 100,000 19-07-2009<br />
10,000 29-12-2010<br />
Sub total 110,000 0.167 01 February 2011 01 Year 31 January 2012<br />
97 Mr. Mohsin Ahmed Shareholder 100,000 19-07-2009<br />
10,000 29-12-2010<br />
Sub total 110,000 0.167 01 February 2011 01 Year 31 January 2012<br />
98 Mr. Mamunur Rashid Shareholder 100,000 19-07-2009<br />
10,000 29-12-2010<br />
Sub total 110,000 0.167 01 February 2011 01 Year 31 January 2012<br />
99 Mr. Md. Gazi Toufiqur Rahman Shareholder 100,000 19-07-2009<br />
10,000 29-12-2010<br />
Sub total 110,000 0.167 01 February 2011 01 Year 31 January 2012<br />
100 Mr. Mamunur Rashid Shahin Shareholder 100,000 19-07-2009<br />
10,000 29-12-2010<br />
Sub total 110,000 0.167 01 February 2011 01 Year 31 January 2012<br />
101 Mr. Aminur Rashed Shareholder 100,000 19-07-2009<br />
10,000 29-12-2010<br />
Sub total 110,000 0.167 01 February 2011 01 Year 31 January 2012<br />
102 Mr. Md. Tipu Sultan Shareholder 200,000 19-07-2009<br />
20,000 29-12-2010<br />
Sub total 220,000 0.333 01 February 2011 01 Year 31 January 2012<br />
103 Mr. A M Aminuddin Shareholder 150,000 19-07-2009<br />
15,000 29-12-2010<br />
Sub total 165,000 0.250 01 February 2011 01 Year 31 January 2012<br />
104 Mr. Syed Rafiqul Haque Shareholder 35,750 19-07-2009<br />
3,575 29-12-2010<br />
Sub total 39,325 0.060 01 February 2011 01 Year 31 January 2012<br />
105 Mr. Md. Jasim Uddin Shareholder 100,000 19-07-2009<br />
10,000 29-12-2010<br />
Sub total 110,000 0.167 01 February 2011 01 Year 31 January 2012<br />
106 Mr. Sayed Zabir Hossain Shareholder 200,000 19-07-2009<br />
20,000 29-12-2010<br />
Sub total 220,000 0.333 01 February 2011 01 Year 31 January 2012<br />
107 Mr. Abdul Mosabbir Shareholder 250,000 19-07-2009<br />
25,000 29-12-2010<br />
Sub total 275,000 0.417 01 February 2011 01 Year 31 January 2012<br />
108 Mr. Aminul Islam Choudhury Shareholder 333,330 19-07-2009<br />
33,333 29-12-2010<br />
Sub total 366,663 0.556 01 February 2011 01 Year 31 January 2012<br />
109 Mr. Gulam Isdani Chowdhury Shareholder 404,280 19-07-2009<br />
40,428 29-12-2010<br />
Sub total 444,708 0.674 01 February 2011 01 Year 31 January 2012<br />
110 Ms. Sayeda Yasmin Hussain Shareholder 502,750 19-07-2009<br />
50,275 29-12-2010<br />
Sub total 553,025 0.838 01 February 2011 01 Year 31 January 2012<br />
111 Ms. Tahsina Chowdhury Shareholder 110,000 19-07-2009<br />
11,000 29-12-2010<br />
Sub total 121,000 0.183 01 February 2011 01 Year 31 January 2012<br />
112 Ms. Shahrina Newaz Shareholder 325,330 19-07-2009<br />
32,533 29-12-2010<br />
Sub total 357,863 0.542 01 February 2011 01 Year 31 January 2012<br />
����<br />
51
52<br />
����<br />
PROSPECTUS<br />
sl.<br />
No.<br />
Name status<br />
No. <strong>of</strong> shares<br />
Hold<br />
%<br />
Holding<br />
Allotment<br />
Date<br />
113 Ms. Farhana Aktar Chowdhury Shareholder 140,000 19-07-2009<br />
14,000 29-12-2010<br />
Date <strong>of</strong><br />
Issuance <strong>of</strong><br />
<strong>Prospectus</strong><br />
Period<br />
<strong>of</strong> Lock<br />
In<br />
expire<br />
date<br />
<strong>of</strong> lock-in<br />
Sub total 154,000 0.233 01 February 2011 01 Year 31 January 2012<br />
114 Ms. Saleka Khanom Shareholder 394,280 19-07-2009<br />
39,428 29-12-2010<br />
Sub total 433,708 0.657 01 February 2011 01 Year 31 January 2012<br />
115 Ms. Abeda Khanom Chowdhury Shareholder 309,280 19-07-2009<br />
30,928 29-12-2010<br />
Sub total 340,208 0.515 01 February 2011 01 Year 31 January 2012<br />
116 Mr. Capt. Saifur Rahman Shareholder 1,000,000 19-07-2009<br />
100,000 29-12-2010<br />
Sub total 1,100,000 1.667 01 February 2011 01 Year 31 January 2012<br />
117 Mr. Umar Haider Khan Shareholder 500,000 19-07-2009<br />
50,000 29-12-2010<br />
Sub total 550,000 0.833 01 February 2011 01 Year 31 January 2012<br />
118 Eminent Securities Ltd. Shareholder 500,000 19-07-2009<br />
50,000 29-12-2010<br />
Sub total 550,000 0.833 01 February 2011 01 Year 31 January 2012<br />
119 Mr. Mohammed Tariq Ismail Shareholder 500,000 19-07-2009<br />
200,000 17-09-2009<br />
70,000 29-12-2010<br />
Sub total 770,000 1.167 01 February 2011 01 Year 31 January 2012<br />
120 Mr. Mozammel Haque Bhuiyan Shareholder 200,000 19-07-2009<br />
20,000 29-12-2010<br />
Sub total 220,000 0.333 01 February 2011 01 Year 31 January 2012<br />
121 Mr. Syed Golam Wadud Shareholder 200,000 19-07-2009<br />
20,000 29-12-2010<br />
Sub total 220,000 0.333 01 February 2011 01 Year 31 January 2012<br />
122 Mr. M M Mustafa Zamal Shareholder 100,000 19-07-2009<br />
10,000 29-12-2010<br />
Sub total 110,000 0.167 01 February 2011 01 Year 31 January 2012<br />
123 Mr. Engr. Md. Mokhlesur Rahman Shareholder 300,000 19-07-2009<br />
30,000 29-12-2010<br />
Sub total 330,000 0.500 01 February 2011 01 Year 31 January 2012<br />
124 Foster Securities Ltd. Shareholder 130,000 19-07-2009<br />
13,000 29-12-2010<br />
Sub total 143,000 0.217 01 February 2011 01 Year 31 January 2012<br />
125 Mr. A.B.M. Golam Moula Shareholder 100,000 19-07-2009<br />
10,000 29-12-2010<br />
Sub total 110,000 0.167 01 February 2011 01 Year 31 January 2012<br />
126<br />
Ms. Jesmin Sultana & Ms. Sultana<br />
Jesmin Chino<br />
Shareholder 100,000 19-07-2009<br />
10,000 29-12-2010<br />
Sub total 110,000 0.167 01 February 2011 01 Year 31 January 2012<br />
127 Mr. Mehdi Hasan Khan Shareholder 170,000 19-07-2009<br />
17,000 29-12-2010<br />
Sub total 187,000 0.283 01 February 2011 01 Year 31 January 2012<br />
128 Mr. M. Emdadul Haque Shareholder 114,280 19-07-2009<br />
11,428 29-12-2010<br />
Sub total 125,708 0.190 01 February 2011 01 Year 31 January 2012<br />
129 Mr. Suhel Ahmed Chowdhury Shareholder 249,000 19-07-2009<br />
24,900 29-12-2010<br />
Sub total 273,900 0.415 01 February 2011 01 Year 31 January 2012<br />
130<br />
Mr. Monowar Ahmed & Mr. Mufti<br />
Abdul Mokshit Al Malum<br />
Shareholder 300,000 19-07-2009<br />
310,000 17-09-2009<br />
61,000 29-12-2010<br />
Sub total 671,000 1.017 01 February 2011 01 Year 31 January 2012
sl.<br />
No.<br />
Name status<br />
No. <strong>of</strong> shares<br />
Hold<br />
%<br />
Holding<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Allotment<br />
Date<br />
131 Ms. Afia Begum Shareholder 100,000 19-07-2009<br />
10,000 29-12-2010<br />
Date <strong>of</strong><br />
Issuance <strong>of</strong><br />
<strong>Prospectus</strong><br />
Period<br />
<strong>of</strong> Lock<br />
In<br />
expire<br />
date<br />
<strong>of</strong> lock-in<br />
Sub total 110,000 0.167 01 February 2011 01 Year 31 January 2012<br />
132 Bangladesh Mutual Securities Ltd. Shareholder 1,500,000 17-09-2009<br />
150,000 29-12-2010<br />
Sub total 1,650,000 2.500 01 February 2011 01 Year 31 January 2012<br />
133 Mr. M A Kashem Shareholder 1,000,000 17-09-2009<br />
100,000 29-12-2010<br />
Sub total 1,100,000 1.667 01 February 2011 01 Year 31 January 2012<br />
134 Mr. Tajul Islam Shareholder 1,000,000 17-09-2009<br />
100,000 29-12-2010<br />
Sub total 1,100,000 1.667 01 February 2011 01 Year 31 January 2012<br />
135 Ms. Rezia Akhter Begum Shareholder 230,000 17-09-2009<br />
23,000 29-12-2010<br />
Sub total 253,000 0.383 01 February 2011 01 Year 31 January 2012<br />
136 Mr. Engr. Alauddin Al Mamun Shareholder 230,000 17-09-2009<br />
23,000 29-12-2010<br />
Sub total 253,000 0.383 01 February 2011 01 Year 31 January 2012<br />
137 Mr. Md. Kamal Uddin Shareholder 230,000 17-09-2009<br />
23,000 29-12-2010<br />
Sub total 253,000 0.383 01 February 2011 01 Year 31 January 2012<br />
sub total 43,271,052 65.56<br />
Grand total 66,000,000 100<br />
REFUND OF SUBSCRIPTION MONEY<br />
As per SEC Notification Dated February 9, 2010, the issuer shall refund application money to the unsuccessful applicant<br />
<strong>of</strong> the public <strong>of</strong>fer by any <strong>of</strong> the following manner based on the option given by the applicant in the application form;a)<br />
Through banking channel for onward deposit <strong>of</strong> the refund money into the applicant’s bank account as provided in<br />
the respective application form for subscription; or<br />
b) Through issuance <strong>of</strong> refund warrant in the name and address <strong>of</strong> the applicant as provided in the respective<br />
application form for subscription: Provided that, in case <strong>of</strong> deposit into the applicant’s bank account, the applicant<br />
will bear the applicable service charge, if any, <strong>of</strong> the applicant’s banker, and the issuer shall simultaneously issue<br />
a letter <strong>of</strong> intimation to the applicant containing, among others, the date and amount remitted with details <strong>of</strong> the<br />
bank through and to which bank such remittance has been effected.<br />
����<br />
53
54<br />
����<br />
PROSPECTUS<br />
SUBSCRIPTION BY AND REFUND TO NON-RESIDENT BANGLADESHI (NRB)<br />
(1) A non-resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank payable<br />
at Dhaka, or through a nominee by paying out <strong>of</strong> foreign currency deposit account maintained in Bangladesh or<br />
in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for the value <strong>of</strong><br />
securities applied for through crossed bank cheque marking “Account Payee only”.<br />
(2) The value <strong>of</strong> securities applied for by such person may be paid in Taka or US Dollar or UK Pound Sterling or EURO<br />
at the rate <strong>of</strong> exchange mentioned in the securities application form.<br />
(3) Refund against oversubscription shall be made in the currency in which the value <strong>of</strong> securities was paid for by<br />
the applicant through Account Payee bank cheque payable at Dhaka with bank account number, bank’s name and<br />
branch as indicated in the securities application form. If the applicants’ bank accounts as mentioned in their <strong>IPO</strong><br />
Application Forms are maintained with the Bankers to the Issue, refund amount <strong>of</strong> those applicants will be directly<br />
credited into the respective bank accounts as mentioned in their <strong>IPO</strong> Application Forms.<br />
Offer<br />
1. Shares<br />
AVAILABILITY OF SECURITIES<br />
Particulars No. <strong>of</strong> shares Amount in tk.<br />
A. 10% <strong>of</strong> <strong>IPO</strong> i.e. 2,000,000 Ordinary Shares shall be reserved for Non Resident<br />
Bangladeshis<br />
B. 10% <strong>of</strong> <strong>IPO</strong> i.e. 2,000,000 Ordinary Shares shall be reserved for Mutual funds and<br />
Collective investment schemes registered with the Commission<br />
c. The remaining 80% <strong>of</strong> <strong>IPO</strong> i.e. 16,000,000 Ordinary Shares shall be opened for<br />
subscription by the General Public<br />
2,000,000 120,000,000<br />
2,000,000 120,000,000<br />
16,000,000 960,000,000<br />
total 20,000,000 1,200,000,000<br />
2. All shares as stated in clause 1.A, 1.B and 1.C shall be <strong>of</strong>fered for subscription and subsequent allotment by<br />
the issuer, subject to any restriction, which may be imposed, from time to time, by the Securities and <strong>Exchange</strong><br />
Commission.<br />
3. In case <strong>of</strong> over-subscription under any <strong>of</strong> the categories mentioned in 1.A, 1.B and 1.C the Issue Manager shall<br />
conduct an open lottery <strong>of</strong> all the applications received under each category separately in accordance with the<br />
letter <strong>of</strong> consent issued by the Securities and <strong>Exchange</strong> Commission.<br />
4. In case <strong>of</strong> under-subscription under any <strong>of</strong> the 10% categories mentioned in 1.A and 1.B, the unsubscribed<br />
portion shall be added to the general public category and, if after such addition, there is over-subscription in<br />
the general public category, the issuer and the issue manager shall jointly conduct and open lottery <strong>of</strong> all the<br />
applicants added together.<br />
5. In case <strong>of</strong> under-subscription <strong>of</strong> the public <strong>of</strong>fering, the unsubscribed portion <strong>of</strong> securities shall be taken up by<br />
the underwriter(s).<br />
6. The lottery as stated in clause (3) and (4) shall be conducted in presence <strong>of</strong> representatives form the issuer,<br />
the stock exchanges, and the applicants, if there be any.<br />
Application for subscription<br />
1. Application for shares may be made for a minimum lot for 200 Ordinary shares to the value <strong>of</strong> tk 12,000 and<br />
should be made on the Company’s Printed Application forms. Application Form and <strong>Prospectus</strong> may be obtained from<br />
the Registered Office & Corporate Office <strong>of</strong> the Company, members <strong>of</strong> Dhaka <strong>Stock</strong> <strong>Exchange</strong> Ltd. and <strong>Chittagong</strong><br />
<strong>Stock</strong> <strong>Exchange</strong> Ltd. or from the Bankers to the Issue. In case adequate forms are not available, applicants may use<br />
photocopied/cyclostyled/hand written/typed copies <strong>of</strong> the forms. Applications must not be for less than 200 shares.<br />
Any application not meeting this criterion will not be considered for allotment purpose.<br />
2.<br />
Joint application form for more than two persons will not be accepted. In the case <strong>of</strong> joint application each party<br />
must sign the application form.
3.<br />
Dhaka Bank Limited<br />
Goran Business Center, Dhaka<br />
Khilgaon Branch, Dhaka<br />
Mirpur Branch, Dhaka<br />
Savar Bazar Branch, Dhaka<br />
Bulta Branch, Narayangonj<br />
CDA Avenue Branch, <strong>Chittagong</strong><br />
Cox’s Bazar Branch, Cox’s Bazar<br />
Comilla Branch, Comilla<br />
kDA Avenue Branch, Khulna<br />
Uposhahar Branch, Sylhet<br />
First security Islami Bank Ltd.<br />
Azampur Branch, Dhaka<br />
Banani Branch, Dhaka<br />
Bangshal Branch, Dhaka<br />
Banoshree Branch, Dhaka<br />
Biswa Road Branch, Dhaka<br />
Dhanmondi Branch, Dhaka<br />
Dilkusha Branch, Dhaka<br />
Donia Branch, Dhaka<br />
Gulshan Branch, Dhaka<br />
Islampur Branch, Dhaka<br />
Mirpur Branch, Dhaka<br />
Mohakhali Branch, Dhaka<br />
Motijheel Branch, Dhaka<br />
Ring Road Branch, Dhaka<br />
Savar Branch, Dhaka<br />
Senanibash Branch, Dhaka<br />
Topkhana Road Branch, Dhaka<br />
Collage Gate Branch, Gazipur<br />
Agrabad Branch, <strong>Chittagong</strong><br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Application must be in full name <strong>of</strong> individuals or limited companies or trusts or societies and not in the name<br />
<strong>of</strong> firms, minors or persons <strong>of</strong> unsound mind. Applications from insurance, financial and market intermediary<br />
companies must be accompanied by Memorandum and Articles <strong>of</strong> Association.<br />
4. An applicant cannot submit more than two applications, one in his own name and another jointly with<br />
another person. In case an applicant makes more than two applications, all applications will be treated<br />
as invalid and will not be considered for allotment purpose. In addition, whole or part <strong>of</strong> application<br />
money may be forfeited by the commission.<br />
5. Bangladeshi Nationals (including non-resident Bangladeshi Nationals working abroad) and Foreign Nationals shall<br />
be entitled to apply for shares.<br />
6. Payment for subscription by investors other than Non-Resident Bangladeshi may be made to the said branches/<br />
<strong>of</strong>fice <strong>of</strong> the banks mentioned below in Cash/Cheque/Pay Order/Bank Draft. The Cheque/Pay Order/Bank Draft<br />
shall be made payable to the bank to which it is sent and be marked “Barakatullah electro Dynamics Limited”<br />
and shall bear the crossing “A/c Payee only” and must be drawn on a bank in the same town <strong>of</strong> the bank to<br />
which application form is deposited.<br />
7. A Non-Resident Bangladeshi (NRB) shall apply against the <strong>IPO</strong> either directly by enclosing a foreign demand draft<br />
drawn on a bank payable at Dhaka, or through a nominee (including a Bank or a Company) by paying out <strong>of</strong> foreign<br />
currency deposit account maintained in Bangladesh, for the value <strong>of</strong> securities applied for. The value <strong>of</strong> securities<br />
applied for may be paid in Taka, US Dollar or UK Pound Sterling or EURO at the spot Buying (TT Clean) rate <strong>of</strong> exchange<br />
prevailing on the date <strong>of</strong> opening <strong>of</strong> subscription. Refund against over subscription <strong>of</strong> shares shall be made in the currency in which the value <strong>of</strong><br />
shares applied for was paid by the applicant. Share application form against the quota for NRB shall be sent by the applicant directly along with a<br />
draft or cheque to the Company. Copies <strong>of</strong> application form and prospectus shall be available with Bangladesh Embassy/High Commission in USA,<br />
UK, Saudi Arabia, UAE, Qatar, Kuwait, Oman, Bahrain, Malaysia and South Korea and web site <strong>of</strong> the issuer, issue manager, DSE, CSE and the<br />
SEC.<br />
8. All completed application forms together with remittances for the full amount payable on application shall be<br />
lodged by investors other than Non-Resident Bangladeshis with the following branches <strong>of</strong> the Bankers to the<br />
Issue:<br />
Bank Asia Limited<br />
Bashundhara Branch, Dhaka<br />
Corporate Branch, Dhaka<br />
Dhanmondi Branch, Dhaka<br />
Gulshan Branch, Dhaka<br />
MCB Banani Branch, Dhaka<br />
MCB Dilkusha Branch, Dhaka<br />
Mirpur Branch, Dhaka<br />
Mitford Branch, Dhaka<br />
Moghbazar Branch, Dhaka<br />
Mohakhali Branch, Dhaka<br />
North South Rd. Branch, Dhaka<br />
Principal Office Branch, Dhaka<br />
Progoti Sarani Branch, Dhaka<br />
Scotia Branch, Dhaka<br />
Shantinagar Branch, Dhaka<br />
Uttara Branch, Dhaka<br />
Agrabad Branch, <strong>Chittagong</strong><br />
Anderkilla Branch, <strong>Chittagong</strong><br />
Bahadderhat Branch, <strong>Chittagong</strong><br />
CDA Avenue Branch, <strong>Chittagong</strong><br />
Kamal Bazar Branch, <strong>Chittagong</strong><br />
Khatunganj Branch, <strong>Chittagong</strong><br />
MCB Sk. Mujib Road Br., <strong>Chittagong</strong><br />
Station Road Branch, <strong>Chittagong</strong><br />
Sylhet Main Branch, Sylhet<br />
Sylhet Uposhahar Branch, Sylhet<br />
Rajshahi Branch, Rajshahi<br />
Khulna Branch, Khulna<br />
Bogra Branch, Bogra<br />
Jessore Branch, Jessore<br />
Ishwardi Branch, Pabna<br />
Andar Killah Branch, <strong>Chittagong</strong><br />
Bohaddarhat Branch, <strong>Chittagong</strong><br />
Hat Hazari Branch, <strong>Chittagong</strong><br />
Jubilee Road Branch, <strong>Chittagong</strong><br />
Khatungonj Branch, <strong>Chittagong</strong><br />
Patia Branch, <strong>Chittagong</strong><br />
Probortak Mor Branch, <strong>Chittagong</strong><br />
Chokioria Branch, Cox’s Bazar<br />
Cox’s Bazar Branch, Cox’s Bazar<br />
Comilla Branch, Comilla<br />
Rangpur Branch, Rangpur<br />
Bogra Branch, Bogra<br />
Rajshahi Branch, Rajshahi<br />
Ambarkhana Branch, Sylhet<br />
Sylhet Branch, Sylhet<br />
Taltola Branch, Sylhet<br />
Jessore Branch, Jessore<br />
Khulna Branch, Khulna<br />
Moulvibazar Branch, Moulvibazar<br />
Patuakhali Branch, Patuakhali<br />
Satkhira Branch, Satkhira<br />
Gobindagonj Branch, Sunamgonj<br />
Lakshmipur Branch, Lakshmipur<br />
IcB<br />
Head Office, Dhaka<br />
Local Office, Dhaka<br />
Barishal Branch, Barishal<br />
Bogra Branch, Bogra<br />
<strong>Chittagong</strong> Branch, <strong>Chittagong</strong><br />
Khulna Branch, Khulna<br />
Rajshahi Branch, Rajshahi<br />
����<br />
55
56<br />
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PROSPECTUS<br />
Sylhet Branch, Sylhet<br />
one Bank Limited<br />
Banani Branch, Dhaka<br />
Banasree Branch, Dhaka<br />
Bangshal Branch, Dhaka<br />
Dhanmondi Branch, Dhaka<br />
Elephant Road Branch, Dhaka<br />
Ganakbari (EPZ) Branch, Dhaka<br />
Gulshan Branch, Dhaka<br />
Imamganj Branch, Dhaka<br />
Jatrabari Branch, Dhaka<br />
Joypara Branch, Dhaka<br />
Kakrail Branch, Dhaka<br />
Kawran Bazar Branch, Dhaka<br />
Mirpur Branch, Dhaka<br />
Motijheel Branch, Dhaka<br />
Nawabgonj Branch, Dhaka<br />
Principal Branch, Dhaka<br />
Progati Sharani Branch, Dhaka<br />
Uttara Branch, Dhaka<br />
Narayanganj Branch, Narayanganj<br />
Agrabad Branch, <strong>Chittagong</strong><br />
CDA Avenue Branch, <strong>Chittagong</strong><br />
Jubilee Road Brahch, <strong>Chittagong</strong><br />
Khatunganj Branch, <strong>Chittagong</strong><br />
Nanupur Bazar Branch, <strong>Chittagong</strong><br />
Cox’s Bazar Branch, Cox’s Bazar<br />
DagonBhuiyan Branch, Feni<br />
Feni Branch, Feni<br />
Islampur Branch, Sylhet<br />
Sylhet Branch, Sylhet<br />
Chowmuhuni Branch, Noakhali<br />
Maijdee Court Branch, Noakhali<br />
Chandragonj Branch, Lakshmipur<br />
Raipur Branch, Laxmipur<br />
Ramganj Branch, Laxmipur<br />
Bogra Branch, Bogra<br />
Jessor Branch, Jessor<br />
Laksham Branch, Comilla<br />
Sherpur Branch, Moulvi Bazar<br />
Sirajgonj Branch, Sirajgonj<br />
shahjalal Islami Bank Limited<br />
Banani Branch, Dhaka<br />
Bangshal Branch, Dhaka<br />
Bijoynagar Branch, Dhaka<br />
College Gate Branch, Dhaka<br />
Dhaka Main Branch, Dhaka<br />
Dhanmondi Branch, Dhaka<br />
Foreign <strong>Exchange</strong> Branch, Dhaka<br />
Gulshan Branch, Dhaka<br />
Gulshan Sourh Av. Br. Dhaka<br />
Kawran Bazar Branch, Dhaka<br />
Mirpur Branch, Dhaka<br />
Mitford Branch, Dhaka<br />
Motijhee Branch, Dhaka<br />
Panthapath Branch, Dhaka<br />
Satmasjid Road Branch, Dhaka<br />
Savar Branch, Dhaka<br />
Uttara Branch, Dhaka<br />
Agrabad Branch, <strong>Chittagong</strong><br />
Chawkbazar Branch, <strong>Chittagong</strong><br />
Jubilee Road Branch, <strong>Chittagong</strong><br />
Khatunganj Branch, <strong>Chittagong</strong><br />
Muradpur Branch, <strong>Chittagong</strong><br />
Dargah Gate Branch, Sylhet<br />
Goala Bazar Branch, Sylhet<br />
Sylhet Branch, Sylhet<br />
Comilla Branch, Comilla<br />
southeast Bank Limited<br />
Aganagar Branch, Dhaka<br />
Agargaon Branch, Dhaka<br />
Ashulia Branch (Rural), Dhaka<br />
Banani Branch, Dhaka<br />
Bangshal Branch, Dhaka<br />
Bashundhara Branch, Dhaka<br />
Corporate Branch, Dhaka<br />
Dhanmondi Branch, Dhaka<br />
Imamganj Branch, Dhaka<br />
Kakrail Branch, Dhaka<br />
Mohammadpur Branch, Dhaka<br />
Mouchak Branch, Dhaka<br />
New Elephant Road Branch, Dhaka<br />
New Eskaton Branch, Dhaka<br />
Pragati Sarani Branch, Dhaka<br />
Principal Branch, Dhaka<br />
Sat Mashjid Road Branch, Dhaka<br />
Savar Branch, Dhaka<br />
Shaymoli Branch, Dhaka<br />
Uttara Branch, Dhaka<br />
Madhabdi Branch (Rural), Narshingdi<br />
Narayanganj Branch, Narayanganj<br />
Tongi Branch, Gazipur<br />
CDA Avenue Branch, <strong>Chittagong</strong><br />
Halishahar Branch, <strong>Chittagong</strong><br />
Madambibir Hat Branch, <strong>Chittagong</strong><br />
Momin Road Branch, <strong>Chittagong</strong><br />
Pahartali Branch, <strong>Chittagong</strong><br />
Cox’s Bazar Branch, Cox’s Bazar<br />
Chhagalnaiya Branch, Feni<br />
Feni Branch, Feni<br />
Kulaura Branch (Rural), Moulvi Bazar<br />
Moulvibazar Branch, Moulvi Bazar<br />
Bandar Bazar Branch, Sylhet<br />
Chouhatta Branch, Sylhet<br />
Laldighirpaar Branch, Sylhet<br />
Pathantula Branch, Sylhet<br />
Barisal Branch, Barisal<br />
Bashurhat Branch (Rural), Noakhali<br />
Bogra Branch, Bogra<br />
Comilla Branch, Comills<br />
Khulna Branch, Khulna<br />
Naogaon Branch, Naogaon<br />
Rajshahi Branch, Rajshahi<br />
Rangpur Branch, Rangpur<br />
standard chartered Bank<br />
Mirpur(OPC) Branch, Dhaka<br />
Motijheel(OPC) Branch, Dhaka<br />
Agrabad Branch, <strong>Chittagong</strong><br />
Nasirabad Branch, <strong>Chittagong</strong><br />
Bogra Branch, Bogra<br />
Khulna Branch, Khulna<br />
Sylhet Branch, Sylhet<br />
trust Bank Limited<br />
Dilkusha Corp. Branch, Dhaka<br />
Kafrul Branch, Dhaka<br />
Millenium Branch, Dhaka<br />
Principal Branch, Dhaka<br />
Radisson Hotel Branch, Dhaka<br />
Savar Cantonment Branch, Dhaka<br />
Sena Kalyan Bhaban Branch, Dhaka<br />
Uttara Corporate Branch, Dhaka<br />
Joydebpur Branch, Gazipur<br />
Tongi Branch, Gazipur<br />
<strong>Chittagong</strong> Cant. Branch, <strong>Chittagong</strong><br />
Naval Base Branch, <strong>Chittagong</strong><br />
Feni Branch, Feni<br />
Beanibazar Branch, Sylhet<br />
Jalalabad Cant. Br., Sylhet<br />
Comilla Cant. Branch, Comilla<br />
Ashugonj Branch, Brahmanbaria<br />
Bogra Cantonment Branch, Bogra<br />
Chowmohoni Branch, Noakhali<br />
Jessore Cantonment Branch, Jessore<br />
Khulna Branch, Khulna<br />
Khwaja Yunus Medical College Br., Sirajgonj<br />
Momenshahi Cant. Br., Mymensingh<br />
Narsingdi Branch, Narsingdi<br />
Rangpur Cant. Branch, Rangpur<br />
S.S. Cantonment Branch, Tangail<br />
BrAc Bank Limited<br />
Asad Gate Branch, Dhaka<br />
Banani Branch, Dhaka<br />
Bashundhara Branch, Dhaka<br />
Donia Branch, Dhaka<br />
Eskaton Branch, Dhaka<br />
Graphics Building Branch, Dhaka<br />
Gulshan Branch, Dhaka<br />
Manda Branch, Dhaka<br />
Mirpur Branch, Dhaka<br />
Nawabpur Branch, Dhaka<br />
Narayangonj Branch, Narayangonj<br />
Rampura Branch, Dhaka<br />
Shyamoli Branch, Dhaka<br />
Uttara Branch, Dhaka<br />
Agrabad Branch, <strong>Chittagong</strong><br />
CDA Avenue Branch, <strong>Chittagong</strong><br />
Halisohor Branch, <strong>Chittagong</strong><br />
KazirDeuri Branch, <strong>Chittagong</strong><br />
Momin Road Branch, <strong>Chittagong</strong><br />
Bogra Branch, Bogra<br />
Rajshahi Branch, Rajshahi<br />
Jessore Branch, Jessore<br />
Khulna Branch, Khulna<br />
Barishal Branch, Barishal<br />
Zindabazar Branch, Sylhet
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
9. The <strong>IPO</strong> subscription money collected from investors (other than Non-Resident Bangladeshis in US Dollar or UK Pound sterling or<br />
EURO) by the bankers to the issue will be remitted to the Company’s A/c # 1501201301509006 with BRAC Bank Limited, Gulshan<br />
Branch, Dhaka, Bangladesh for this purpose.<br />
10. The subscription money collected from Non-Resident Bangladeshis in US Dollar or UK Pound Sterling or EURO shall<br />
be deposited to three FC accounts opened by the Company for <strong>IPO</strong> purpose are as follows:<br />
sl. No. Name <strong>of</strong> the Fc Accounts Account No. Bank & Branch currency<br />
1 Barakatullah Electro Dynamics Limited 1501201301509003 BRAC Bank Limited, Gulshan Branch US Dollar<br />
2 -do- 1501201301509004 BRAC Bank Limited, Gulshan Branch GBP<br />
3 -do- 1501201301509005 BRAC Bank Limited, Gulshan Branch EURO<br />
11. The Company shall close the accounts mentioned above after refund <strong>of</strong> over-subscription, if any.<br />
APPLIcAtIoNs Not IN coNForMItY WItH tHe ABoVe reQuIreMeNts AND tHe INstructIoNs<br />
PrINteD oN tHe APPLIcAtIoN ForM Are LIABLe to Be reJecteD.<br />
Allotment<br />
The company shall issue share allotment letters to all successful applicants within 5 (five) weeks from the date <strong>of</strong> the<br />
subscription closing date. At the same time, the unsuccessful applicants shall be refunded with the application money<br />
within 5 (five) weeks from the closing <strong>of</strong> the subscription date by crediting directly to the recipients’ bank accounts.<br />
A compliance report shall be submitted with the Commission within 7(seven) weeks from the date <strong>of</strong> closure <strong>of</strong><br />
subscription.<br />
UNDERWRITING OF SHARES<br />
The Initial Public Offering (<strong>IPO</strong>) is for 20,000,000 ordinary shares <strong>of</strong> Tk. 60 each including a premium <strong>of</strong> Tk. 50 per share amounting<br />
to Tk. 1,200,000,000. As per SEC’s guideline 50% <strong>of</strong> the said amount i.e. 10,000,000 ordinary shares <strong>of</strong> Tk. 60 each including a<br />
premium <strong>of</strong> Tk. 50 per share amounting to Tk. 600,000,000 has been underwritten by the following institutions:<br />
sl.<br />
No.<br />
1<br />
2<br />
3<br />
4<br />
5<br />
6<br />
7<br />
8<br />
9<br />
Name and address <strong>of</strong> underwriters<br />
Bangladesh Mutual securities Limited<br />
Shareef Mansion (7th Floor), 56-57, Motijheel C/A Dhaka-1000<br />
Bank Asia Limited<br />
Tea Board Building (1st Floor), 111-113, Motijheel C/A Dhaka-1000<br />
swadesh Investment Management Limited<br />
Unique Trade Center (Level 11), Suit No. 01, 8 Panthapath<br />
Kawran Bazar, Dhaka-1215<br />
Mercantile securities Limited<br />
Paramount Heights (13th Floor), 65/2/1 Box Culvert Road, Purana Paltan,<br />
Dhaka-1000<br />
ec securities Limited<br />
Nafi Tower (6th Floor), Plot No. 53, Gulshan South C/A, Gulshan-1<br />
Dhaka-1212<br />
Grameen capital Management Limited<br />
Grameen Bank Bhaban (10th Floor), Mirpur-2, Dhaka-1216<br />
IcB capital Management Limited<br />
BDBL Bhaban (14th Floor), 8 DIT Avenue, Dhaka-1000<br />
IDLc Finance Limited<br />
Eunoos Trade Center (Level 21), 52-53 Dilkusha C/A, Dhaka-1000<br />
LankaBangla Finance Limited<br />
A-A Bhaban (Level 6), 23 Motijheel C/A, Dhaka-1000<br />
Number <strong>of</strong> shares<br />
underwritten<br />
Amount (tk)<br />
300,000 18,000,000<br />
300,000 18,000,000<br />
300,000 18,000,000<br />
300,000 18,000,000<br />
600,000 36,000,000<br />
600,000 36,000,000<br />
600,000 36,000,000<br />
600,000 36,000,000<br />
600,000 36,000,000<br />
����<br />
57
58<br />
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PROSPECTUS<br />
1.<br />
2.<br />
3.<br />
4.<br />
5.<br />
6.<br />
10<br />
11<br />
12<br />
13<br />
14<br />
Prime Bank Investment Limited<br />
Peoples Insurance Bhaban (11th Floor), 36 Dilkusha C/A, Dhaka-1000<br />
southeast Bank Limited<br />
Eunoos Centre (Level 2), 52-53 Dilkusha C/A, Dhaka-1000<br />
union capital Limited<br />
Noor Tower (5th Floor), 73 Sonargaon Road, Dhaka-1205<br />
uttara Finance and Investments Limited<br />
Jiban Bima Tower (6th Floor), 10 Dilkusha C/A, Dhaka-1000<br />
Prime Finance capital Management Limited<br />
63, Dilkusha C/A (3rd Floor), Dhaka-1000<br />
600,000 36,000,000<br />
600,000 36,000,000<br />
600,000 36,000,000<br />
600,000 36,000,000<br />
3,400,000 204,000,000<br />
total 10,000,000 600,000,000<br />
Principal terms and conditions <strong>of</strong> underwriting agreement<br />
If and to the extent that the shares <strong>of</strong>fered to the public by a <strong>Prospectus</strong> authorized hereunder shall not have been<br />
subscribed and paid for in cash in full by the closing date, the Company shall within 10 (ten) days <strong>of</strong> the closure<br />
<strong>of</strong> subscription call upon the underwriter in writing with a copy <strong>of</strong> said writing to the Securities and <strong>Exchange</strong><br />
Commission, to subscribe for the shares not subscribed by the closing date and to pay for in cash in full for such<br />
unsubscribed shares in cash in full within 15 (fifteen) days <strong>of</strong> the date <strong>of</strong> said notice and the said amount shall<br />
have to be credited into shares subscription account within the said period.<br />
If payment is made by Cheque/Bank Draft by the underwriter it will be deemed that the underwriter has not<br />
fulfilled his obligation towards his underwriting commitment under the Agreement, until such time as the Cheque/<br />
Bank Draft has been en-cashed and the Company’s account credited.<br />
In any case within 7 (seven) days after the expiry <strong>of</strong> the aforesaid 15 (fifteen) days, the Company shall send pro<strong>of</strong><br />
<strong>of</strong> subscription and payment by the underwriter to the Commission.<br />
In the case <strong>of</strong> failure by the underwriter to pay for the shares under the terms mentioned above, the said<br />
Underwriter will not be eligible to underwrite any issue, until such time as he fulfils his underwriting commitment<br />
under the Agreement and also other penalties as may be determined by the Commission may be imposed on<br />
him.<br />
In case <strong>of</strong> failure by any underwriter to pay for the shares within the stipulated time, the Company/Issuer will be<br />
under no obligation to pay any underwriting commission under the Agreement.<br />
In case <strong>of</strong> failure by the Company to call upon the underwriter for the aforementioned purpose within the stipulated<br />
time, the Company and its Directors shall individually and collectively be held responsible for the consequences<br />
and/or penalties as determined by the Securities and <strong>Exchange</strong> Commission under the law may be imposed on<br />
them.
FINANCIAL<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
����<br />
59
60 PROSPECTUS<br />
60 <strong>Prospectus</strong><br />
����<br />
AUDITORS’ REPORT<br />
TO THE SHAREHOLDERS OF<br />
BARAkATULLAH ELECTRO DynAmiCS LimiTED<br />
We have audited the accompanying Financial Statements <strong>of</strong> Barakatullah ElEctro<br />
DynamicS limitED comprising <strong>of</strong> Balance Sheet as at June 30, 2010 and the related<br />
income Statement, Statement <strong>of</strong> changes in Equity and cash Flow Statement together with<br />
related Notes thereto for the year ended June 30, 2010. The preparation <strong>of</strong> these financial<br />
statements is the responsibility <strong>of</strong> the company’s management. our responsibility is to<br />
express an independent opinion on these financial statements based on our audit.<br />
We conducted our audit in accordance with Bangladesh Standards on auditing (BSa).<br />
those standards require that we plan and perform the audit to obtain reasonable assurance<br />
about whether the financial statements are free <strong>of</strong> material misstatement. An audit includes<br />
examining, on a test basis, evidence supporting the accounts and disclosures in the financial<br />
statements. An audit also includes assessing the accounting principles used and significant<br />
estimates made by the management, as well as evaluating the overall financial statements<br />
presentation. We believe that our audit provides a reasonable basis for our opinion.<br />
In our opinion, the financial statements prepared in accordance with International Accounting<br />
Standards (iaS) as adopted by the institute <strong>of</strong> chartered accountants <strong>of</strong> Bangladesh (icaB)<br />
as Bangladesg accounting Standards (BaS), represent a true and fair view <strong>of</strong> the state <strong>of</strong><br />
the company’s affairs as at June 30, 2010 and <strong>of</strong> the results <strong>of</strong> its operations and its cash<br />
flows for the year then ended and comply with the Companies Act, 1994, the Securities &<br />
<strong>Exchange</strong> Rules, 1987 and other applicable laws and regulations.<br />
We also report that:<br />
a) We obtained all the information and explanations which to the best <strong>of</strong> our knowledge and<br />
belief were necessary for the purpose <strong>of</strong> our audit and made due verification there<strong>of</strong>;<br />
b) in our opinion, the company has kept proper books <strong>of</strong> account as required by law so far<br />
as it appeared from our examination <strong>of</strong> those books;<br />
c) the company’s Balance Sheet and income Statement dealt with by the report are in<br />
agreement with the books <strong>of</strong> account; and<br />
d) the expenditure incurred was for the purposes <strong>of</strong> the company’s business.<br />
Sd/-<br />
HAQUE SHAHALAM MANSUR & CO.<br />
Chartered Accountants<br />
Date, Dhaka<br />
August 16, 2010
Barakatullah Electro Dynamics Limited<br />
Balance Sheet<br />
as at June 30, 2010<br />
Barakatullah<br />
Barakatullah<br />
Electro<br />
Electro<br />
Dynamics<br />
Dynamics<br />
Limited<br />
Limited 61<br />
Lighting Lighting Bangladesh, Bangladesh, We We Promise... Promise<br />
Notes 30-06-2010 30-06-2009<br />
Taka Taka<br />
ASSETS<br />
Non-Current Assets<br />
Property, Plant & Equipment 5.00 1,914,078,657 33,623,688<br />
Preliminary Expenses - 532,600<br />
Intangible Assets 6.00 34,667 -<br />
Pre-Operating Expenses 7.00 41,861,387 33,276,023<br />
Capital Work-in-Progress 8.00 - 1,787,436,095<br />
Total Non-Current Assets 1,955,974,711 1,854,868,406<br />
Current Assets<br />
Inventories 9.00 8,522,606 -<br />
Accounts Receivables 10.00 134,578,553 -<br />
Advances, Deposits & Pre-payments 11.00 81,501,256 47,389,549<br />
Cash & Bank Balances 12.00 11,526,877 67,952,619<br />
Total Current Assets 236,129,292 115,342,168<br />
TOTAL ASSETS 2,192,104,003 1,970,210,574<br />
EQUITY & LIABILITIES<br />
Shareholders’ Equity<br />
Share Capital 13.00 600,000,000 350,000,000<br />
Share Money Deposit 14.00 - 174,635,936<br />
Retained Earnings 102,053,354 -<br />
Total Shareholders’ Equity 702,053,354 524,635,936<br />
Non-Current Liabilities<br />
Term Loan-Long Term Portion 15.00 1,221,464,642 722,779,830<br />
Total Non-Current Liabilities 1,221,464,642 722,779,830<br />
Current Liabilities<br />
Term Loan-Short Term Portion 15.00 180,050,507 132,088,080<br />
Deferred Liabilities for Plant & Equipment 16.00 - 541,800,000<br />
Liability for Expenses 17.00 14,485,254 48,906,728<br />
Accounts Payable 18.00 74,050,246 -<br />
Total Current Liabilities 268,586,007 722,794,808<br />
TOTAL EQUITY & LIABILITIES 2,192,104,003 1,970,210,574<br />
Net Assets Value Per Share (NAVPS) 11.70 14.99<br />
The accounting policies and other notes form an integral part <strong>of</strong> these financial statements.<br />
Sd/- Sd/- Sd/-<br />
Company Secretary Managing Director Chairman<br />
This is the Balance Sheet<br />
referred to in our report <strong>of</strong> even date.<br />
Sd/-<br />
Dated, Dhaka HAQUE SHAHALAM MANSUR & CO.<br />
August 16, 2010 Chartered Accountants.<br />
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Barakatullah Electro Dynamics Limited<br />
Income Statement<br />
for the year ended June 30, 2010<br />
Particulars Notes 30-06-2010 30-06-2009<br />
Taka Taka<br />
Revenue 19.00 514,542,637 -<br />
Cost <strong>of</strong> Sales 20.00 (245,353,077) -<br />
Gross Pr<strong>of</strong>it 269,189,560 -<br />
General & Administrative Expenses 21.00 (50,514,638) -<br />
Operating Pr<strong>of</strong>it 218,674,922 -<br />
Financial Income 22.00 724,753 -<br />
219,399,675 -<br />
Financial Expenses 23.00 (111,763,872) -<br />
Pr<strong>of</strong>it before Tax 107,635,803 -<br />
Provision for Tax 17.01 (5,582,449) -<br />
Pr<strong>of</strong>it for the year 102,053,354 -<br />
Earnings per Share:<br />
Basic Earnings per Share (par value Tk. 10 each) 24.00 1.76 -<br />
The accounting policies and other notes form an integral part <strong>of</strong> these financial statements.<br />
Sd/- Sd/- Sd/-<br />
Company Secretary Managing Director Chairman<br />
This is the Income Statement<br />
referred to in our report <strong>of</strong> even date.<br />
Sd/-<br />
Dated, Dhaka HAQUE SHAHALAM MANSUR & CO.<br />
August 16, 2010 Chartered Accountants.
Barakatullah Electro Dynamics Limited<br />
Statement <strong>of</strong> Changes in Equity<br />
for the year ended June 30, 2010<br />
Barakatullah<br />
Barakatullah<br />
Electro<br />
Electro<br />
Dynamics<br />
Dynamics<br />
Limited<br />
Limited 63<br />
Lighting Lighting Bangladesh, Bangladesh, We We Promise... Promise<br />
Amount in Taka<br />
Particulars Share Share Money Retained Total<br />
Capital Deposit Earnings Taka<br />
Balance as on 01-07-2008 15,000,000 148,829,877 - 163,829,877<br />
Net Pr<strong>of</strong>it/(Loss) during the year - - - -<br />
Transactions with the shareholders:<br />
Additional Deposit during the year - 25,806,059 - 25,806,059<br />
Issue <strong>of</strong> Ordinary Share 335,000,000 - - 335,000,000<br />
Balance as on 30-06-2009 350,000,000 174,635,936 - 524,635,936<br />
Particulars Share Share Money Retained Total<br />
Capital Deposit Earnings Taka<br />
Balance as on 01-07-2009 350,000,000 174,635,936 - 524,635,936<br />
Net Pr<strong>of</strong>it/(Loss) during the year - - 102,053,354 102,053,354<br />
Transactions with the shareholders:<br />
Additional Deposit during the year - 75,364,064 - 75,364,064<br />
Adjustment during the year - (250,000,000) - (250,000,000)<br />
Issue <strong>of</strong> Ordinary Share 250,000,000 - - 250,000,000<br />
Balance as on 30-06-2010 600,000,000 - 102,053,354 702,053,354<br />
The accounting policies and other notes form an integral part <strong>of</strong> these financial statements.<br />
Sd/- Sd/- Sd/-<br />
Company Secretary Managing Director Chairman<br />
This is the Statement <strong>of</strong> Changes in Equity<br />
referred to in our report <strong>of</strong> even date.<br />
Sd/-<br />
Dated, Dhaka HAQUE SHAHALAM MANSUR & CO.<br />
August 16, 2010 Chartered Accountants.<br />
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Barakatullah Electro Dynamics Limited<br />
Cash Flow Statement<br />
for the year ended June 30, 2010<br />
Particulars 30-06-2010 30-06-2009<br />
Taka Taka<br />
Cash Flow from Operating Activities:<br />
Cash Receipts from Customer 379,964,084 -<br />
Cash paid to Suppliers (223,600,969) -<br />
Financial Expenses (111,039,119)<br />
Net Cash Flow Used in from Operating Activities 45,323,996 -<br />
Cash Flow from Investing Activities:<br />
Acquisition <strong>of</strong> Fixed Assets (1,923,025,887) (17,430,947)<br />
Disposal <strong>of</strong> PPE 364,160 -<br />
Capital Work-in-Progress 1,787,436,095 (1,740,024,527)<br />
Advances, Deposits & Pre-payments (36,163,004) (45,764,549)<br />
Investment in Pre-Operating Expenses (10,532,405) (17,712,875)<br />
Intangible Assets (40,000) -<br />
Net Cash Used in Investing Activities (181,961,041) (1,820,932,898)<br />
Cash Flow from Financing Activities:<br />
Share Capital 250,000,000 335,000,000<br />
Share Money Deposit (174,635,936) 25,806,059<br />
Term Loan 498,684,812 854,867,910<br />
Short Term Loan 47,962,427 (3,572,535)<br />
Payment <strong>of</strong> Deferred Liabilities for Plant & Equipment (541,800,000) 541,800,000<br />
Net Cash Generated from Financing Activities 80,211,303 1,753,901,434<br />
Net Cash Inflow/Outflow) for the year (56,425,742) (67,031,464)<br />
Opening Cash & Bank Balances 67,952,619 134,984,083<br />
Closing Cash & Bank Balances 11,526,877 67,952,619<br />
Net Operating Cash Flows Per Share (NOCFPS) 0.76 -<br />
The accounting policies and other notes form an integral part <strong>of</strong> these financial statements.<br />
Sd/- Sd/- Sd/-<br />
Company Secretary Managing Director Chairman<br />
This is the Cash Folw Statement<br />
referred to in our report <strong>of</strong> even date.<br />
Sd/-<br />
Dated, Dhaka HAQUE SHAHALAM MANSUR & CO.<br />
August 16, 2010 Chartered Accountants.
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
1.00 Reporting Entity:<br />
1.01 Background <strong>of</strong> the Company:<br />
Barakatullah<br />
Barakatullah<br />
Electro<br />
Electro<br />
Dynamics<br />
Dynamics<br />
Limited<br />
Limited 65<br />
Lighting Lighting Bangladesh, Bangladesh, We We Promise... Promise<br />
Barakatullah Electro Dynamics Limited (the Company) was incorporated in Bangladesh on June 26,<br />
2007 as a Private Limited Company. On September 25, 2008 the Company registered itself as a Public<br />
Limited Company under the Companies Act, 1994.<br />
The principal activity <strong>of</strong> this Company is to set up power plants for generation and supply <strong>of</strong> electricity.<br />
The plant, capacity <strong>of</strong> 51 MW at Fenchugonj, Sylhet, has successfully commissioned on 10 October,<br />
2009 and started its commercial operation from 24 October, 2009 and supplying to National Grid.<br />
The registered <strong>of</strong>fice <strong>of</strong> the Company is situated at 102 Azadi, Mirboxtula, Sylhet.<br />
1.02 Power Purchase Agreement (PPA)<br />
The Company has signed power supply agreement with Bangladesh Power Development Board on<br />
28 April, 2008 for a term <strong>of</strong> 15 years to provide 51 MW net electrical power to Bangladesh Power<br />
Development Board (BPDB).<br />
This agreement shall become effective upon signing and shall terminate 15 years after Commercial<br />
Operations Date, unless extended or earlier terminated pursuant to the provisions <strong>of</strong> this Agreement.<br />
The purpose <strong>of</strong> this agreement is the supply by Company to BPDB <strong>of</strong> Net Energy Output and to make<br />
available capacity and BPDB agrees to accept and pay for the Dependable Capacity & Net Energy<br />
Output under the terms and conditions provided herein. For this purpose Company shall be responsible<br />
for financing, complete design, supply, inspection, testing, delivery to the site, erection, testing &<br />
commissioning, operation and maintenance including overhauling and major overhauling <strong>of</strong> the plant<br />
for the entire term. Spares consumables required for the plant for the entire term shall be supplied by the<br />
Company at its own cost in accordance with this agreement.<br />
The PPA stipulates a two elements tariff. One is Rental Payment (Rental Received) and another is<br />
Energy Payment (Energy Sale) . The Rental Payment and Energy Payment payable to the Company for<br />
Dependable Capacity and Net Energy output respectively for each contract year through out the term. If<br />
power plant could not achieve dependable capacity for any particular billing month due to reasons other<br />
than the default <strong>of</strong> the Company, then BPDB shall pay monthly rental payment.<br />
1.03 Gas Supply Agreement<br />
The Company has signed gas supply agreement with Jalalabad Gas Transmission and Distribution System<br />
Ltd. (JGTDSL) on 22 June, 2008 for a term <strong>of</strong> 15 years.<br />
This agreement shall become effective upon signing and shall continue subject to the other provisions <strong>of</strong><br />
this agreement for a period that ends on the expiry date which is the expiration date for the term <strong>of</strong> the<br />
Power Purchase Agreement.<br />
Subject to the terms and condition <strong>of</strong> this agreement and availability <strong>of</strong> gas, gas seller shall sell and<br />
deliver to project company at all times all project company’s requirements for gas for the facility during<br />
the term here<strong>of</strong> to meet start-up, commissioning and operation <strong>of</strong> the facility and project company shall<br />
accept, receive and pay for gas from gas seller at a gas price set by the Government or any authority<br />
assigned by it from time to time.<br />
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Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
2.00 Basis <strong>of</strong> Preparation and Presentation <strong>of</strong> the Financial Statements:<br />
2.01 Statement <strong>of</strong> Compliance:<br />
The financial statements have been prepared in accordance with Bangladesh Accounting Standards<br />
(BAS), Bangladesh Financial Reporting Standards (BFRS), Securities and <strong>Exchange</strong> Rules 1987, the<br />
Companies Act, 1994 and other laws and regulations applicable in Bangladesh.<br />
2.02 Basis <strong>of</strong> Measurement:<br />
All the elements <strong>of</strong> financial statements have been measured on “Historical Cost” basis which is one <strong>of</strong><br />
the most commonly adopted basis as provided in “The Framework for the Preparation and Presentation<br />
<strong>of</strong> Financial Statements” issued by the Bangladesh Accounting Standards (BAS).<br />
2.03 Responsibility for Preparation and Presentation <strong>of</strong> Financial Statements:<br />
The Board <strong>of</strong> Directors is responsible for the preparation <strong>of</strong> financial statements under section 183 <strong>of</strong> the<br />
Companies Act, 1994 and as per the provision <strong>of</strong> “The Framework for the Preparation and Presentation<br />
<strong>of</strong> Financial Statements” issued by the Bangladesh Accounting Standard (BAS).<br />
2.04 Use <strong>of</strong> Estimates and Judgment:<br />
The preparation <strong>of</strong> financial statements in conformity with BASs requires management to make judgments,<br />
estimates and assumptions that affect the application <strong>of</strong> accounting policies and the reported amounts <strong>of</strong><br />
assets, liabilities, income and expenses. Actual results may differ from these estimates.<br />
Estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting<br />
estimates are recognized in the period in which the estimates are revised if the revision affects only<br />
that period, or in the period <strong>of</strong> revision and future periods if the revision affects both current and future<br />
periods.<br />
In particular, information about significant areas <strong>of</strong> estimation uncertainty and critical judgments<br />
in applying accounting policies that have the most significant effect on the amount recognized in the<br />
financial statements are described in the following notes:<br />
Note 17: Liabilities for Expenses<br />
Note 25: Contingent Liability<br />
2.05 Functional and Presentational Currency and Level <strong>of</strong> Precision:<br />
The financial statements are prepared in Bangladesh Taka (Taka/Tk./BDT) which is the Company’s both<br />
functional currency and presentation currency. All financial information presented in Taka and have been<br />
rounded <strong>of</strong>f to the nearest taka.<br />
2.06 Reporting Period:<br />
The financial period <strong>of</strong> the Company under audit covers the period from July 01, 2009 to June 30,<br />
2010.
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
3.00 Significant Accounting Policies:<br />
Barakatullah<br />
Barakatullah<br />
Electro<br />
Electro<br />
Dynamics<br />
Dynamics<br />
Limited<br />
Limited 67<br />
Lighting Lighting Bangladesh, Bangladesh, We We Promise... Promise<br />
The accounting policies set out below have been applied consistently through out the period presented in these<br />
financial statements.<br />
3.01 Property, Plant and Equipment:<br />
a. Recognition and Measurement:<br />
In compliance with BAS-16 (Property, Plant & Equipment) items <strong>of</strong> property, plant and equipment<br />
(PPE), excluding land, are initially measured at cost less accumulated depreciation and accumulated<br />
impairment losses, if any. Land is measured at cost. The cost <strong>of</strong> an item <strong>of</strong> PPE comprises its purchase<br />
price, import duties and non-refundable taxes, after deducting trade discount and rebates and any costs<br />
directly attributable to bringing the assets to the location and condition necessary for it to be capable<br />
<strong>of</strong> operating in the intended manner.<br />
b. Capitalization <strong>of</strong> Borrowing Cost:<br />
Finance costs that are directly attributable to the construction <strong>of</strong> plants are included in the cost <strong>of</strong> those<br />
plants in compliance with BAS-23: Borrowing Cost, allowed alternative treatment. Capitalization <strong>of</strong><br />
borrowing costs cease from the date <strong>of</strong> the report submitted by commercial test witness committee<br />
which, in accordance with Power Purchase Agreement, confirms the availability <strong>of</strong> plants for use.<br />
c. Subsequent Costs:<br />
The cost <strong>of</strong> replacing part <strong>of</strong> an item <strong>of</strong> property, plant and equipment is recognized in the carrying<br />
amount <strong>of</strong> the item if it is probable that the future economic benefits embodied within the part will flow<br />
to the Company and its cost can be measured reliably. The cost <strong>of</strong> the day to day maintaining cost on<br />
PPE are recognized in the income statement as incurred.<br />
d. Depreciation:<br />
No depreciation is charged on land and land development.<br />
Depreciation is recognized in the Income Statement on a straight line basis over the estimated useful<br />
lives <strong>of</strong> each item <strong>of</strong> property, plant & equipment.<br />
Each item <strong>of</strong> PPE are depreciated from the month in which the assets comes into use or capitalized. In<br />
case <strong>of</strong> disposals, depreciation is charged for full month in the month <strong>of</strong> disposal.<br />
Depreciation <strong>of</strong> Power Plant has been charged considering 30 years <strong>of</strong> useful life and residual value<br />
as 10% <strong>of</strong> original cost, on straight line basis on the ground that management intends to continue with<br />
operation after completion <strong>of</strong> 15 years as stated in the Power Purchase Agreement (PPA).<br />
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Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
The estimated useful lives <strong>of</strong> PPE for the current year as follows:<br />
Name <strong>of</strong> the Assets as at June 30, 2010 (in years)<br />
Furniture & Fixtures 10<br />
Office & Electrical Equipment 5<br />
Office Decoration 5<br />
Motor Vehicles 5<br />
Maintenance Equipment 5<br />
Building & Civil Construction 15<br />
Plant & Machineries 30<br />
No depreciation is charged on PPE due to non-operation <strong>of</strong> the company in the year ended June 30, 2009.<br />
e. Retirements and Disposals:<br />
An asset is derecognized on disposal or when no future economic benefits are expected from its use and<br />
subsequent disposal. Gains or losses arising from the retirement or disposal <strong>of</strong> an asset is determined as<br />
the difference between the net disposal proceeds and the carrying amount <strong>of</strong> the asset and is recognized<br />
as gain and loss from disposal <strong>of</strong> asset under other income in the Income Statement.<br />
3.02 Intangible assets:<br />
Intangible assets includes IT s<strong>of</strong>tware which is used to maintain Company’s accounts.<br />
a. Recognition and Measurement:<br />
Intangible assets are measured at cost less accumulated amortization and accumulated impairment<br />
loss, if any. It is recognized if it is probable that future economic benefits that are attributable to the<br />
asset will flow to the enterprise and cost <strong>of</strong> the assets can be measured reliably as required by BAS 38:<br />
Intangible assets. The cost <strong>of</strong> the Intangible assets comprises its purchase price and any costs directly<br />
attributable to the assets.<br />
b. Subsequent Costs:<br />
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied<br />
in the specific asset to which it relates. All other expenditures are recognized in the Income statement<br />
when incurred.<br />
c. Amortization:<br />
3.03 Advance:<br />
Amortization is recognized in the income statement on a straight line basis over the estimated useful<br />
lives <strong>of</strong> the assets, from the month that they are available for use.<br />
The estimated lives <strong>of</strong> the IT s<strong>of</strong>tware (Tally.ERP 9) is recognized 5 (five) years from the month <strong>of</strong> its<br />
recognition.<br />
Advances are initially measured at cost. After initial recognition advances are carried at cost less<br />
deductions, adjustments or charges to other account heads such as PPE or inventory etc.<br />
3.04 Cash and Cash Equivalents:<br />
For the purpose <strong>of</strong> Balance Sheet and Cash Flow Statements, Cash in hand and Bank balances represent
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
Barakatullah<br />
Barakatullah<br />
Electro<br />
Electro<br />
Dynamics<br />
Dynamics<br />
Limited<br />
Limited 69<br />
Lighting Lighting Bangladesh, Bangladesh, We We Promise... Promise<br />
cash and cash equivalents considering the BAS-1 “Presentation <strong>of</strong> Financial Statements” and BAS-7<br />
“Cash Flow Statement”, which provide that Cash and Cash equivalents are readily convertible to known<br />
amounts <strong>of</strong> Cash and are subject to an insignificant risk <strong>of</strong> changes in value and are not restricted as to<br />
use.<br />
3.05 Cash Flow Statement:<br />
Cash Flow Statement is prepared principally in accordance with BAS-7 “Cash Flow Statement” and the<br />
cash flow from the operating activities have been presented under direct method as prescribed by the<br />
Securities and <strong>Exchange</strong> Rules, 1987 and considering the provision <strong>of</strong> paragraph 19 <strong>of</strong> BAS-7 which<br />
provides that “Enterprises are Encouraged to Report Cash Flow from Operating Activities Using the<br />
Direct Method”.<br />
3.06 Accounts Receivables:<br />
Accounts receivables consists <strong>of</strong> unpaid bills receivables from Bangladesh Power Development Board<br />
(BPDB) and unbilled revenue recognized at the balance sheet date.<br />
3.07 Inventories:<br />
Inventories consisting <strong>of</strong> lube oil, alternator grease, coolnet water and spare parts. These are for use in the<br />
operation and maintenance <strong>of</strong> power plant. Cost <strong>of</strong> inventories include expenditure incurred in acquiring<br />
the inventories and other costs incurred in bringing them to use.<br />
3.08 Provisions:<br />
A provision is recognized on the balance sheet date if, as a result <strong>of</strong> past events, the Company has a<br />
present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow <strong>of</strong><br />
economic benefits will be required to settle the obligation.<br />
3.09 Income Tax:<br />
Income tax expenses comprises current tax and deferred tax. Income tax expense is recognized in the<br />
income statement except to the extent that it relates to items recognized directly in equity, in which case<br />
it is recognized in equity.<br />
a. Current Tax:<br />
Current tax is the expected tax payable on the taxable income for the year, using tax rates applicable in<br />
Bangladesh. As per section 52N <strong>of</strong> Income Tax Ordinance, 1984, tax at sources shall be deducted from<br />
revenue income <strong>of</strong> the company which will be treated as final discharge <strong>of</strong> tax liability as per section<br />
82C <strong>of</strong> said ordinance. Also current tax is payable in the year for interest on FDR.<br />
b. Deferred Tax:<br />
In compliance with BAS-12: Income tax, there are no temporary difference is accrued as yet between<br />
the carrying amount <strong>of</strong> assets and liabilities for financial reporting purpose and amounts used for<br />
taxation purpose. As no deferred tax is accrued.<br />
3.10 Revenue Recognition:<br />
Revenue is initially recognized in the income statement upon supply <strong>of</strong> electricity based on net energy<br />
output on a monthly basis. Net energy output is determined by the Joint meter reading and verification<br />
committee consisting <strong>of</strong> BEDL personnel’s and BPDB representatives. After initial recognition,<br />
adjustment is made on actual bill paid by the BPDB.<br />
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Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
3.11 Financial Income and Expenses:<br />
Financial income comprise interest income received from bank on FDR and STD A/C.<br />
Financial expenses comprises interest expenses on term loan. All borrowing costs are recognized in the<br />
income statement using effective interest method except to the extent that they are capitalized during<br />
construction period <strong>of</strong> the plants in compliance with BAS-23: Borrowing Cost.<br />
3.12 Earnings per Share:<br />
The Company presents basic and diluted (when applicable) earnings per share (EPS) data for its ordinary<br />
shares.<br />
a. Basic Earnings per Share:<br />
Basic earnings per share is calculated by dividing the pr<strong>of</strong>it and loss attributable to the ordinary<br />
shareholders <strong>of</strong> the Company by the weighted average number ordinary share outstanding during the<br />
period.<br />
b. Diluted Earnings per Share:<br />
As there were no potential ordinary shares issued by the company, so no dilution is taken into effect.<br />
3.13 Foreign Currency Translation:<br />
Foreign currency transactions are translated into Bangladeshi taka at the rates ruling on the transaction<br />
date. All monetary assets and liabilities at the balance sheet date are translated using rates prevailing on<br />
that day. Gain/Loss arising from translation <strong>of</strong> foreign currency is recognize as Income/Expenses in the<br />
Income statement. However management feel the impact <strong>of</strong> translation <strong>of</strong> foreign currency is not material<br />
during the year.<br />
3.14 Employees’ Benefit:<br />
Employees <strong>of</strong> the Company is entitled to get 2 (two) festival bonus in a year and management will be<br />
shortly introduced Contributory Provided Fund and Gratuity Scheme. Both the fund is taken into effect<br />
from 01 July 2010.<br />
3.15 Contingencies:<br />
Contingencies arising from claim, litigation assessment, fines, penalties etc. are recorded when it is<br />
probable that a liability has been incurred and the amount can reasonably be measured.<br />
3.16 Events after Balance Sheet Date:<br />
Events after the balance sheets date that provide additional information about the Company’s position at<br />
the balance sheet date are reflected in the financial statements. Events after the balance sheet date that are<br />
not adjusting event are disclosed as <strong>of</strong>f balance sheet items.<br />
4.00 Future Prospect:<br />
The Company’s net current liabilities stood at Tk. 32,456,715 at the balance sheet date. On that date, a substantial<br />
amount <strong>of</strong> current liabilities comprise <strong>of</strong> Company’s commitment for it debt service on account <strong>of</strong> project loans<br />
falling due within next 12 months. Management is confident <strong>of</strong> meeting the obligation from the resources<br />
generated from its operation coupled with continued support <strong>of</strong> bankers.
Amount in Taka<br />
Cost Depreciation Written Down value<br />
Adj. made<br />
Charged Adj. made<br />
Balance as at Rate Balance as at<br />
Balance as at As at As at<br />
during the<br />
during the during the<br />
30-06-2010 (%) 01-07-2009<br />
30-06-2010 30 06-2010 30-06-2009<br />
year<br />
year year<br />
5.00 Property, Plant & Equipment: Tk. 1,914,078,657<br />
Addition<br />
during the year<br />
Balance as at<br />
01-07-2009<br />
Particulars<br />
Sl.<br />
No.<br />
01 Land & Land Development 25,868,520 717,348 - 26,585,868 - - - - - 26,585,868 25,868,520<br />
02 Furniture & Fixtures 1,542,435 1,050,339 - 2,592,774 10 - 227,662 - 227,662 2,365,112 1,542,435<br />
03 Office & Electrical Equipment 2,514,120 2,529,700 - 5,043,820 20 - 923,584 - 923,584 4,120,236 2,514,120<br />
04 Office Decoration 728,320 1,228,330 364,160 1,592,490 20 - 231,415 - 231,415 1,361,075 728,320<br />
05 Motor Vehicles 2,970,293 1,614,956 - 4,585,249 20 - 635,590 - 635,590 3,949,659 2,970,293<br />
06 Building & Civil Construction - 77,608,586 - 77,608,586 7 - 3,393,442 - 3,393,442 74,215,144 -<br />
07 Maintenance Equipment - 461,179 - 461,179 20 - 44,491 - 44,491 416,688 -<br />
Sub-Total 33,623,688 85,210,438 364,160 118,469,966 - 5,456,184 - 5,456,184 113,013,782 33,623,688<br />
08 Plant & Machinery - 1,837,815,449 - 1,837,815,449 3 - 36,750,574 - 36,750,574 1,801,064,875 -<br />
Sub-Total - 1,837,815,449 - 1,837,815,449 - 36,750,574 - 36,750,574 1,801,064,875 -<br />
Grand Total 33,623,688 1,923,025,887 364,160 1,956,285,415 - 42,206,758 - 42,206,758 1,914,078,657 33,623,688<br />
Barakatullah<br />
Barakatullah<br />
Electro<br />
Electro<br />
Dynamics<br />
Dynamics<br />
Limited<br />
Limited 71<br />
Lighting Lighting Bangladesh, Bangladesh, We We Promise... Promise<br />
6.00 Intangible Assets: Tk. 34,667<br />
Cost<br />
Amortization Written Down value<br />
No.<br />
Sl.<br />
Adj. made<br />
Charged Adj. made<br />
Particulars Balance as at Addition<br />
Balance as at <strong>of</strong> Balance as at<br />
Balance as at As at As at<br />
No.<br />
during the<br />
during the during the<br />
01-07-2009 during the year<br />
30-06-2010 years 01-07-2009<br />
30-06-2010 30-06-2010 30-06-2009<br />
year<br />
year year<br />
Intangible Assets (IT S<strong>of</strong>tware)<br />
01 40,000 - 40,000 5 - 5,333 - 5,333 34,667 -<br />
-<br />
Total - 40,000 - 40,000 - 5,333 - 5,333 34,667 -<br />
7.00 Pre-operating Expenses: Tk. 41,861,387<br />
Cost<br />
Amortization Written Down value<br />
No.<br />
Adj. made<br />
Charged Adj. made<br />
Particulars Balance as at Addition<br />
Balance as at <strong>of</strong> Balance as at<br />
Balance as at As at As at<br />
during the<br />
during the during the<br />
01-07-2009 during the year<br />
30-06-2010 years 01-07-2009<br />
30-06-2010 30-06-2010 30-06-2009<br />
year<br />
year year<br />
Pre-operating Expenses (Note<br />
33,276,023 10,532,405 - 43,808,428 15 - 1,947,041 - 1,947,041 41,861,387 33,276,023<br />
-7.01)<br />
Total 33,276,023 10,532,405 - 43,808,428 - 1,947,041 - 1,947,041 41,861,387 33,276,023<br />
Sl.<br />
No.<br />
01<br />
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����<br />
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
30-06-2010 30-06-2009<br />
Taka Taka<br />
7.01 Pre-operating Expenses: Tk. 43,808,428<br />
Particulars<br />
Salary & Allowances 8,071,972 4,880,562<br />
Director’s Remuneration 10,045,000 9,034,000<br />
Entertainment & Others 1,785,370 1,490,757<br />
Travelling & Conveyance 6,883,213 6,565,357<br />
Printing & Stationery 523,518 495,154<br />
Trade License & Others 952,700 874,600<br />
Tender Document Expenses 1,173,863 1,137,363<br />
General Repair & Maintenances 1,125,734 532,074<br />
Legal Fees & Pr<strong>of</strong>essional Consultancy 3,433,253 2,981,553<br />
Business Development Expenses 5,697,822 4,680,870<br />
Donation & Subscription 1,505,365 1,041,365<br />
Office Rent 1,530,000 1,046,000<br />
Utility Expenses 281,546 152,594<br />
Vehicle Running Expenses 1,222,219 740,541<br />
Communication Expenses 504,749 360,907<br />
Miscellaneous Expenses 345,530 343,117<br />
Bank Charges & Commission 3,014,656 2,970,203<br />
Advertisement & Publicity 485,358 446,558<br />
Bank Guarantee Expenses 833,977 -<br />
AGM Expenses 366,974 -<br />
Fooding & Lodging 148,117 -<br />
Uniform Expenses 5,220 -<br />
Newspaper, Books & Periodicals 5,664 -<br />
Office Decoration Written Off 364,160 -<br />
Audit Fees 95,000 95,000<br />
50,400,980 39,868,575<br />
Less: Interest Income 6,592,552 6,592,552<br />
Total 43,808,428 33,276,023<br />
8.00 Capital Work-in-Progress: Tk. Nil<br />
Particulars<br />
Building & Civil Construction - 58,852,178<br />
Plant & Machinery - 1,728,583,917<br />
Total - 1,787,436,095<br />
9.00 Inventories: Tk. 8,522,606<br />
Particulars<br />
Opening Balance - -<br />
Purchase during the year 27,219,929 -<br />
Balance available for consumption 27,219,929 -<br />
Consumption during the year 18,697,323 -<br />
Closing Balance (Note-9.01) 8,522,606 -
Barakatullah<br />
Barakatullah<br />
Electro<br />
Electro<br />
Dynamics<br />
Dynamics<br />
Limited<br />
Limited 73<br />
Lighting Lighting Bangladesh, Bangladesh, We We Promise... Promise<br />
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
30-06-2010 30-06-2009<br />
Taka Taka<br />
9.01 Closing Balance <strong>of</strong> Inventories: Tk. 8,522,606<br />
Particulars<br />
Spare Parts 1,067,420 -<br />
Lube Oil 7,178,169 -<br />
Grease 173,057 -<br />
Coolnet Water 103,960 -<br />
Total 8,522,606 -<br />
The balance <strong>of</strong> inventories are verified and reconciled by the management team at the year end.<br />
10.00 Accounts Receivables: Tk. 134,578,553<br />
Particulars<br />
Bangladesh Power Development Board (BPDB):<br />
Rental Bill 52,781,427 -<br />
Energy Bill 81,797,126 -<br />
Total 134,578,553 -<br />
This balance represents the arrear bill from BPDB for the month <strong>of</strong> May & June 2010.<br />
11.00 Advances, Deposits & Pre-payments: Tk. 81,501,256<br />
Particulars<br />
Advances:<br />
Advance to Employees & Others 20,000 6,000<br />
Advance against Building & Civil Construction - 1,724,062<br />
Advance against Land - 320,000<br />
Advance against Furniture & Fixtures - 100,000<br />
Advance against Other Expenses 465,588 465,588<br />
Advance against Issue Management Fees 200,000 200,000<br />
Advance to Other Parties 50,000 -<br />
Advance Income Tax 72,475 -<br />
Advance against assets/inventory 26,290 -<br />
Sub Total 834,353 2,815,650<br />
Deposits:<br />
Deposit for Bank Guarantee 73,524,954 44,403,899<br />
Sub Total 73,524,954 44,403,899<br />
Prepayments:<br />
Prepayment for Office Rent 100,000 170,000<br />
Prepayment against Bank Guarantee Expenses 5,819,726 -<br />
Prepayment against Insurance Premium 1,222,223 -<br />
Sub Total 7,141,949 170,000<br />
Grand Total 81,501,256 47,389,549<br />
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74 PROSPECTUS<br />
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Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
30-06-2010 30-06-2009<br />
Taka Taka<br />
12.00 Cash & Bank Balances: Tk. 11,526,877<br />
Particulars<br />
Cash in Hand 633,867 624,105<br />
Sub Total 633,867 624,105<br />
Cash at Bank<br />
Trust Bank Ltd., Sylhet Br. 618,966 9,002,698<br />
EXIM Bank Ltd., Fenchugong Br. 17,986 75,375<br />
Mercantile Bank Ltd., Mohakhali Br. 165,096 177,541<br />
BRAC Bank Ltd., Gulshan Br. 10,049,772 39,088,762<br />
Prime Bank Ltd., Gulshan Br. 2,700 3,850<br />
Standard Bank Ltd., Topkhana Road Br. 350 1,500<br />
Islami Bank Ltd., Sylhet Branch 770 -<br />
Shahjalal Islami Bank Ltd., Dhaka Main Br. 37,370 378,788<br />
Sub Total 10,893,010 48,728,514<br />
FDR Accounts<br />
BRAC Bank Ltd., Gulshan Br. - 11,100,000<br />
Trust Bank Ltd., Sylhet Br. - 7,500,000<br />
Sub Total - 18,600,000<br />
Grand Total 11,526,877 67,952,619<br />
The bank balances have been confirmed and reconciled with respective bank statements.<br />
Cash in hand has been verified by the management at the close <strong>of</strong> the year and a cash custody certificate was<br />
furnished to the auditors.<br />
13.00 Share Capital: Tk. 600,000,000<br />
Authorised:<br />
100,000,000 Ordinary Shares <strong>of</strong> Tk. 10 each 1,000,000,000 1,000,000,000<br />
Issued, Subscribed and Paid-up:<br />
60,000,000 Ordinary Shares <strong>of</strong> Tk. 10 each 600,000,000 350,000,000<br />
(3,500,000 ordinary shares <strong>of</strong> Tk. 100 each in the year 2009)
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
Shareholding Position was as follows:<br />
Sl. No. Name <strong>of</strong> shareholders<br />
Barakatullah<br />
Barakatullah<br />
Electro<br />
Electro<br />
Dynamics<br />
Dynamics<br />
Limited<br />
Limited 75<br />
Lighting Lighting Bangladesh, Bangladesh, We We Promise... Promise<br />
Percentage <strong>of</strong> shareholdings Amount in Tk.<br />
30-06-2010 30-06-2009 30-06-2010 30-06-2009<br />
1 Faisal Ahmed Chowdhury 2.71 4.64 16,250,000 16,250,000<br />
2 Gulam Rabbani Chowdhury 2.71 4.64 16,250,000 16,250,000<br />
3 Md. Ahsanul Kabir 3.25 5.57 19,500,000 19,500,000<br />
4 Nasim Ahmed Chowdhury 1.39 2.39 8,355,700 8,355,700<br />
5 Nayem Ahmed Chowdhury 1.19 2.04 7,125,000 7,125,000<br />
6 Fahim Ahmed Chowdhury 0.89 1.52 5,323,400 5,323,400<br />
7 Alimus Sadat Chowdhury 0.27 0.46 1,625,000 1,625,000<br />
8 Manzur Ashraf Khan 0.41 0.70 2,460,000 2,460,000<br />
9 Muhammed Monsur Alam Chowdhury 0.53 0.91 3,183,700 3,183,700<br />
10 Yeahyea Murad Khan 0.51 0.88 3,083,400 3,083,400<br />
11 Nanu Kazi Mohammed Miah 2.04 3.19 12,237,200 11,154,400<br />
12 Md. Shirajul Islam 1.76 3.02 10,577,200 10,577,200<br />
13 Mohammed Abdul Ahad 1.01 1.74 6,077,200 6,077,200<br />
14 Abdul Mumin 1.61 2.48 9,671,500 8,671,500<br />
15 Robin Chowdhury 9.58 16.33 57,493,000 57,153,000<br />
16 Abdul Bari 1.18 1.59 7,077,200 5,577,200<br />
17 Kazi Mohammed Angur Miah 1.76 3.02 10,577,200 10,577,200<br />
18 Ubaydia Chowdhury 0.93 0.00 5,577,200 -<br />
19 Afzal Rashid Choudhury 0.70 1.20 4,182,900 4,182,900<br />
20 Other shareholders 65.56 43.68 393,373,200 152,873,200<br />
Total 100.00 100.00 600,000,000 350,000,000<br />
Details <strong>of</strong> the Shareholding is given below:<br />
The distribution schedule showing the number <strong>of</strong> Shareholders and their shareholding in percentage has been<br />
disclosed below as a requirement <strong>of</strong> the “Listing Regulation” <strong>of</strong> Dhaka and <strong>Chittagong</strong> <strong>Stock</strong> <strong>Exchange</strong>.<br />
Range <strong>of</strong> holdings in number <strong>of</strong> Shares No. <strong>of</strong> Shareholders Holding %<br />
30-06-2010 30-06-2009 30-06-2010 30-06-2009<br />
Less than 500 shares - - - -<br />
500 to 5,000 shares - - - -<br />
5,001 to 10,000 shares - - - -<br />
10,001 to 20,000 shares - - - -<br />
20,001 to 30,000 shares - - - -<br />
30,001 to 40,000 shares 1.00 - 0.73 -<br />
40,001 to 50,000 shares - - - -<br />
50,001 to 100,000 shares 14.00 2.00 10.22 2.47<br />
100,001 to 1,000,000 shares 107.00 70.00 78.10 86.42<br />
1,000,001 to 10,000,000 shares 15.00 9.00 10.95 11.11<br />
Total 137.00 81.00 100.00 100.00<br />
Split <strong>of</strong> Face Value <strong>of</strong> Share:<br />
A special resolution is passed and duly certified from RJSC dated 30 December 2009 to adopt a new Articles <strong>of</strong><br />
Association. By the said special resolution the company’s face value <strong>of</strong> share is reduced from Tk. 100 to Tk. 10.<br />
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����<br />
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
14.00 Share Money Deposit: Tk. Nil<br />
30-06-2010 30-06-2009<br />
Taka Taka<br />
Particulars<br />
Share Money Deposit - 174,635,936<br />
- 174,635,936<br />
15.00 Term Loan: Tk. 1,401,515,149<br />
Particulars<br />
Long Term Portion: Interest Rate<br />
Infrastructure Development Finance Company Ltd. (IDCOL) 13% 430,555,554 325,366,491<br />
BRAC Bank Ltd. 13% 236,363,636 169,229,348<br />
Trust Bank Ltd. 13% 118,181,816 84,614,672<br />
AB Bank Ltd. 13% 118,181,817 84,614,673<br />
Janata Bank Ltd. 13% 78,787,879 39,303,097<br />
Industrial & Infrastructure Development Finance Co. Ltd. (IIDFC) 14% 39,393,940 19,651,549<br />
Prime Finance & Investment Ltd. 15% 200,000,000 -<br />
Sub Total 1,221,464,642 722,779,830<br />
Short Term Portion:<br />
Infrastructure Development Finance Company Ltd. (IDCOL) 13% 55,050,507 27,777,777<br />
BRAC Bank Ltd. 13% 50,000,000 42,657,213<br />
Trust Bank Ltd. 13% 25,000,000 21,328,607<br />
AB Bank Ltd. 13% 25,000,000 21,328,607<br />
Janata Bank Ltd. 13% 16,666,667 12,663,918<br />
Industrial & Infrastructure Development Finance Co. Ltd. (IIDFC) 14% 8,333,333 6,331,958<br />
Sub Total 180,050,507 132,088,080<br />
Grand-Total 1,401,515,149 854,867,910<br />
Infrastructure Development Finance Company Ltd. (IDCOL) along with other banks/non-banking financial institution has<br />
arranged syndication loan <strong>of</strong> Tk. 1,250,000,000 as lead arranger in January, 2009. From this amount, company has availed<br />
full amount <strong>of</strong> Tk. 1,250 million in June, 2010. The interest rate <strong>of</strong> this syndication loan is 13.00% per annum for IDCOL<br />
and other lenders except IIDFC with semi-annual review by the agent and lenders from August, 2009. The first drawdown<br />
was made on January 26, 2009. The grace period <strong>of</strong> this syndication loan is <strong>of</strong> 12 months from the first drawdown date. The<br />
term loan facility in case <strong>of</strong> IDCOL shall be repaid in equal 36 quarterly installments and in case <strong>of</strong> other lenders shall be<br />
repaid in equal 22 quarterly installments on repayment dates commencing from the immediate quarter-end upon the expiry<br />
<strong>of</strong> the grace period.<br />
The security package for the project is as follows:<br />
-Mortgage <strong>of</strong> project land;<br />
-Hypothecation <strong>of</strong> all fixed and floating assets including but not limited to machinery, book debts, furniture, fixture and<br />
equipment on first ranking pari passu basis creating present and future charge with the RJSC;<br />
-Establishment <strong>of</strong> Escrow Account and Debt Service Account with appropriate cash waterfall arrangement to the satisfaction<br />
<strong>of</strong> the lenders;<br />
-Co-payee <strong>of</strong> benefits under all insurance policies insuring the relevant moveable and immoveable assets <strong>of</strong> the issuer.<br />
A term loan is taken from Prime Finance & Investment Ltd. for a period <strong>of</strong> 18 months (including a grace period <strong>of</strong> 3 months)<br />
at Interest rate <strong>of</strong> 15% p.a. on 08 March, 2010. Repayment <strong>of</strong> interest will be paid from the 4th month to 18th month starting<br />
from the end <strong>of</strong> the grace period and principal repayment will be paid at the end <strong>of</strong> the term.
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
16.00 Deferred Liability for Plant & Machinery: Tk. Nil<br />
Barakatullah<br />
Barakatullah<br />
Electro<br />
Electro<br />
Dynamics<br />
Dynamics<br />
Limited<br />
Limited 77<br />
Lighting Lighting Bangladesh, Bangladesh, We We Promise... Promise<br />
30-06-2010 30-06-2009<br />
Taka Taka<br />
Fifty percent (50%) value <strong>of</strong> 15 (fifteen) Gen Set (JGS 620 GS-N.L) purchased from GE Jenbacher Gmbh &<br />
Co. OHG, Austria @ $ 1,032,000/Engine, have been paid during the year.<br />
Particulars<br />
Gen Set (JGS 620 GS-N.L)-15 nos engine - 541,800,000<br />
Total - 541,800,000<br />
17.00 Liability for Expenses: Tk. 14,485,254<br />
Particulars<br />
Salary & Allowances 1,218,878 878,492<br />
Director’s Remuneration 500,700 734,000<br />
Audit Fees 50,000 40,000<br />
Provision for Tax ( Note-17.01 ) 5,582,449 3,359,633<br />
Utility Expenses 98,190 -<br />
Office Rent 15,000 23,283<br />
Legal Fees & Pr<strong>of</strong>essional Expenses 5,000 -<br />
Vehicle Running Expenses 96,615 -<br />
Infrastructure Development Company Limited (IDCOL) - 19,390,535<br />
BRAC Bank Limited - 11,566,297<br />
Trust Bank Limited - 5,764,261<br />
AB Bank Limited - 4,584,864<br />
Janata Bank Limited - 1,709,361<br />
Industrial & Infrastructure Development Finance Co. Ltd. (IIDFC) 120,644 856,002<br />
Prime Finance & Investment Limited 6,797,778 -<br />
Total 14,485,254 48,906,728<br />
17.01 Provision For Tax: Taka 5,582,449<br />
Provision for tax on Revenue<br />
Tax applicable on total revenue 20,581,705<br />
Tax paid on revenue received (15,198,563)<br />
Provision for tax on Revenue 5,383,142<br />
Provision for Tax on Other Income<br />
Tax applicable on bank interest 271,782<br />
Tax deducted by bank (72,475)<br />
Provision for tax on other income 199,307<br />
Total 5,582,449<br />
As per section 52N <strong>of</strong> the Income tax ordinance 1984, BPDB has deducted source tax on company’s revenue,<br />
which is the final discharge <strong>of</strong> tax liability as per the said ordinance. But the company has earned an amount<br />
<strong>of</strong> bank interest on FDR & STD A/C. As such the management feels to create tax provision for this income at<br />
applicable rate enforced in Bangladesh.<br />
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78 PROSPECTUS<br />
78 <strong>Prospectus</strong><br />
����<br />
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
18.00 Accounts Payable: Tk. 74,050,246<br />
30-06-2010 30-06-2009<br />
Taka Taka<br />
Particulars<br />
Jalalabad Gas T & D Co. Limited 61,419,970 -<br />
Mobil Jamuna Lubricants Limited 6,085,622 -<br />
United Bricks 676,015 -<br />
Mr. M K Babul 268,100 -<br />
Arti Sun Craft 205,000 -<br />
Technic Construction 4,000,000 -<br />
Sumon Brothers 31,783 -<br />
Rakin Traders 26,035 -<br />
Fahim Electric 12,721 -<br />
Blue Bird Auto Ltd. 1,325,000 -<br />
Total 74,050,246 -<br />
19.00 Revenue: Tk. 514,542,637<br />
Particulars<br />
Rental Received 215,630,995 -<br />
Energy Sale 298,911,642 -<br />
Total 514,542,637 -<br />
20.00 Cost <strong>of</strong> Sales: Tk. 245,353,077<br />
Particulars<br />
Gas Consumption 189,405,258 -<br />
Lube Oil Consumption 18,485,270 -<br />
Grease 184,443 -<br />
Coolnet Water 11,040 -<br />
Spare Parts-Others Consumption 16,570 -<br />
Depreciation on Plant & Machinery 36,750,574 -<br />
Repair & Maintenances 499,922 -<br />
Total 245,353,077 -
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
21.00 General & Administrative Expenses: Tk. 50,514,638<br />
Barakatullah<br />
Barakatullah<br />
Electro<br />
Electro<br />
Dynamics<br />
Dynamics<br />
Limited<br />
Limited 79<br />
Lighting Lighting Bangladesh, Bangladesh, We We Promise... Promise<br />
30-06-2010 30-06-2009<br />
Taka Taka<br />
Particulars<br />
Salary & Allowances 10,855,859 -<br />
Director’s Remuneration 5,724,500 -<br />
Communication Expenses 333,211 -<br />
Travelling & Conveyance 1,097,603 -<br />
Utility Expenses 171,299 -<br />
Office Rent, Rates & Taxes 677,500 -<br />
AGM & EGM Expenses 38,036 -<br />
Vehicle Running Expenses 1,395,472 -<br />
General Repair & Maintenances 368,208 -<br />
Entertainment & Others 736,870 -<br />
Business Development Expenses 281,354 -<br />
Plant Inauguration Expenses 2,117,956 -<br />
Legal Fees & Pr<strong>of</strong>essional Consultancy 66,132 -<br />
Staff Fooding & Lodging 367,644 -<br />
Advertisement & Publicity 50,985 -<br />
Tender Document Expenses 70,340 -<br />
Audit Fees 50,000<br />
Photocopy & Stationeries 46,169 -<br />
Uniform 113,175 -<br />
Newspaper, Books & Periodicals 15,072 -<br />
Printing Expenses 66,756 -<br />
License Renewal Fees 566,108 -<br />
Bank Charges & Commission 131,488 -<br />
Miscellaneous 58,204 -<br />
Donation & Subscription 527,348 -<br />
Insurance Premium 977,777 -<br />
Training & Workshop Expenses 34,943 -<br />
Gardening Expenses 151,981 -<br />
Annual Sports Expenses 17,680 -<br />
Gift & Greetings 8,297 -<br />
ISO Certification Expenses 106,950 -<br />
Rest House Keeping Expenses 150,000 -<br />
Preliminary Expenses Written Off 532,600<br />
Advance Income Tax Paid 15,198,563<br />
Amortization Expenses 1,952,374 -<br />
Depreciation Expenses 5,456,184 -<br />
Total 50,514,638 -<br />
22.00 Financial Income: Tk. 724,753<br />
Particulars<br />
Bank Interest 724,753 -<br />
Total 724,753 -<br />
����
80 PROSPECTUS<br />
80 <strong>Prospectus</strong><br />
����<br />
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
30-06-2010 30-06-2009<br />
Taka Taka<br />
23.00 Financial Expenses: Tk. 111,763,872<br />
Particulars<br />
Interest Expenses:<br />
BRAC Bank Limited 24,026,000 -<br />
Trust Bank Limited 12,014,415 -<br />
Infrastructure Development Company Limited (IDCOL) 40,252,804 -<br />
Industrial & Infrastructure Development Finance Co. Ltd. (IIDFC) 4,347,429 -<br />
Janata Bank Limited 7,903,301 -<br />
AB Bank Limited 12,014,393 -<br />
Prime Finance & Investment Limited 9,856,778 -<br />
Sub Total 110,415,120 -<br />
Bank Guarantee Expenses 1,348,752 -<br />
Sub Total 1,348,752 -<br />
Grand Total 111,763,872 -<br />
24.00 Earnings Per Share (EPS): Tk. 1.76<br />
Particulars<br />
Pr<strong>of</strong>it Attributable to Ordinary Shareholders 102,053,354<br />
Weighted Average Number <strong>of</strong> Ordinary Shares Outstanding during the year (Note 23 A) 57,944,444<br />
Basic Earnings Per Share (EPS) 1.76<br />
24.01 Weighted Average Number <strong>of</strong> Ordinary Shares: 57,944,444<br />
The weighted average number <strong>of</strong> ordinary shares outstanding during the year is the number <strong>of</strong> ordinary shares<br />
outstanding at the beginning <strong>of</strong> the year, adjusted by the number <strong>of</strong> ordinary shares issued during the year<br />
multiplied by a time-weighted factor. The time-weighted factor is the number <strong>of</strong> days that the shares are<br />
outstanding as a proportion <strong>of</strong> the total number <strong>of</strong> days in the year (considering 360 days in a year).<br />
Outstanding ordinary shares as at July 01, 2009 35,000,000<br />
Effect <strong>of</strong> issue <strong>of</strong> additional shares during the year 22,944,444<br />
Total 57,944,444<br />
24.02 Dilution <strong>of</strong> Earnings Per Share:<br />
No diluted earnings per share is required to be calculated for the year presented as there was no potential<br />
ordinary shares has been issued by the company, as such no scope for dilution during the year.<br />
25.00 Contingent Liability: Tk. 212,463,647<br />
Contingent liability existed for the Company <strong>of</strong> Tk. 212,463,647 as at 30 June, 2010 in relation to issue <strong>of</strong> bank<br />
guarantee in favor <strong>of</strong> Bangladesh Power Development Board, JGT&DCL, Commissioner <strong>of</strong> Customs, Customs<br />
House (Import)-Dhaka, <strong>Chittagong</strong> & Benapole.<br />
The company has been filed few petition involving an amount <strong>of</strong> Tk. 10,11,76,307 (writ # 868/2009, 2100/2009,<br />
2788/2009, 3272/2009, 3807/2009, 5641/2009) against BPDB, NBR, Custom and other parties for taking the<br />
exemption facility <strong>of</strong> import duty, VAT, Supplementary duty etc.
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
Nature <strong>of</strong> Contingent Liability Expiry date<br />
Barakatullah<br />
Barakatullah<br />
Electro<br />
Electro<br />
Dynamics<br />
Dynamics<br />
Limited<br />
Limited 81<br />
Lighting Lighting Bangladesh, Bangladesh, We We Promise... Promise<br />
30-06-2010 30-06-2009<br />
Taka Taka<br />
Bank Guarantee-Bangladesh power development board 22.10.2009 - 75,000,000<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Dhaka Open ended 591,537 591,537<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Dhaka Open ended 682,346 682,346<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Dhaka Open ended 159,980 159,980<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Dhaka Open ended 48,688 48,688<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Dhaka Open ended 65,839 65,839<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Dhaka Open ended 108,712 108,712<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Dhaka Open ended 55,356 55,356<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Dhaka Open ended 12,844 12,844<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Dhaka Open ended 866,530 866,530<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Dhaka Open ended 750,053 750,053<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Dhaka Open ended 100,459 100,459<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Dhaka Open ended 280,801 280,801<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 21,927,458 21,927,458<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 8,257,227 8,257,227<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 421,806 421,806<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 6,757 6,757<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 118,496 118,496<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 88,616 88,616<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 3,215,448 3,215,448<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 926,706 926,706<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 617,796 617,796<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 2,176,655 2,176,655<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 5,775,934 5,775,934<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 664,022 664,022<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 1,992,065 1,992,065<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 6,317,980 6,317,980<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 207,146 207,146<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 6,530,548 6,530,548<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 6,526,384 6,526,384<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 6,526,384 6,526,384<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 4,350,923 4,350,923<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 120,615 120,615<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 112,935 112,935<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Benapole Open ended 1,801,023 1,801,023<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Benapole Open ended 1,530,870 1,530,870<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Benapole Open ended 1,368,777 1,368,777<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Benapole Open ended 900,512 900,512<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Benapole Open ended 5,752,018 5,752,018<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Benapole Open ended 33,196 33,196<br />
Bank Guarantee-Commissioner <strong>of</strong> Customs, Customs House (Import) - Ctg. Open ended 9,184,865 -<br />
Bank Guarantee-Jalalabad Gas Transmission & Distribution Co. Ltd. -Sylhet Aug.30, 2012 60,886,080 -<br />
Bank Guarantee-Bangladesh Power Development Board, Dhaka 16 Nov. 2013 50,401,260 -<br />
Total 212,463,647 166,991,442<br />
����
82 PROSPECTUS<br />
82 <strong>Prospectus</strong><br />
����<br />
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
26.00 Commitment <strong>of</strong> Capital Expenditure: Tk. 3,770,897<br />
Name <strong>of</strong> the company L/C Number Currency Value as at 30-06-2010 Value as at 30-06-2009<br />
in FCY in BDT in FCY in BDT<br />
Forain S. R. I. Italy 308509010046 EURO - - 238,805 24,035,723<br />
Eagle Power Ltd. England 308509010515 POUND - - 23,969 2,796,703<br />
Siemex Power Generation Company N/A BDT - - - 1,970,000<br />
Quantum Builders & Engineering Ltd. N/A BDT - - - 7,904,335<br />
Technic Construction Company N/A BDT - - - 2,204,296<br />
Ningbo Demy (D&M) Bearing Co. Ltd., China 308510010470 USD 54,238 3,770,897 - -<br />
Total 54,238 3,770,897 262,774 38,911,057<br />
27.00 Remittance <strong>of</strong> Foreign Currency: Tk. 570,078,001<br />
Name <strong>of</strong> beneficiary<br />
Value as at 30-06-2010 Value as at 30-06-2009<br />
L/C Number Currency<br />
in FCY in BDT in FCY in BDT<br />
Capital Equipment 175208010128 USD - - 4,000,000 277,680,000<br />
Capital Equipment 235908010338 USD - - 208,800 14,494,896<br />
Capital Equipment 235908010339 USD - - 974,000 67,615,080<br />
Capital Equipment 235908010340 USD - - 40,000 2,776,800<br />
Capital Equipment 235908010341 EURO - - 25,980 2,614,887<br />
Capital Equipment 235908010342 USD - - 255,500 17,736,810<br />
Capital Equipment 308509010021 USD - - 2,580,000 179,103,600<br />
Capital Equipment 308509010047 EURO - - 27,132 2,730,836<br />
Capital Equipment 308509010048 USD - - 251,500 17,459,130<br />
Capital Equipment 308509010049 USD - - 117,764 8,175,203<br />
Capital Equipment 308509010050 USD - - 60,158 4,176,157<br />
Capital Equipment 308509010081 USD - - 52,800 3,665,376<br />
Capital Equipment 308509010111 USD - - 28,000 1,943,760<br />
Capital Equipment 308509010164 USD - - 27,442 1,905,024<br />
Capital Equipment 308509010263 USD - - 109,966 7,633,812<br />
Capital Equipment 308509010295 USD - - 42,500 2,950,350<br />
Capital Equipment 308509010046 EURO 238,805 23,915,700 - -<br />
Capital Equipment 308509010515 POUND 23,969 2,790,471 - -<br />
Capital Equipment 308509010021 USD 2,642,068 183,743,015 - -<br />
Capital Equipment 308509010080 USD 4,644,000 323,315,280 4,644,000 322,386,480<br />
Capital Equipment 308509010109 USD 516,000 35,965,200 516,000 35,820,720<br />
Spare Parts 308510010283 USD 5,000 348,335 - -<br />
Total 8,069,842 570,078,001 13,961,542 970,868,920<br />
28.00 Value <strong>of</strong> Imports Calculated on CIF Basis: 30-06-2010 30-06-2009<br />
Taka Taka<br />
Spare Parts (includes inventory) 348,335 -<br />
29.00 Related Party Transactions:<br />
A. During the year, the Company carried out a number <strong>of</strong> transactions with related party in the normal course <strong>of</strong> business.<br />
The names <strong>of</strong> the related parties and nature <strong>of</strong> these transactions have been set out in accordance with the provisions<br />
<strong>of</strong> BAS 24: Related Party Disclosures.<br />
Transaction with key management personnel:<br />
30-06-2010 30-06-2009<br />
Taka Taka<br />
Employee Benefits 10,234,600 8,175,000<br />
Total 10,234,600 8,175,000<br />
Key management personnel includes Chairman, Managing Director, Directors, Director-Technical, Company Secretary and Plant Manager.
Notes to the Financial Statements<br />
as at and for the year ended June 30, 2010<br />
B. Other Related Party Transactions:<br />
30.00 Capacity<br />
Name <strong>of</strong> the<br />
Related Party<br />
Royal Homes Ltd.<br />
Nature <strong>of</strong><br />
Relationship<br />
Nature <strong>of</strong><br />
Transaction<br />
Owned by key<br />
Short term<br />
management<br />
loan<br />
personnel <strong>of</strong> BEDL<br />
Barakatullah<br />
Barakatullah<br />
Electro<br />
Electro<br />
Dynamics<br />
Dynamics<br />
Limited<br />
Limited 83<br />
Lighting Lighting Bangladesh, Bangladesh, We We Promise... Promise<br />
Transactions during the year Receivables/Payables<br />
30-06-2010 30-06-2009 30-06-2010 30-06-2009<br />
Taka Taka Taka Taka<br />
8,115,000 3,572,535 - -<br />
Name <strong>of</strong> Plant<br />
Installed Plant factor Energy<br />
Licensed<br />
Energy Sold<br />
Capacity (% on Licensed Capacity) Generation<br />
Capacity (MW)<br />
(MwH)<br />
(MW) Average Maximum (MwH)<br />
Fenchugonj, Sylhet 51.00 55.14 79.94 98.97 275,894.77 264,199.43<br />
31.00 Disclosure as per Requirement <strong>of</strong> Schedule XI, Part II <strong>of</strong> Companies Act, 1994<br />
a. Disclosure as per Requirement <strong>of</strong> Schedule XI, Part II Para 4:<br />
Payment to Directors during the year ended 30 June 2010<br />
Name Designation Period Amount in Taka Remarks<br />
Mr. Faisal Ahmed Chowdhury Chairman July’09 to June ‘10 1,980,000 Remuneration<br />
Mr. Gulam Rabbani Chowdhury Managing Director July’09 to June ‘10 1,980,000 Remuneration<br />
Mr. Md. Ahsanul Kabir Vice-Chairman July’09 to June ‘10 990,000 Remuneration<br />
Mr. Fahim Ahmed Chowdhury Director July’09 to June ‘10 967,500 Remuneration<br />
Mr. Nayem Ahmed Chowdhury Director July’09 to Oct. ‘09 330,000 Remuneration<br />
Mr. Alimus Sadat Chowdhury Director Dec. ‘09 to June ‘10 140,000 Remuneration<br />
Mr. Md. Monsur Alam Chowdhury Director July’09 to Nov. ‘09 348,000 Remuneration<br />
Total 6,735,500<br />
32.00 General Disclosures:<br />
32.01 Number <strong>of</strong> regular employees receiving remuneration <strong>of</strong> Tk 36,000 or above per annum was 80 (eighty)<br />
as at 30 June 2010 and was 50 as at 30 June 2009 as disclosure required by the Schedule XI, Part II, note 5 <strong>of</strong><br />
para 3 <strong>of</strong> Companies Act, 1994.<br />
32.02 Comparative figures have been rearranged wherever considered necessary to conform to the current year’s<br />
presentation.<br />
33.00 Events after the Balance Sheet Date:<br />
a. Introduction <strong>of</strong> Employees’ Benefit Scheme:<br />
Provident Fund:<br />
The board <strong>of</strong> directors <strong>of</strong> the company have been decided to introduce a Contributory Provident Fund with<br />
effect from 01 July, 2010 for all <strong>of</strong> it’s permanent employees, which is a defined contribution plan. The<br />
fund is governed by the Board <strong>of</strong> Trustee and funded by contribution <strong>of</strong> employee @ 10% <strong>of</strong> the basic pay<br />
and equal contribution is funded by the employer also. These contributions are invested separately from the<br />
company’s business. Management is hopeful for getting recognition from the National Board <strong>of</strong> Revenue<br />
(NBR).<br />
Gratuity Fund:<br />
The board <strong>of</strong> directors <strong>of</strong> the company also decided to introduce an unfunded gratuity scheme which is<br />
defined benefit scheme. A provision in respect <strong>of</strong> this made periodically covering all permanent employees by<br />
applying period <strong>of</strong> employment to latest basic salary.<br />
����
84<br />
����<br />
PROSPECTUS<br />
Selected Ratios<br />
Barakatullah Electro Dynamics Limited<br />
Auditors’ Certificate regarding calculation <strong>of</strong> EPS & Ratios<br />
We have examined the following earnings per share (EPS) and other ratios <strong>of</strong> Barakatullah Electro Dynamics Limited as on 30 June<br />
2010, 2009 and 2008 & for the year ended 30 June 2010, 2009 and 2008, which have been produced by the management <strong>of</strong> the<br />
company to us. The preparation <strong>of</strong> the EPS and other ratios is the responsibility <strong>of</strong> the company’s management. Our responsibility<br />
is to review them and certify as to whether they have been properly prepared using acceptable principles on the basis <strong>of</strong> audited<br />
financial statements for the year ended 30 June 2010, 2009 and 2008.<br />
Based on our review, we certify that the company has properly prepared the following EPS and other ratios using acceptable<br />
principles on the basis <strong>of</strong> audited financial statements for the year ended 30 June 2010, 2009 and 2008.<br />
Name <strong>of</strong> ratio Formula<br />
A. Liquidity ratios<br />
1 Current Ratio<br />
2 Quick Ratio<br />
3<br />
Time Interest Earned<br />
Ratio (Times)<br />
4 Debt to Equity Ratio<br />
B. operating ratios<br />
1<br />
2<br />
3<br />
Accounts Receivable<br />
Turnover Ratio<br />
(Times)<br />
Inventory Turnover<br />
Ratio (Times)<br />
Assets Turnover<br />
Ratio (Times)<br />
c. Pr<strong>of</strong>itability Ratios<br />
1 Gross Margin Ratio<br />
2<br />
Operating Income<br />
Ratio<br />
3 Net Income Ratio<br />
4<br />
5<br />
Return on Assets<br />
Ratio<br />
Return on Equity<br />
Ratio<br />
Amount in taka<br />
2010 2009 2008<br />
calculation result % calculation result % calculation result %<br />
Current Assets<br />
Current Liability<br />
236,129,292<br />
0.88<br />
268,586,007<br />
115,342,168<br />
722,794,808 0.16<br />
136,609,083<br />
6,388,173<br />
Current Assets -<br />
Inventory<br />
Current Liability<br />
227,606,686<br />
0.85<br />
268,586,007<br />
115,342,168<br />
722,794,808<br />
0.16<br />
136,609,083<br />
6,388,173<br />
Operating Income 218,674,922<br />
1.96 N/A - N/A -<br />
Interest expenses 111,763,872<br />
Total Debt 1,401,515,149<br />
854,867,910<br />
Total stockholder’s<br />
equity<br />
2.00<br />
702,053,354 524,635,936 1.63<br />
N/A -<br />
Gross Turnover 269,189,560<br />
Receivables 134,578,553<br />
2.00 N/A - N/A -<br />
Cost <strong>of</strong> goods sold 245,353,077<br />
28.79 N/A - N/A -<br />
Inventory 8,522,606<br />
Gross Turnover 269,189,560<br />
0.12 N/A - N/A -<br />
Total Assets 2,192,104,003<br />
Grass Pr<strong>of</strong>it 269,189,560 0.52 N/A - N/A -<br />
Gross Revenue 514,542,637<br />
Operating Pr<strong>of</strong>it 218,674,922<br />
Total Operating<br />
Revenue<br />
514,542,637<br />
Pr<strong>of</strong>it After Tax 102,053,354<br />
Total Operating<br />
Revenue<br />
514,542,637<br />
Pr<strong>of</strong>it After Tax 102,053,354<br />
Total Assets 2,192,104,003<br />
Pr<strong>of</strong>it After Tax 102,053,354<br />
Share Holders Equity 702,053,354<br />
0.42 N/A - N/A -<br />
0.20 N/A - N/A -<br />
0.05 N/A - N/A -<br />
0.15 N/A - N/A -<br />
Pr<strong>of</strong>it After Tax 102,053,354<br />
6<br />
Earnings Per Share<br />
(EPS) (Tk.)<br />
Weighted Average<br />
No. <strong>of</strong> Shares<br />
Outstanding<br />
57,944,444<br />
1.76* N/A - N/A -<br />
* Denomination <strong>of</strong> Face Value <strong>of</strong> Share from Tk 1,000 to Tk 100<br />
30-Nov-08<br />
Denomination <strong>of</strong> Face Value <strong>of</strong> Share from Tk 100 to Tk 10<br />
30-Dec-09<br />
Dated, Dhaka<br />
02 December 2010<br />
21.38<br />
21.38<br />
Sd/-<br />
HAQUE SHAHALAM MANSUR & CO.<br />
Chartered Accountants.
Barakatullah Electro Dynamics Limited<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Auditors’ Report under section 135(1) and paragraph 24(1) <strong>of</strong> Part -II <strong>of</strong> Third Schedule <strong>of</strong> the<br />
Companies Act, 1994, For the periods from 26 June 2007 to 30 June 2010<br />
We have examined the financial statements <strong>of</strong> Barakatullah Electro Dynamics Limited for the years ended 30 June<br />
2008 , 2009 and 2010 . In pursuance <strong>of</strong> Section 135(1) under Paragraph 24(1) <strong>of</strong> Part -II <strong>of</strong> Third Schedule <strong>of</strong> the<br />
Companies Act 1994, our report is as under-<br />
A. Statement <strong>of</strong> Assets and Liabilities: Amount in Taka<br />
As At<br />
30.06.2010 30.06.2009 30.06.2008<br />
ASSETS<br />
Non-Current Assets<br />
Property, Plant & Equipment 1,914,078,657 33,623,688 16,192,741<br />
Preliminary Expenses - 532,600 532,600<br />
Intangible Assets 34,667 - -<br />
Pre-Operating Expenses 41,861,387 33,276,023 13,343,378<br />
Capital Work-in-Progress - 1,787,436,095 3,540,248<br />
Total Non-Current Assets 1,955,974,711 1,854,868,406 33,608,967<br />
Current Assets<br />
Inventories 8,522,606 - -<br />
Accounts Receivables 134,578,553 - -<br />
Advances, Deposits & Pre-payments 81,501,256 47,389,549 1,625,000<br />
Cash & Bank Balances 11,526,877 67,952,619 134,984,083<br />
Total Current Assets 236,129,292 115,342,168 136,609,083<br />
TOTAL ASSETS 2,192,104,003 1,970,210,574 170,218,050<br />
EQUITY & LIABILITIES<br />
Shareholders’ Equity<br />
Share Capital 600,000,000 350,000,000 15,000,000<br />
Share Money Deposit - 174,635,936 148,829,877<br />
Retained Earnings 102,053,354 - -<br />
Total Shareholders’ Equity 702,053,354 524,635,936 163,829,877<br />
Non-Current Liabilities<br />
Term Loan-Long Term Portion 1,221,464,642 722,779,830 -<br />
Total Non-Current Liabilities 1,221,464,642 722,779,830 -<br />
Current Liabilities<br />
Term Loan-Short Term Portion 180,050,507 132,088,080 -<br />
Short Term Loan - - 3,572,535<br />
Deferred Liabilities for Plant & Equipment - 541,800,000 -<br />
Liability for Expenses 14,485,254 48,906,728 2,815,638<br />
Accounts Payable 74,050,246 - -<br />
Total Current Liabilities 268,586,007 722,794,808 6,388,173<br />
TOTAL EQUITY & LIABILITIES 2,192,104,003 1,970,210,574 170,218,050<br />
Dated, Dhaka Sd/-<br />
October 3, 2010 HAQUE SHAHALAM MANSUR & CO.<br />
Chartered Accountants.<br />
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PROSPECTUS<br />
B. Statement <strong>of</strong> Operating Results: Amount in Taka<br />
For the year ended<br />
30.06.2010 30.06.2009 30.06.2008<br />
Revenue 514,542,637 - -<br />
Cost <strong>of</strong> Sales (245,353,077) - -<br />
Gross Pr<strong>of</strong>it 269,189,560 - -<br />
General & Administrative Expenses (50,514,638) - -<br />
Operating Pr<strong>of</strong>it 218,674,922 - -<br />
Financial Income 724,753 - -<br />
219,399,675 - -<br />
Financial Expenses (111,763,872) - -<br />
Pr<strong>of</strong>it before Tax 107,635,803 - -<br />
Provision for Tax (5,582,449) - -<br />
Pr<strong>of</strong>it for the year 102,053,354 - -<br />
C. Cash Flow Statement Amount in Taka<br />
For the year ended<br />
30.06.2010 30.06.2009 30.06.2008<br />
Cash Flow from Operating Activities:<br />
Cash Receipts from Customer 379,964,084 - -<br />
Cash paid to Suppliers (223,600,969) - -<br />
Financial Expenses (111,039,119) - -<br />
Net Cash Flow Used in Operating Activities 45,323,996 - -<br />
Cash Flow from Investing Activities:<br />
Acquisition <strong>of</strong> Fixed Assets (1,923,025,887) (17,430,947) (16,192,741)<br />
Disposal <strong>of</strong> Property, Plant & Equipment 364,160 - -<br />
Capital Work-in-Progress 1,787,436,095 (1,740,024,527) (3,540,248)<br />
Preliminary Expenses - - (532,600)<br />
Advances, Deposits & Pre-payments (36,163,004) (45,764,549) (1,625,000)<br />
Investment in Pre-Operating Expenses (10,532,405) (17,712,875) (10,527,740)<br />
Intangible Assets (40,000) - -<br />
Net Cash Used in Investing Activities (181,961,041) (1,820,932,898) (32,418,329)<br />
Cash Flow from Financing Activities:<br />
Share Capital 250,000,000 335,000,000 15,000,000<br />
Share Money Deposit (174,635,936) 25,806,059 148,829,877<br />
Term Loan 498,684,812 854,867,910 -<br />
Short Term Loan 47,962,427 (3,572,535) 3,572,535<br />
Payment <strong>of</strong> Deferred Liabilities for Plant & Equipment (541,800,000) 541,800,000 -<br />
Net Cash Generated from Financing Activities 80,211,303 1,753,901,434 167,402,412<br />
Net Cash Inflow/(Outflow) for the year (56,425,742) (67,031,464) 134,984,083<br />
Opening Cash & Bank Balances 67,952,619 134,984,083 -<br />
Closing Cash & Bank Balances 11,526,877 67,952,619 134,984,083<br />
Dated, Dhaka Sd/-<br />
October 3, 2010 HAQUE SHAHALAM MANSUR & CO.<br />
Chartered Accountants.
D. Dividend:<br />
The Company’s data relating to dividend is as under:<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
For the year ended<br />
30.06.2010 30.06.2009 30.06.2008<br />
Cash Dividend - % Nil Nil Nil<br />
<strong>Stock</strong> Dividend (Bonus shares) - % 10 (Proposed) Nil Nil<br />
The company has started its commercial operation from 24 October 2009. So that the company did not declared any<br />
dividend for the year ended 30 June 2008 & 30 June 2009.<br />
E. The company was incorporated on 26 June 2007 as Private Limited Company. On 25 September 2008, The company<br />
registered itself as a Public Limited Company under the Companies Act, 1994. The share <strong>of</strong> the company is<br />
denominated from Tk. 1,000 to Tk. 100 at 30 November 2008 and from Tk. 100 Tk. 10 at 30 December 2009;<br />
F. The Statement <strong>of</strong> Assets and Liabilities (Balance Sheet) as at 30 June 2010, 2009 and 2008 <strong>of</strong> the Company has been<br />
duly certified by us;<br />
G. We also certify the Statement <strong>of</strong> Operating Results (Income Statement) for the years ended 30 June 2010, 2009 and<br />
2008 <strong>of</strong> the Company;<br />
H. The Cash Flow Statement for the years ended 30 June 2010, 2009 and 2008 <strong>of</strong> the Company are enclosed and certified<br />
by us;<br />
I. The Company has no subsidiaries;<br />
K. No proceeds or part <strong>of</strong> proceeds <strong>of</strong> the issue <strong>of</strong> shares were applied directly or indirectly by the company in the<br />
purchase <strong>of</strong> any other business;<br />
L. The Company did not prepare any financial statements for any period subsequent to 30 June 2010; and<br />
M. Figures related to previous years have been rearranged wherever considered necessary.<br />
Dated, Dhaka Sd/-<br />
October 3, 2010 HAQUE SHAHALAM MANSUR & CO.<br />
Chartered Accountants.<br />
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CRAB Ratings Corporate<br />
CREDIT RATING<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...
CRAB Ratings Corporate<br />
CREDIT RATING REPORT<br />
Barakatullah Electro Dynamics Limited<br />
Long Term Rating: AA 2<br />
Date <strong>of</strong> Rating : 06 September 2010<br />
Validity : 31 December 2011<br />
Analysts:<br />
01. RATIONALE<br />
Md. Abdullah Omar<br />
Financial Analyst<br />
omar@crab.com.bd<br />
Niaz Ahmed<br />
Financial Analyst<br />
niaz@crab.com.bd<br />
Credit Rating Agency <strong>of</strong> Bangladesh (CRAB)<br />
Limited has assigned AA 2 (Pronounced as Double<br />
A Two) rating in the Long Term to the 51 MW<br />
gas based power project <strong>of</strong> Barakatullah Electro<br />
Dynamics Limited (hereinafter referred to as BEDL<br />
or the Company).<br />
Corporate entities rated AA 2 in the long term<br />
belong to ‘Very Strong Capacity’ cohort. These<br />
Companies are judged to be <strong>of</strong> very high quality<br />
to meet financial commitments and are subject to<br />
very low credit risk.<br />
In CRAB’s view, power shortage in Bangladesh has<br />
made the sector highly attractive for investment.<br />
Power sector investment <strong>of</strong>fers the lenders very<br />
low business risks compared to corporate entities.<br />
Highly supportive authority <strong>of</strong>fers implied sovereign<br />
support to ensure reliability <strong>of</strong> gas supply and<br />
regulatory framework allows full cost recovery.<br />
Large well protected service area and support for<br />
the electric transmission system outweigh user<br />
considerations. Competition is absent in the sector<br />
and monopoly or oligopoly is contained by contract<br />
with public sector entities and regulatory authority.<br />
Regulatory framework is designed fundamentally<br />
to achieve balance between supply reliability and<br />
service, efficiency, price and financial returns to<br />
the project undertaker.<br />
Electricity is wholly sold under 15 years contract to<br />
creditworthy counter party BPDB (a government<br />
owned company), which assumes all risk <strong>of</strong><br />
fluctuation in the market prices <strong>of</strong> fuel and<br />
electricity resulting in lowest business risks.<br />
Under Rental Power Agreement, the power<br />
company receives a capacity charge, which covers<br />
the portion <strong>of</strong> the fixed costs in relation to the<br />
power availability. These fixed payments cover<br />
partial debt service and are made irrespective <strong>of</strong><br />
electricity generation or not. In addition, energy<br />
charge is received for energy generation to cover<br />
the partial debt and variable costs <strong>of</strong> the project.<br />
The rating accounts for the risk management<br />
pass through capability, price considerations,<br />
excess reserve capacity <strong>of</strong> the plant, risk-sharing<br />
arrangements and default provisions embedded in<br />
the 15 year term supply contract.<br />
Bangladesh has adopted an “ex-ante” approach,<br />
under which the tariff structure is set in advance.<br />
In spite <strong>of</strong> moderate leverage, the rating draws<br />
comfort for the predictable revenue stream <strong>of</strong> the<br />
project, zero level <strong>of</strong> demand and product risk,<br />
inflation adjusted pricing mechanism and 15 year<br />
contracted period vis a vis 9 years <strong>of</strong> debt maturity.<br />
The debt holders’ interests are protected for longer<br />
term <strong>of</strong> contracted period. However, the project<br />
may exposed to operating and maintenance risk to<br />
some extent in spite <strong>of</strong> reserve capacity margin <strong>of</strong><br />
8.11%. The rating is constrained to this operating<br />
risk as most <strong>of</strong> the overhauling except major one<br />
would be done by local qualified engineers and<br />
technicians.<br />
The set up cost <strong>of</strong> the 51 MW power plant was BDT<br />
2,050 million (debt/equity ratio <strong>of</strong> 71:29). Delayed<br />
by 9 months from anticipated timeframe, the<br />
Company managed to start commercial operation<br />
in 24 October 2009. Therefore, the Company was<br />
exposed to liquidated damages but got waiver<br />
from the concerned authority (BPDB).<br />
The debt redemption schedule indicates that<br />
in 2011 there will be a bullet payment <strong>of</strong> BDT<br />
200 million in addition to quarterly installment<br />
payments. As such, the cash flow may squeeze<br />
due to this bullet payment. However, the rating<br />
remains comfortable owing to the proposed initial<br />
public <strong>of</strong>fering. Delay in public <strong>of</strong>fering could be a<br />
negative trigger for the rating.<br />
PROSPECTUS<br />
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CRAB Ratings Corporate<br />
02. COMPANY PROFILE & BUSINESS OVERVIEW<br />
Barakatullah Electro Dynamics Limited is the first private sector power generating company developed<br />
by a group <strong>of</strong> NRB investors and local entrepreneurs <strong>of</strong> Bangladesh which was incorporated on 26 June<br />
2007 as a Private Limited Company. The Company was converted into a public limited company on<br />
25 September 2008 under the Companies Act 1994. Its registered <strong>of</strong>fice is at 102 Azadi, Mirboxtola,<br />
Sylhet-3100, corporate <strong>of</strong>fice at 6/A/1 (2 nd Floor), Segunbagicha, Ramna, Dhaka - 1000 and power<br />
plant at Fenchuganj, Sylhet.<br />
BEDL along with foreign partner STFE Co. Ltd. from Thailand bid a tender for 50 MW (±10%) power<br />
plant initiated by Bangladesh Power Development Board (BPDB). They won the bid for implementing,<br />
generating, and supplying electricity to national grid with contracted capacity <strong>of</strong> 51 MW and operating<br />
it on Build-Own-Operate (BOO) basis for a period <strong>of</strong> 15 years. It signed an agreement with BPDB for<br />
supply <strong>of</strong> electricity on rental basis on 28 April 2008. The plant was successfully commissioned on 10<br />
October 2009 and started commercial operation from 24 October 2009. The major milestones <strong>of</strong> the<br />
Company are presented below:<br />
Exhibit 01: Major milestones <strong>of</strong> the Company<br />
26 June, 2007 Incorporation <strong>of</strong> the Company<br />
15 August, 2007 Consortium agreement with STFE Co. Ltd., Thailand<br />
21 January, 2008 Notification <strong>of</strong> award issued by BPDB<br />
28 April, 2008 Signing <strong>of</strong> project agreement<br />
22 June, 2008<br />
Gas supply agreement with Jalalabad Gas Transmission and<br />
Distribution System Ltd. (JGTDSL)<br />
12 August, 2008 Gen-set supply contract<br />
25 September, 2008 Conversion from private to public limited company<br />
29 September, 2008 Sub station equipment supply contract<br />
24 November, 2008 Gas RMS supply contract<br />
22 January, 2009 Signing syndicated term loan facility<br />
03 March, 2009 Gen-set arrival at site<br />
07 September, 2009 Interconnection facility<br />
10 October, 2009 Commissioning started<br />
24 October, 2009 Commercial operation started<br />
03 April, 2010 Formal Inauguration by Honorable Prime Minister<br />
01 September, 2010<br />
Got ISO 9001:2008 certification from Moody International for<br />
quality management system<br />
The overall plant area <strong>of</strong> the Company is 6 acres where power house area is 3,5931.50 sqft. Government<br />
owned 90 MW and 105 MW power plants already exist near the project site. All required facilities like-<br />
national grid line, gas transmission centre and river etc are available at the site. The plant is comprised<br />
<strong>of</strong> 19 units <strong>of</strong> generator sets from the world renowned gas fuelled reciprocating engine manufacturer GE<br />
Jenbacher, Austria and the sponsors procured all other auxiliary equipments from reliable sources. Total<br />
installed capacity <strong>of</strong> the plant is 55.138 MW where contracted capacity is 51 MW <strong>of</strong> electricity. Because<br />
<strong>of</strong> safety, the project has 8.11% <strong>of</strong> reserve margin to ensure the contracted capacity output. Following<br />
table shows an overview <strong>of</strong> the plant:<br />
Installed<br />
Capacity<br />
55.138 MW<br />
Engine type Unit<br />
Reciprocating<br />
engine<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Exhibit 02: An overview <strong>of</strong> the plant<br />
Each unit<br />
capacity<br />
19 2.902 MW<br />
Engine<br />
model<br />
JGS 620<br />
GS-N.L<br />
Engine<br />
manufacturer<br />
GE Jenbacher<br />
Engine<br />
supplier<br />
Orion Energy<br />
Systems Ltd.<br />
Fuel<br />
Natural<br />
gas
CRAB Ratings Corporate<br />
03. INDUSTRY OVERVIEW<br />
The power supply situation in the country has aggravated. The acute power shortage continues to hit<br />
the country hard with no sign <strong>of</strong> an immediate respite from load shedding that hovered around 1,000-<br />
1,500 MW during the peak. Average power generation during May and June 2010 was 4,072.24 MW and<br />
4,076.27 MW. The power production in 30 June 2010 was 3,775.50 MW during evening (3593 MW during<br />
morning) against the forecast demand <strong>of</strong> 5,000 MW (shortage <strong>of</strong> 1,224.50 MW), due to shut down <strong>of</strong><br />
few power plants, shortages <strong>of</strong> gas, maintenance and under capacity to meet the demand. Sometimes<br />
major debacle in power supply occurred due to system loss, sudden shut down <strong>of</strong> production units<br />
having worn out machinery. The load shedding not only causes loss <strong>of</strong> work hours but also causes<br />
damage to the production systems <strong>of</strong> the industries and electrical home appliances.<br />
Present Power Situation<br />
The installed generation capacity <strong>of</strong> Bangladesh was about 5,719 MW (Hydro: 4.19%, Steam Turbine:<br />
48.03%, Gas Turbine: 18.15%, Combined Cycle: 24.74%, Diesel: 4.89% as on June 2009) from a<br />
meager 88 MW in 1960. Electricity generation grew at about 7% p. a. during last fifteen years compared<br />
with average annual GDP growth rate <strong>of</strong> about 5.5%. The maximum generation in FY 2009 was 4,162<br />
MW against the forecast demand <strong>of</strong> 6,066 MW as per updated Power System Master Plan (PSMP-<br />
2006). The net energy generated during FY 2009 total including Independent Power Producer (IPP) but<br />
excluding energy purchased by REB from private generation was about 25,622 Giga Watt hour (GWh).<br />
The per capita electricity generation <strong>of</strong> Bangladesh is 183.74 kWh in FY2008-09 which is still among the<br />
lowest in the world. About 47% <strong>of</strong> the population has access to electricity which is also low compared to<br />
many developing countries. This implies that there is a scope for significant growth in power sector.<br />
Exhibit 03: Energy Generation<br />
Power Generation Pattern (FY 2009) Year wise total Gross Energy Generation<br />
In the east zone, electricity generation was mainly done by indigenous gas based power plants and a<br />
small percentage from hydro power plant. In the west zone, imported liquid fuel, domestic coal, and<br />
natural gas were used for generation <strong>of</strong> electricity. Low cost electricity generated in the east zone,<br />
was also transferred to the west zone through 230 kV East-West Inter-connector (EWI). The energy<br />
transferred through EWI at the Ghorasal and Ashuganj end in FY2009 was 2548.99 GWh. The average<br />
fuel cost per unit generation <strong>of</strong> thermal power plants in the east and west zone under BPDB was BDT<br />
0.82/kWh and BDT 3.87/kWh respectively.<br />
Government is committed for providing affordable and reliable electricity to all citizens by 2020 for<br />
economic and social development. As per election manifesto <strong>of</strong> the present government, electricity<br />
generation in the country would be 7,000 MW by the year 2013, 8,000 MW by 2015 and 20,000 MW<br />
by the year 2021. Meanwhile, the government has declared its vision for power sector to make the<br />
country free from load shedding beyond 2011 and to make electricity available for all by the year 2020.<br />
In order to fulfill the vision, additional 9,000 MW electricity will be required to be produced within next<br />
5 years under short, medium and long term out <strong>of</strong> which 5,400 MW would be produced under private<br />
PROSPECTUS<br />
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CRAB Ratings Corporate<br />
sector. Adequate transmission and distribution facilities would also be developed to get access to this<br />
electricity. Estimated total investment US$ <strong>of</strong> 9.5 billion would be required all together for generation,<br />
transmission and distribution <strong>of</strong> power. In fact power sector reforms started in late 70’s through the<br />
creation <strong>of</strong> REB. However as part <strong>of</strong> reform programs, following activities have been done so far.<br />
Policies:<br />
� National Energy Policy (NEP) in 1996<br />
� Private Sector Power Generation Policy in 1996<br />
� Policy Guidelines for Small Power Plants in Private Sector in 1998<br />
� Vision Statement and Policy Statement on Power Sector Reforms in June 2000<br />
� Energy Regulatory Commission Act 2003<br />
Sector Restructuring:<br />
� Creation <strong>of</strong> PGCB & DESCO in 1996<br />
� Corparatization <strong>of</strong> Ashugonj Power Station in 2002<br />
� Creation <strong>of</strong> West Zone Power Distribution Company (WZPDC) in 2003<br />
� Energy Regulatory Commission Starts functioning in 2004<br />
� Approval to convert BPDB into a Holding Company in January 2004<br />
Private Power Generation<br />
Power sector is a capital-intensive industry that requires huge investment. Competing demands on<br />
government resources and declining levels <strong>of</strong> external assistance from multilateral/bilateral donor<br />
agencies further constrained the potential for public investment in the power sector. Recognizing these<br />
trends, GOB amended its industrial policy to enable private investment in the power sector and Private<br />
Sector Power Generation Policy was framed in 1996 for promoting private sector participation in the<br />
generation <strong>of</strong> electricity.<br />
Power Cell, created under Power Division <strong>of</strong> Ministry <strong>of</strong> Power, Energy & Mineral Resources, got the<br />
mandate to lead private power development. The Government is committed to attract private investment<br />
for installing new power generation capacity on build-own-operate (BOO) basis. A number <strong>of</strong> fiscal<br />
incentives are provided in the Policy for the private power companies. Under the Private Sector Power<br />
Generation Policy, number <strong>of</strong> power plants have been established and under operation and most <strong>of</strong><br />
which was established during the year 1999-2002.<br />
Fuel Supply<br />
Presently, natural gas is the only significant source <strong>of</strong> commercial energy in Bangladesh. While sustained<br />
energy supply is a prerequisite for economic development, current information indicates that the<br />
existing gas reserves will be able to meet the gas demand (at 7% per annum) up to 2016 though with<br />
the present production capacity it can not meet the existing demand. As such there exists a demand<br />
and supply gap. The demand would reach to 5.6 billion cubic feet by 2025. As the current reserves<br />
(12 trillion cubic feet) would be unable to meet the increasing demand, there will be a requirement <strong>of</strong><br />
investments <strong>of</strong> over $ 9 billion for exploration, development and transmission network expansion by<br />
2025. The current average daily gas production is about 1970 MMCF against actual demand <strong>of</strong> 2200<br />
MMCF resulting deficit <strong>of</strong> around 230 MMCF per day. About 3.3 billion tons <strong>of</strong> coal reserves comprising<br />
5 deposits at depths <strong>of</strong> 118-1158 meters have been discovered so far. Out <strong>of</strong> which 4 deposits (118-<br />
509 meters) are extractable at present while one deposit may not be viable for extraction by present<br />
day’s technology due to greater depth (640-1158 meters). Only one deposit (Barapukuria) has been<br />
developed and coal is being extracted mainly for one thermal power plant.<br />
Power System Reliability<br />
In Bangladesh today, the power system is unreliable. Often, not enough generation is available to serve<br />
demand. BPDB sheds load by disconnecting distribution circuits on a rotating basis throughout the<br />
country. It is clear that more generation must be built to supply customer demand.<br />
A key question is how much generation is enough to supply customer demand with appropriate<br />
reliability. In the demand forecast, we ignore the need for operating reserves and the chance that some<br />
<strong>of</strong> the installed generation would not be available due to scheduled (planned) or unscheduled (forced)<br />
maintenance outages. These outages keep any individual unit out <strong>of</strong> service from 10-25%, or more,<br />
<strong>of</strong> the time. Thus, the power system needs substantially more than projected demand to meet actual<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...
CRAB Ratings Corporate<br />
demand. Units experience random forced outages at rates <strong>of</strong> 10-15% <strong>of</strong> the time. Typically, power<br />
system operators do not schedule outages during times when peak demand is likely to occur. Thus, the<br />
forced outages become the dominant factor.<br />
However, there is very small chance that all units will be out <strong>of</strong> service at the time <strong>of</strong> peak demand,<br />
leaving the system unable to meet all demand. No matter how many units are installed, there will<br />
always be some chance that enough units will be forced out <strong>of</strong> service that the system is unable to meet<br />
all demand. As more units are added, the chance <strong>of</strong> this occurring becomes very small, but they are<br />
never zero. As such actual installed capacity should be higher than the projected demand.<br />
04. BOARD COMPOSITION<br />
The Company comprises <strong>of</strong> 137 shareholders but the Board <strong>of</strong> Directors comprises <strong>of</strong> 19 members all<br />
from different tracks. The authorized share capital <strong>of</strong> the Company is BDT 1,000.00 million divided into<br />
100 million ordinary shares <strong>of</strong> BDT 10 each and the paid up capital is BDT 600.00 million divided into<br />
60 million ordinary shares <strong>of</strong> BDT 10 each. The present shareholdings pattern <strong>of</strong> the Company is as<br />
follows:<br />
Exhibit 04: Shareholding Structure<br />
Name <strong>of</strong> Shareholders Designation No. <strong>of</strong> shares % <strong>of</strong> Holdings<br />
Mr. Faisal Ahmed Chowdhury Chairman 1,625,000 2.71<br />
Mr. Md. Ahsanul Kabir Vice-Chairman 1,950,000 3.25<br />
Mr. Abdul Bari Vice-Chairman 707,720 1.18<br />
Mr. Gulam Rabbani Chowdhury Managing Director 1,625,000 2.71<br />
Mr. Nayem Ahmed Chowdhury Director 712,500 1.19<br />
Mr. Fahim Ahmed Chowdhury Director 532,340 0.89<br />
Mr. Robin Chowdhury Director 5,749,300 9.58<br />
Mr. Nanu Kazi Mohammed Miah Director 1,223,720 2.04<br />
Mr. Md. Shirajul Islam Director 1,057,720 1.76<br />
Mr. Mohammed Abdul Ahad Director 607,720 1.01<br />
Mr. Kazi Mohammed Angur Miah Director 1,057,720 1.76<br />
Mr. Abdul Mumin Director 967,150 1.61<br />
Mr. Nasim Ahmed Chowdhury Director 835,570 1.39<br />
Mr. Manzur Ashraf Khan Director 246,000 0.41<br />
Mr. Alimus Sadat Chowdhury Director 162,500 0.27<br />
Mr. Afzal Rashid Chowdhury Director 418,290 0.7<br />
Mr. Monsur Alam Chowdhury Director 318,370 0.53<br />
Mr. Yeahyea Murad Khan Director 308,340 0.51<br />
Mrs. Ubaydia Chowdhury Director 557,720 0.93<br />
Others Shareholders 39,337,320 65.56<br />
Total 60,000,000 100%<br />
Mr. Faisal Ahmed Chowdhury is the Chairman <strong>of</strong> BEDL who possesses 20 years <strong>of</strong> successful leadership<br />
in business. In 1996 he settled in England. He worked for several British companies and after that<br />
started his own business in London by founding Apex Printing and Publishing Ltd. Later, he established<br />
another printing wing in the name <strong>of</strong> Imprint Trading Ltd. He is an Executive Member <strong>of</strong> Bangladesh Red<br />
Crescent Society, Sylhet Unit and Mujib-Jahan Blood Bank. He is currently acting as Chairman <strong>of</strong> Royal<br />
Homes- a large real estate company in Bangladesh.<br />
Mr. Md. Ahsanul Kabir is the Vice-Chairman <strong>of</strong> BEDL having 24 years <strong>of</strong> business experience. He started<br />
his career with own proprietorship business in civil planning & construction. He is also the proprietor <strong>of</strong><br />
Ahsan Trading Center and Architect & Builders Ltd.<br />
PROSPECTUS<br />
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Mr. Abdul Bari is the Vice-Chairman <strong>of</strong> BEDL having 40 years <strong>of</strong> business experience. He started his<br />
business career in tourism sector in the early 70’s. Later, he started garments business and also invested<br />
in some other potential projects such as Sylhet Shishu Park Ltd. and Sylhet Women’s Medical College &<br />
Hospital. He also has a UK based restaurant business on partnership.<br />
Mr. Gulam Rabbani Chowdhury is the Managing Director <strong>of</strong> BEDL, Alim Industries Ltd., Royal Homes Ltd.<br />
and also Director <strong>of</strong> Sylhet Chamber <strong>of</strong> Commerce & Industries. He has 24 years <strong>of</strong> work experience<br />
in industrial sector such as tea processing machinery, electric generator assembling, textile machinery<br />
& agro-machinery production, research, development, quality improvement, field demonstration and<br />
marketing domestic & overseas.<br />
05. MANAGEMENT EVALUATION & CORPORATE GOVERNANCE<br />
5.1 Management Overview<br />
The overall management <strong>of</strong> the Company is vested with its Board <strong>of</strong> Directors, who formulates the<br />
policies and strategies for the business. Moreover, the Managing director is the Chief Executive to<br />
dictate and supervise the overall functions and day to day operational performance <strong>of</strong> the Company.<br />
However, for uninterrupted operational speed <strong>of</strong> the Company, the MD seeks advice, valued comments<br />
and guidance from the Director. In addition, a team <strong>of</strong> skilled pr<strong>of</strong>essionals is working in the Company<br />
for advice and consultancy services for smooth operation. The overall management is separated into<br />
corporate <strong>of</strong>fice and plant <strong>of</strong>fice comprising different departments. Top executives <strong>of</strong> the Company<br />
are experienced in their own field and most <strong>of</strong> them serve the group for a long time. As the<br />
sponsors are directly involved with the Company management, their personal credit history and<br />
net worth play an important role in determining the Company’s credit quality.<br />
5.2 Human Resources<br />
Presently the Company has 84 employees working in Dhaka <strong>of</strong>fice, registered <strong>of</strong>fice at Sylhet and<br />
plant site. There are 49 skilled employees and 35 unskilled workforces. Officers are recruited by<br />
top management through internal recruitment process based on education, skills, experiences etc.<br />
Workers are recruited locally by the Plant Manager <strong>of</strong> the plant with necessary approval by top<br />
management.<br />
5.3 External Audit<br />
The accounts are audited by Haque, Shahalam, Mansur & Co., Chartered Accountants for the period<br />
under analysis. The financial year <strong>of</strong> the Company ended at 30th June. The financial statements have<br />
been prepared in line with accounting policies following Bangladesh Accounting Standards (BAS)<br />
based on accrual basis following going concern assumption. The audit report provides adequate<br />
disclosures <strong>of</strong> the financial statements.<br />
06. OPERATIONAL REVIEW<br />
6.1 Contracts & Agreements<br />
Power Purchase Agreement: BEDL signed power supply agreement on rental basis with BPDB<br />
on 28 April 2008 for a term <strong>of</strong> 15 years to provide 51 MW net electrical power and operating it on<br />
Build-Own-Operate (BOO) basis.<br />
Gas Supply Agreement (GSA): BEDL signed gas supply agreement with Jalalabad Gas Transmission<br />
and Distribution System Ltd (JGTDSL) on 22 June 2008 for a term <strong>of</strong> 15 years to supply gas in<br />
required quantity and specifications throughout the agreement period. Under the contract, the<br />
Maximum Hourly Gas Usage (MHGU) shall be 13,500 Standard Cubic Meter (Sm 3 ) per hour,<br />
the Maximum Daily Gas Usage (MDGU) shall be 324,000 Sm 3 per day, the Maximum Monthly<br />
Gas Usage (MMGU) shall be 7,776,000 Sm 3 per month and the Annual Contract Gas Usage<br />
(ACGU) during a Contract Year shall be 74,503,800 Sm 3 per annum commencing on the initial<br />
delivery date.<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...
CRAB Ratings Corporate<br />
Supply contract & Spare Parts Contract:<br />
BEDL has entered into a supply contract with Orient Energy Systems Ltd., local authorized distributor<br />
<strong>of</strong> GE Jenbacher GmbH & Co on 12 August 2008 for delivery <strong>of</strong> 19 units JGS 620 GS-N.L model<br />
gas engines. It has also signed spare parts contract with GE Jenbacher GmbH & Co for supply <strong>of</strong><br />
all necessary spare parts for a period <strong>of</strong> 15 years with 1 year warranty period from the date <strong>of</strong><br />
delivery.<br />
Sub-Station Contract:<br />
The contract for setting up electric sub-station signed with Simex Power Generation Ltd for<br />
supply, installation, testing & commissioning <strong>of</strong> 11/132KV sub-station equipment including power<br />
transformer 132KV switchyard equipment, 132KV protection panel, 11KV switchgear, LV switchgear,<br />
132KV cable, 11KV cable with termination etc.<br />
Engineering, Procurement and Construction (EPC) Contract:<br />
For erection and installation <strong>of</strong> the plant, BEDL engaged local firms to do the task as per plant<br />
layout design provided by GE Jenbacher GmbH & Co. BEDL has appointed suitable EPC contractor<br />
after negotiating with a number <strong>of</strong> local firms namely Energy Pac Engineering Ltd., Simex Power<br />
Generation Ltd. etc. in this regard. Moreover, the plant was installed by the EPC contractor<br />
under top supervision <strong>of</strong> GE Jenbacher GmbH representative at the project site. GE Jenbacher<br />
GmbH will also be responsible for testing and commissioning <strong>of</strong> the plant.<br />
Operation & Maintenance (0&M) Contract:<br />
The plant is being operated and maintained by BEDL. For 0&M <strong>of</strong> the plant, BEDL has appointed<br />
local qualified engineers and technicians who have experience to work in the power plants. During<br />
major overhaul, BEDL will engage GE Jenbacher GmbH & Co. for providing the overhaul services.<br />
Besides, STFE Co. Ltd., Thailand, one <strong>of</strong> the shareholders <strong>of</strong> BEDL, will also oversee operational and<br />
maintenance aspects <strong>of</strong> the power plant. STFE Co. Ltd., has experiences in the field <strong>of</strong> engineering,<br />
design, consultancy and turnkey solution <strong>of</strong> power generation projects in Thailand.<br />
6.2 Raw Materials<br />
The major raw material <strong>of</strong> the project Company is natural gas, which is supplied by Jalalabad Gas<br />
Transmission and Distribution System Limited (a company <strong>of</strong> Petrobangla). The Company has<br />
entered into Gas Supply Agreement (GSA) which specifies the sale <strong>of</strong> all times all project Company’s<br />
requirements for gas for the facility during the term here<strong>of</strong> to meet start-up, commissioning and<br />
operation <strong>of</strong> the facility. Again, lube oil is needed for operating machines. Total monthly average<br />
consumption <strong>of</strong> lube oil is 10,422 liters at BDT 215 per liter.<br />
For smooth operation and avoidance <strong>of</strong> any future conflicts, the agreement specifies the maximum<br />
quantity (daily, monthly and/or annually) <strong>of</strong> fuel with defined minimum and/or maximum quality<br />
specifications, with an agreed date and agreed term. The fuel quality specification is already in the<br />
agreement, which satisfy the fuel quality requirements related to the equipment manufacturer’s<br />
warranties. The key features <strong>of</strong> the GSA are given at Annexure-A in this report.<br />
6.3 Technology<br />
The Company has an infrastructure with most sophisticated state-<strong>of</strong>-the-art machinery and<br />
equipments. The production facilities are based on currently available technology. The Company<br />
has been equipped with both imported and local machinery. Imported machinery includes gas<br />
generator, gas pipe, gas chromatograph, 132 KV CT, transformer, surge suppressors, lighting<br />
arrestor etc from world renowned suppliers like GE Jenbacher, Symtec, Siemex in Austria, Germany,<br />
China etc.<br />
PROSPECTUS<br />
95<br />
����
96<br />
����<br />
CRAB Ratings Corporate<br />
6.4 Cost Structure<br />
Cost <strong>of</strong> sales includes gas consumption which constituted to nearly 47% and lube oil consumption<br />
to 5% <strong>of</strong> total cost in FY 2009-10. Other expenses includes grease expense, cool net water, spare<br />
parts consumption, repair & maintenance which were quite low constituted to only 0.26% <strong>of</strong> total<br />
cost.<br />
Salary and Director’s remuneration contributed to 4% <strong>of</strong> total cost as it doesn’t require maintaining<br />
large size <strong>of</strong> human resources. General & administrative expenses contributed to around 6% and<br />
depreciation & amortization expenses contributed to 11% <strong>of</strong> total cost. Financial expenses are the<br />
second large component contributed to 27% <strong>of</strong> total cost as the operation is running with huge<br />
bank financing.<br />
Exhibit 05: Cost Structure FY 2009-10<br />
07. EVALUATION OF RENTAL POWER AGREEMENT (RPA)<br />
The Rental Power Agreement was signed on 28 April 2008 between BPDB and BEDL for a term <strong>of</strong> 15<br />
years. Whereas BPDB is a public utility engaged in generation, distribution and sale <strong>of</strong> electric capacity<br />
and energy in Bangladesh and BEDL desired to set up a gas fired power plant located at Fenchugong<br />
to provide 51 MW <strong>of</strong> electric capacity and energy output <strong>of</strong> the plant to BPDB on rental basis. For this<br />
purpose, the Company would be responsible for financing, complete design, supply, inspection, testing,<br />
delivery to the site, erection, testing & commissioning, operation & maintenance including overhauling<br />
and major overhauling <strong>of</strong> the plant for the entire term. Spares consumables required for the plant for<br />
the entire term would be supplied by the Company at its own cost in accordance with the agreement.<br />
The tariff structure as laid down in the RPA is presented below:<br />
Exhibit 06: Tariff Structure as per RPA<br />
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RNERP: Reference Non-Escalable Rental Price in BDT/KW/Month<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...
CRAB Ratings Corporate<br />
RERP: Reference Escalable Rental Price in BDT/KW/Month. Adjustment is applicable to the Local Inflation<br />
Indexation Factor applicable to the Month. Local Inflation Indexation Factor (LIIF) to be calculated by<br />
dividing the value <strong>of</strong> the Bangladesh Consumer Price Index as published by the Bangladesh Bank for<br />
the 1 st month <strong>of</strong> the quarter by the value <strong>of</strong> the Bangladesh Consumer Price Index as published by the<br />
Bangladesh Bank for the month in which the agreement is signed.<br />
RVOMP: Reference Variable O&M Price in BDT/KWh. Adjustment is applicable to the Local Inflation<br />
Indexation Factor applicable to the Month. Local Inflation Indexation Factor to be calculated by dividing<br />
the value <strong>of</strong> the Bangladesh Consumer Price Index as published by the Bangladesh Bank for the 1 st month<br />
<strong>of</strong> the quarter by the value <strong>of</strong> the Bangladesh Consumer Price Index as published by the Bangladesh<br />
Bank for the month in which the agreement is signed.<br />
RFP: Reference Fuel Price in BDT/KWh for each contract year and plant factor. Fuel Price Indexation<br />
Factor (FPIF) applicable to the billing month and shall be calculated by dividing the price <strong>of</strong> natural gas<br />
in BDT per 1000 Scft as declared by GOB prevailing for the billing month by the price <strong>of</strong> natural gas in<br />
BDT 73.91 per 1000 Scft.<br />
The reference tariff is composed <strong>of</strong> two components i.e. Rental Payment (Capacity Price) for Dependable<br />
Capacity and Energy Payment for Net Energy Output. Capacity price is made up <strong>of</strong> two sub components<br />
i.e. RNERP and RERP. Energy price is made up <strong>of</strong> two sub components i.e. RVOMP and RFP. If power<br />
plant could not achieve dependable capacity for any particular billing month due to reasons other than<br />
the default <strong>of</strong> the Company, BPDB would pay monthly rental payment. The calculation methodology is<br />
cited in the followin Exhibit.<br />
Exhibit 07: Calculation Methodology <strong>of</strong> Rental and Energy Payment<br />
Capacity Price = RPNE + RP<br />
Where, RPNE= RNERP X Dependable Capacity (DC)<br />
Where, RPE= RERP X Dependable Capacity (DC) X Local Inflation Indexation Factor (LIIF)<br />
Energy Price (EP) = VOMP + FP<br />
Where VOMP= RVOMP X Net Energy Output measured in KWh for the billing month X LIIF<br />
Where FP= RFP X Net Energy Output measured in KWh for the billing month X Fuel Price Indexation Factor (FPIF)<br />
Note:<br />
Where, RPNE = Non-Escalable Rental Payment payable in BDT<br />
RPE = Escalable Rental Payment payable in BDT<br />
RNERP = Reference Non-Escalable Rental Price in BDT per KW-Month<br />
RERP = Reference Escalable Rental Price in BDT per KW-Month Agreement<br />
VOMP = Variable Operation and Maintenance Payment payable in BDT<br />
RVOMP = Reference Variable Operation and Maintenance Price in BDT-KW<br />
FP = Fuel Payment payable in BDT<br />
RFP = Reference Fuel Price in BDT-KW<br />
It is revealed from the tariff calculation that, the Company would receive rent for dependable capacity<br />
composed <strong>of</strong> fixed rental price <strong>of</strong> BDT 370.60 per kW-month for its dependable capacity and escalable<br />
rental price <strong>of</strong> BDT 123.53 per kW-month for its dependable capacity which is adjustable with local<br />
inflation indexation factor. This capacity payment methodology partially <strong>of</strong>fset the risk arising from<br />
future inflation. Dependable capacity means at any given time the net amount <strong>of</strong> capacity <strong>of</strong> the<br />
plant expressed in kW, measured at the Delivery Point as determined by the most recent Dependable<br />
Capacity Test. Contracted Capacity means 51 MW net at Reference Site Conditions at a power factor<br />
0.85, measured at Delivery point. If the Dependable Capacity is above the Contracted Capacity then<br />
Dependable Capacity shall be set at the value not exceeding the Contracted Capacity <strong>of</strong> 51 MW.<br />
PROSPECTUS<br />
97<br />
����
98<br />
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CRAB Ratings Corporate<br />
In addition to the capacity price, the Company would receive payment for supplying net energy output<br />
which will be calculated through adding VOMP and FP. VOMP is the product <strong>of</strong> Reference Variable O&M<br />
Price (fixed), Net Energy Output measured in the billing month and Local Inflation Indexation Factor.<br />
On the other hand, Fuel Price (FP) is the product <strong>of</strong> Reference Fuel price (fixed), Net Energy Output<br />
measured in the billing month and Fuel Price Indexation Factor. The both part <strong>of</strong> the Energy Price (EP)<br />
partially takes care <strong>of</strong> the inflation as well as future changes in gas price.<br />
Tariff structure <strong>of</strong> the power project is considered favorable considering the rental price (i.e. capacity<br />
price), which covers the debt service obligation, partial fixed O&M expenses as well as compensation for<br />
equity investment. Given the 67% debt to capitalization ratio, the aggregated rental payment at 51 MW<br />
available capacity and energy payment could service the debt obligation and fixed O&M expenses.<br />
The terms <strong>of</strong> the RPA serves two important functions. First, BPDB agrees to pay the capacity price <strong>of</strong><br />
the plant irrespective <strong>of</strong> energy output generation for its dependable capacity. So the Company should<br />
ensure the level <strong>of</strong> dependable capacity. BPDB will not pay the capacity price if dependable capacity<br />
is below 80% <strong>of</strong> the contracted capacity and such derating has not been rectified within a period <strong>of</strong> 6<br />
month from the date <strong>of</strong> such derating has occurred. At the same time, the Company should also ensure<br />
the contracted capacity <strong>of</strong> 51 MW and if dependable capacity falls below the contracted capacity level<br />
then the Company will pay liquidated damage to the BPDB. The rental payment for 51 MW could not<br />
service the debt obligation without the energy output price. Second, it defines in reasonable detail the<br />
rights, responsibilities and obligations <strong>of</strong> the project Company and the purchasing authority throughout<br />
the entire term <strong>of</strong> contract.<br />
Under the RPA, the Company agrees to make the contracted level <strong>of</strong> electricity generation capacity<br />
available to BPDB (subject to a certain amount <strong>of</strong> annual outage time for maintenance or other outages)<br />
by an agreed term and the purchaser agrees to pay the agreed tariff for capacity made available to it<br />
and the net electrical output dispatched to it. The RPA also incorporates the provisions and methodology<br />
related to the arrangements and mechanics <strong>of</strong> payments.<br />
Although there are two parties in RPA, the responsibilities and obligations <strong>of</strong> each party under this<br />
umbrella agreement must be consistent and acceptable to all the stakeholders especially the gas<br />
supplier, EPC and O&M Contractor, and lenders. This broader consensus is important from lenders and<br />
rating point <strong>of</strong> view because the lenders should be ensured that the risks assumed by the Company<br />
under the RPA, which potentially affect its cash flow adversely, be passed through the other project<br />
agreements to the appropriate parties.<br />
The RPA includes protections and damages designed to ensure the risks associated with load growth or<br />
shrinkage and gas price variations to the facility. Other key provisions <strong>of</strong> RPA include:<br />
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Tariff adjustment mechanism linked to local inflation<br />
For delays and poor performance <strong>of</strong> the Company damages are levied but there is no provision<br />
<strong>of</strong> tariff adjustment for the purpose<br />
Invoicing and Payment procedures as well as metering requirements<br />
Force Majeure provisions<br />
Testing and Commissioning procedures<br />
Termination procedure<br />
Event <strong>of</strong> Default from both party and consequences there on<br />
Dispute resolution<br />
The RPA incorporates the major risks and its mitigation, which is viewed favorable for the project<br />
undertaker as well as lenders to the project’s point <strong>of</strong> view. Salient features <strong>of</strong> RPA are placed at<br />
Annexure-B in this report.<br />
Liquidated Damages (LDs)<br />
LDs are damage penalties provided by the parties as a genuine pre-estimated <strong>of</strong> loss for failure to<br />
perform. LDs are generally payable for failure to (i) achieve certain performance parameters i.e.<br />
Performance LDs (PLDs) and (ii) meet time bound performance milestones i.e. Delay LDs (DLDs).<br />
Liquidity Damages <strong>of</strong> different part is highlighted below:<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...
CRAB Ratings Corporate<br />
Project Agreement Pr<strong>of</strong>ile <strong>of</strong> LDs<br />
RPA<br />
GSA<br />
• Delay in Commercial Operation:<br />
The project company shall pay BPDB a sum equal to BDT<br />
14,000 per MW per day or fraction there<strong>of</strong> within 14 days after<br />
Commercial operation Date (COD).<br />
• Contracted Capacity:<br />
If the company fails to maintain contracted capacity<br />
(dependable capacity is less than contracted capacity) i.e.<br />
51 MW then the Company has to pay one time as liquidated<br />
damages to BPDB an amount equal to BDT 70,000 per KW<br />
within 7 days after COD.<br />
• Forced Outages and Maintenance Outages:<br />
If sum <strong>of</strong> (a) equivalent forced outages energy for the facility;<br />
(b) maintenance outages energy and (c) scheduled outages<br />
energy exceed ( p) average dependable capacity for that<br />
contracted year multiplied by (q) 876 hours in that year, then<br />
the power company shall pay to BPDB as liquidated damages<br />
as follows:<br />
Rental Factor Amount x [ (a + b + c ) – (p + q) ]<br />
Rental Factor Amount = Reference Rental Price x 1.37<br />
• Security Deposit:<br />
(a) Performance Security Deposit: The Company shall<br />
provide Performance Security Deposit to BPDB to meet<br />
Commercial Operation Liquidity Damages an amount<br />
equivalent to 3 months Rental Payment which will be<br />
maintained upto COD.<br />
(b) Operations Security Deposit: An amount equal to 2<br />
months Rental Payment to ensure the proper operation<br />
and maintenance <strong>of</strong> the facility which will be maintained at<br />
all times for 4 years from COD.<br />
• Minimum Gas Purchase<br />
Under the GSA, the Company has to pay LDs to the gas<br />
supplier for failing to consume minimum purchase obligation<br />
after scheduled COD an Annual Deficiency Payment amount<br />
based upon the gas price in effect for such contract year for<br />
the full amount <strong>of</strong> Annual Gas Deficiency.<br />
PROSPECTUS<br />
99<br />
����
100<br />
����<br />
CRAB Ratings Corporate<br />
Project Agreement Pr<strong>of</strong>ile <strong>of</strong> LDs<br />
EPC<br />
• Delivery LDs<br />
If actual delivery date is delayed more than 14 days beyond the<br />
scheduled delivery date, seller shall pay buyer as LDs a sum<br />
equal to 0.25% <strong>of</strong> the equipment price for each subsequent<br />
full week <strong>of</strong> delay in delivery, up to an aggregate maximum <strong>of</strong><br />
5% <strong>of</strong> the contract price.<br />
Seller shall have no liability to buyer for the foregoing LDs,<br />
unless delay causes deferment <strong>of</strong> the initial operation date <strong>of</strong><br />
the equipment and the buyer suffers actual damages.<br />
• Performance LDs<br />
Seller guaranteed that if tested in accordance with the<br />
specification and technical instructions <strong>of</strong> GE Jenbacher, the<br />
equipment will achieve the values set forth as follows:<br />
Criterion Liquidated Damages<br />
Output 0.25% <strong>of</strong> the contract price allocable to the nonperforming<br />
unit for each full 1.0% deficiency in<br />
accordance to the technical description.<br />
Electrical<br />
Efficiency<br />
08. CAPITAL STRUCTURE OF POWER PROJECT<br />
0.25% <strong>of</strong> the contract price allocable to the nonperforming<br />
unit for each full 1.0% deficiency in<br />
accordance to the technical description.<br />
The LDs payable in respect <strong>of</strong> deficiencies in performance shall not<br />
exceed 5% <strong>of</strong> the contract price for the non-performing unit(s).<br />
Total cost <strong>of</strong> the project was estimated at BDT 1,581.86 million taking into consideration reconditioned<br />
machineries. However, actual project cost was BDT 2,050 million since the management decided to<br />
procure brand new machineries instead <strong>of</strong> reconditioned machineries resulting in 29.59% increase<br />
<strong>of</strong> initial project cost. The present capital structure <strong>of</strong> the Company comprises <strong>of</strong> BDT 1,450 million<br />
(syndicated loan BDT 1,250 million and term finance BDT 200 million) <strong>of</strong> debt and BDT 600 million <strong>of</strong><br />
equity at a debt-equity ratio <strong>of</strong> 71:29. Detailed breakup <strong>of</strong> the project cost is given below:<br />
Exhibit 08: Total Project Costs<br />
Particulars Total Cost %<br />
(BDT in Million)<br />
Land & land development 26.59 1.30%<br />
Building & civil construction 77.61 3.79%<br />
Main equipments (Gen-sets) 1390.00 67.80%<br />
Other equipments 347.82 16.97%<br />
Vehicles, furniture & <strong>of</strong>fice equipments 14.32 0.70%<br />
Pre operating expenses 43.81 2.14%<br />
Interest on bank loan 85.00 4.15%<br />
Loan arrangement fees & others 15.00 0.73%<br />
Other expenses 49.85 2.43%<br />
Total Cost 2,050.00 100.00%<br />
The major part <strong>of</strong> the project cost was accounted for imported main equipments which was BDT 1,390<br />
million contributed to 67.80% <strong>of</strong> total cost. Other equipments include gas line to facilitate interconnection<br />
between gas transmission and plant, which was BDT 347.82 million contributed to 16.97% <strong>of</strong> total cost.<br />
Per MW project cost stood at BDT 40.20 million.<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...
CRAB Ratings Corporate<br />
It is found that per MW cost <strong>of</strong> equipment and installation <strong>of</strong> the rated project is around BDT 33.33<br />
million. After reviewing the project cost it is also found that the cost estimation is mostly congruent<br />
with the standard cost estimation required per MW. However, it can be justified that major part <strong>of</strong> the<br />
project is accounted for plant & machinery and prices <strong>of</strong> plant & machinery could vary from vendor to<br />
vendor and accompanying auxiliaries. Cost reduction is not justifiable through sacrificing quality. Quality<br />
sacrifice could adversely affect the project during operation time, which leads to higher outage time,<br />
and shut down <strong>of</strong> the plant thereby reduces the cash flow generation ability <strong>of</strong> the project.<br />
09. RISK ANALYSIS<br />
The key success factors to assess the Company include favorable industry, modern technology and<br />
upgraded machinery, maximum capacity utilization, efficient procurement <strong>of</strong> raw materials as well as<br />
effective cost control strategy. So, assessing related risks are crucial for the success <strong>of</strong> the business.<br />
Power project is free from market risk, product risk, demand risk and price risk because the project has<br />
agreement with the government regarding purchase <strong>of</strong> contracted power generation and rental price<br />
is pre fixed with a provision <strong>of</strong> inflation adjustment. Thus, the evaluation <strong>of</strong> credit quality covers the<br />
broad areas <strong>of</strong> risks like business risk, technology risk, operational risk, management evaluation, and<br />
financial risk.<br />
9.1 Financial Risk:<br />
As per agreement, BPDB agrees to pay capacity price for its contracted capacity <strong>of</strong> 51 MW. But<br />
if dependable capacity is below the contracted capacity then BPDB will pay up to the dependable<br />
capacity. Again, if dependable capacity is below 80% <strong>of</strong> the contracted capacity and such derating<br />
has not been rectified within a period <strong>of</strong> 6 month from the date <strong>of</strong> such derating has occurred,<br />
BPDB will terminate the contract. This capacity generation is fully reflected in revenue generation<br />
<strong>of</strong> the Company, which will be used for debt repayment <strong>of</strong> BDT 1450 million. Due to maintenance<br />
or machinery problem, the Company may not provide contracted capacity which may affect the<br />
revenue generation and ultimately affect the debt servicing ability.<br />
9.2 Fuel Price Escalation & Availability Risk:<br />
As per agreement, Jalalabad Gas Transmission and Distribution System Ltd. will ensure gas supply<br />
in required quantity and specification throughout the agreement period. As the plant is located in<br />
Sylhet which is a gas prone area and the state body (JGTDSL) also makes sure the uninterrupted<br />
supply <strong>of</strong> gas, it would reduce the fuel availability risk to a greater extent. Moreover, any increase/<br />
decrease in gas price is adjusted with energy payment by BPDB which will <strong>of</strong>fset the risk <strong>of</strong> future<br />
changes in gas price. However, adjustment <strong>of</strong> gas price is incorporated in the RPA.<br />
9.3 Operating Risk:<br />
Operational risk covers the ability <strong>of</strong> the project to achieve the performance as envisaged. The<br />
evaluation is done based on technology, fuel supply arrangement, operation and maintenance<br />
arrangements etc.<br />
Cost <strong>of</strong> Engine as well as operation and maintenance cost (O&M) governs the generation cost <strong>of</strong><br />
electricity. Fuel cost for operating <strong>of</strong> engine is the major component <strong>of</strong> O&M cost. The overhauling<br />
<strong>of</strong> machine depends on running hours and no. <strong>of</strong> starts and stops. The plant is being operated and<br />
maintained by BEDL itself. The plant vendor GE Jenbacher GmbH & Co will supply all necessary<br />
spare parts for a period <strong>of</strong> 15 years with 1 year warranty period from the date <strong>of</strong> delivery. During<br />
major overhaul, BEDL will engage GE Jenbacher GmbH & Co. for providing the overhaul services.<br />
As BEDL installed 19 units <strong>of</strong> gen-set, there is a scope <strong>of</strong> partial supply <strong>of</strong> electricity to the national<br />
grid in case <strong>of</strong> scheduled maintenance or any minor problem. As such, the project is flexible during<br />
operation. Even in worst possible case, the whole operation need not to be completely shutdown<br />
at a time due to maintenance or problem in any engine as the residuals can be engaged in power<br />
generation.<br />
Power project in general has operational risk and for this project it is quite high considering 15<br />
years <strong>of</strong> operation. However technical expertise availability in the country, supply contract with the<br />
vendor as well as reserve margin <strong>of</strong> around 8.11% (installed capacity) mitigates the operational<br />
risk to some extent.<br />
PROSPECTUS<br />
101<br />
����
102<br />
����<br />
CRAB Ratings Corporate<br />
9.4 Project Implementation Risk:<br />
As per agreement, the implementation period was 9 months from the contract signing date <strong>of</strong> 28<br />
April 2008. But the actual implementation period was delayed by another 9 months because <strong>of</strong> delay<br />
in L/C opening due to higher bank financing cost. The Company reported that, the management had<br />
appealed to the concerned authority and got waiver <strong>of</strong> fine due to liquidity damage provision laid<br />
down in the agreement.<br />
If the authority did not waive the fine, then the project Company would incur a cost <strong>of</strong> maximum<br />
BDT 64.26 million (BDT 14,000 per MW per day x 51 MW <strong>of</strong> contracted capacity x 3 months; the<br />
total damages should not exceed 3 months equivalent rental payment as per RPA) which might<br />
squeeze its cash flows. However, the project is on full operation since October 2009. At this level,<br />
the Company does not have any implementation risk.<br />
9.5 Counter Party Risk:<br />
Revenue generation for the power project depends upon the financial strength <strong>of</strong> the buyer. The buyer<br />
<strong>of</strong> power is the government body BPDB. The power purchase agreement made by the government<br />
is the sovereign guarantee. As the <strong>of</strong>f-taker is the government, credit risk <strong>of</strong> the <strong>of</strong>f-taker assumes<br />
very low from national point <strong>of</strong> view. BPDB’s historical behavior regarding payments to the power<br />
Company does not provide any substantial default behavior. Again, payment security is backed by<br />
BPDB letter <strong>of</strong> credit equal to 2 months rental payment, which shall have initial term <strong>of</strong> 1 year and<br />
shall provide for annual renewal immediately prior to each relevant expiry date for further period<br />
<strong>of</strong> 1 year. In the last 8 months, the Company received payment on an average 5 days prior <strong>of</strong> last<br />
due date.<br />
10. FINANCIAL PERFORMANCE ANALYSIS<br />
The quantitative aspect <strong>of</strong> CRAB’s ratings focuses on a review <strong>of</strong> the Company’s policies in relation to<br />
financial strength like- the ability to generate cash, service debt, financial leverage targets, generate<br />
sufficient return to enable continuous access to fund market etc. The overall performance <strong>of</strong> the Company<br />
can be assessed by analyzing different ratios based on some factors- internal liquidity, operating<br />
efficiency, operating pr<strong>of</strong>itability, coverage and leverage structure.<br />
Exhibit 09: Financial Performance FY 2009-10<br />
(BDT in Million)<br />
Particulars Amount % <strong>of</strong> Revenue<br />
Rental Revenue 215.63 41.91%<br />
Energy Revenue 298.91 58.09%<br />
Total Revenue 514.54 100.00%<br />
Cost <strong>of</strong> Sales 245.33 47.68%<br />
Gross Pr<strong>of</strong>it 269.22 52.32%<br />
General & Administrative Expenses 50.51 9.82%<br />
Operating Pr<strong>of</strong>it 218.70 42.50%<br />
Financial Income 0.72 0.14%<br />
EBIT 219.43 42.65%<br />
Financial Expenses 111.76 21.72%<br />
Net Pr<strong>of</strong>it Before Tax 107.66 20.92%<br />
Provision for Taxation 5.58 1.08%<br />
Net Pr<strong>of</strong>it After Tax 102.08 19.84%<br />
The reported turnover <strong>of</strong> the Company was BDT 514.54 million during FY 2009-10 in its 8 months <strong>of</strong><br />
operation. The major component <strong>of</strong> cost <strong>of</strong> sales includes gas consumption <strong>of</strong> BDT 189.41 million. The<br />
net pr<strong>of</strong>it after tax was BDT 102.08 million representing net pr<strong>of</strong>itability margin <strong>of</strong> 19.84%. Going<br />
forward, in the upcoming years the project would incur financial expenses as well as requires schedule<br />
maintenance and overhauling. As such, it needs to build up overhauling reserve which may affect net<br />
pr<strong>of</strong>itability. Gross pr<strong>of</strong>it margin and EBITDA margin stands at 52.32% and 51.23% respectively.<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...
In the following exhibits, month wise as well as sub head wise rental payment from BPDB along<br />
with consumption <strong>of</strong> gas and payment for gas is depicted. Total revenue is calculated by taking CPI<br />
adjustment into consideration. On the other hand, total gas payment is adjusted with the<br />
additional bill made by JGTDSL due to heating value.<br />
Sl.<br />
No.<br />
01<br />
CRAB Ratings Corporate<br />
Bill No. Month<br />
BEDL/BPDB/0001.1/2009<br />
(Before COD)<br />
BEDL/BPDB/0001.2/2009<br />
(After COD)<br />
Exhibit 10: Monthly Billing History<br />
Dependable<br />
Capacity<br />
(Kwh)<br />
Net<br />
Energy<br />
Output<br />
(Kwh)<br />
Rate <strong>of</strong><br />
Revenue/<br />
Kwh<br />
(BDT)<br />
NERP<br />
Amount<br />
ERP<br />
Amount<br />
VOMP<br />
Amount<br />
FP<br />
Amount<br />
(BDT in Million)<br />
Supple<br />
mentary<br />
Invoice<br />
Amount<br />
Oct-09 37,944,000 16,956,237 0.92 --- --- --- 15.53 --- 15.53<br />
Oct-09 36,720,000 10,507,163 1.79 4.88 1.63 2.10 9.62 0.56 18.78<br />
02 BEDL/BPDB/0002/2009 Nov-09 37,944,000 25,543,530 2.17 18.90 6.30 5.11 23.39 1.69 55.39<br />
03 BEDL/BPDB/0003/2009 Dec-09 37,944,000 17,272,783 2.66 18.90 6.30 3.45 15.82 1.44 45.92<br />
04 BEDL/BPDB/0004/2010 Jan-10 34,272,000 23,941,767 2.23 18.90 6.30 4.79 21.92 1.96 53.87<br />
05 BEDL/BPDB/0005/2010 Feb-10 37,944,000 30,858,827 1.98 18.90 6.30 6.17 28.26 1.78 61.41<br />
06 BEDL/BPDB/0006/2010 Mar-10 36,720,000 37,552,270 1.84 18.90 6.30 7.51 34.39 1.97 69.07<br />
07 BEDL/BPDB/0007/2010 Apr-10 37,944,000 32,898,567 1.94 18.90 6.30 6.58 30.13 1.86 63.76<br />
08 BEDL/BPDB/0008/2010 May-10 36,720,000 33,635,791 1.92 18.90 6.30 6.73 30.80 1.88 64.61<br />
09 BEDL/BPDB/0009/2010 Jun-10 37,944,000 35,032,490 1.89 18.90 6.30 7.01 32.08 1.91 66.20<br />
Total 264,199,425 156.08 52.03 49.44 241.94 15.05 514.54<br />
Sl.<br />
No.<br />
Exhibit 11: Monthly Gas Bill History<br />
Bill No. Month Billing Date Sm 3 Rate<br />
(BDT)<br />
Total<br />
Pay<br />
ment<br />
(BDT in Million)<br />
Due Date Total Amount Remarks<br />
01 39.0334/114 Oct-09 02 Nov-09 6,916,062.53 2.82 22 Nov-09 19.69 Paid<br />
02 39.0334/135 Nov-09 08 Dec-09 6,532,774.92 2.82 27 Dec-09 18.71 Paid<br />
03 39.0334/154 Dec-09 05 Jan-10 4,446,352.50 2.82 18 Feb-10 12.66 Paid<br />
04 39.1908/180 Jan-10 08 Feb-10 5,902,160.01 2.82 24 Mar-10 16.78 Paid<br />
05 39.1908/217 Feb-10 11 Mar-10 7,634,877.64 2.82 24 Apr-10 21.71 Paid<br />
06 39.1908/247 Mar-10 19 Apr-10 9,409,616.87 2.82 02 Jun-10 26.60 Paid<br />
07 39.1908/266 Apr-10 05 May-10 8,343,009.05 2.82 18 Jun-10 23.70 Paid<br />
08 391908/322 May-10 02 Jun-10 8,518,150.48 2.82 18 Jul-10 24.02 Paid<br />
09 39.1908/358 Jun-10 08 Jul-10 9,055,379.89 2.82 22 Aug-10 25.54 Paid<br />
Sl.<br />
No.<br />
Month<br />
Total 66,758,383.89 189.41<br />
Exhibit 12: Present performance at a Glance<br />
Plant<br />
Factor<br />
(%)<br />
Billing Date<br />
Bill Received<br />
Date<br />
Deviation<br />
(Days)<br />
Gross Bill<br />
Amount<br />
(BDT in Million)<br />
Gas Bill<br />
Amount<br />
Net Bill<br />
Amount<br />
01 Oct-09 72.38 12 Nov-09 15 Dec-09 33 34.31 19.69 14.62<br />
02 Nov-09 69.56 06 Dec-09 11 Jan-10 36 55.39 18.71 36.68<br />
03 Dec-09 45.52 06 Jan-10 09 Feb-10 34 45.92 12.66 33.26<br />
04 Jan-10 63.10 07 Feb-10 09 Mar-10 30 53.87 16.78 37.09<br />
05 Feb-10 90.04 07 Mar-10 12 Apr-10 36 61.41 21.71 39.70<br />
06 Mar-10 98.97 07 Apr-10 12 May-10 35 69.07 26.60 42.47<br />
07 Apr-10 89.59 05 May-10 07 Jun-10 33 63.76 23.70 40.07<br />
08 May-10 88.65 06 Jun-10 30 Jun-10 24 64.61 24.02 40.59<br />
09 Jun-10 95.40 06 Jul-10 10 Aug-10 35 66.20 25.54 40.66<br />
Grand Total 514.54 189.41 325.14<br />
PROSPECTUS<br />
103<br />
����
104<br />
����<br />
CRAB Ratings Corporate<br />
From the balance sheet below, total assets <strong>of</strong> the Company stood at BDT 2,192.10 million. Total liabilities<br />
stood at BDT 1,490.05 million <strong>of</strong> which long term liabilities represents 81.97%. Total equity stood at BDT<br />
702.05 million <strong>of</strong> which retained earnings constituted to BDT 102.05 million. Therefore, debt to equity<br />
ratio is 2.00 times and debt ratio is 63.93%. Cash flow coverage ratio and times interest earned ratio<br />
are 1.31 times and 1.96 times respectively which is found satisfactory. On the other hand, current ratio<br />
and quick ratio are 0.88 times and 0.85 times respectively. Average collection period <strong>of</strong> the Company<br />
is 64 days which indicates BPDB takes around 2 months to settle down the accounts. Again, return on<br />
assets (ROA) and return on equity (ROE) stands at 4.66% and 14.54% respectively.<br />
Exhibit 13: Balance Sheet FY 2009-10<br />
Assets<br />
(BDT in Million)<br />
Current Assets 236.13<br />
Inventories 8.52<br />
Accounts Receivable 134.58<br />
Advances, Deposits & Prepayments 81.50<br />
Cash & Bank Balances 11.53<br />
Non-Current Assets 1955.97<br />
Property, Plant & Equipments 1914.08<br />
Intangible Assets 0.03<br />
Pre-Operating Expenses 41.86<br />
Total Assets 2192.10<br />
Liabilities & Owner’s Equity<br />
Current Liabilities 268.59<br />
Term Loan- Short Term Portion 180.05<br />
Liability for Expenses 14.49<br />
Accounts Payable 74.05<br />
Non Current Liabilities 1221.46<br />
Term Loan- Long Term Portion 1221.46<br />
Total Liabilities 1490.05<br />
Owner’s Equity 702.05<br />
Share Capital 600.00<br />
Retained Earnings 102.05<br />
Total Liabilities & Owner’s Equity 2192.10<br />
11. STRESS RESULTS<br />
Key variability <strong>of</strong> the projected cash flow and its ability to service debt on time depends on number<br />
<strong>of</strong> factors. Major sources <strong>of</strong> uncertainty for which revenue and cost can vary are plant load factor,<br />
achievement <strong>of</strong> contracted capacity, machine heat rate, gas heat rate and provision for schedule and<br />
force outage. For running Monte-Carlo Simulation (this technique involves generating random numbers<br />
for the assumption variables), following ranges <strong>of</strong> assumption variables have been taken. We have used<br />
triangular distribution for the assumption variables where the parameters are minimum, likeliest, and<br />
maximum and run thousand trials to get statistics, percentile and sensitivity results <strong>of</strong> output variables.<br />
Assumption Ranges are depicted in the following exhibit:<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...
CRAB Ratings Corporate<br />
Exhibit 14: Assumptions for Stressing<br />
After stressing the key output variable <strong>of</strong> Debt Service Coverage Ratio (DSCR), the following stress<br />
results are generated. The result <strong>of</strong> each indicator implies the debt service capacity <strong>of</strong> the project under<br />
stress. If all the assumption variables run together at a time then the Mean and Median values as well<br />
as Minimum and Maximum values <strong>of</strong> output variable are depicted as follows:<br />
Statistics<br />
DSCR<br />
Y-1<br />
DSCR<br />
Y-2<br />
Exhibit 15: Stress Output<br />
DSCR<br />
Y-3<br />
DSCR<br />
Y-4<br />
Trials 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000<br />
Mean 1.26 0.65 1.20 1.30 1.42 1.87 4.72 5.21 5.82 25.12<br />
Median 1.26 0.65 1.19 1.29 1.42 1.86 4.71 5.20 5.81 25.07<br />
Standard Deviation 0.07 0.04 0.08 0.08 0.09 0.12 0.30 0.34 0.38 1.62<br />
Variance 0.01 0.00 0.01 0.01 0.01 0.01 0.09 0.11 0.14 2.63<br />
Coeff. <strong>of</strong> Var. 0.0566 0.0647 0.0644 0.0651 0.0656 0.0647 0.0645 0.0645 0.0645 0.0645<br />
Minimum 1.03 0.51 0.94 1.02 1.11 1.47 3.71 4.10 4.58 19.75<br />
Maximum 1.51 0.79 1.46 1.59 1.74 2.28 5.77 6.37 7.11 30.69<br />
Mean Std. Error 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.01 0.01 0.05<br />
Percentiles<br />
DSCR<br />
Y-1<br />
DSCR<br />
Y-2<br />
DSCR<br />
Y-3<br />
DSCR<br />
Y-4<br />
DSCR<br />
Y-5<br />
DSCR<br />
Y-5<br />
DSCR<br />
Y-6<br />
DSCR<br />
Y-6<br />
DSCR<br />
Y-7<br />
DSCR<br />
Y-7<br />
DSCR<br />
Y-8<br />
DSCR<br />
Y-8<br />
DSCR<br />
Y-9<br />
DSCR<br />
Y-9<br />
DSCR<br />
Y-10<br />
DSCR<br />
Y-10<br />
5% 1.15 0.58 1.08 1.17 1.27 1.68 4.24 4.69 5.23 22.58<br />
95% 1.38 0.72 1.33 1.44 1.58 2.08 5.25 5.80 6.48 27.94<br />
Sensitivity Data<br />
Assumptions<br />
DSCR<br />
Y-1<br />
DSCR<br />
Y-2<br />
DSCR<br />
Y-3<br />
DSCR<br />
Y-4<br />
Contracted Capacity 0.66 0.61 0.62 0.61 0.60 0.61 0.62 0.62 0.62 0.62<br />
Gas Heat Rate 0.63 0.67 0.67 0.68 0.68 0.68 0.67 0.67 0.67 0.67<br />
Machine Heat Rate -0.28 -0.30 -0.30 -0.30 -0.31 -0.30 -0.30 -0.30 -0.30 -0.30<br />
Plant Load Factor 0.18 0.14 0.14 0.13 0.13 0.14 0.14 0.14 0.14 0.14<br />
It is identified that the output variable DSCR is highly sensitive with the contracted capacity and gas<br />
heat rate. Distribution <strong>of</strong> DSCR on year by year basis is plotted below:<br />
DSCR<br />
Y-5<br />
DSCR<br />
Y-6<br />
DSCR<br />
Y-7<br />
DSCR<br />
Y-8<br />
DSCR<br />
Y-9<br />
DSCR<br />
Y-10<br />
PROSPECTUS<br />
105<br />
����
106<br />
����<br />
CRAB Ratings Corporate<br />
Exhibit 16: Distribution <strong>of</strong> DSCR on year by year basis<br />
DSCR Y-1 DSCR Y-2<br />
Entire range is from 1.03 to 1.51<br />
Base case is 1.25<br />
After 1,000 trials, the std. error <strong>of</strong> the mean is 0.00<br />
DSCR Y-3 DSCR Y-4<br />
Entire range is from 0.94 to 1.46<br />
Base case is 1.18<br />
After 1,000 trials, the std. error <strong>of</strong> the mean is 0.00<br />
DSCR Y-5 DSCR Y-6<br />
Entire range is from 1.11 to 1.74<br />
Base case is 1.40<br />
After 1,000 trials, the std. error <strong>of</strong> the mean is 0.00<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Entire range is from 0.51 to 0.79<br />
Base case is 0.64<br />
After 1,000 trials, the std. error <strong>of</strong> the mean is 0.00<br />
Entire range is from 1.02 to 1.59<br />
Base case is 1.28<br />
After 1,000 trials, the std. error <strong>of</strong> the mean is 0.00<br />
Entire range is from 1.47 to 2.28<br />
Base case is 1.84<br />
After 1,000 trials, the std. error <strong>of</strong> the mean is 0.00
CRAB Ratings Corporate<br />
DSCR Y-7 DSCR Y-8<br />
Entire range is from 3.71 to 5.77<br />
Base case is 4.66<br />
After 1,000 trials, the std. error <strong>of</strong> the mean is 0.01<br />
DSCR Y-9 DSCR Y-10<br />
Entire range is from 4.58 to 7.11<br />
Base case is 5.74<br />
After 1,000 trials, the std. error <strong>of</strong> the mean is 0.01<br />
12. BANK FACILITY & CREDIT HISTORY<br />
Entire range is from 4.10 to 6.37<br />
Base case is 5.14<br />
After 1,000 trials, the std. error <strong>of</strong> the mean<br />
is 0.01<br />
Entire range is from 19.75 to 30.69<br />
Base case is 24.78<br />
After 1,000 trials, the std. error <strong>of</strong> the mean is 0.05<br />
The Company has banking relationship with four banks namely BRAC Bank Ltd., AB Bank Ltd., Trust<br />
Bank Ltd. and Janata Bank Ltd. It has also financing relationship with three other non-banking financial<br />
institutions namely Infrastructure Development Company Limited (IDCOL), Industrial & Infrastructure<br />
Development Finance Company Limited (IIDFC) and Prime Finance & Investment Limited. In January<br />
2009, the Company arranged a Syndicated Loan facility <strong>of</strong> BDT 1,250 million where IDCOL is the lead<br />
arranger and BRAC Bank is the co-arranger and agent <strong>of</strong> this facility. Again, the Company arranged a<br />
Term Finance facility <strong>of</strong> BDT 200 million with Prime Finance & Investment Ltd. (PFIL) in January 2010.<br />
The Company has availed the full amount <strong>of</strong> funds from the banks/NBFIs at different times over the<br />
period <strong>of</strong> its operations. The interest rate <strong>of</strong> this syndication loan is 13.00% per annum for IDCOL<br />
and other lenders except IIDFC with semi-annual review by the agent and lenders from August 2009.<br />
The first drawdown was made on 26 January 2009. The grace period <strong>of</strong> this syndication loan is <strong>of</strong> 12<br />
months from the first drawdown date. The term loan facility in case <strong>of</strong> IDCOL shall be repaid in equal<br />
36 quarterly installments and in case <strong>of</strong> other lenders shall be repaid in equal 22 quarterly installments<br />
on repayment dates commencing from the immediate quarter-end upon the expiry <strong>of</strong> the grace period.<br />
As on 11 July 2010 the Company had outstanding long term loan <strong>of</strong> BDT 1,174.52 million which was<br />
81.00% <strong>of</strong> total sanctioned limit <strong>of</strong> BDT 1,450.00 million. On the other hand, the term financing facility<br />
shall be repaid within 18 months bullet payment in nature with 3 months grace period from the date <strong>of</strong><br />
first disbursement.<br />
PROSPECTUS<br />
107<br />
����
108<br />
����<br />
CRAB Ratings Corporate<br />
According to the banker’s report, BEDL’s relationship with the Bank is found satisfactory. Its financial<br />
relationship with suppliers and customers in payment through issuing cheque drawn on the banks is<br />
satisfactory. The outstanding debt <strong>of</strong> the Company as on 11 July 2010 is given below:<br />
Bank/NBFI<br />
Interest<br />
Rate<br />
Exhibit 17: External Borrowings<br />
Limit <strong>of</strong> Loan Disburse<br />
Repayment<br />
<strong>of</strong> Term Loan<br />
(BDT in Million)<br />
Outstanding as on<br />
11 July 2010<br />
BRAC Bank Limited 13% 300.00 300.00 21.53 278.47<br />
IDCOL 13% 500.00 500.00 21.65 478.35<br />
AB Bank Limited 13% 150.00 150.00 10.77 139.23<br />
Trust Bank Limited 13% 150.00 150.00 10.77 139.23<br />
Janata Bank Limited 13% 100.00 100.00 7.18 92.82<br />
IIDFC 14% 50.00 50.00 3.59 46.41<br />
PFIL 15% 200.00 200.00 --- 200.00<br />
Total 1,450.00 1,450.00 75.48 1,374.52<br />
Collateral Value:<br />
�<br />
�<br />
�<br />
�<br />
�<br />
�<br />
Mortgage <strong>of</strong> Project Land.<br />
Hypothecation <strong>of</strong> all fixed and floating assets including but not limited to machinery, book debts,<br />
furniture, fixture and equipment on first ranking pari passu basis creating present and future<br />
charge with the RJSC.<br />
Establishment <strong>of</strong> Escrow Account and Debt Service Account with appropriate cash waterfall<br />
arrangement to the satisfaction <strong>of</strong> the lenders.<br />
Co-payee <strong>of</strong> benefits under all insurance policies insuring the relevant moveable and immoveable<br />
assets <strong>of</strong> the issuer.<br />
A tri-partite agreement has been signed among Prime Finance, BEDL and BRAC Bank regarding<br />
payment <strong>of</strong> installment <strong>of</strong> Prime Finance.<br />
Personal guarantee <strong>of</strong> all the sponsor directors <strong>of</strong> BEDL including spouses <strong>of</strong> MD and chairman<br />
<strong>of</strong> the Company.<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...
CRAB Ratings Corporate<br />
Annexure- A<br />
Key Features <strong>of</strong> Gas Supply Agreement<br />
Parameters Covenant<br />
Purchase and Sale <strong>of</strong> Gas<br />
Construction and Cost <strong>of</strong> Gas<br />
Interconnection Facilities<br />
Gas Nominations<br />
Gas Usage and Security Deposit<br />
Minimum Purchase Obligation<br />
Payment Obligation<br />
Gas seller shall sell gas and deliver to the gas delivery point<br />
to the Company at all times up to maximum specification<br />
subject to the availability <strong>of</strong> gas. And the Company shall<br />
pay for gas at a gas price set by the govt. or any authority<br />
assigned by it from time to time.<br />
Increase/Decrease in gas price is at the discretion <strong>of</strong> the gas<br />
seller. But gas price adjustment with tariff <strong>of</strong>fset the risk <strong>of</strong><br />
future changes in gas price.<br />
The Company shall at its own cost and expense, construct<br />
the gas interconnection facilities to deliver gas to the gas<br />
delivery point including Regulating & Metering Station (RMS)<br />
and gas pipeline.<br />
It is the responsibility <strong>of</strong> the Company to provide gas<br />
seller with a commissioning program and schedule <strong>of</strong><br />
commissioning test and test procedures include among<br />
others pressure testing, gas metering system, the quality <strong>of</strong><br />
the gas, the capability <strong>of</strong> gas seller’s system to supply the<br />
Maximum Hourly Gas Usage.<br />
During the period <strong>of</strong> testing and startup, the gas seller<br />
shall make gas available the amount <strong>of</strong> gas necessary for<br />
commissioning <strong>of</strong> the facility to the Company. The covenants<br />
include annual gas nominations, monthly adjustments, daily<br />
nomination amount and procedures as per standard terms.<br />
The covenant specifies the maximum amount <strong>of</strong> gas usage<br />
by the Company and may request excess quantities <strong>of</strong> gas.<br />
The gas seller would provide excess gas if available.<br />
The Company shall pay to the gas seller a security deposit<br />
an amount equivalent to 3 months gas bills based upon<br />
Maximum Monthly Gas Usage and the prevailing gas tariff.<br />
The Company for each contract year shall pay Minimum<br />
Purchase Obligation, which is 50% <strong>of</strong> the Annual Contract<br />
Gas Usage.<br />
The Company would get 45 days for making payment to<br />
the gas seller. The Gas seller entitled the right to suspend<br />
deliveries <strong>of</strong> gas at any time outstanding invoice or invoices<br />
remain unpaid as per terms.<br />
There is also a provision <strong>of</strong> price adjustment for Heating<br />
Value. The standard Heating Value is 950 BTU per standard<br />
cubic foot. The price will be adjusted at the same direction<br />
and in proportion to the ratio between actual heating value<br />
and standard value.<br />
PROSPECTUS<br />
109<br />
����
110<br />
����<br />
CRAB Ratings Corporate<br />
Parameters Covenant<br />
Metering and Monitoring System Adequate provisions are incorporated in the agreement.<br />
Maintenance and Repair<br />
Force Majeure<br />
Event <strong>of</strong> Default<br />
Gas Specification<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
The Company is responsible to maintain and repair the facilities.<br />
Schedule maintenance program to be chalked out with the<br />
consent <strong>of</strong> gas seller and in accordance with the Purchase<br />
Power Agreement. For any unscheduled maintenance, it is to<br />
be done through both party consultations.<br />
Force Majeure events are described as Bangladesh political<br />
events, foreign political events, Force Majeure-natural. The<br />
party affected by the Force Majeure shall use its reasonable<br />
efforts to mitigate the effects <strong>of</strong> any event constituting the<br />
Force Majeure, including but not limited to the payment <strong>of</strong><br />
all reasonable sums <strong>of</strong> money by or on behalf <strong>of</strong> the affected<br />
party.<br />
The event <strong>of</strong> default by either party may lead to termination<br />
<strong>of</strong> the agreement but there is no provision <strong>of</strong> termination<br />
benefit or penalties in the deed.<br />
It is agreed that gas delivered will have a Higher Heating<br />
Value (HHV) <strong>of</strong> 950 BTU per standard cubic foot but shall<br />
not at any time a HHV <strong>of</strong> less than 900 BTU per standard<br />
cubic foot. The pressure at which the gas will be delivered<br />
to the Company at the gas delivery point shall be maximum<br />
350 psig. The temperature <strong>of</strong> the delivered gas shall not be<br />
less than 59 degrees Fahrenheit (15 degree Celsius) and not<br />
more than 140 degrees Fahrenheit (60 degree Celsius).
CRAB Ratings Corporate<br />
Annexure- B<br />
Key Features <strong>of</strong> Rental Power Agreement<br />
Component <strong>of</strong> Risk Measures in RPA<br />
Demand & Price: Revenue may<br />
fluctuate as a result <strong>of</strong> potential<br />
decrease in tariff for capacity and<br />
energy output level and demand<br />
volatility<br />
Capacity<br />
Inflation: High domestic<br />
inflation negatively affects O&M<br />
costs, resulting in lower operating<br />
pr<strong>of</strong>it<br />
Foreign Currency: Foreign currency<br />
rises in value with respect to local<br />
currency and tariff revenues are<br />
inadequate to pay operating costs,<br />
debt service and equity return<br />
Credit Risk: Off-taker fails to<br />
honour its contractual payment<br />
obligations<br />
From demand and supply analysis, it can be assumed that<br />
risk arises from demand volatility is very low.<br />
BPDB agrees to provide the Company the rental payment<br />
and energy payment over the life <strong>of</strong> the contract: (a) agreed<br />
capacity subject to some conditions (b) net energy output<br />
price.<br />
Capacity payment depends on the performance <strong>of</strong> the<br />
Company and its plant. As such a considerable amount <strong>of</strong><br />
due diligence is required by lenders for dimensioning the<br />
probability <strong>of</strong> such events occurring.<br />
The risk arises from price variability <strong>of</strong> the product<br />
mitigates through per-fixed tariff structure and calculation<br />
methodologies.<br />
BPDB agrees to pay capacity price for its contracted capacity<br />
<strong>of</strong> 51 MW if dependable capacity is above the contracted<br />
capacity and pay to the Company for making available the<br />
dependable capacity after dependable capacity test. Because<br />
BPDB does not take this risk.<br />
The purchaser assumes this risk by agreeing to index the<br />
local components <strong>of</strong> output price as well as capacity price<br />
against the appropriate local cost index. Hence, an increased<br />
cost <strong>of</strong> 0&M caused by economic variables over which the<br />
project has no control partially takes care <strong>of</strong> through this<br />
index mechanism.<br />
There is no substantial currency parity risk as the Company<br />
revenues and costs are in the same currency.<br />
Where the credit <strong>of</strong> the <strong>of</strong>f-taker is in question, we looked<br />
into the position <strong>of</strong> the purchaser. The purchaser here is the<br />
Bangladesh Power Development Board (BPDB), a statutory<br />
body constituted under P.O. 59 <strong>of</strong> 1972 <strong>of</strong> the Peoples<br />
Republic <strong>of</strong> Bangladesh- a public utility body engaged in<br />
the generation, distribution and sale <strong>of</strong> electric capacity and<br />
energy in the Peoples Republic <strong>of</strong> Bangladesh. From national<br />
point <strong>of</strong> view, as the <strong>of</strong>f taker is the government, credit risk<br />
<strong>of</strong> the <strong>of</strong>f-taker assumes low.<br />
BPDB’s Letter <strong>of</strong> Credit in favour <strong>of</strong> Company from Sonali<br />
Bank or any other Issuing Bank equal to two months rental<br />
payments reduces the credit risk to some extent.<br />
PROSPECTUS<br />
111<br />
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112<br />
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CRAB Ratings Corporate<br />
Component <strong>of</strong> Risk Measures in RPA<br />
Force Majeure (FM) Events<br />
Event <strong>of</strong> Default and Termination<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
As per the RPA, FM means an event or situation beyond<br />
the control <strong>of</strong> the affected party that is not foreseeable,<br />
is unavoidable, and its origin is not due to negligence or<br />
lack <strong>of</strong> care on the part <strong>of</strong> the affected party. Such events<br />
may include acts <strong>of</strong> BPDB in its sovereign capacity, wars<br />
or revolutions, fires, floods, non availability or reduction<br />
or any interruption <strong>of</strong> gas due to national gas grid failure,<br />
epidemics, quarantine restrictions and freight embargoes.<br />
In case <strong>of</strong> FM, the affected party shall use all reasonable<br />
efforts to mitigate the effects <strong>of</strong> a FM Event. The affected<br />
party shall not be liable for any failure or delay in performing<br />
its obligations (other than an obligation to make a payment)<br />
during the existence <strong>of</strong> a FM Event. And performance<br />
deadline shall be extended and the unaffected party shall<br />
not bear any liability for any loss or expense suffered by the<br />
affected party as a result <strong>of</strong> FM Event.<br />
Payment Mechanism for FM Event:<br />
If FM Event occurs after Commercial Operation date, then<br />
during the FM Event, BPDB shall pay to the Company (a)<br />
energy payments for net energy output delivered during<br />
such FM Event plus (b) Rental Payments in an amount equal<br />
to the amount due to the Company immediately prior to<br />
such FM Events multiplied by FM Ratio.<br />
FM Ratio shall be calculated in the following way:<br />
�<br />
�<br />
�<br />
If FM declared by the Company, where the plant is<br />
capable <strong>of</strong> partly operation, a fraction, the ratio <strong>of</strong>:<br />
Dependable Capacity after the FM Event / Dependable<br />
Capacity most recent test prior to the FM Event.<br />
If FM declared by the Company and plant is not<br />
capable <strong>of</strong> operation, FM ratio shall be zero.<br />
In case <strong>of</strong> National Gas Grid failure in which case<br />
plant is not capable <strong>of</strong> operation, FM ratio shall be<br />
zero.<br />
The Company shall not be entitled to any additional energy<br />
payments and rental payments from BPDB arising during<br />
any FM Event.<br />
Events <strong>of</strong> Default by either party may lead to termination <strong>of</strong><br />
the agreement. And in such case BPDB does not guarantee<br />
any sort <strong>of</strong> guaranteed revenue and there is virtually no other<br />
market where the Company could sell power generated by<br />
the plant.
CRAB Ratings Corporate<br />
CRAB RATING SCALES AND DEFINITIONS –Long Term (Corporate)<br />
Long Term Rating Definition<br />
AAA<br />
Triple A<br />
AA 1 , AA 2 , AA 3 *<br />
Double A<br />
A , A , A 1 2 3<br />
Single A<br />
BBB 1 , BBB 2 , BBB 3<br />
Triple B<br />
BB , BB , BB 1 2 3<br />
Double B<br />
B , B , B 1 2 3<br />
Single B<br />
CCC 1 , CCC 2 , CCC 3<br />
Triple C<br />
CC<br />
Double C<br />
C<br />
Single C<br />
D<br />
(Default)<br />
Companies rated in this category have extremely strong capacity to meet financial<br />
commitments. These companies are judged to be <strong>of</strong> the highest quality, with minimal<br />
credit risk.<br />
Companies rated in this category have very strong capacity to meet financial commitments.<br />
These companies are judged to be <strong>of</strong> very high quality, subject to very low credit risk.<br />
Companies rated in this category have strong capacity to meet financial commitments, but<br />
are susceptible to the adverse effects <strong>of</strong> changes in circumstances and economic conditions.<br />
These companies are judged to be <strong>of</strong> high quality, subject to low credit risk.<br />
Companies rated in this category have adequate capacity to meet financial commitments<br />
but more susceptible to adverse economic conditions or changing circumstances. These<br />
companies are subject to moderate credit risk. Such companies possess certain speculative<br />
characteristics.<br />
Companies rated in this category have inadequate capacity to meet financial commitments.<br />
Have major ongoing uncertainties and exposure to adverse business, financial, or economic<br />
conditions. These companies have speculative elements, subject to substantial credit risk.<br />
Companies rated in this category have weak capacity to meet financial commitments. These<br />
companies have speculative elements, subject to high credit risk.<br />
Companies rated in this category have very weak capacity to meet financial obligations.<br />
These companies have very weak standing and are subject to very high credit risk.<br />
Companies rated in this category have extremely weak capacity to meet financial obligations.<br />
These companies are highly speculative and are likely in, or very near, default, with some<br />
prospect <strong>of</strong> recovery <strong>of</strong> principal and interest.<br />
Companies rated in this category are highly vulnerable to non-payment, have payment<br />
arrearages allowed by the terms <strong>of</strong> the documents, or subject <strong>of</strong> bankruptcy petition,<br />
but have not experienced a payment default. Payments may have been suspended in<br />
accordance with the instrument’s terms. These companies are typically in default, with little<br />
prospect for recovery <strong>of</strong> principal or interest.<br />
D rating will also be used upon the filing <strong>of</strong> a bankruptcy petition or similar action if<br />
payments on an obligation are jeopardized.<br />
*Note: CRAB appends numerical modifiers 1, 2, and 3 to each generic rating classification from AA through CCC. The<br />
modifier 1 indicates that the obligation ranks in the higher end <strong>of</strong> its generic rating category; the modifier 2 indicates a midrange<br />
ranking; and the modifier 3 indicates a ranking in the lower end <strong>of</strong> that generic rating category.<br />
© Copyright 2008, CREDIT RATING AGENCY OF BANGLADESH LIMITED (“CRAB”). All rights reserved. ALL INFORMATION<br />
CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE<br />
REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR<br />
STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS<br />
WHATSOEVER, BY ANY PERSON WITHOUT CRAB’S PRIOR WRITTEN CONSENT. All information contained herein is obtained by<br />
CRAB from sources believed by it to be accurate and reliable. Because <strong>of</strong> the possibility <strong>of</strong> human or mechanical error as well<br />
as other factors, however, such information is provided “as is” without warranty <strong>of</strong> any kind and CRAB, in particular, makes<br />
no representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for<br />
any particular purpose <strong>of</strong> any such information. Under no circumstances shall CRAB have any liability to any person or entity<br />
for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or<br />
other circumstance or contingency within or outside the control <strong>of</strong> CRAB or any <strong>of</strong> its directors, <strong>of</strong>ficers, employees or agents<br />
in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery<br />
<strong>of</strong> any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever<br />
(including without limitation, lost pr<strong>of</strong>its), even if CRAB is advised in advance <strong>of</strong> the possibility <strong>of</strong> such damages, resulting<br />
from the use <strong>of</strong> or inability to use, any such information. The credit ratings and financial reporting analysis observations, if<br />
any, constituting part <strong>of</strong> the information contained herein are, and must be construed solely as, statements <strong>of</strong> opinion and<br />
not statements <strong>of</strong> fact or recommendations to purchase, sell or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS<br />
TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY<br />
SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY CRAB IN ANY FORM OR MANNER WHATSOEVER.<br />
Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf <strong>of</strong> any user<br />
<strong>of</strong> the information contained herein, and each such user must accordingly make its own study and evaluation <strong>of</strong> each security<br />
and <strong>of</strong> each issuer and guarantor <strong>of</strong>, and each provider <strong>of</strong> credit support for, each security that it may consider purchasing,<br />
holding or selling.<br />
PROSPECTUS<br />
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114<br />
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PROSPECTUS<br />
APPLICATION FORMS<br />
Interested persons are entitled to a prospectus, if they desire, and that copies <strong>of</strong> prospectus may be obtained from the issuer and the issue manager<br />
����<br />
Barakatullah Electro Dynamics Limited<br />
Application Form<br />
APPLIcAtIoN For sHAres BY INVestors otHer tHAN NoN-resIDeNt BANGLADesHI(s)<br />
Warning: Please read the instructions at the back <strong>of</strong> this form. Incorrectly filled applications may be rejected.<br />
the Managing Director<br />
Barakatullah Electro Dynamics Limited<br />
6/A/1 (2nd floor), Segunbagicha<br />
Ramna, Dhaka-1000, Bangladesh<br />
Banker’s Sl. No.<br />
Dear Sir,<br />
I/we apply for and request you to allot me/us the …………..........… number <strong>of</strong> Shares and I/we agree to accept the same or any<br />
smaller number that may be allotted to me/us upon the terms <strong>of</strong> the Company’s approved <strong>Prospectus</strong> and subject to the Memorandum<br />
and Articles <strong>of</strong> Association <strong>of</strong> the Company. Further, I/we authorize you to place my/our name(s) on the Register <strong>of</strong> Members <strong>of</strong> the<br />
Company and deposit the said shares to my BO (Beneficiary Owner) Account and/or in respect <strong>of</strong> any application money refundable<br />
by crediting directly to the first applicant’s bank account stated below:<br />
1. No. <strong>of</strong> Ordinary Shares …………..……............… <strong>of</strong> Tk. 60/- each including a premium <strong>of</strong> Tk. 50/- per share.<br />
Amount <strong>of</strong> Tk. (in figure), ……………..…, Taka (in words) ……………….………………………………………………..only deposited vide<br />
Cash/Cheque/Draft/Pay Order No. …………………................................................…………………… dated ………………......……..…<br />
on ………………..........…………………........................………................……… Bank ……………………….....………......…………. Branch<br />
3. Depository (B/O) Account Number<br />
(If you do not mention your valid BO (Beneficiary Owners) account, your application will be treated as invalid)<br />
4. I/We agree to fully abide by the instruction given herein.<br />
5. Particulars <strong>of</strong> Applicant(s):<br />
a) sole/First Applicant<br />
Name:<br />
Father’s/Husband’s name:<br />
Mother’s name:<br />
Postal address:<br />
Occupation: Nationality: Telephone No. (if any)<br />
For refund warrant (Application will not be treated as valid if anyone uses a non-scheduled bank. To avoid this complication, investors<br />
are requested not to use the name <strong>of</strong> any non-scheduled bank) Please write the correct and full name <strong>of</strong> bank and branch.<br />
For refund purpose: I/we want refund through � Bank Account � Hand Delivery/Courier (please put tick mark in which refund will be made)<br />
the applicant shall provide with the same Bank Account number in the application form as it is in the Bo account <strong>of</strong> the applicant.<br />
otherwise the application will be considered invalid and the subscription money may be forfeited.<br />
In Case <strong>of</strong> deposit into the applicant’s bank account. the applicant will bear the applicable charge, if any, <strong>of</strong> the applicants banker and the issuer<br />
shall symultaneously issue a letter on intimation to the applicant consisting, among others, the date and amount remitted with details <strong>of</strong> the bank<br />
through and to which bank such remittance has been effected.<br />
Applicant’s Bank A/C No.:<br />
Name <strong>of</strong> the Bank: Branch:<br />
b) second Applicant<br />
Name:<br />
Father’s/Husband’s name:<br />
Mother’s name:<br />
Postal address:<br />
Occupation: Nationality:<br />
6. I/we hereby declare that I/we have read the <strong>Prospectus</strong> <strong>of</strong> Barakatullah electro Dynamics Limited and have willingly<br />
subscribed for …………… no. <strong>of</strong> shares <strong>of</strong> Tk. 60/- each including a premium <strong>of</strong> Tk. 50/- per share on this form.<br />
7. Specimen Signature(s):<br />
(i) Name (in Block Letters) Signature:<br />
(ii) Name (in Block Letters) Signature:<br />
BANKer’s AcKNoWLeDGeMeNt<br />
Certified that this bank has received Tk. ……………………… (in word) ………………………………………………………………………… only from<br />
Mr./Mrs./Ms. …………………………………………………………………..…….……… being the Application Money for …………… nos. Ordinary<br />
Shares <strong>of</strong> Barakatullah electro Dynamics Limited.<br />
Authorized signature<br />
Banker’s sl. No. ………………. seal and Date (Name & Designation)
115<br />
PROSPECTUS<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
Instructions<br />
1. As per provision <strong>of</strong> Depository Act, 1999 and regulations made thereunder shares will be only be issued in dematerialized condition. Please mention your BO (Beneficiary Owner)<br />
Account number in the Application form. If you do not mention your valid BO (Beneficiary Owner) Account, your application will be treated as invalid.<br />
2. All information must be typed or written in full (in block letters) in English or in Bengali and must not be abbreviated.<br />
3. Application must be made on the Company’s printed form/photocopy or on typed copy/hand written form there<strong>of</strong>.<br />
4. Application must not be for less than 200 Ordinary shares and must be for a multiple <strong>of</strong> 200 ordinary shares. Any application not meeting these criterions will not be considered for allotment<br />
purpose.<br />
5. Remittance for the full amount <strong>of</strong> the shares must accompany each application and must be forwarded to any <strong>of</strong> the Bankers’ to the Issue. Remittance should be in the form<br />
<strong>of</strong> cash/cheque/bank draft/pay order payable to one <strong>of</strong> the Bankers’ to the Issue favoring “Barakatullah electro Dynamics Limited” and crossed “A/c Payee only” and<br />
must be drawn on a bank in the same town as the bank to which the application form has been sent.<br />
6. In the case <strong>of</strong> a joint application form, the allotment letter will be dispatched to the person whose name appears first on this application form.<br />
7. Joint application form for more than two persons will not be accepted. In case <strong>of</strong> joint application, each party must sign the application form.<br />
8. Applications must be in the full name <strong>of</strong> individuals or companies or societies or trusts and not in the name <strong>of</strong> firms, minors or persons <strong>of</strong> unsound mind. Application from<br />
financial and market intermediary companies must be accompanied by Memorandum <strong>of</strong> Association and Articles <strong>of</strong> Association and Certificate <strong>of</strong> Incorporation.<br />
9. An applicant cannot submit more than two applications, one in his/her own name and another jointly with another person. In case an applicant makes<br />
more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, whole or part <strong>of</strong><br />
application money may be forfeited by the commission.<br />
10. No receipt will be issued for the payment made with the application, but the bankers will issue a provisional acknowledgement to the issue for application lodged with them.<br />
11. In the case <strong>of</strong> non-allotment <strong>of</strong> securities, if the applicants’ bank accounts as mentioned in their <strong>IPO</strong> Application Forms are maintained with the Bankers to the Issue, refund amount<br />
<strong>of</strong> those applicants will be directly credited into the respective bank accounts as mentioned in their <strong>IPO</strong> Application Forms. Otherwise, refund will be made only through “Account<br />
Payee” cheque(s) with bank account number and name <strong>of</strong> bank branch as mentioned in the application payable at Dhaka or <strong>Chittagong</strong>, as the case may be.<br />
12. Allotment shall be made solely in accordance with the instructions <strong>of</strong> the Securities and <strong>Exchange</strong> Commission.<br />
13. Making <strong>of</strong> any false statement in the application or supplying <strong>of</strong> incorrect information therein or suppressing any relevant information shall make the application liable to<br />
rejection and subject to forfeiture <strong>of</strong> application money and/or forfeiture <strong>of</strong> share (unit) before or after issuance <strong>of</strong> the same by the issuer. The said forfeited Application money<br />
or share (unit) will be deposited in account specified by the Securities and <strong>Exchange</strong> Commission (SEC). This may be in addition to any other penalties as may be provided for<br />
by the law.<br />
14. Applications which do not meet the above requirements, or applications, which are incomplete, shall not be considered for allotment purpose.<br />
15. The Bankers to the issue Banks shall be obliged to receive the A/C Payee Cheque (s) on the closing day <strong>of</strong> the subscription.<br />
16. No sale <strong>of</strong> securities shall be made nor shall any money be taken from any person, in connection with such sale until twenty five days after the prospectus have been<br />
published.<br />
Bankers to the Issue<br />
Bank Asia Limited<br />
Bashundhara Branch, Dhaka<br />
Corporate Branch, Dhaka<br />
Dhanmondi Branch, Dhaka<br />
Gulshan Branch, Dhaka<br />
MCB Banani Branch, Dhaka<br />
MCB Dilkusha Branch, Dhaka<br />
Mirpur Branch, Dhaka<br />
Mitford Branch, Dhaka<br />
Moghbazar Branch, Dhaka<br />
Mohakhali Branch, Dhaka<br />
North South Rd. Branch, Dhaka<br />
Principal Office Branch, Dhaka<br />
Progoti Sarani Branch, Dhaka<br />
Scotia Branch, Dhaka<br />
Shantinagar Branch, Dhaka<br />
Uttara Branch, Dhaka<br />
Agrabad Branch, <strong>Chittagong</strong><br />
Anderkilla Branch, <strong>Chittagong</strong><br />
Bahadderhat Branch, <strong>Chittagong</strong><br />
CDA Avenue Branch, <strong>Chittagong</strong><br />
Kamal Bazar Branch, <strong>Chittagong</strong><br />
Khatunganj Branch, <strong>Chittagong</strong><br />
MCB Sk. Mujib Road Branch, <strong>Chittagong</strong><br />
Station Road Branch, <strong>Chittagong</strong><br />
Sylhet Main Branch, Sylhet<br />
Sylhet Uposhahar Branch, Sylhet<br />
Rajshahi Branch, Rajshahi<br />
Khulna Branch, Khulna<br />
Bogra Branch, Bogra<br />
Jessore Branch, Jessore<br />
Ishwardi Branch, Pabna<br />
Dhaka Bank Limited<br />
Goran Business Center, Dhaka<br />
Khilgaon Branch, Dhaka<br />
Mirpur Branch, Dhaka<br />
Savar Bazar Branch, Dhaka<br />
Bulta Branch, Narayangonj<br />
CDA Avenue Branch, <strong>Chittagong</strong><br />
Cox’s Bazar Branch, Cox’s Bazar<br />
Comilla Branch, Comilla<br />
kDA Avenue Branch, Khulna<br />
Uposhahar Branch, Sylhet<br />
First security Islami Bank Limited<br />
Azampur Branch, Dhaka<br />
Banani Branch, Dhaka<br />
Bangshal Branch, Dhaka<br />
Banoshree Branch, Dhaka<br />
Biswa Road Branch, Dhaka<br />
Dhanmondi Branch, Dhaka<br />
Dilkusha Branch, Dhaka<br />
Donia Branch, Dhaka<br />
Gulshan Branch, Dhaka<br />
Islampur Branch, Dhaka<br />
Mirpur Branch, Dhaka<br />
Mohakhali Branch, Dhaka<br />
Motijheel Branch, Dhaka<br />
Ring Road Branch, Dhaka<br />
Savar Branch, Dhaka<br />
Senanibash Branch, Dhaka<br />
Topkhana Road Branch, Dhaka<br />
Collage Gate Branch, Gazipur<br />
Agrabad Branch, <strong>Chittagong</strong><br />
Andar Killah Branch, <strong>Chittagong</strong><br />
Bohaddarhat Branch, <strong>Chittagong</strong><br />
Hat Hazari Branch, <strong>Chittagong</strong><br />
Jubilee Road Branch, <strong>Chittagong</strong><br />
Khatungonj Branch, <strong>Chittagong</strong><br />
Patia Branch, <strong>Chittagong</strong><br />
Probortak Mor Branch, <strong>Chittagong</strong><br />
Chokioria Branch, Cox’s Bazar<br />
Cox’s Bazar Branch, Cox’s Bazar<br />
Comilla Branch, Comilla<br />
Rangpur Branch, Rangpur<br />
Bogra Branch, Bogra<br />
Rajshahi Branch, Rajshahi<br />
Ambarkhana Branch, Sylhet<br />
Sylhet Branch, Sylhet<br />
Taltola Branch, Sylhet<br />
Jessore Branch, Jessore<br />
Khulna Branch, Khulna<br />
Moulvibazar Branch, Moulvibazar<br />
Patuakhali Branch, Patuakhali<br />
Satkhira Branch, Satkhira<br />
Gobindagonj Branch, Sunamgonj<br />
Lakshmipur Branch, Lakshmipur<br />
Investment corporation <strong>of</strong> Bangladesh<br />
Head Office, Dhaka<br />
Local Office, Dhaka<br />
Barishal Branch, Barishal<br />
Bogra Branch, Bogra<br />
<strong>Chittagong</strong> Branch, <strong>Chittagong</strong><br />
Khulna Branch, Khulna<br />
Rajshahi Branch, Rajshahi<br />
Sylhet Branch, Sylhet<br />
one Bank Limited<br />
Banani Branch, Dhaka<br />
Banasree Branch, Dhaka<br />
Bangshal Branch, Dhaka<br />
Dhanmondi Branch, Dhaka<br />
Elaphant Road Branch, Dhaka<br />
Ganakbari (EPZ) Branch, Dhaka<br />
Gulshan Branch, Dhaka<br />
Imamganj Branch, Dhaka<br />
Jatrabari Branch, Dhaka<br />
Joypara Branch, Dhaka<br />
Kakrail Branch, Dhaka<br />
Kawran Bazar Branch, Dhaka<br />
Mirpur Branch, Dhaka<br />
Motijheel Branch, Dhaka<br />
Nawabgonj Branch, Dhaka<br />
Principal Branch, Dhaka<br />
Progati Sharani Branch, Dhaka<br />
Uttara Branch, Dhaka<br />
Narayanganj Branch, Narayanganj<br />
Agrabad Branch, <strong>Chittagong</strong><br />
CDA Avenue Branch, <strong>Chittagong</strong><br />
Jubilee Road Brahch, <strong>Chittagong</strong><br />
Khatunganj Branch, <strong>Chittagong</strong><br />
Nanupur Bazar Branch, <strong>Chittagong</strong><br />
Cox’s Bazar Branch, Cox’s Bazar<br />
DagonBhuiyan Branch, Feni<br />
Feni Branch, Feni<br />
Islampur Branch, Sylhet<br />
Sylhet Branch, Sylhet<br />
Chowmuhuni Branch, Noakhali<br />
Maijdee Court Branch, Noakhali<br />
Chandragonj Branch, Lakshmipur<br />
Raipur Branch, Laxmipur<br />
Ramganj Branch, Laxmipur<br />
Bogra Branch, Bogra<br />
Jessor Branch, Jessor<br />
Laksham Branch, Comilla<br />
Sherpur Branch, Moulvi Bazar<br />
Sirajgonj Branch, Sirajgonj<br />
shahjalal Islami Bank Limited<br />
Banani Branch, Dhaka<br />
Bangshal Branch, Dhaka<br />
Bijoynagar Branch, Dhaka<br />
College Gate Branch, Dhaka<br />
Dhaka Main Branch, Dhaka<br />
Dhanmondi Branch, Dhaka<br />
Foreign <strong>Exchange</strong> Branch, Dhaka<br />
Gulshan Branch, Dhaka<br />
Gulshan Sourh Av. Br. Dhaka<br />
Kawran Bazar Branch, Dhaka<br />
Mirpur Branch, Dhaka<br />
Mitford Branch, Dhaka<br />
Motijhee Branch, Dhaka<br />
Panthapath Branch, Dhaka<br />
Satmasjid Road Branch, Dhaka<br />
Savar Branch, Dhaka<br />
Uttara Branch, Dhaka<br />
Agrabad Branch, <strong>Chittagong</strong><br />
Chawkbazar Branch, <strong>Chittagong</strong><br />
Jubilee Road Branch, <strong>Chittagong</strong><br />
Khatunganj Branch, <strong>Chittagong</strong><br />
Muradpur Branch, <strong>Chittagong</strong><br />
Dargah Gate Branch, Sylhet<br />
Goala Bazar Branch, Sylhet<br />
Sylhet Branch, Sylhet<br />
Comilla Branch, Comilla<br />
southeast Bank Limited<br />
Aganagar Branch, Dhaka<br />
Agargaon Branch, Dhaka<br />
Ashulia Branch (Rural), Dhaka<br />
Banani Branch, Dhaka<br />
Bangshal Branch, Dhaka<br />
Bashundhara Branch, Dhaka<br />
Corporate Branch, Dhaka<br />
Dhanmondi Branch, Dhaka<br />
Imamganj Branch, Dhaka<br />
Kakrail Branch, Dhaka<br />
Mohammadpur Branch, Dhaka<br />
Mouchak Branch, Dhaka<br />
New Elephant Road Branch, Dhaka<br />
New Eskaton Branch, Dhaka<br />
Pragati Sarani Branch, Dhaka<br />
Principal Branch, Dhaka<br />
Sat Mashjid Road Branch, Dhaka<br />
Savar Branch, Dhaka<br />
Shaymoli Branch, Dhaka<br />
Uttara Branch, Dhaka<br />
Madhabdi Branch (Rural), Narshingdi<br />
Narayanganj Branch, Narayanganj<br />
Tongi Branch, Gazipur<br />
CDA Avenue Branch, <strong>Chittagong</strong><br />
Halishahar Branch, <strong>Chittagong</strong><br />
Madambibir Hat Branch, <strong>Chittagong</strong><br />
Momin Road Branch, <strong>Chittagong</strong><br />
Pahartali Branch, <strong>Chittagong</strong><br />
Cox’s Bazar Branch, Cox’s Bazar<br />
Chhagalnaiya Branch, Feni<br />
Feni Branch, Feni<br />
Kulaura Branch (Rural), Moulvi Bazar<br />
Moulvibazar Branch, Moulvi Bazar<br />
Bandar Bazar Branch, Sylhet<br />
Chouhatta Branch, Sylhet<br />
Laldighirpaar Branch, Sylhet<br />
Pathantula Branch, Sylhet<br />
Barisal Branch, Barisal<br />
Bashurhat Branch (Rural), Noakhali<br />
Bogra Branch, Bogra<br />
Comilla Branch, Comills<br />
Khulna Branch, Khulna<br />
Naogaon Branch, Naogaon<br />
Rajshahi Branch, Rajshahi<br />
Rangpur Branch, Rangpur<br />
standard chartered Bank<br />
Mirpur(OPC) Branch, Dhaka<br />
Motijheel(OPC) Branch, Dhaka<br />
Agrabad Branch, <strong>Chittagong</strong><br />
Nasirabad Branch, <strong>Chittagong</strong><br />
Bogra Branch, Bogra<br />
Khulna Branch, Khulna<br />
Sylhet Branch, Sylhet<br />
trust Bank Limited<br />
Dilkusha Corp. Branch, Dhaka<br />
Kafrul Branch, Dhaka<br />
Millenium Branch, Dhaka<br />
Principal Branch, Dhaka<br />
Radisson Hotel Branch, Dhaka<br />
Savar Cantonment Branch, Dhaka<br />
Sena Kalyan Bhaban Branch, Dhaka<br />
Uttara Corporate Branch, Dhaka<br />
Joydebpur Branch, Gazipur<br />
Tongi Branch, Gazipur<br />
<strong>Chittagong</strong> Cant. Branch, <strong>Chittagong</strong><br />
Naval Base Branch, <strong>Chittagong</strong><br />
Feni Branch, Feni<br />
Beanibazar Branch, Sylhet<br />
Jalalabad Cant. Br., Sylhet<br />
Comilla Cant. Branch, Comilla<br />
Ashugonj Branch, Brahmanbaria<br />
Bogra Cantonment Branch, Bogra<br />
Chowmohoni Branch, Noakhali<br />
Jessore Cantonment Branch, Jessore<br />
Khulna Branch, Khulna<br />
Khwaja Yunus Medical College Br., Sirajgonj<br />
Momenshahi Cant. Branch, Mymensingh<br />
Narsingdi Branch, Narsingdi<br />
Rangpur Cant. Branch, Rangpur<br />
S.S. Cantonment Branch, Tangail<br />
BrAc Bank Limited<br />
Asad Gate Branch, Dhaka<br />
Banani Branch, Dhaka<br />
Bashundhara Branch, Dhaka<br />
Donia Branch, Dhaka<br />
Eskaton Branch, Dhaka<br />
Graphics Building Branch, Dhaka<br />
Gulshan Branch, Dhaka<br />
Manda Branch, Dhaka<br />
Mirpur Branch, Dhaka<br />
Nawabpur Branch, Dhaka<br />
Narayangonj Branch, Narayangonj<br />
Rampura Branch, Dhaka<br />
Shyamoli Branch, Dhaka<br />
Uttara Branch, Dhaka<br />
Agrabad Branch, <strong>Chittagong</strong><br />
CDA Avenue Branch, <strong>Chittagong</strong><br />
Halisohor Branch, <strong>Chittagong</strong><br />
KazirDeuri Branch, <strong>Chittagong</strong><br />
Momin Road Branch, <strong>Chittagong</strong><br />
Bogra Branch, Bogra<br />
Rajshahi Branch, Rajshahi<br />
Jessore Branch, Jessore<br />
Khulna Branch, Khulna<br />
Barishal Branch, Barishal<br />
Zindabazar Branch, Sylhet<br />
115<br />
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116<br />
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PROSPECTUS<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise<br />
Interested persons are entitled to a prospectus, if they desire, and that copies <strong>of</strong> prospectus may be obtained from the issuer and the issue manager<br />
����<br />
Barakatullah electro Dynamics Limited<br />
Application Form<br />
APPLIcAtIoN For sHAres BY NoN-resIDeNt BANGLADesHI(s)<br />
(TO BE SENT DIRECTLY TO THE COMPANY’S CORPORATE OFFICE)<br />
Warning: Please read the instructions at the back <strong>of</strong> this form. Incorrectly filled applications or failing to comply with any <strong>of</strong> the<br />
instructions there in, applications may be rejected.<br />
the Managing Director<br />
Barakatullah Electro Dynamics Limited<br />
6/A/1 (2nd floor), Segunbagicha<br />
Ramna, Dhaka-1000, Bangladesh<br />
Dear Sir,<br />
I/we apply for and request you to allot me/us the following number <strong>of</strong> Shares and I/we agree to accept the same or any smaller<br />
number that may be allotted to me/us upon the terms <strong>of</strong> the Company’s approved <strong>Prospectus</strong> and subject to the Memorandum and<br />
Articles <strong>of</strong> Association <strong>of</strong> the Company. Further, I/we authorize you to place my/our name(s) on the Register <strong>of</strong> Members <strong>of</strong> the<br />
Company as the holder(s) <strong>of</strong> …………………Shares allotted to me/us pursuant to this application and credit the said shares to my BO<br />
(Beneficiary Owner) Account and/or in respect <strong>of</strong> any application money refundable by crediting directly to the first applicant’s bank<br />
account stated below:<br />
1. No. <strong>of</strong> Shares ……………………………. <strong>of</strong> Tk. 60/- each including a premium <strong>of</strong> Tk. 50/- per share.<br />
2. Amount <strong>of</strong> Tk ( in figure) …………………, (in words) …………………………………………………………………….. only Convertible into<br />
US Dollar 1.00 = Tk …………, UK Pound Sterling 1.00 = Tk …………, and Euro 1.00 = Tk …………<br />
3. Payment by cheque/draft no. ………………………………. dated ………….…………… for US Dollar or UK Pound Sterling or Euro or<br />
Tk. ……………… drawn on ………………………..…………… Bank ………………………… Branch.<br />
5.<br />
6.<br />
4. Depository (B/O) Account Number<br />
(If you do not mention your valid BO (Beneficiary Owners) account, your application will be treated as invalid)<br />
I/we agree to fully abide by the instructions given herein.<br />
Particulars <strong>of</strong> Applicant(s):<br />
a) sole/First Applicant<br />
Name:<br />
Father’s/Husband’s name:<br />
Mother’s name:<br />
Mailing Address:<br />
Occupation: Nationality:<br />
Passport No.: Valid up to:<br />
Date <strong>of</strong> Birth:<br />
For refund warrant: Applicant’s Bank A/C No.:<br />
Name <strong>of</strong> the Bank: Branch:<br />
the applicant shall provide with the same Bank Account number in the application form as it is in the Bo account <strong>of</strong> the applicant.<br />
otherwise the application will be considered invalid and the subscription money may be forfeited.<br />
b) second Applicant<br />
Name:<br />
Father’s/Husband’s name:<br />
Mother’s name:<br />
Mailing Address:<br />
Occupation: Nationality:<br />
Passport No.:<br />
Date <strong>of</strong> Birth:<br />
Nominee:<br />
Valid up to:<br />
Name:<br />
Mailing Address:<br />
7. I/we hereby declare that I/we have read the <strong>Prospectus</strong> <strong>of</strong> Barakatullah electro Dynamics Limited and have willingly<br />
subscribed for ……………. no. <strong>of</strong> shares <strong>of</strong> Tk. 60/- each including a premium <strong>of</strong> Tk. 50/- per share on this form.<br />
8. specimen signature(s):<br />
Sole/First Applicant:<br />
Second Applicant:<br />
Nominee:<br />
Name in Block Letters signature<br />
116
Instructions<br />
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
1. As per provision <strong>of</strong> Depository Act, 1999 and regulations made thereunder shares will be only be issued in<br />
dematerialized condition. Please mention your BO (Beneficiary Owner) account number in the Application form. If<br />
you do not mention your valid BO (Beneficiary Owner) Account, your application will be treated as invalid.<br />
2. All information must be written or typed in block letters in English and must not be abbreviated.<br />
3. Application must not be for less than 200 Ordinary shares and must be for a multiple <strong>of</strong> 200 ordinary shares. Any<br />
application not meeting this criterion will not be considered for allotment purpose.<br />
4. An application must be accompanied by a foreign demand draft drawn on a bank payable at Dhaka or cheque<br />
drawn out <strong>of</strong> foreign currency deposit account maintained in Bangladesh for the full value <strong>of</strong> shares favoring<br />
“Barakatullah electro Dynamics Limited” and crossed “Account payee only”.<br />
5. An application shall be sent by the applicant directly to the Company by 10/03/2011 so as to reach the Company<br />
by 19/03/2011. Applications sent after 10/03/2011 or received by the Company after 19/03/2011 will not<br />
be considered for allotment purpose.<br />
6. Refund against over-subscription shall be made in the currency in which the value <strong>of</strong> shares was paid for by the<br />
applicant at the same rate as stated on the application form through Account Payee cheque payable at Dhaka with<br />
bank account number, bank’s name and branch as indicated in the securities application form.<br />
7. In case <strong>of</strong> over-subscription, allotment shall be made by lottery solely in accordance with the instructions by<br />
SEC.<br />
8. Money receipt on clearance <strong>of</strong> draft or cheque, as the case may be, shall be sent by post to the applicant by the<br />
Company.<br />
9. Joint application by two persons will be acceptable. In such a case, allotment or refund shall be made to the first<br />
applicant.<br />
10. Application must be made by an individual, a corporation or company, a trust or a society and not by a firm, minor<br />
or persons <strong>of</strong> unsound mind.<br />
11. In the case <strong>of</strong> non-allotment <strong>of</strong> securities, if the applicants’ bank accounts as mentioned in their <strong>IPO</strong> Application<br />
Forms are maintained with the Bankers to the Issue, refund amount <strong>of</strong> those applicants will be directly credited<br />
into the respective bank accounts as mentioned in their <strong>IPO</strong> Application Forms. Otherwise, refund will be made<br />
only through “Account Payee” cheque(s) with bank account number and name <strong>of</strong> bank branch as mentioned in the<br />
application payable at Dhaka or <strong>Chittagong</strong>, as the case may be.<br />
12. Making <strong>of</strong> any false statement in the application or supplying <strong>of</strong> incorrect information therein or suppressing any<br />
relevant information in the application shall make the Application liable to rejection and subject to forfeiture <strong>of</strong><br />
application money and/or forfeiture <strong>of</strong> share (unit) before or after issuance <strong>of</strong> the same by the issuer. The said<br />
forfeited Application money or share (unit) will be deposited in account specified by the Securities and <strong>Exchange</strong><br />
Commission (SEC). This may be in addition to any other penalties as may be provided for by the law.<br />
13. The intending NRB applicants shall deposit share money by US$/UK Pound Sterling/EURO draft drawn on any<br />
Bank and payable in Dhaka, Bangladesh, or through a nominee by paying out <strong>of</strong> foreign currency deposit account<br />
maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned<br />
bank, for the value <strong>of</strong> securities applied for through crossed bank cheque marking “Account Payee only”. So that<br />
the issuer’s collecting bank can clear the proceeds and deposit the same into issuer bank’s account in time.<br />
14. The spot buying rate (TT Clean) in US$, UK Pound Sterling and EURO <strong>of</strong> Sonali Bank at the day <strong>of</strong> subscription<br />
opening will be applicable for the Non-Resident Bangladeshi (NRB) applicants.<br />
15. the applicant shall furnish photocopies <strong>of</strong> relevant pages <strong>of</strong> valid passports in support <strong>of</strong> his being<br />
a NrB, duel citizenship or <strong>of</strong> the foreign passport bearing an endorsement from the concerned<br />
Bangladeshi embassy to the effect that no visa is required for him to travel to Bangladesh.<br />
16. In case <strong>of</strong> joint NRB application joint applicants shall also submit supporting papers/documents in support <strong>of</strong> their<br />
being an NRB as mentioned in para-15 above.<br />
17. An applicant cannot submit more than two applications, one in his/her own name and another<br />
jointly with another person. In case an applicant makes more than two applications, all applications<br />
will be treated as invalid and will not be considered for allotment purpose. In addition, whole or part<br />
<strong>of</strong> application money may be forfeited by the commission.<br />
18. No sale <strong>of</strong> securities shall be made nor shall any money be taken from any person, in connection with<br />
such sale until twenty five days after the prospectus have been published.<br />
tHe NrB APPLIcAtIoN ALoNG WItH tHe ForeIGN currNeNcY DrAFt, As ABoVe, Is to Be suBMItteD to<br />
tHe coMPANY’s corPorAte oFFIce DIrectLY WItHIN tHe stIPuLAteD tIMe MeNtIoNeD IN PArA 5.<br />
117<br />
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PROSPECTUS<br />
ADDITIONAL DISCLOSURE BY THE AUDITOR AS PER REQUIREMENT BY<br />
THE SECURITIES AND EXCHANGE COMMISSION (SEC)<br />
sec Query No 1<br />
Detail calculation <strong>of</strong> weighted average number <strong>of</strong> shares outstanding during the year<br />
compliance with Query No 1<br />
earnings Per share (ePs):<br />
Basic Earnings Per Share:<br />
Weighted Average No. <strong>of</strong> Ordinery Share Outstanding as at 30 June 2010:<br />
Date <strong>of</strong> Allotment ordinery share<br />
Weighted no. <strong>of</strong><br />
Days<br />
calculation<br />
Weighted Average No.<br />
<strong>of</strong> share<br />
01-07-2009 35,000,000.00 - - 35,000,000.00<br />
19-07-2009 20,000,000.00 342 =20000000*342/360 19,000,000.00<br />
17-09-2009 5,000,000.00 284 =5000000*284/360 3,944,444.44<br />
60,000,000.00 57,944,444.44<br />
Weighted Average No. <strong>of</strong> Ordinery Share Outstanding (a) 57,944,444<br />
Pr<strong>of</strong>it attributable to the ordinery shareholders (b) 102,053,354<br />
Basic Earnings per share (c=b/a) 1.76<br />
sec Query No 2<br />
Break up <strong>of</strong> employee benefits as included in note 29.00A <strong>of</strong> the Audited Accounts for the year ended 30th June , 2010<br />
compliance with Query No 2<br />
Break up <strong>of</strong> employee benefit as details below:<br />
Name Position Period Amount in tk. remarks<br />
Mr. Faisal Ahmed Chowdhury Chairman, Head <strong>of</strong> Planning & Business Development July’09 to June’10 1,980,000 Remuneration<br />
Mr. Gulam Rabbani Chowdhury Managing Director July’09 to June’10 1,980,000 Remuneration<br />
Mr. Md. Ahsanul Kabir Vice Chairman, Head <strong>of</strong> Administration July’09 to June’10 990,000 Remuneration<br />
Mr. Fahim Ahmed Chowdhury Director, Project Director July’09 to June’10 967,500 Remuneration<br />
Mr. Nayem Ahmed Chowdhury Director, Former Head <strong>of</strong> Administration July’09 to Oct ‘09 330,000 Remuneration<br />
Mr. Alimus Sadat Chowdhury Director, Head <strong>of</strong> Procurement Dec. ‘09 to June’10 140,000 Remuneration<br />
Mr. Md. Monsur Alam Chowdhury Director, Former Asstt. Head <strong>of</strong> Procurement July’09 to Nov ‘09 348,000 Remuneration<br />
Mr. Khijir Khan Director-Technical July’09 to June’10 1,200,000 Honorarium<br />
Mr. Muhammed Monirul Islam Chief Financial Officer & Company Secretary July’09 to June’10 1,222,200 Salary<br />
Mr. Abdullah Al Saiful Islam Plant Manager July’09 to June’10 1,076,900 Salary<br />
totAL 10,234,600<br />
sec Query No 3<br />
Note 8.00 <strong>of</strong> the audited accounts shows amount <strong>of</strong> capital work-in-progress as Tk.178,74,36,095.00 as on 30.06.2009 which is<br />
shown as nil on 30.06.2010. Explain it.<br />
compliance with Query No 3<br />
In note 8.00 <strong>of</strong> the audited accounts as on 30 June 2010 state that work in process is nil as on 30th June 2010 which was Tk.<br />
178,74,36,095.00 as on 30th June 2009 due to the said capital expenditure has been recognized and capitalized under plant &<br />
machinery and building & civil construction in current year.<br />
SEC Query No 4<br />
Confirm whether holding <strong>of</strong> the post <strong>of</strong> head <strong>of</strong> planning and business development by Mr. Faisal Ahmed Chowdhury, head <strong>of</strong><br />
procurement by Mr. Alimus Sadat Chowdhury and Project director by Mr. Fahim Ahmed Chowdhury are in line with the section 104 <strong>of</strong><br />
the Companies Act, 1994.<br />
Compliance with Query No 4<br />
Holding <strong>of</strong> the post <strong>of</strong> head <strong>of</strong> planning and business development by Mr. Faisal Ahmed Chowdhury, Mr. Md. Ahsanul kabir- head <strong>of</strong><br />
administration, head <strong>of</strong> procurement by Mr. Alimus Sadat Chowdhury and Project director by Mr. Fahim Ahmed Chowdhury are in line<br />
with the section 104 <strong>of</strong> the Companies Act, 1994.<br />
Dated, Dhaka Sd/-<br />
02 December 2010 HAQUE SHAHALAM MANSUR & CO.<br />
Chartered Accountants
Barakatullah Electro Dynamics Limited<br />
Lighting Bangladesh, We Promise...<br />
ADDITIONAL DISCLOSURE BY THE MANAGEMENT OF BARAKATULLAH<br />
ELECTRO DYNAMICS LIMITED AS REQUIRED BY<br />
THE DHAKA STOCK EXCHANGE LIMITED (DSE)<br />
Query-1: Pre-operating expenses not recognized as expenses when incurred<br />
Barakatullah Electro Dynamics Limited was incorporated on 26 June 2007 and started its commercial operation on<br />
24 October 2009. Pre-operating expenses amounting to Tk. 41,486,387 is the accumulated figures <strong>of</strong> all deferred<br />
expenses <strong>of</strong> revenue nature incurred between the date <strong>of</strong> incorporation and date <strong>of</strong> commercial operation.<br />
The Company has prepared its financial statements in compliance with the requirement <strong>of</strong> the Companies Act 1994.<br />
Since the Company is not a listed Company, the Company followed the requirement <strong>of</strong> Companies Act 1994 in recognizing<br />
pre-operating expenses. Para-M, Part-I, Schedule-XI <strong>of</strong> Companies Act 1994 permits deferral <strong>of</strong> administrative expenses<br />
which can reasonably be amortized over a certain period <strong>of</strong> time. Para-N, Part-I, Schedule-XI <strong>of</strong> Companies Act 1994<br />
also stipulates that if costs are deferred, those should be allocated on systematic basis to future accounting periods.<br />
The Board <strong>of</strong> Directors <strong>of</strong> the Company decided to defer the administrative expenses incurred between the date <strong>of</strong><br />
incorporation and date <strong>of</strong> commercial operation and amortized over 15 years from the year <strong>of</strong> commercial operation<br />
[Amortization period and amortization expenses are disclosed in the notes 7 and 21 to the financial statements].<br />
In the past, Securities and <strong>Exchange</strong> Commission has also allowed in some cases to recognize pre-operating expenses<br />
in accordance with the requirement <strong>of</strong> Para-M, Part-I, Schedule-XI <strong>of</strong> the Companies Act 1994. We refer the following<br />
prospectus in this regard for your perusal.<br />
o<br />
o<br />
o<br />
o<br />
Deshbandhu Polymer Limited<br />
BSRM Steels Limited<br />
Summit Power Limited<br />
Lafarge Surma Cement Limited<br />
Query-2: No Workers Participation Fund and Workers welfare Fund<br />
The Board <strong>of</strong> Directors <strong>of</strong> the Company is fully aware <strong>of</strong> the employees’ benefit stated in the Bangladesh Labor Act<br />
2006 and already introduced a Contributory Provident Fund recognized by the National Board <strong>of</strong> Revenue vide its<br />
letter no. dated 26 October 2010 (enclosed)and also implemented a<br />
Gratuity Fund for the employees with effect from 1 July 2010 which was disclosed in the note 33.00a to the audited<br />
financial statements.<br />
Since the Company is a capital intensive company rather than labor intensive, the Board <strong>of</strong> Directors <strong>of</strong> the Company<br />
found it impracticable to form Workers’ Pr<strong>of</strong>it Participations Fund in the initial stage <strong>of</strong> the Company.<br />
However, The Board <strong>of</strong> Directors <strong>of</strong> the company will be introducing a Workers’ Pr<strong>of</strong>it Participation Fund from January<br />
2011.<br />
Query-3: Wrong accounting treatment <strong>of</strong> advance payment <strong>of</strong> tax<br />
The Company made a Power Purchase Agreement (PPA) with Bangladesh Power Development Board (BPDB) agreeing<br />
to supply 51 MW net electrical power to BPDB for a period <strong>of</strong> 15 years. As per section 52N <strong>of</strong> the Income Tax Ordinance<br />
1984, at the time <strong>of</strong> payment to power rental company on account <strong>of</strong> purchase <strong>of</strong> rental power from the company,<br />
BPDB shall deduct tax @ 4% which shall be treated as final discharge <strong>of</strong> tax liability <strong>of</strong> the rental power company<br />
regarding the sale <strong>of</strong> such rental power.<br />
In accordance with the above section, income tax deducted at source by the BPDB amounting to Tk. 15,198,563 is the<br />
final discharge <strong>of</strong> tax liability and which is the ultimate tax expense <strong>of</strong> the Company for the current year.<br />
Income Tax paid under section 52N <strong>of</strong> the Income Tax Ordinance 1984 was presented under the head ‘General &<br />
Administrative expenses’ which is not an advance tax in nature rather current tax expenses <strong>of</strong> the Company and should<br />
have been presented under the head ‘Provision for tax’ in the Income Statement. This was an inadvertent mistake in<br />
presentation.<br />
sd/-<br />
Gulam rabbani chowdhury<br />
Director & Managing Director<br />
Dated: 19 December 2010<br />
119<br />
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PROSPECTUS<br />
ADDITIONAL DISCLOSURE BY THE MANAGEMENT OF<br />
BARAKATULLAH ELECTRO DYNAMICS LIMITED<br />
Disclosure 1: Increase <strong>of</strong> Authorized capital<br />
The shareholders <strong>of</strong> the Company in its 6th extra ordinary general meeting held on 28 December 2010 unanimously approved<br />
to increase authorized capital <strong>of</strong> the company from Tk. 100 crore to Tk. 300 crore. The relevant clauses <strong>of</strong> Memorandum <strong>of</strong><br />
Association & Articles <strong>of</strong> Association have been amended accordingly. RJSC certified copy <strong>of</strong> Special Resolution with related<br />
documents have been submitted to the Securities and <strong>Exchange</strong> Commission in this respect.<br />
Disclosure 2: Approval <strong>of</strong> stock Dividend<br />
The shareholders <strong>of</strong> the Company in its 3rd Annual General Meeting held on 28 December 2010 unanimously approved 10%<br />
stock dividend for the year ended 30 June 2010. Presently paid up capital <strong>of</strong> the company is Tk. 66 crore. RJSC certified<br />
copy <strong>of</strong> Return on Allotment with related documents have been submitted to the Securities and <strong>Exchange</strong> Commission in<br />
this regard.<br />
Sd/-<br />
Gulam rabbani chowdhury<br />
Director & Managing Director<br />
Dated:20 January 2011