BArAKAtuLLAH eLectro DYNAMIcs LIMIteD Electro Dynamics Limited... · Barakatullah Electro Dynamics Limited ... Jiban Bima Tower ... Financial statements 59 Auditors’ report to the

Barakatullah Electro Dynamics Limited Lighting Bangladesh, We Promise...

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“If you have any query about this document, you may consult issuer, issue manager and underwriter”

ProsPectusProsPectusFor Public offering of 20,000,000 ordinary shares of tk. 60/- each including

a premium of tk. 50/- per share totaling tk. 1,200,000,000/- of

BArAKAtuLLAH eLectro DYNAMIcs LIMIteD Opening Date for Subscription: 6 March 2011 Closing Date for Subscription: 10 March 2011

For Non-Resident Bangladeshi Quota Subscription Closes on: 19 March 2011

MANAGer to tHe IssueMANAGer to tHe IssuePrime Finance capital Management Limited

63 Dilkusha C/A (3rd Floor), Dhaka-1000, Phone: 9563883 Fax: 9563692E-mail: [email protected] ; Website: www.primefincap.com

uNDerWrItersuNDerWrIters

Bangladesh Mutual securities LimitedShareef Mansion (7th Floor), 56-57, Motijheel C/A Dhaka-1000

Bank Asia LimitedTea Board Building (1st Floor), 111-113, Motijheel C/A, Dhaka-1000

ec securities LimitedNafi Tower (6th Floor), Plot No. 53, Gulshan South C/A, Gulshan-1, Dhaka-1212

Grameen capital Management LimitedGrameen Bank Bhaban (10th Floor), Mirpur-2, Dhaka-1216

IcB capital Management LimitedBDBL Bhaban (14th Floor), 8 D.I.T Avenue, Dhaka-1000

IDLc Finance LimitedEunoos Trade Center (Level 21), 52-53 Dilkusha C/A, Dhaka-1000

LankaBangla Finance LimitedSafura Tower (Level 11), 20 Kemal Ataturk Avenue, Banani, Dhaka-1213

Mercantile securities LimitedParamount Heights (13th Floor), 65/2/1 Box Culvert Road

Purana Paltan, Dhaka-1000

Prime Bank Investment LimitedPeoples Insurance Bhaban (11th Floor), 36 Dilkusha C/A, Dhaka-1000

Prime Finance capital Management Limited63, Dilkusha C/A (3rd Floor), Dhaka-1000

southeast Bank LimitedEunoos Centre (Level 2), 52-53 Dilkusha C/A, Dhaka-1000

swadesh Investment Management LimitedUnique Trade Center (Level 11), Suit No. 01, 8 Panthapath

Kawran Bazar, Dhaka-1215

union capital LimitedNoor Tower (5th Floor), 73 Sonargaon Road, Dhaka-1205

uttara Finance and Investments LimitedJiban Bima Tower (6th Floor), 10 Dilkusha C/A, Dhaka-1000

BANKers to tHe IssueBANKers to tHe Issue

Investment Corporation of Bangladesh (ICB)Bank Asia LimitedDhaka Bank LimitedFirst Security Islami Bank LimitedOne Bank Limited

BRAC Bank LimitedShahjalal Islami Bank LimitedSoutheast Bank LimitedStandard Chartered BankTrust Bank Limited

creDIt rAtING creDIt rAtING credit rating by: Credit Rating Agency of Bangladesh Limited (CRAB)

rating: Long term AA 2

Date of Prospectus: 1 February 2011

the issue shall be placed in “N” category

“SECURITIES UNDER THE SECURITIES AND EXCHANGE ORDINANCE, 1969, AND THE SECURITIES AND EXCHANGE COMMISSION (PUBLIC ISSUE) RULES, 2006. IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS CONSENT THE COMMISSION DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE ISSUER COMPANY, ANY OF ITS PROJECTS OR THE ISSUE PRICE OF ITS SECURITIES OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINION EXPRESSED WITH REGARD TO THEM. SUCH RESPONSIBILITY LIES WITH THE ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER, ISSUE MANAGER, UNDERWRITER AND/OR AUDITOR”

Barakatullah electro Dynamics Limited(AN Iso 9001:2008 certIFIeD coMPANY)

REGISTERED OFFICE102-Azadi, Mirboxtola, Sylhet-3100

Phone: 0821-2832117 ; Fax : 0821-2830282E-mail: [email protected]

Website: www.bedlbd.com

CORPORATE OFFICE6/A/1 (2nd Floor), Segunbagicha, Ramna, Dhaka-1000Phone: 02-9572305, 02-9560339 ; Fax : 02-9559015

E-mail: [email protected]: www.bedlbd.com

PROSPECTUS2

ELEBARATION OF ABBREVIATED TERMSELEBARATION OF ABBREVIATED TERMS

BEDL/The Company Barakatullah Electro Dynamics LimitedBSA Bangladesh Standards on AuditingBPDB Bangladesh Power Development BoardBOO Build-Own-OperateBAS Bangladesh Accounting StandardsBO Account Beneficiary Owners AccountCSE Chittagong Stock Exchange LimitedCDBL Central Depository Bangladesh LimitedCIB Credit Information BureauDSE Dhaka Stock Exchange LimitedGOB Government of BangladeshIAS International Accounting StandardsICAB Institute of Chartered Accountants of BangladeshIDCOL Infrastructure Development Company LimitedIIDFC Industrial & Infrastructure Development Finance Company LimitedJGTDSL Jalalabad Gas Transmission and Distribution System LtdNRB Non Resident BangladeshiNAV Net Asset ValueO&M Operation & MaintenancePPA Power Purchase AgreementGEN SET Generator PLANT FACTOR Generation capacity (KWH) proportionate to the Rendering capacity (KWH) MICR Magnetic Ink Character RecognitionFC Account Foreign Currency Account


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AVAILABILITY OF PROSPECTUSAVAILABILITY OF PROSPECTUS

Prospectus of Barakatullah Electro Dynamics Limited may be obtained from the Issuer Company, Issue Manager, Underwriters and the Stock Exchanges as follows:

company contact Person telephone Number

Barakatullah electro Dynamics LimitedRegistered Office: 102-Azadi, Mirboxtola, Sylhet-3100Corporate Office: 6/A/1 (2nd Floor), SegunbagichaRamna, Dhaka-1000

Monoj Das GuptaAssistant Manager

Nasirul Islam (Kazol)Assistant Manager

+880-821-2832117,+880-2-9572305,+880-2-9560339

Manager to the issue contact Person telephone Number

Prime Finance capital Management Limited 63, Dilkusha C/A (3rd Floor)Dhaka-1000

M. Mosharraf Hossain PhD, FcAManaging Director & CEO

9563883

underwriters contact Person telephone Number

Bangladesh Mutual securities LimitedShareef Mansion (7th Floor), 56-57, Motijheel C/ADhaka-1000

suman chandra ModakAssistant Vice President 7169428

Bank Asia LimitedTea Board Building (1st Floor) , 111-113, Motijheel C/A, Dhaka-1000

Md. Ashrafuddin AhmedSenior Vice President 7177031-32

ec securities LimitedNafi Tower (6th Floor), Plot No. 53, Gulshan South C/A, Gulshan-1, Dhaka-1212

Mohammad Khurshid AlamHead of Monitoring &

Settlement8818108-9

Grameen capital Management LimitedGrameen Bank Bhaban (10th Floor), Mirpur-2Dhaka-1216

shieadul MorsalinHead of Merchant Banking 9005257-69

IcB capital Management LimitedBDBL Bhaban (14th Floor), 8 D.I.T AvenueDhaka-1000

Md. Abdur roufChief Executive Officer 7160326-7

IDLc Finance LimitedEunoos Trade Center (Level 21), 52-53 Dilkusha C/ADhaka-1000

Md. MoniruzzamanHead of Merchant Banking 9571170

LankaBangla Finance LimitedA-A Bhaban (Level 6), 23 Motijheel C/ADhaka-1000

M. shakil Islam BhuiyanHead of Merchant Banking 9561238

Mercantile securities LimitedParamount Heights (13th Floor), 65/2/1 Box Culvert Road, Purana Paltan, Dhaka-1000

Mustofa KamalChief Executive Officer 7119654

Prime Bank Investment LimitedPeoples Insurance Bhaban (11th Floor), 36 Dilkusha C/A, Dhaka-1000

sheikh Mortuza AhmedChief Executive Officer 9555674

Prime Finance capital Management Limited 63, Dilkusha C/A (3rd Floor)Dhaka-1000

M. Mosharraf Hossain PhD, FcAManaging Director & CEO 9563883

southeast Bank LimitedEunoos Centre (Level 2), 52-53 Dilkusha C/ADhaka-1000

Farjana Akter sadiAssistant Vice President 9571115

swadesh Investment Management LimitedUnique Trade Center (Level 11), Suit No. 01, 8 Panthapath, Kawran Bazar, Dhaka-1215

Mamun AhmedManaging Director 8158166

union capital LimitedNoor Tower (5th Floor), 73 Sonargaon RoadDhaka-1205

Abul Munim KhanExecutive Vice President &

Head of Business9662888

uttara Finance and Investments LimitedJiban Bima Tower (6th Floor), 10 Dilkusha C/ADhaka-1000

Mohammad shahinur rahmanPrincipal Officer,

Merchant Banking9568207

PROSPECTUS4

stock exchanges Available At telephone Number

Dhaka stock exchange Ltd.9/F Motijheel C/ADhaka–1000

DSE Library 9564601-7

chittagong stock exchange Ltd. 1080 Sheikh Mujib Road, AgrabadChittagong–4100

CSE Library(031) 714632-3(031) 720871-3

Prospectus is also available on these web sites www.secbd.org, www.primefincap.com, www.bedlbd.com, www.dsebd.org, www.csebd.com and public reference room of the Securities and Exchange Commission (SEC) for reading and study.

CORPORATE DIRECTORYCORPORATE DIRECTORY

reGIstereD oFFIce corPorAte oFFIce PLANtreGIstereD oFFIce corPorAte oFFIce PLANt102-Azadi, Mirboxtola 6/A/1 (2nd Floor), Segunbagicha, Ramna FenchugonjSylhet-3100, Bangladesh Dhaka-1000, Bangladesh Sylhet, BangladeshTel: +880-821-2832117 Tel: +880-2-9572305, 9560339 Fax: +880-821-2830282 Fax: +880-2-9559015

E-mail: [email protected] Web Site: www.bedlbd.com

AUDITORAUDITOR

HAQue sHAHALAM MANsur & co.Chartered Accountants

27- Bijoy Nagar, Shaj Bhaban (6th Floor), B-11

Dhaka-1000, Bangladesh

Tel: +880-2-8311197, 9358787

Fax: +880-2-9362649

E-mail: [email protected]


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TABLE OF CONTENTSTABLE OF CONTENTSItem Page No.

Disclosure in respect of issuance of securities in demat form 7conditions under section 2cc of the securities and exchange ordinance, 1969 7General information 11Declarations and due diligence certificates 12Declaration about the responsibility of the Directors including the CEO of the Company in respect of the prospectus 12Consent of the Director(s) to Serve a Director(s) 13Declaration about filing of prospectus with the Registrar of Joint Stock Companies & Firms 13Due Diligence Certificate of Manager to the Issue 14Due Diligence Certificates of the Underwriter(s) 15risk factors & management perceptions about the risks 16capital structure 18use of IPo proceeds 18Description of business 19Company at a glance 19Important dates 19Nature of business 19Principal products and services 19Market for products and services 19Relative contribution of the product/service that account for more than 10% of the total revenue 19Associate, subsidiary/related holding company 19Distribution of products/services 19Competitive condition in business 20Sources and availability of raw materials and the name of principal suppliers 20Sources of, and requirement for power, gas and water or any other utilities 20Customer providing 10% or more revenues 20Description of contract(s) with principal suppliers/customers 20Material patents, trademarks, licenses or royalty agreements 21Number of employees 21Production or service rendering capacity and current utilization 22Description of property 23Plan of operation and discussion of financial condition 23Internal and external sources of cash 23Material commitment for capital expenditure 24Causes for material changes from period to period 24Seasonal aspect of the company’s business 24Known trends, events or uncertainties 24Changes in the assets of the company used to pay off any liabilities 24Loan taken from holding/parent company or subsidiary company 24Loan given to holding/parent company or subsidiary company 24Future contractual liabilities 24Future capital expenditure 24VAT, income tax, customs duty or other tax liability 25Operating lease during the last five years 25Financial lease commitment 25Personnel related scheme 25Breakdown of issue expenses 26Revaluation of assets 27Transactions with subsidiary/holding company or associate companies 27Auditors’ special report regarding allotment of shares for consideration other than for cash 27

PROSPECTUS6

Material information which is likely to have an impact 27Directors and officers 28Information regarding directorship 28Directors’ involvement in other organization 29Family relationship among directors and top five officers 30Short bio-data of the directors 31Credit Information Bureau (CIB) report 31Description of senior executives and departmental heads 34Involvement of Directors and officers in certain legal proceedings 34certain relationships and related transactions 35Transaction with related parties 35Directors’ facilities 35executive compensation 36Remuneration paid to top five salaried officers 36Aggregate amount of remuneration paid to directors and officers 36Future compensation 36Pay increase intention 36Options granted to Directors, officers and employees 36transaction with the Directors and subscribers to the Memorandum 36tangible assets per share 38ownership of the company’s securities 39Shareholding structure 39Securities owned by the officers 39Determination of offering price 40Market for the securities being offered 45Description of securities outstanding or being offered 45Dividend, voting, pre-emption rights 45Conversion and liquidation rights 45Dividend policy 45Other rights of stockholders 46Debt securities 46Lock-in on sponsors’ shares 46refund of subscription money 53Subscription by and refund to non-resident Bangladeshi (NRB) 54Availability of securities 54Offer 54Application for subscription 54Allotment 57underwriting of shares 57Principal terms and conditions of underwriting agreement 58Financial statements 59Auditors’ report to the shareholders 60Selected ratios 84Auditors’ report in pursuance of Section 135(1) under Para 24(1) of Part II of Third Schedule of the Companies Act, 1994 85credit rating report 88Application forms 114Additional disclosure by the auditor 118Additional disclosure by the management as required by the Dse 119Additional disclosure by the management 120


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DISCLOSURE IN RESPECT OF ISSUANCE OF SECURITY IN DEMAT FORM

As per provision of the Depository Act, 1999 and regulations made thereunder, shares will only be issued in dematerialized condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh Ltd. (CDBL) system and any further issuance of shares (right/bonus) will be issued in dematerialized form only.

CONDITIONS UNDER SECTION 2CC OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969

PART A

The company shall go for Initial Public Offer (IPO) for 2,00,00,000 ordinary shares of Tk 60 each including a 1. premium of Tk. 50 per share totaling Tk 120,00,00,000 (One hundred twenty crore) following the Securities and Exchange Commission (Public Issue) Rules, 2006, the Depository Act, 1999 and regulations made there under.

The abridged version of the prospectus, as approved by the Commission, shall be published by the issuer in 4 (four)2. national daily newspapers (two in Bangla and two in English), within 03 (three) working days of issuance of the consent letter. The issuer shall post the full prospectus, vetted by the Securities and Exchange Commission in the issuer’s website and shall also put on the websites of the Commission, Stock Exchanges, and the Issue Manager within 03 (three) working days from the date of issuance of this letter and shall remain posted till the closure of the subscription list. The issuer shall submit to SEC, the Stock Exchanges and the Issue Manager a diskette containing the text of the vetted prospectus in “MS-Word” format.

Sufficient copies of prospectus shall be made available by the issuer so that any person requesting a copy may 3. receive one. A notice shall be placed on the front of the application form distributed in connection with the offering, informing that interested persons are entitled to a prospectus, if they so desire, and that copies of prospectus may be obtained from the issuer and the issue managers. The subscription application shall indicate in bold type that no sale of 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 has been published.

The company shall submit 40 (forty) copies of the printed prospectus to the Securities and Exchange Commission for 4. official record within 5 (Five) working days from the date of publication of the abridged version of the prospectus in the newspaper.

The issuer company and the issue manager shall ensure transmission of the prospectus, abridged version of the 5. prospectus and relevant application forms for NRBs through e-mail, simultaneously with publication of the abridged version of the prospectus, to the Bangladesh Embassies and Missions abroad and shall also ensure sending of the printed copies of abridged version of the prospectus and application forms to the said Embassies and Missions within 5 (five) working days of the publication date by Express Mail Service (EMS) of the postal department. A compliance report shall be submitted in this respect to the SEC jointly by the issuer and the issue manger within 2 (two) working days from the date of said dispatch of the prospectus & the forms.

The paper clipping of the published abridged version of the prospectus, as mentioned at 6. condition no.2 above, shall be submitted to the Commission within 24 hours of the publication thereof.

The company shall maintain separate bank account(s) for collecting proceeds of the Initial Public Offering and shall 7. also open Foreign Currency (FC) account(s) to deposit the application money of the Non-Resident Bangladeshis (NRBs) for IPO purpose, and shall incorporate full particulars of said FC account(s) in the prospectus. The company shall open the above-mentioned accounts for IPO purpose; and close these accounts after refund of over-subscription money. Non-Resident Bangladeshi (NRB) means Bangladeshi citizens staying abroad including all those who have dual citizenship (provided they have a valid Bangladeshi passport) or those, whose foreign passport bear a stamp from the concerned Bangladesh Embassy to the effect that no visa is required to travel to Bangladesh.

The issuer company shall apply to all the stock exchanges in Bangladesh for listing within 07(Seven) working days 8. from the date of issuance of this letter and shall simultaneously submit the vetted prospectus with all exhibits, as submitted to SEC, to the stock exchanges.

PROSPECTUS8

The following declaration shall be made by the company in the prospectus, namely:-9.

“Declaration about Listing of Shares with the Stock Exchange(s):None of the stock exchange(s), if for any reason, grants listing within 75 (Seventy Five) days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within 15 (Fifteen) days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (Seventy Five) days, as the case may be.

In case of non-refund of the subscription money within the aforesaid fifteen days, the Directors of the Company, in addition to the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (Two Percent) per month above the bank rate, to the subscribers concerned.

The issue managers, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and shall submit compliance report thereon to the Commission within 7 (seven) days of expiry of the aforesaid fifteen days time period allowed for refund of the subscription money.”

The subscription list shall be opened and the sale of securities commenced 10. after 25 (twenty five) days of the publication of the abridged version of the prospectus and shall remain open for 5 (Five) consecutive banking days.

A non-resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank payable 11. at Dhaka, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for the value of securities applied for through crossed bank cheque marking “Account Payee only”. The NRB applicants shall send applications to the issuer company within the closing date of the subscription so as to reach the same to the company by the closing date plus 9 (Nine) days. Applications received by the company after the above time period will not be considered for allotment purpose.

The company shall apply the spot buying rate (TT clean) in US Dollar, UK Pound Sterling and Euro of Sonali Bank, 12. which shall be mentioned in the Prospectus, as prevailed on the date of opening of the subscription for the purpose of application of the NRBs and other non-Bangladeshi persons, where applicable.

The Company and the issue manager shall ensure prompt collection/clearance of the foreign remittances of NRBs 13. and other non-Bangladeshis, if applicable, for allotment of shares.

Upon completion of the period of subscription for securities, the issuer and the issue manager shall jointly provide 14. the Commission and the stock exchanges with the preliminary status of the subscription within 05 (five) working days, in respect of the following matters, namely: -

Total number of securities for which subscription has been received;(a) Amount received from the subscription; and(b) Amount of commission paid to the banker to the issue.(c)

The issuer and the issue manager shall jointly provide the Commission and the stock exchanges with the list of 15. valid and invalid applicants (i.e. final status of subscription) in electronic form in 2 (Two) CDs and final status of subscription to the Commission within 3 (three) weeks after the closure of the subscription along with bank statement (original), branch-wise subscription statement. The list of valid and invalid applicants shall be finalized after examination with the CDBL in respect of BO accounts and particulars thereof.

The IPO shall stand cancelled and the application money shall be refunded immediately (but not later than 5 (Five) 16. weeks from the date of the subscription closure), if any of the following events occur:

Upon closing of the subscription list it is found that the total number of valid applications (in case of (a) under subscription including the number of the underwriter) is less than the minimum requirement as specified in the listing regulations of the stock exchange(s) concerned; orAt least 50% of the IPO is not subscribed.(b)

10% of total public offering shall be reserved for non-resident Bangladeshi (NRB) and 10% for mutual funds 17. and collective investment schemes registered with the Commission, and the remaining 80% shall be open for subscription by the general public. In case of under-subscription under any of the 10% categories mentioned above, the unsubscribed portion shall be added to the general public category and, if after such addition, there is over subscription in the general public category, the issuer and the managers to the issue shall jointly conduct an open lottery of all the applicants added together.


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All the applicants shall first be treated as applied for one minimum market lot of 18. 200 shares worth tk. 12,000/-(taka twelve thousand only). If, on this basis, there is over subscription, then lottery shall be held amongst the applicants allocating one identification number for each application, irrespective of the application money. In case of over-subscription under any of the categories mentioned hereinabove, the issuer and the issue manager shall jointly conduct an open lottery of all the applications received under each category separately in presence of representatives from the issuer, the stock exchanges and the applicants, if there be any.

An applicant can not submit more than two applications, one in his/her own name and another 19. jointly with another person. In case an applicant makes more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, whole or part of application money may be forfeited by the commission.

the applicant shall provide the same bank account number in the application form as it is in the Bo 20. account of the application. otherwise the application will be considered invalid and the subscription money may be forfeited.

Lottery (if applicable) shall be held within 21. 4 (four) weeks from closure of the subscription date.

The company shall issue share allotment letters to all successful applicants within 22. 5 (five) weeks from the date of the subscription closing. Within the same time, refund to the unsuccessful applicants shall be made in the currency in which the value of securities was paid for by the applicants without any interest, through direct deposit to the applicant’s bank account as far as possible/Account Payee Cheque/refund warrants with bank account number, bank’s name and branch as indicated in the securities application forms payable at Dhaka/Chittagong/Khulna/Rajshahi/Barisal/Sylhet/ Bogra, as the case may be subject to condition 19 above.

Refund money of the unsuccessful applicants shall be credited directly to their respective bank accounts, who have closen the option in the IPO application forms, as maintained in with the bankers to the issue or any other banks mentioned in the application.

A compliance report in this regard shall be submitted to the Commission within 7(Seven) weeks from the date of closure of subscription.

The company shall furnish the List of Allotees to the Commission and the stock exchange(s) simultaneously in 23. which the shares will be listed, within 24 (Twenty Four) hours of allotment.

In the event of under-subscription of the public offering, the unsubscribed portion of securities shall be taken up by the 24. underwriter(s) (subject to para -16 above). The issuer must notify the underwriter to take up the underwritten shares within 10 (Ten) days of the subscription closing date on full payment of the share money within 15 (Fifteen) days of the issuer’s notice. The underwriter shall not share any underwriting fee with the issue manager, other underwriters, issuer or the sponsor group.

All issued shares of the issuer except the institutional bidders shares, at the time of according this consent shall 25. be subject to a lock- in period of three years from the date of issuance of prospectus or commercial operation, whichever comes later.

Provided that the persons (other than Directors and those who hold 5% or more shares in the company), who have subscribed to the shares of the company within immediately preceding two years of according consent shall be subject to a lock-in period of 1 (one) year from the date of issuance of prospectus or commercial operation, whichever comes later.

In respect of shares of Sponsor/Directors/Promoters (if in paper format) shall be handed over to security custodian 26. bank registered with SEC and shall remain till completion of lock in and the name the name and branch of the bank shall be furnished to the Commission jointly by the issuer and issue managers, along with a confirmation thereof from the custodian bank, within one week of listing of the shares with the stock exchange(s). Or they (shares of Sponsor/ Directors/ Promoters) can be demated and will remain in lock-in under CDBL system and issuer will submit a dematerialization confirmation report generated by CDBL and attested by Managing Director of the company along with lock-in confirmation with SEC within one week of listing of the shares with the stock exchange(s). In respect of shares other than Sponsor/Directors/Promoters the issuer will ensure their lock-in of those shares and submit a statement to this effect to SEC.

The company shall apply to the stock exchanges for listing within 27. 7(seven) working days of issuance of this letter and shall simultaneously submit to the Commission attested copies of the application filed with the stock exchanges.

PROSPECTUS10

PART B

Prime Finance & Investment Limited,1. the Issue Manager, shall ensure that the abridged version of the prospectus and the full prospectus is published correctly and in strict conformity with the conditions of this letter without any error/omission, as vetted by the Securities and Exchange Commission.

The issue manager shall carefully examine and compare the published abridged version of prospectus on the date 2. of publication with the copy vetted by SEC. If any discrepancy/inconsistency is found, both the issuer and the issue manager shall jointly publish a corrigendum immediately in the same newspapers concerned, simultaneously endorsing copies thereof to SEC and the stock exchange(s) concerned, correcting the discrepancy/inconsistency as required under ‘Due Diligence Certificates’ provided with SEC.

Both the issuer company and the issue manager shall, immediately after publication of the prospectus and its 3. abridged version, jointly inform the Commission in writing that the published prospectus and its abridged version are verbatim copies of the same as vetted by the Commission.

The fund collected through Public Offering shall not be utilized prior to listing with stock exchanges and that 4. utilization of the said fund shall be effected through banking channel, i.e. through account payee cheque, pay order or bank drafts etc.

The company shall furnish report to the Commission on utilization of Public Offering proceeds 5. within 15 (Fifteen) days of the closing of each quarter until such fund is fully utilized, as mentioned in the schedule contained in the prospectus, and in the event of any irregularity or inconsistency, the Commission may employ or engage any person, at issuer’s cost, to examine whether the issuer has utilized the proceeds for the purpose disclosed in the prospectus.

All transactions, excluding petty cash expenses, shall be effected through the company’s bank account(s).6.

Proceeds of the Public Offering shall not be used for any purpose other than those specified in the prospectus. Any 7. deviation in this respect must have prior approval of the shareholders in the shareholders Meeting under intimation to SEC and stock exchange(s).

Directors on the Company’s Board will be in accordance with the applicable laws, rules and regulations.8.

PART C

All the above conditions imposed under Section 2CC of the Securities and Exchange Ordinance, 1969 shall be incorporated 1. in the prospectus immediately after the page of the table of contents, with a reference in the table of contents, prior to its publication.

The Commission may impose further conditions/restrictions etc. from time to time as and when considered 2. necessary, which shall also be binding upon the issuer company.

PART D

As per provision of the Depository Act, 1999 and regulations made there under, shares will only be issued in 1. dematerialized condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh Ltd. (CDBL) system and any further issuance of shares (Including right/bonus) will be issued in dematerialized form only.

An applicant (including NRB) shall not be able to apply for allotment of shares without Beneficial Owners (BO) account .

The company shall deposit 3% tax to the Government Treasury on the share premium of the IPO and submit 2. authenticated copy of ‘treasury Chalan’ to the Commission, among others, to obtain consent for holding of lottery in line with the NBR’s Order No. Rviv‡ev/AvqKi ev‡RU/2010/97 dated 30.06.2010 dated 06.07.2010.

The company along with the issue manager shall also ensure due compliance of all above condition and the 3. Securities & Exchange Commission (Public Issue) Rules, 2006.


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GENERAL INFORMATION

The Prospectus has been prepared by Prime Finance capital Management Limited from information supplied by Barakatullah electro Dynamics Limited (the Company) and also several discussions with the Managing Director and related executives of the Company which is publicly available. The Board of Directors of Barakatullah electro Dynamics Limited hereby confirms that to the best of their knowledge and belief the information contained herein is true and correct in all material respects and that there are no other material facts the omission of which would make any statement herein misleading.

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

The Issue, as contemplated in this document, is made in Bangladesh and is subject to the exclusive jurisdiction of the Courts of Bangladesh. Forwarding this Prospectus to any person residing outside Bangladesh in no way implies that the issue is made in accordance with the laws of that country or is subject to the jurisdiction of the laws of that country.

PROSPECTUS12

DECLARATIONS AND DUE DILIGENCE CERTIFICATESDECLARATIONS AND DUE DILIGENCE CERTIFICATES

Declaration about the Responsibility of the Directors, including the CEO of the Company “Barakatullah Electro Dynamics Limited” in Respect of the Prospectus

This prospectus has been prepared, seen and approved by us, and we, individually and collectively, accept full responsibility for the authenticity and accuracy of the statements made, information given in the prospectus, documents, financial statements, exhibits, annexes, papers submitted to the Commission in support thereof, and confirm, after making all reasonable inquiries that all conditions concerning this public issue and prospectus have been met and that there are no other information or documents the omission of which make any information or statements therein misleading for which the Commission may take any civil, criminal or administrative action against any or all of us as it may deem fit.

We also confirm that full and fair disclosure has been made in this prospectus to enable the investors to make a well informed decision for investment.

Sd/-Faisal Ahmed chowdhury

Chairman

Sd/-Md. Ahsanul Kabir

Vice Chairman

Sd/-Abdul Bari

Vice Chairman

Sd/-Nayem Ahmed chowdhury

Director

Sd/-Fahim Ahmed chowdhury

Director

Sd/-robin chowdhury

Director

Sd/-Nanu Kazi Mohammed Miah

Director

Sd/-Md. shirajul Islam

Director

Sd/-Mohammed Abdul Ahad

Director

Sd/-Kazi Mohammed Angur Miah

Director

Sd/-Abdul Mumin

Director

Sd/-Nasim Ahmed chowdhury

Director

Sd/-Manzur Ashraf Khan

Director

Sd/-Alimus sadat chowdhury

Director

Sd/-Afzal rashid chowdhury

Director

Sd/-Monsur Alam chowdhury

Director

Sd/-Yeahyea Murad Khan

Director

Sd/-ubaydia chowdhury

Director

Sd/-Gulam rabbani chowdhuryDirector & Managing Director


13

Consent of the director(s) to serve as director(s)We hereby agree that we have been serving as Director(s) of “Barakatullah electro Dynamics Limited” and continue to act as Director(s) of the Company.

Sd/-Faisal Ahmed chowdhury

Chairman

Sd/-Md. Ahsanul Kabir

Vice Chairman

Sd/-Abdul Bari

Vice Chairman

Sd/-Nayem Ahmed chowdhury

Director

Sd/-Fahim Ahmed chowdhury

Director

Sd/-robin chowdhury

Director

Sd/-Nanu Kazi Mohammed Miah

Director

Sd/-Md. shirajul Islam

Director

Sd/-Mohammed Abdul Ahad

Director

Sd/-Kazi Mohammed Angur Miah

Director

Sd/-Abdul Mumin

Director

Sd/-Nasim Ahmed chowdhury

Director

Sd/-Manzur Ashraf Khan

Director

Sd/-Alimus sadat chowdhury

Director

Sd/-Afzal rashid chowdhury

Director

Sd/-Monsur Alam chowdhury

Director

Sd/-Yeahyea Murad Khan

Director

Sd/-ubaydia chowdhury

Director

Sd/-Gulam rabbani chowdhuryDirector & Managing Director

Declaration about filing of Prospectus with the Registrar of Joint Stock Companies & Firms

A dated and signed copy of the Prospectus has been filed for registration with the Registrar of Joint Stock Companies & Firms, Government of the Peoples’ Republic of Bangladesh, as required under Section 138(1) of the Companies Act, 1994 before Publication of the Prospectus.

PROSPECTUS14

Due diligence certificate of manager to the issue

sub: Public offer of 20,000,000 ordinary shares of tk. 60/- each including a premium of tk. 50/- per share totaling to tk. 1,200,000,000 of Barakatullah electro Dynamics Limited

We, the under-noted Manager to the Issue to the above mentioned forthcoming issue, state as follows:

We, while finalizing the draft prospectus pertaining to the said issue, have examined various documents and other 1. materials as relevant for adequate disclosures to the investors; and

On the basis of such examination and the discussions with the issuer company, it’s Directors and Officers, and 2. other Agencies, independent verification of the statements concerning objects of the issue and the contents of the documents and other materials furnished by the issuer company.

We coNFIrM tHAt:

the draft prospectus forwarded to the Commission is in conformity with the documents, materials and papers (a)

relevant to the issue;

all the legal requirements connected with the said issue have been duly complied with; and(b)

the disclosures made in the draft prospectus are true, fair and adequate to enable the investors to make a well (c)

informed decision for investment in the proposed issue.

For Manager to the Issue

Sd/-

M. Mosharraf Hossain PhD, FcAManaging Director & CEO

Prime Finance Capital Management Limited

Date: 01 February 2011


15

Due diligence certificate of the underwriter(s)

sub: Public offer of 20,000,000 ordinary shares of tk. 60/- each including a premium of tk. 50/- per share totaling to tk. 1,200,000,000 of Barakatullah electro Dynamics Limited

We, the under-noted Underwriter(s) to the abovementioned forthcoming issue, state individually and collectively as follows:

We, while underwriting the abovementioned issue on a firm commitment basis, have examined the draft prospectus, 1. other documents and materials as relevant to our underwriting decision; and

On the basis of such examination and the discussion with the issuer company, it’s Directors and Officers, and 2. other Agencies, independent verification of the statements concerning objects of the issue and the contents of the documents and other materials furnished by the issuer company; -

We coNFIrM tHAt:

(a) all information as are relevant to our underwriting decision have been received by us and the draft prospectus forwarded to the Commission has been approved by us;

(b) we shall subscribe and take up the un-subscribed securities against the abovementioned public issue within 15 (fifteen) days of calling up thereof by the issuer; and

(c) this underwriting commitment is unequivocal and irrevocable.

For underwriters

Sd/-Md. Golam sarwar Bhuiyan

Managing DirectorBangladesh Mutual Securities Limited

Sd/-erfanuddin Ahmed

President & Managing DirectorBank Asia Limited

Sd/-tanjil chowdhury

Chief Executive OfficerEC Securities Limited

Sd/-Md. AliuzzamanManaging Director

Grameen Capital Management Limited

Sd/-Md. Abdur rouf

Chief Executive OfficerICB Capital Management Limited

Sd/-selim r. F. Hussain

CEO & Managing DirectorIDLC Finance Limited

Sd/-Mafizuddin SarkerManaging Director

LankaBangla Finance Limited

Sd/-Mustofa Kamal

Chief Executive OfficerMercantile Securities Limited

Sd/-sheikh Mortuza Ahmed

Chief Executive OfficerPrime Bank Investment Limited

Sd/-M. Mosharraf Hossain PhD, FcA

Managing Director & CEOPrime Finance Capital Management

Limited

Sd/-syed Imtiaz Hasib

Deputy Managing DirectorSoutheast Bank Limited

Sd/-Mamun AhmedManaging Director

Swadesh Investment Management Limited

Sd/-Mushfiq Ul Quayoom

Managing Director (Current Charge) Union Capital Limited

Sd/-S.M. Shamsul Arefin

Managing Director & CEOUttara Finance and Investments

Limited

PROSPECTUS16

RISK FACTORS & MANAGEMENT PERCEPTIONS ABOUT THE RISKS

Every equity investment is associates with risks. Among those risks some can be averted, others are beyond control. Before making any investment decision, Investors should take the risk factors into consideration. Major such risk factors are described in brief as under:

Interest rate risksVolatility of money market may influences the overall interest rate structure of the country. On 30 June 2010, as the company has about Tk. 140.15 crore of outstanding loans, any unfavorable change in interest rate structure may affect the company’s business adversely.

Management perceptionManagement of the company believes that rise in interest rate will not substantially affect the company. On the other hand, if interest rate falls, the company will go for alternative investment schemes to utilize its funds. Moreover, management of BEDL is planning to pay off its term loans with the IPO proceeds. After paying off the term loans exposure of BEDL to interest rate risk will reduce to a great extent.

exchange rate risksTaka has been devalued significantly against dollar and it is very unlikely to appreciate in near future. But devaluation of local currency against major international currencies will not affect the company’s business.

Management perceptionSince all dues relating to import of machineries and equipments from abroad has been settled, exchange rate risk is not going to hamper business of the company.

Industry risksThe Company is operating in an industry where there is a huge gap between demand and supply. Although power sector is a highly demanding and aggravated sector in our country, chances are there that excessive competition may hamper the company’s business.

Management perceptionCurrently there is a huge gap between demand and supply of electricity in our country. On the other hand demand for electricity is increasing drastically day by day. In this situation chance of excessive competition is almost zero. Moreover BPDB purchase 100% of the electricity produced by the company at a rate predetermined in the Power Purchase Agreement which is also adjusted as per consumer price index. Hence, the company is protected against any sort of loss due to competition or inflation.

Market and technology-related risksCapacity of generating power is dependent to a great extent on the capacity of its generators. Should there be any disturbance in the technology used by the company; operation of the company may face major turbulence.

Management perceptionThe company is using state of the art technology and modern machines. The plant is comprised of 19 units of generator sets from the world renowned gas fuelled reciprocating engine manufacturer GE Jenbacher, Austria. Total installed capacity of the plant is 55.138 MW where contracted capacity is 51 MW of electricity. To ensure uninterrupted supply of electricity the project has 8.11% of reserve margin in production. To reduce any chance of disturbances the company has enter a spare parts supply contract for a period of 15 years with GE Jenbacher. Furthermore the management of the company is very serious about timely maintenance of the machineries.

Potential or existing government regulationsAlthough existing government rules and regulations are very favorable for the company, chances are there that the government might take any policy that may adversely affect profitability and operation of the company.

Management perceptionThe Government is committed for providing affordable and reliable electricity to all citizens by 2020 for economic and social development. The government has declared its vision for power sector to make the country free from load shedding beyond 2011 and to make electricity for all by year 2020.


17

Hence, management of the company is confident enough that regarding government policy BEDL will not have to face any unfavorable situation.

Potential changes in global or national policiesChanges in government policy as well as policy of foreign countries may affect adversely the business of the company. Any structural change in power generation industry may adversely affect the business and may have negative impact on the profitability of the Company.

Management perception

Modern life is totally dependent on electricity. Without electricity modern life cannot sustain. Without uninterrupted flow of electricity development of a country is not possible. Hence, As far as national policy is concerned, power sector is not going to face any adverse effect. On the other hand, chances of global policies hampering power sector of our country is very negligible.

History of non-operationIf a company becomes non-operative for some period in its operating life then risk of becoming non-operative in future for the same reasons or other probable reasons should be considered carefully.

Management perceptionThe Company does not have any history of non- operation so no risk has arise in this respect. Moreover the Company is trying to expand its business by installing more power plants. So, chance of becoming non-operative in future is very low.

operations risksOperational risk covers the ability of the project to achieve the performance as envisaged. Technology used, fuel supply arrangement, operation & maintenance (O&M) arrangement and political condition are major sources of operational risk for the company.


To mitigate fuel supply problem BEDL has signed gas supply agreement with Jalalabad Gas Transmission and Distribution Systems Ltd. (JGTDSL) on 22 June 2008 for a term of 15 years to supply gas in required quantity and specification throughout the agreement period. For O&M of the plant, BEDL has appointed local qualified engineers and technicians who have experience to work in power plants. Moreover the plant vendor GE Jenbacher GmbH & Co. will supply all necessary spare parts for a period of 15 years with 1 year warranty period from the date of delivery. During major overhaul, BEDL will engage GE Jenbacher GmbH & Co. for providing the overhaul services. As the company installed 19 units of generators, electricity supply will not be hampered to a great extent even at the time of scheduled maintenance or any minor problem. Power project in general has operational risk and for this project is quite high considering 15 years of operation. However technical expertise availability in the country, supply contract with the vendor as well as reserve margin of around 8.11% (installed capacity)

mitigates the operational risk to a great extent.

otHer rIsKs

Project duration risk

The company entered an agreement with Bangladesh Power Development Board (BPDB) with a condition that the agreement shall become effective upon signing and shall terminate fifteen (15) years after the commercial operations date, unless extended or earlier terminated persuante to the provisions of this agreement.


Management perceive that there are no possibilities of early termination of the agreement as there are huge demand for power in our country. Government of Bangladesh is encouraging more local entrepreneur to invest in this sector to meet up demand and supply gap. Moreover, at present scarcity of power revels that the power crisis will remain in future as economy of Bangladesh is growing and demand for power and electricity is increasing. So there is scope of extension of the term of current agreement subject to approval of BPDB.

PROSPECTUS18

CAPITAL STRUCTURECAPITAL STRUCTURE1. Authorized capital Tk. 3,000,000,000

2. capital structure prior to IPoIssued, subscribed and paid up capitaltotal paid up capital prior to IPo

Tk. 660,000,000tk. 660,000,000

3. capital structure after IPoa) Issued, subscribed and paid up capital prior to IPO Tk. 660,000,000b) Initial Public Offering (IPO) without premium Tk. 200,000,000

c) total paid up capital after IPo (a + b) tk. 860,000,000

d) Premium from IPo tk. 1,000,000,000

USE OF IPO PROCEEDSUSE OF IPO PROCEEDSa. Barakatullah electro Dynamics Limited will utilize the net proceeds of public offer as per following schedule:

use of proceeds

sl. No. Particulars Amount of taka01 Bank Loan pay off 1,142,350,000

total 1,142,350,000

Means of Finance

sl. No. Particulars Amount of taka01 From IPO 1,200,000,00002 Less: IPO expenses 57,650,000

total 1,142,350,000

sd/- sd/-(Gulam rabbani chowdhury) (Muhammed Monirul Islam) Director & Managing Director Chief Financial Officer &

Company Secretary

b. Implementation schedule of use of IPo proceeds

sl. No. Particulars Amount of taka

Approximate date for payment

01 Bank Loan as on 30 June 2010 1,401,515,149 -

02 Payment during the period from July 2010 to November 2010 75,479,798 -

03 Loan as on 30 November 2010 1,326,035,351 -

04 Payment to be made 47,979,798 within February 2011

05 Outstanding loan will be as on 01 March 2011 1,278,055,553

06Loan pay off by way of raising fund through IPO

(90% of outstanding loan)1,142,350,000

Within 02 month of getting IPO proceeds (i.e. within

June 2011)

sd/- sd/-(Gulam rabbani chowdhury) (Muhammed Monirul Islam)Director & Managing Director Chief Financial Officer &

Company Secretary

c. there is no other contract on which the proceeds of IPo will be utilized.


19

DESCRIPTION OF BUSINESSDESCRIPTION OF BUSINESS

Company at a glanceBarakatullah Electro Dynamics Ltd. is the first private sector power producing company, developed by Non Resident Bangladeshi (NRB) investors and local entrepreneur established in 2007 with the main focus on power generation in Bangladesh. The Government of Bangladesh (GOB) recognizes that power development has to be accelerated in order to achieve overall economic development targets of the country and avoid looming power shortages. Hence, the GOB is to boost up private sector for power generation in the country for the sake of overall development. Barakatullah Electro Dynamics Ltd., Bangladesh bid a tender for 50 MW ±10% Power Plant, (build-own-operate basis) at Fenchuganj, Sylhet. Finally the company has been selected as a qualified company by Bangladesh Power Development Board (BPDB) and agreement was signed as on 28 April 2008 with BPDB. The project involves setting up of a rental power plant by Barakatullah Electro Dynamics Limited (BEDL) with a capacity of 51 MW at Fenchuganj, Sylhet and operating it on Build-Own-Operate (BOO) basis for a term of 15 years after the commercial operations date, unless extended or earlier terminated pursuant to the provisions of the agreement. The generated electricity of the project is being sold to BPDB. The plant has successfully commissioned on 10 October 2009 and started its commercial operation from 24 October 2009 and supplying electricity to BPDB very reliably.

Important dates

Incorporation of the Company (as Private Limited) 26 June 2007

Date of signing power supply agreement with BPDB 28 April 2008

Date of signing gas supply agreement with JGTDSL 22 June 2008

Date of signing Gen-set supply agreement with GE Jenbacher GmbH & Co, Austria 12 August 2008

Date of conversion into Public Limited 25 September 2008

Denomination of Face Value of Share from Tk 1000 to Tk 100 30 November 2008

Denomination of Face Value of Share from Tk 100 to Tk 10 30 December 2009

Date of commercial operation 24 October 2009

Date of formal inauguration by Honorable Prime Minister 03 April 2010

Date of ISO 9001:2008 certification for quality management system 01 September 2010

Nature of businessThe principal activity of the company is to set up power plants for generation and supply of electricity.

Principal products and servicesAt present generating and supplying electricity is the principal product/service of the company.

Market for products and servicesThe generated electricity of the project is being sold to BPDB. The plant has successfully commissioned on 10 October 2009 and started its commercial operation from 24 October 2009 and supplying electricity to BPDB.

Relative contribution of the product/service that accounts for more than 10% of total revenueGenerating and supplying electricity is the principal product of the company which contributes almost 100% of its revenue.

Associate, subsidiary/related holding companyThe company does not have any associate, subsidiary/related holding company.

Distribution of products/servicesThe company is generating electricity through its power plant located at Fenchugonj, Sylhet and supplying the electricity to National Grid.

PROSPECTUS20

Competitive condition in businessThe sector does not pause any competition due to serious dearth of reliable and adequate electricity demand. However there are few other companies are engaed of producing electricity to meet up of local demand as are main competitors of the company:

sl. No. Name of competitore01 Summit Power Limited02 Khulna Power Company Limited

Sources and availability of raw materials and the names of the principal suppliersThe main raw material for generating electricity is natural gas. The Company has signed Gas Sales Agreement with Jalalabad Gas Transmission and Distribution System Ltd. on 22 June 2008 for supply of gas to 51 MW Fenchuganj Rental Power Plant, Sylhet shall commence on the execution date and shall continue subject to the other provisions of Gas Purchase Agreement for a period that ends on the expiry date which is the expiration date for the term of the power purchase agreement.

Sources of, and requirement for power, gas and water or any other utilitiesPower: The power requirement is met from company’s own generation. However any disruption is met through

supply from local Palli Bidyut Samity for auxiliary use only.

Gas: The Company requires natural gas for generation of electricity. The required gas is supplied by Jalalabad Gas Transmission and Distribution System Ltd. The annual contract Gas usage (ACGU) during a contract year shall be 74,503,800 Sm³ per annum.

Water: The Company uses close circuit cooling system for its generators and the cooling water requirement is very minimal which is supplied from deep tube well through demineralization plant.

Customer providing 10% or more revenuesThe company has signed power supply agreement on rental basis with BPDB on 28 April 2008 for a term of 15 years to provide 51 MW net electrical power to Bangladesh Power Development Board (BPDB). Under the scope, BEDL build, own and operate the electricity generation facility on rental basis and sell electricity output to BPDB. BPDB purchases total electrical capacity and energy from Barakatullah Electro Dynamics Ltd.

Description of contract(s) with principal suppliers/customers

Power Purchase Agreement

The company has signed power supply agreement on rental basis with Bangladesh Power Development Board on 28 April 2008 for a term of 15 years to provide 51 MW net electrical power to Bangladesh Power Development Board (BPDB).

This agreement shall become effective upon signing and shall terminate 15 years after Commercial Operations Date, unless extended or earlier terminated pursuant to the provisions of this Agreement.

The purpose of this agreement is the supply by company to BPDB of Net Energy Output and to make available capacity and BPDB agrees to accept and pay for the Dependable Capacity & Net Energy Output under the terms and conditions provided herein. For this purpose company shall be responsible for financing, complete design, supply, inspection, testing, delivery to the site, erection, testing & commissioning, operation and maintenance including overhauling and major overhauling of the plant for the entire term. Spares consumables required for the plant for the entire term shall be supplied by the company at its own cost in accordance with this agreement.

The PPA stipulates a two elements tariff. One is Rental Payment and another is Energy Payment. The Rental Payment and Energy payment payable to the company for Dependable Capacity and Net Energy output respectively for each contract year through out the term. If power plant could not achieve dependable capacity for any particular billing month due to reasons other than the default of the company, then BPDB shall pay monthly rental payment. The levalige tariff payment to BPDB is Tk 2.015 per KWH.

termination clauseThe agreement shall become effective upon signing and shall terminate fifteen (15) years after the commercial operations date, unless extended or earlier terminated persuante to the provisions of this agreement.


21

Gas supply Agreement

The company has signed gas supply agreement with Jalalabad Gas Transmission and Distribution System Ltd. (JGTDSL) on 22 June 2008 shall continue subject to the other provisions of Gas Purchase Agreement for a period that ends on the expiry date which is the expiration date for the term of the power purchase agreement.

This agreement shall become effective upon signing and shall continue subject to the other provisions of this agreement for a period that ends on the expiry date which is the expiration date for the term of the Power Purchase Agreement.

Subject to the terms and condition of this agreement and availability of gas, gas seller shall sell and deliver to project company at all times all project company’s requirements for gas for the facility during the term hereof to meet start-up, commissioning and operation of the facility and project company shall accept, receive and pay for gas from gas seller at a gas price set by the Government or any authority assigned by it from time to time.

termination clause

The agreement shall commence on the execution date and shall continue subject to the other provisions of this agreement for a period that ends on the expiry date which is the expiration date for the term of the power purchase agreement.

supply contract with orient energy systems Ltd. for 19 unit of Gas engine

The company has entered into a supply contract with Orient Energy Systems Ltd., local authorized distributor of GE Jenbacher GmbH & Co, Austria on 12 August 2008 for delivery of 19 units JGS 620 GS-N.L model gas engines @ 1,000,000 USD per engine.

The warranty period for the equipment shall be 24 months from start up or 16,000 operating hours or a maximum of 30 months from GE Jenbacher’s written confirmation of readiness to ship from Jenbach, Austria, whichever is earlier.

spare Parts AgreementThe company has entered into spare parts contract with GE Jenbacher GmbH & Co. Under the contract, GE Jenbacher GmbH & Co, Austria will supply all necessary spare parts for the 19 units gas engines for a period of 15 years. All spare parts would have 1-year warranty period from the date of delivery.

Material patents, trademarks, licenses or royalty agreementsThe Company has not entered into any such agreement.

Number of employees

Sylhet Dhaka Plant Total

Full-time employees• 6 11 67 84

Part-time employees• - - - -

PROSPECTUS22

Production or service rendering capacity and current utilization

Rendering capacity and Generation of the plant since commercial date of operation is given below:

(I)BillingMonth

(II)Rendering Capacity

(KWH)

(III)Generation

(KWH)

(IV=III/II)Plant Factor

(%)

Oct-2009 29,112,864 29,037,376 99.74

Nov-2009 39,699,360 27,329,100 68.84

Dec-2009 41,022,672 17,919,400 43.68

Jan-2010 41,022,672 24,584,600 59.93

Feb-2010 37,052,736 31,947,900 86.22

Mar-2010 41,022,672 39,147,900 95.43

Apr-2010 39,699,360 34,357,500 86.54

May-2010 41,022,672 34,642,200 84.45

June-2010 39,699,360 36,144,500 91.05

July-2010 41,022,672 38,966,200 94.99

Aug-2010 41,022,672 38,944,100 94.93

Sept-2010 39,699,360 35,658,700 89.82

Oct-2010 41,022,672 36,423,200 88.79

In this connection Auditor disclosure is as follows:

Name of PlantLicense capacity (MW)

Installed Capacity

(MW)

Plant Factor (% on Licensed capacity)

Energy Generation

(MwH)

Energy Sold (MwH)

Average Maximum

Fenchuganj Sylhet 51.00 55.14 79.94 98.97 275,894.77 264,199.43


23

DESCRIPTION OF PROPERTYDESCRIPTION OF PROPERTYThe company’s business is operated through registered office at 102 Azadi, Mirboxtola, Sylhet-3100, corporate •office at 6/A/1 (2nd Floor), Segunbagicha, Ramna, Dhaka-1000 and power plant at Fenchugonj, Sylhet. The registered office and the corporate office are situated on rented premise while premise of the power plant is owned by the company.

The Fixed asset schedule as per audited accounts as on 30 June 2010 as follows:

sl. No. Name of Fixed Asset01 Land and Land Development02 Furniture and Fixtures03 Office and Electrical Equipment04 Office Decoration05 Motor Vehicles06 Building and Civil Construction07 Maintenance Equipment08 Plant and Machinery

All the assets of the company are situated at company’s office premises and power plant premises. All the assets •of the company are in good operating condition.

The properties are purchased in brand new condition.•

The company itself owns the entire property and none is on lease or borrowed.•

The plant & machinery and other assets of the company are mortgaged (1• st charge) till 31-December-2018, to Infrastructure Development Company Limited (IDCOL), BRAC Bank Limited, Trust Bank Limited, AB Bank Limited, Janata Bank Limited & Industrial and Infrastructure Development Finance Company Limited (IIDFC) and mortgaged (2nd charge) to Prime Finance & Investment Limited till 5th August 2011 against the term loan.

Mentionable here that the company has owning 5.265 acres of land of which 4.47 acres of land are given under mortgage to the above lenders against term loan.

PLAN OF OPERATION AND DISCUSSION OF FINANCIAL CONDITIONPLAN OF OPERATION AND DISCUSSION OF FINANCIAL CONDITIONInternal and external sources of cash (as per audited accounts)

30-June-10Amount in taka



Internal sources of cash

Share capital 600,000,000 350,000,000 15,000,000

Retained earnings* 102,053,354 - -

sub-total 702,053,354 350,000,000 15,000,000

external sources of cash

Share money deposit - 174,635,936 148,829,877

Term loan-loan term portion 1,221,464,642 722,779,830 -

Term loan-short term portion 180,050,507 132,088,080 -

Short term loan - - 3,572,535

Deferred liabilities for plant & equipment - 541,800,000 -

Accounts payable 74,050,246 - -

sub-total 1,475,565,395 1,571,303,846 152,402,412

Grand total 2,177,618,749 1,921,303,846 167,402,412

* The company started its commercial operation from 24 October 2009. So no revenue was generated previous two years.

PROSPECTUS24

Material commitment for capital expenditureThe company has not yet made any material commitment for capital expenditure.

Causes for material changes from period to period (as per audited accounts)

ParticularsAmount in taka

30-Jun-10

Income

Revenue 514,542,637

Cost of sales 245,353,077

Gross profit 269,189,560

General & Administrative expenses 50,514,638

Operating profit 218,674,922

Financial income 724,753

219,399,675

Financial expenses 111,763,872

Profit before tax 107,635,803

Provision for tax 5,582,449

Profit for the year 102,053,354

The company has started its commercial operation from 24 October 2009. During the year ended on 30 June 2010 operating profit of the company was Tk. 21.87 crore and net profit after tax was Tk. 10.21 crore.

Seasonal aspect of the company’s businessThe operation of the company is not, in general, affected by any seasonal variances.

Known trends, events or uncertaintiesForce majeure such as political unrest, flood and other natural calamities are generally known events that may affect the business operations of the company.

Changes in the assets of the company used to pay off any liabilitiesNo asset of the company has been disposed to pay off the liabilities of the company.

Loan taken from holding/parent company or subsidiary companyThe company has no holding/parent company or subsidiary company, hence has not taken any loan from such party. However the Company taken loan from Royal Homes Limited which is under common management as disclosed in note 29.B. of the audited accounts as on 30 June 2010.

Loan given to holding/parent company or subsidiary companyThe company has no holding/parent company or subsidiary company, hence has not given any loan to such party.

Future contractual liabilitiesThe company has no plan to enter into any contractual liabilities within next one year other than the normal course of business.

Future capital expenditureThe company does not have any plan for capital expenditure in the near future other than normal course of business.


25

VAT, income tax, customs duty or other tax liability

VAt

The company is not under the scope of VAT. As such, there is no outstanding VAT claim up to the year ended 30 June 2010.

Income tax

As per section 52N of the Income Tax Ordinance, 1984 Bangladesh Power Development Board (BPDB) has been deducted tax at source @ 4% during the payment of power generation invoice which is treated as final discharge of tax liability as per the said Ordinance. However, general tax rate is applicable on other incomes of BEDL.As per section 75 of the said Ordinance, the company has furnished return for the Income years 2007/08 and 2008/09, statuses of which are given below:

FinancialYear

AssessmentYear

AssessedIncome

tax Assessedby Dct

Paid remarks

2007-2008 2008 -2009 1,170,719 439,020 439,020 Assessment completed on 09-September-2010.

2008 -2009 2009 -2010 6,141,054 2,302,895 2,302,895 Assessment completed on 09-September-2010.

custom duty or other liabilities

There is no outstanding on account of custom duty or other tax liability. Whereas an amount of Tk. 212,463,647 is considered as contingent liability out of which Tk. 101,176,307/- is related with custom duty and other liability as per audited accounts for the year ended on 30 June 2010 due to filing of petition against BPDB, NBR, Customs and other parties for taking exemption facility of import duty, VAT, Supplementary duty etc.

Operating lease during the last five yearsThe company has established its registered office at Sylhet and corporate office at Dhaka on leased/rented accommodation. Other than these rented accommodations the company did not had any operating lease during the last five years. Particulars of the leased/rented accommodations are as follows:

sl.No.

Branch Name Location contract period Area

(sft.)Monthly

rent (tk.)Advance outstanding on

30-06-2010 (tk.)

1. Registered Office

102-Azadi, MirboxtolaSylhet – 3100.

2 years starting from 1-11-2008 1550 15,000 -

2. Corporate Office

6/A/1 (2nd floor), SegunbagichaRamna, Dhaka – 1000.

10 years startingfrom 1-11-2009 2,015 30,000 1,00,000

Financial lease commitmentThere is no financial lease commitment of the company during the last five years.

Personnel related schemeThe company believes in supporting its employees and is offering Festival bonus (2 festival bonuses in a year), Provident Fund as per Board of Directore meeting held on August 16, 2010 and subsequently permission granted by National Board of Revenue (NBR) dated 26th October 2010 which was effective from 1st July 2010.The matter also disclose in note 33.A of the audited accounts as on 30 June 2010. Company also has a well-designed Compensation plan for attracting highly capable staff with higher degree of integrity.

PROSPECTUS26

Breakdown of issue expensesThe total IPO expenses are estimated as follows:

Particulars rate Amounttk

Issue Management Fee:

Manager to the Issue fee 0.60% or maximum Tk. 20 lac 2,000,000VAT against Issue Management fee 15% of Issue Management fee 300,000

sec fee:

Application fee At actual 10,000Consent fee 0.15% 1,800,000

Fees related to the stock exchanges:

Application fee (DSE) At actual 5,000Listing fees for stock exchanges (DSE & CSE) @ 0.25% up to Tk. 10 crore

@ 0.15% above Tk. 10 crore of paid up capital subject to maximum of Tk. 20 lac each

2,780,000

Annual fee (DSE & CSE) As per listing regulations 190,000

cDBL fees and expenses:

Documentation fee At actual 2,500Initial Public Offering fee At actual 300,000Annual fee At actual 100,000

commission & other expenses:

Underwriting commission 0.50% 3,000,000

Bankers to the Issue commission(assuming subscription of 5 times) 0.10% 6,000,000

Credit rating fees At Actual 312,500

expenses related to printing and publications:

Abridged version of prospectus Estimated 200,000

Notice for subscription, lottery, refund etc. Estimated 240,000

Printing of prospectus and forms Estimated 600,000

Distribution and collection of forms and data processing Estimated 7,550,000

Lottery related expenses including BUET fee Estimated 740,000

Other expenses including MICR related expenses Estimated 1,520,000

tax on share premium 3% on premium amount 30,000,000

total 57,650,000


27

Revaluation of assetsThe Company has made no revaluation of any of its assets since inception.

Transactions with subsidiary/holding company or associate companiesThe company has no subsidiary/holding company or associate company. Hence no transaction has taken place. However the Company taken loan from Royal Homes Limited which is under common management as disclosed in note 29.B. of the audited accounts as on 30 June 2009.

Auditors’ certificate regarding allotment of shares to Directors, Subscribers to the Memorandum of Association and Articles of Association or Sponsor shareholders for consideration otherwise than for cash

This is to certify that Barakatullah Electro Dynamics Limited has not allotted any shares for consideration otherwise than for cash to any shareholders, including its Directors, Subscribers to the Memorandum of Association and Articles of Association and/or Sponsor shareholders, up to 30 June 2010.

Sd/- HAQue sHAHALAM MANsur & co.Dated, Dhaka: 3 October 2010 Chartered Accountants

Material information which is likely to have an impactThere is no other material information which is likely to have an impact on the offering or change the terms and conditions under which the offer has been made to the public.

PROSPECTUS28

DIRECTORS AND OFFICERSDIRECTORS AND OFFICERS

Information regarding directorship

sl. No. Name of Directors Position Age(Years)

Date of becoming a director for the first time

Date of expiration of current term

1 Mr. Faisal Ahmed Chowdhury Chairman 40 10.08.2007 24.09.2013

2 Mr. Md. Ahsanul Kabir Vice Chairman 50 10.08.2007 18.07.2014

3 Mr. Abdul Bari Vice Chairman 66 15.07.2008 24.09.2013

4 Mr. Nayem Ahmed Chowdhury Director 27 10.08.2007 4th AGM (to be held On 2011)

5 Mr. Fahim Ahmed Chowdhury Director 35 15.07.2008 3rd AGM (to be held On 28 Dec. 2010)

6 Mr. Robin Chowdhury Director 47 15.07.2008 3rd AGM (to be held On 28 Dec. 2010)

7 Mr. Nanu Kazi Mohammed Miah Director 46 15.07.2008 3rd AGM (to be held On 28 Dec. 2010)

8 Mr. Md. Shirajul Islam Director 56 15.07.2008 3rd AGM (to be held On 28 Dec. 2010)

9 Mr. Mohammed Abdul Ahad Director 35 15.07.2008 3rd AGM (to be held On 28 Dec. 2010)

10 Mr. Kazi Mohammed Angur Miah Director 52 15.07.2008 4th AGM (to be held On 2011)

11 Mr. Abdul Mumin Director 41 15.07.2008 4th AGM (to be held On 2011)

12 Mr. Nasim Ahmed Chowdhury Director 34 15.07.2008 3rd AGM (to be held On 28 Dec. 2010)

13 Mr. Manzur Ashraf Khan Director 35 15.07.2008 4th AGM (to be held On 2011)

14 Mr. Alimus Sadat Chowdhury Director 40 15.07.2008 4th AGM (to be held On 2011)

15 Mr. Afzal Rashid Chowdhury Director 40 25.04.2009 4th AGM (to be held On 2011)

16 Mr. Monsur Alam Chowdhury Director 33 19.07.2009 5th AGM (to be held On 2012)

17 Mr. Yeahyea Murad Khan Director 40 19.07.2009 5th AGM (to be held On 2012)

18 Ms. Ubaydia Chowdhury Director 34 19.07.2009 5th AGM (to be held On 2012)

19 Mr. Gulam Rabbani Chowdhury Director & Managing Director 44 10.08.2007 24.09.2013


29

Directors’ involvement in other organization

sl. No. Name and PositionInvolvement in other organization

Name of the organization Position

1 Mr. Faisal Ahmed Chowdhury, Chairman Royal Homes Ltd. Chairman

2 Mr. Md. Ahsanul Kabir, Vice Chairman Syltop Associates (Pvt) Ltd. Director & CEO

3 Mr. Abdul Bari, Vice Chairman Woman’s Medical College & Hospital, Sylhet Director

4 Mr. Nayem Ahmed Chowdhury, Director Royal Homes Ltd. Director

5 Mr. Fahim Ahmed Chowdhury, Director ----- -----

6 Mr. Robin Chowdhury, Director Kensington Ltd. Managing Director

7 Mr. Nanu Kazi Mohammed Miah, Director ----- -----

8 Mr. Md. Shirajul Islam, Director ----- -----

9 Mr. Mohammed Abdul Ahad, Director Royal Homes Ltd. Director

10 Mr. Kazi Mohammed Angur Miah, Director ----- -----

11 Mr. Abdul Mumin, Director ----- -----

12 Mr. Nasim Ahmed Chowdhury, Director ----- -----

13 Mr. Manzur Ashraf Khan, Director Royal Homes Ltd. Director

14 Mr. Alimus Sadat Chowdhury,Director

Alim Industries Ltd. Royal Homes Ltd.

Brothers Machinery

ChairmanDirector Partner

15 Mr. Afzal Rashid Chowdhury,Director

Nina-Afzal Industries Ltd.Balisera Hill Tea Co. Ltd.

Abhinoy Niketon Ltd.Blue-Bird Auto Ltd.Crystal Properties

Auto Diagnose Centre

Managing DirectorManaging DirectorManaging Director

ChairmanManaging PartnerManaging Partner

16 Mr. Monsur Alam Chowdhury, Director ----- -----

17 Mr. Yeahyea Murad Khan, Director Royal Homes Ltd. Director

18 Ms. Ubaydia Chowdhury, Director ----- -----

19 Mr. Gulam Rabbani Chowdhury,Director & Managing Director

Alim Industries Ltd.Royal Homes Ltd.

Brothers Machinery

Managing DirectorManaging Director

Partner

PROSPECTUS30

Family relationship among Directors and top five OfficersThere is no family relationship among directors and top five officers of Barakatullah Electro Dynamics Limited except the following:

sl. No. Name Family relationship

1 Mr. Faisal Ahmed ChowdhuryChairman

Elder brother of Mr. Nasim Ahmed Chowdhury, Mr. Fahim Ahmed Chowdhury and Mr. Nayem Ahmed Chowdhury;Cousin of Mr. Monsur Alam Chowdhury and Ms. Ubaydia Chowdhury;Brother in law of Mr. Md. Ahsanul Kabir and Mr. Gulam Rabbani Chowdhury.

2 Mr. Md. Ahsanul KabirVice Chairman

Brother in law of Mr. Faisal Ahmed Chowdhury, Mr. Nasim Ahmed Chowdhury, Mr. Fahim Ahmed Chowdhury, Mr. Nayem Ahmed Chowdhury and Mr. Monsur Alam Chowdhury.

3 Mr. Fahim Ahmed ChowdhuryDirector

Elder brother of Mr. Nasim Ahmed Chowdhury and Mr. Nayem Ahmed Chowdhury;Younger brother of Mr. Faisal Ahmed Chowdhury;Cousin of Mr. Monsur Alam Chowdhury and Ms. Ubaydia Chowdhury;Brother in law of Mr. Md. Ahsanul Kabir and Mr. Gulam Rabbani Chowdhury.

4 Mr. Nasim Ahmed ChowdhuryDirector

Elder brother of Mr. Nayem Ahmed Chowdhury;Younger brother of Mr. Faisal Ahmed Chowdhury and Mr. Fahim Ahmed Chowdhury;Cousin of Mr. Monsur Alam Chowdhury and Ms. Ubaydia Chowdhury;Brother in law of Mr. Md. Ahsanul Kabir and Mr. Gulam Rabbani Chowdhury.

5 Mr. Nayem Ahmed ChowdhuryDirector

Younger brother of Mr. Faisal Ahmed Chowdhury, Mr. Fahim Ahmed Chowdhury and Mr. Nasim Ahmed Chowdhury;Cousin of Mr. Monsur Alam Chowdhury and Ms. Ubaydia Chowdhury;Brother in law of Mr. Md. Ahsanul Kabir and Mr. Gulam Rabbani Chowdhury.

6 Mr. Monsur Alam ChowdhuryDirector

Cousin of Mr. Faisal Ahmed Chowdhury, Mr. Fahim Ahmed Chowdhury, Mr. Nasim Ahmed Chowdhury, Mr. Nayem Ahmed Chowdhury and Ms. Ubaydia Chowdhury;Brother in law of Mr. Md. Ahsanul Kabir and Mr. Gulam Rabbani Chowdhury.

7 Mr. Alimus Sadat ChowdhuryDirector Cousin of Mr. Gulam Rabbani Chowdhury

8 Mr. Gulam Rabbani ChowdhuryDirector & Managing Director

Brother in law of Mr. Faisal Ahmed Chowdhury, Mr. Nasim Ahmed Chowdhury, Mr. Fahim Ahmed Chowdhury, Mr. Nayem Ahmed Chowdhury and Mr. Monsur Alam Chowdhury;Cousin of Mr. Alimus Sadat Chowdhury

9 Ms. Ubaydia Chowdhury Director

Cousin of Mr. Faisal Ahmed Chowdhury, Mr. Fahim Ahmed Chowdhury, Mr. Nasim Ahmed Chowdhury, Mr. Nayem Ahmed Chowdhury and Mr. Monsur Alam Chowdhury.


31

Short bio-data of the directors

Mr. Faisal Ahmed chowdhury, Chairman

Mr. Faisal Ahmed Chowdhury possesses twenty years of successful leadership in the area of fiscal, strategic, and operational management. He is a dynamic and result oriented person with a strong track record of performance in a number of industrial sectors. His excellent analytical, interpersonal and motivational skills made him a successful businessman in the diverse range of businesses.

After completion his graduation in mid 90’s he moved to UK and started his own business there by founding Apex Printing and Publishing Ltd. which he led to a renowned and successful business in the printing and publishing industry. Later, he established Imprint Trading Ltd. and made it successful. His strong entrepreneurial and leadership skills enabled him to encourage the NRB’s (Non Resident Bangladeshis) to invest in Bangladesh and successfully started a large real estate company in Bangladesh named Royal Homes Ltd. He is currently acting as Chairman of Royal Homes Ltd. One of the projects of Royal Homes Limited called Royal City, which is situated just outside of Sylhet town, is aimed to establish a modern independent town with all civic facilities. Along with NRB’s and local investment Mr. Faisal established Barakatullah Electro Dynamics Ltd (BEDL) in 2007 which contributes to improve national power shortage problem in Bangladesh. His unique entrepreneurial and leadership skills made BEDL fully functional and valuable within very short time.

Mr. Faisal is also involved with several community and social organizations. He is an Executive Member of Bangladesh Red Crescent Society, Sylhet Unit and Mujib-Jahan Blood Bank. He has deep passion of actively participating in the various development works in the society.

Mr. Faisal visited many countries such as India, China, Thailand, Singapore, Hong Kong, Malaysia, Saudi Arabia, Belgium, Germany, France, UK and USA for his business promotion and also attended business seminar and international exhibition there.

Mr.Faisal Ahmed Chowdhury is also a Head of Planing and Business development of the company

Mr. Md. Ahsanul Kabir, Vice Chairman

Mr. Ahsanul Kabir is a Diploma-in-civil Engineering. After completion of his education, he started his career with own proprietorships business in civil planning & construction. Over the years he has acquired vast knowledge and experience in construction sector. He is the Vice-Chairman of Barakatullah Electro Dynamics Ltd. and Director & CEO of Syltop Associates (Pvt.) Ltd.

Mr. Md. Ahsanul Kabir is also Head of Administration of the company.

Mr. Abdul Bari, Vice Chairman

Mr. Alhaj Abdul Bari is a prominent businessman. He started his business career in tourism sector in the early 70’s. Later he started Garments business and also invested in other potential project such as Sylhet Woman’s Medical College & Hospital. He has other business in U.K. where he joint as a partner of a restaurant. He is the Vice Chairman of Barakatullah Electro Dynamics Ltd.

Mr. Nayem Ahmed chowdhury, Director

Mr. Nayem Ahmed Chowdhury was born & brought up in a noble family in Sylhet in 1983. After completion of his graduation he engaged himself with the leading businessmen of the community and has devolved a large Real Estate Company in Sylhet named “Royal Homes Limited”, a joint venture project between NRB’s & local investors. Mr. Chowdhury has been appointed as a Director of Royal Homes Limited. He is experienced in different business sector.

Mr. Fahim Ahmed chowdhury, Director

Mr. Fahim Ahmed Chowdhury came from a reputed business family. After completion of his education, he started business in UK in a small face. Using his versatile business skill he has been successful. In the spirit of doing something in the motherland he returned to Bangladesh and joined BEDL as a Director.

Mr. Fahim Ahmed Chowdhury is also Project Director of the company.

PROSPECTUS32

Mr. robin chowdhury, Director

Mr. Robin Chowdhury is practicing law as a professional solicitor (Lawyer) in U.K. Besides, his engagement in business is also noticeable. He is a partner of a restaurant in U. K. Despite being a success businessman in U.K, he was very much interested to invest in home country Bangladesh. Thus he accepted the proposal for being a Director of Barakatullah Electro Dynamics Ltd. He is also a Managing Director of Kensington Ltd.

Mr. Nanu Kazi Mohammed Miah, Director

Mr. Nanu Kazi Mohammed Miah was born in a village of Gonipur, P. O & P. S Chatak, District, Sunamgonj. At his early age, he had settled in England, where he obtained a national diploma in Business management. After completing education, he decided to devote himself in business. In 1984, he started his first restaurant business in Henley-in-Arden which became very successful. From there he has opened other restaurants and now, he has a total of 7 restaurants and other companies in England, which are up and running today.

Mr. Md. shirajul Islam, Director

Mr. Sirajul Islam is an NRB and having garments business in U.K. Besides he invested a potential amount in hotel business. He has the potential skills required to manage diversified business in different countries. Barakatullah Electro Dynamics Ltd. fined the qualities that match to be a Director of the company and have the honor to absorb him for the position.

Mr. Mohammed Abdul Ahad, Director

Mr. Mohammed Abdul Ahad is an NRB and having various businesses in UK and Bangladesh. He earns success through ensuring honesty, integrity and trust. He started his business career with departmental store, later he switched in different business. Recently he joined as a director of Barakatullah Electro Dynamics Ltd. He is also a Director of Royal Homes Limited.

Mr. Kazi Mohammed Angur Miah, Director

Mr. Kazi Md. Angur Miah is a successful businessman. He has started a departmental Grocery Store at early stage of his business carrier in U.K. Later he started restaurant business too. In a developed country like U.K he is running his own business efficiently. Recently Barakatullah Electro Dynamics Ltd. offered him to join as a Director of the company and that was accepted and highly appreciated.

Mr. Abdul Mumin, Director

Mr. Abdul Momin was born in 1969 at renowned business family of Sylhet, Bangladesh. Now he is staying in United Kingdom and doing significantly well in his business through his honesty, integrity & innovative ideas. Recently he joined BEDL as a Director.

Mr. Nasim Ahmed chowdhury, Director

Mr. Nasim Ahmed started his business carrier in U.K. He won a business enterprise related to Travel and Money Exchange. He is one of the shareholders of Royal Homes Ltd. and entrusted with the responsibility of managing UK corporate office of the Company. Recently Barakatullah Electro Dynamics Ltd. offered him to join as a Director of the company and that was accepted and highly appreciated.

Mr. Manzur Ashraf Khan, Director

Mr. Manzur Ashraf Khan is an NRB and having various businesses in UK and Bangladesh. He started his business career with Travels & money exchange business. Recently he joined as a director of Barakatullah Electro Dynamics Ltd. He is also a Director of Royal Homes Limited.

Mr. Alimus sadat chowdhury, Director

Mr. Alimus Sadat Chowdhury born & brought up in a noble family in Sylhet in the year 1971. After completion of his education, he has taken the charge of Alim Industries Ltd. as a Chairman. He is one of the founder Directors of Royal Homed Ltd. Recently he joined as a director of Barakatullah Electro Dynamics Ltd.

Mr. Alimus Sadat Chowdhury is also Head of Procurement of the Company.


33

Mr. Afzal rashid chowdhury, Director

Mr. Afzal Rashid Chowdhury was born in 1969 at Sylhet, Bangladesh. By his wide range of knowledge in the field of business, he expands his business activity in a vast area. Beside the directorship of the company, he is the Chairman of Blue-Bird Auto Ltd., Managing Director of Nina-Afzal Industries Ltd., Balisera Hill Tea Co. Ltd., Abhinoy Niketon Ltd. and also the Managing Partner of Crystal Properties & Auto Diagnose Center.

Mr. Monsur Alam chowdhury, Director

Mr. Monsur Alam Chowdhury was born in 1977 in a reputed business family of Sylhet, Bangladesh. After completion of education, he started to step forward in the sector of business and is became very successful in a short span of time. He is a Director of Barakatullah Electro Dynamics Limited.

Mr. Yeahyea Murad Khan, Director

Successfully completing his honors and masters degree in economics from Dhaka University in 1994, he was actively involved in cultural and media sector in Bangladesh. This involvement includes writing and direction for stage and media. Introducing drama in schools like Scholastica or initiate and deliver a joint venture project with BRAC to make non-formal education interesting in Bangladesh.

After moving to UK, Mr. Khan completed his degree course on ‘youth and community development’ from Luton University and started to work for Northamptonshire County Council (Local Government authorities in UK) and later moved to Dudley Borough Council. He is also the director of Royal Homes Limited.

Ms. ubaydia chowdhury, Director

After successfully completion of her graduation, Mrs. Chowdhury has been starting to build herself as entrepreneur. She is one of the leading entrepreneurs in Sylhet city. Recently she joined as a director of Barakatullah Electro Dynamics Ltd.

Mr. Gulam rabbani chowdhury, Director & Managing Director

Mr. Gulam Rabbani Chowdhury, a renowned dynamic and pioneer leading business personality among the business community in home and abroad born & brought up in a noble family in Sylhet in the year 1966. At the very beginning of his educational life he could prove his genuineness & with a high ambition he dedicated his life in business profession especially in Industrial sector. With a vast knowledge of Industrial development activities in 1990 he has established Alim Industries Ltd. a President Award winning leading Agricultural Machinery manufacturer of the country in the Bengali year 1395.

Under his prudent stewardship with a group of NRB investors the Royal homes Ltd.has grown steadily over the years to become the leading real estate company in Sylhet. In international communities Mr. Chowdhury has glorious reputation as a successful entrepreneur.

He has 24 years of practical work experience in industrial sector such as Tea Processing Machinery, Electric Generator, Textile Machinery & Agro-Machinery production, Research, Development, Quality improvement and Marketing in domestic and overseas. He is a President of BSCIC Industrial Owners Association, Sylhet, Director of Sylhet Chamber of Commerce & Industries, President of Agricultural Machinery Manufacturers Association of Bangladesh, Member of Royal Agricultural Society of England, UK and Federation of Bangladesh Chambers of Commerce & Industries.

Mr. Chowdhury has visited many countries for business promotion and also attended many business seminars and international exhibitions in India, China, Thailand, Malaysia, Denmark, Germany, France, U.K. and U.S.A.

PROSPECTUS34

Credit Information Bureau (CIB) reportNeither the company nor any of its directors or shareholders who hold 5% or more shares in the paid- up capital of the issuer is loan defaulter in terms of the CIB Report of the Bangladesh Bank.

Description of senior executives and departmental heads

Name Position educational Qualification

Date of Joining in the company

Name(s) of organization(s) where worked during the last five years

Mr. Gulam Rabbani Chowdhury Managing Director

B. Sc (Hon.),Diploma in Metallurgy & Machinery Production

01-02-2008

Managing Director of Alim Industries Ltd. & Royal Homes Ltd., Partner of Brothers Machinery

Mr. Faisal Ahmed Chowdhury

Head of Planning & Business Development B. A 01-02-2008 Chairman of Royal Homes

Limited

Mr. Md. Ahsanul Kabir Head of Administration Diploma-in-civil Engineering 01-02-2008 Director & CEO of Syltop

Associates (Pvt) Ltd.

Mr. Alimus Sadat Chowdhury Head of Procurement B. A 01-12-2009

Chairman of Alim Industries Ltd., Director of Royal Homes Ltd., Partner of Brothers Machinery

Mr. Fahim Ahmed Chowdhury Project Director B. A 01-01-2009 -

Mr. Muhammed Monirul Islam

Chief Financial Officer & Company Secretary MBA (Finance) 01-11-2008 Summit Power Limited

Mr. Abdullah Al Saiful Islam Plant Manager B. Sc Engineer (Electrical) 31-01-2009 Summit Power Limited

Mr. Monowar Ahmed Manager-Admin & Commercial MBA 01-03-2009 Summit Power Limited

INVOLVEMENT OF DIRECTORS AND OFFICERS IN CERTAIN LEGAL PROCEEDINGSINVOLVEMENT OF DIRECTORS AND OFFICERS IN CERTAIN LEGAL PROCEEDINGS

No director or officer of the Company was involved in any of the following types of legal proceedings in the last ten years:

Any bankruptcy petition filed by or against any company of which any officer or director of the issuer company (a) filing the prospectus was a director, officer or partner at the time of the bankruptcy.

Any conviction of director, officer in a criminal proceeding or any criminal proceeding pending against him.(b)

Any order, judgment or decree of any court of competent jurisdiction against any director, officer permanently or (c) temporarily enjoining, barring, suspending or otherwise limiting the involvement of any director or officer in any type of business, securities or banking activities.

Any order of the Securities and Exchange Commission, or other regulatory authority or foreign financial regulatory (d) authority, suspending or otherwise limiting the involvement of any director or officer in any type of business, securities or banking activities.


35

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transaction with related partiesNeither proposed any transaction nor had any transaction during the last two years, between the issuer and any of the following persons:

Any director or executive officer of the issuer;(a)

Any director or officer;(b)

Any person owning 5% or more of the outstanding shares of the issuer;(c)

Any member of the immediate family (including spouse, parents, brothers, sisters, children, and in-laws) of any of the (d) above persons

Any transaction or arrangement entered into by the issuer or its subsidiary for a person who is currently a director or in (e) any way connected with a director of either the issuer company or any of its subsidiaries/holding company or associate concerns, or who was a director or connected in any way with a director at any time during the last three years prior to the issuance of prospectus.

Any loan either taken or given from or to any director or any person connected with the director, any loan taken from (f) any such person who did not have any stake in the issuer, its holding company or its associate concerns prior to such loan.

Any director holding any position, apart from being a director in the issuer company, in any company, society, trust, (g) organization, or proprietorship or partnership firm.

Except the transactions disclosed in Note 29.00 and Note 31.00 of the Audited Financial Statements for the year ended June 30, 2010 as follows:

Name Position Period Amount in tk. remarks

Mr. Faisal Ahmed Chowdhury Chairman, Head of Planning & Business Development July’09 to June’10 1,980,000 Remuneration

Mr. Gulam Rabbani Chowdhury Managing Director July’09 to June’10 1,980,000 Remuneration

Mr. Md. Ahsanul Kabir Vice Chairman, Head of Administration July’09 to June’10 990,000 Remuneration

Mr. Fahim Ahmed Chowdhury Director, Project Director July’09 to June’10 967,500 Remuneration

Mr. Nayem Ahmed Chowdhury Director, Former Head of Administration July’09 to Oct ‘09 330,000 Remuneration

Mr. Alimus Sadat Chowdhury Director, Head of Procurement Dec. ‘09 to June’10 140,000 Remuneration

Mr. Md. Monsur Alam Chowdhury Director, Former Asstt. Head of Procurement July’09 to Nov ‘09 348,000 Remuneration

Mr. Khijir Khan Director-Technical July’09 to June’10 1,200,000 Honorarium

Mr. Muhammed Monirul Islam Chief Financial Officer & Company Secretary July’09 to June’10 1,222,200 Salary

Mr. Abdullah Al Saiful Islam Plant Manager July’09 to June’10 1,076,900 Salary

totAL 10,234,600

Directors’ facilitiesThe Directors did not enjoy any interest or facilities, whether pecuniary or non-pecuniary excepting fee for attending in the Meetings of the Board of Directors and remuneration as disclosed in Note 7, Note 21 and Note 31.00, of the Audited Financial Statements for the year ended June 30, 2010 as follows:

ref. of Notes to the Accounts Particulars Amount in taka

Note 7.01 (pre-Operating expenses) Director’s Remuneration 1,011,000

Note 21 (General and Administrative Expenses in continuing operation) Director’s Remuneration 5,724,500

total 6,735,500

Total in Note 31.A (As per requirement of Schedule XI , part II para 4 of Companies Act, 1994 6,735,500

PROSPECTUS36

EXECUTIVE COMPENSATIONEXECUTIVE COMPENSATIONRemuneration paid to top five salaried officers

sl. No. Name of the employee Positiontotal remuneration paid for the

year ended 30-06-2010

1 Mr. Gulam Rabbani Chowdhury* Managing Director 19,80,000

2 Mr. Faisal Ahmed Chowdhury* Head of Planning & Business Development 19,80,000

3 Mr. Muhammed Monirul Islam Chief Financial Officer & Company Secretary 12,22,200

4 Mr. Abdullah Al Saiful Islam Plant Manager 10,76,900

5 Mr. Md. Ahsanul Kabir* Head of Administration 9,90,000

* Mr. Gulam Rabbani Chowdhury, Mr. Faisal Ahmed Chowdhury and Mr. Md. Ahsanul Kabir also the Director of the Company.

Aggregate amount of remuneration paid to directors and officers (as per audited accounts)

GroupAmount Paid for the

year ended 30-06-2010

Directors’ remuneration Tk. 67,35,500

Salaries & allowances Tk. 1,40,47,269

The company did not pay any remuneration to any director who was not an officer during the last accounting year.

Future compensationThere is no contract with any director or officer for future compensation.

Pay increase intentionPeriodical review of salary and benefits of the employees may be made depending on the growth of the company’s operation.

OPTIONS GRANTED TO DIRECTORS, OFFICERS AND EMPLOYEESOPTIONS GRANTED TO DIRECTORS, OFFICERS AND EMPLOYEESThe company has not granted any option to directors, officers or employees.

TRANSACTION WITH THE DIRECTORS AND SUBSCRIBERS TO THE MEMORANDUMTRANSACTION WITH THE DIRECTORS AND SUBSCRIBERS TO THE MEMORANDUMBenefit received by the Directors from the Company during the last three years as follows:(a)

Name of the Directors and subscriber to the

MemorandumNature of Value received

Period01 July 2009 to30 June 2010

Amount in Taka

01 July 2008 to30 June 2009

Amount in Taka

26 June 2007 to30 June 2008

Amount in Taka

Mr.Faisal Ahmed ChowdhuryChairman

Remuneration 19,80,000 18,00,000 7,50,000 (for 5 months from Feb-08 )

Board meeting Attendence Fees Nil Nil Nil

Dividend Nil Nil Nil

Mr.Md. Ahsanul KabirVice Chairman

Remuneration 990,000 900,000 375,000(for 5 months from Feb-08 )



Mr.Abdul BariVice Chairman

Remuneration Nil Nil Nil



Mr. Gulam Rabbani ChowdhuryDirector & Managing Director

Remuneration 1,980,000 18,00,000 7,50,000 (for 5 months from Feb-08 )




37

Name of the Directors and subscriber to the

MemorandumNature of Value received

Period

01 July 2009 to30 June 2010

Amount in Taka

01 July 2008 to30 June 2009

Amount in Taka

26 June 2007 to30 June 2008

Amount in Taka

Mr. Nayem Ahmed ChowdhuryDirector

Remuneration330,000

(for 4 months from July 09-Oct 09)

600,000 250,000(for 5 months from Feb-08 )



Mr. Fahim Ahmed ChowdhuryDirector

Remuneration 967,500450,000

(for 6 months from Jan-09 )

Nil



Mr. Robin ChowdhuryDirector




Mr. Nanu Kazi Mohammed MiahDirector




Mr. Md. Shirajul IslamDirector




Mr. Mohammed Abdul AhadDirector




Mr. Kazi Mohammed Angur MiahDirector




Mr. Abdul MuminDirector




Mr. Nasim Ahmed ChowdhuryDirector




Mr. Manzur Ashraf KhanDirector




Mr. Alimus Sadat ChowdhuryDirector

Remuneration 140,000(for 7 months from Dec-09) Nil Nil

Board meeting Attendence Fees Nil Nil NilDividend Nil Nil Nil

Mr. Afzal Rashid ChowdhuryDirector

Remuneration Nil Nil NilBoard meeting Attendence Fees Nil Nil NilDividend Nil Nil Nil

Mr. Monsur Alam ChowdhuryDirector

Remuneration348,000

(for 5 months fromJuly 09-Nov 09)

Nil Nil

Board meeting Attendence Fees Nil Nil NilDividend Nil Nil Nil

Mr. Yeahyea Murad KhanDirector


Ms. Ubaydia ChowdhuryDirector


PROSPECTUS38

The issuer also has not received any assets, services or other consideration from its Directors and Subscribers to the memorandum except :

1. Fund against allotment of shares.2. Services rendered from

Name of Directors status in the company

Mr. Faisal Ahmed Chowdhury Chairman

Mr. Md. Ahsanul Kabir Vice Chairman

Mr. Gulam Rabbani Chowdhury Director

Mr. Fahim Ahmed Chowdhury Director

Mr. Alimus Sadat Chowdhury Director

Mr. Nayem Ahmed Chowdhury* Director

Mr. Md. Monsur Alam chowdhury* Director

*The Company received service from the Mr. Nayem Ahmed Chowdhury upto October 2009 and Mr. Md. Monsur Alam Chowdhury upto November 2009.

(b) No assets were acquired or are to be acquired from the Directors and Subscribers to the memorandum.

TANGIBLE ASSETS PER SHARE AS AT 30 JUNE 2010TANGIBLE ASSETS PER SHARE AS AT 30 JUNE 2010

sl. No. Particulars taka

A. Assets :1 Property, Plant & Equipment 1,914,078,657

2 Intangible Assets 34,667

3 Pre-Operating Expenses 41,861,387

4 Inventories 8,522,606

5 Accounts Receivables 134,578,553

6 Advances, Deposits & Pre-payments 81,501,256

7 Cash & Bank Balances 11,526,877

total Assets 2,192,104,003

B. Liabilities :

1 Term Loan-Long Term Portion 1,221,464,642

2 Term Loan-Short Term Portion 180,050,507

3 Liability for Expenses 14,485,254

4 Accounts Payable 74,050,246

total Liabilities 1,490,050,649

c. Net Asset (A-B) 702,053,354

D. Intangible Asset 34,667

E. Net Tangible Asset (C-D) 702,018,687

F. Number of Shares outstanding 60,000,000

G. Net tangible assets per share (e/F) 11.70

After considering 10% stock dividend Net tangible assets per share stands as Tk. 702,018,687/66,000,000 = Tk. 10.64/-


39

OWNERSHIP OF THE COMPANY’S SECURITIESOWNERSHIP OF THE COMPANY’S SECURITIES

Shareholding structure

sl. No. Name status No. of sharesheld

Amounttaka

% Holding

1 Mr. Faisal Ahmed Chowdhury Chairman 1,787,500 17,875,000 2.71

2 Mr. Md. Ahsanul Kabir Vice Chairman 2,145,000 21,450,000 3.25

3 Mr. Abdul Bari Vice Chairman 778,492 7,784,920 1.18

4 Mr. Nasim Ahmed Chowdhury Director 919,127 9,191,270 1.39

5 Mr. Nayem Ahmed Chowdhury Director 783,750 7,837,500 1.19

6 Mr. Fahim Ahmed Chowdhury Director 585,574 5,855,740 0.89

7 Mr. Alimus Sadat Chowdhury Director 178,750 1,787,500 0.27

8 Mr. Md. Shirajul Islam Director 1,163,492 11,634,920 1.76

9 Mr. Mohammed Abdul Ahad Director 668,492 6,684,920 1.01

10 Mr. Abdul Mumin Director 1,063,865 10,638,650 1.61

11 Mr. Robin Chowdhury Director 6,324,230 63,242,300 9.58

12 Mr. Kazi Mohammed Angur Miah Director 1,163,492 11,634,920 1.76

13 Mr. Nanu Kazi Mohammed Miah Director 1,346,092 13,460,920 2.04

14 Mr. Yeahyea Murad Khan Director 339,174 3,391,740 0.51

15 Mr. Manzur Ashraf Khan Director 270,600 2,706,000 0.41

16 Ms. Ubaydia Chowdhury Director 613,492 6,134,920 0.93

17 Mr. Afzal Rashid Chowdhury Director 460,119 4,601,190 0.70

18 Mr. Monsur Alam Chowdhury Director 350,207 3,502,070 0.53

19 Mr. Gulam Rabbani Chowdhury Director & Managing Director 1,787,500 17,875,000 2.71

20 All Other General Shareholders * Shareholder 43,271,052 432,710,520 65.57

total 66,000,000 660,000,000 100

* There are total 118 shareholders in this group and none of them holds 5% or above shares in the paid up capital of Barakatullah Electro Dynamics Limited.

Securities owned by the officersNo share or security is held by any officer of the company except 1,787,500 shares held by Mr. Gulam Rabbani Chowdhury, the Managing Director of the Company and 671,000 shares held by Monowar Ahmed, Manager–Admin & Commercial and Mufti Abdul Mokshit Al Malum, Manager-Accounts.Moreover, six board members of the company, who are owner of total 5,830,781 Shares, have provided their services as paid executives in different positions during the last accounting year. Detail of their particulars is as follows:

sl. No. Name Designation shareholding

1 Mr. Faisal Ahmed Chowdhury Chairman,Head of Planning & Business Development 1,787,500

2 Mr. Md. Ahsanul Kabir Vice Chairman,Head of Administration 2,145,000

3 Mr. Nayem Ahmed Chowdhury Director,Former Head of Administration 783,750

4 Mr. Fahim Ahmed Chowdhury Director,Project Director 585,574

5 Mr. Alimus Sadat Chowdhury Director,Head of Procurement 178,750

6 Mr. Monsur Alam Chowdhury Director,Former Asst. Head of Procurement 350,207

PROSPECTUS40

DETERMINATION OF OFFERING PRICEDETERMINATION OF OFFERING PRICEThe issue price at Tk. 60 each including a premium of Tk. 50 per share is justified as detailed below:

(i) Net Asset Value Per shareThe offering price of the common stock of Barakatullah Electro Dynamics Limited has been determined by assessing the Net Asset Value (NAV). The financial calculations are presented form the audited accounts as at 30 June 2010.

sl. No. Particulars taka

A. Assets :1 Property, Plant & Equipment 1,914,078,6572 Intangible Assets 34,6673 Pre-Operating Expenses 41,861,3874 Inventories 8,522,6065 Accounts Receivables 134,578,5536 Advances, Deposits & Pre-payments 81,501,2567 Cash & Bank Balances 11,526,877

total Assets 2,192,104,003B. Liabilities :1 Term Loan-Long Term Portion 1,221,464,6422 Term Loan-Short Term Portion 180,050,5073 Liability for Expenses 14,485,2544 Accounts Payable 74,050,246

total Liabilities 1,490,050,649c. Net Asset Value (A-B) 702,053,354D. Number of Shares outstanding 60,000,000e. Net tangible assets per share (c/D) 11.70

After considering 10% stock dividend, NAV per share stands at Tk. 702,053,354/66,000,000 = Tk. 10.64/-.

(ii) earning Based Value per share

For the year ended on Net profit after tax ePs after tax

30 June 2010 Tk. 102,053,354 Tk. 1.76

The company started its commercial operation from 24 October 2009. Hence, although the above EPS is mentioned in the annual accounts, it actually reveals EPS for the last 8 months of operation. If we consider market P/E ratio of 28.46* then price of the shares of BEDL becomes Tk. 1.76 x 28.46 = Tk. 50.09 and considering sectoral P/E of Fuel & Power sector, which is 33.77* on October 2010, price of shares of BEDL becomes Tk. 1.76 x 33.77 = Tk. 59.43.

On the other hand annual EPS of the company stands at Tk. (1.76 x 12) / 8 = Tk. 2.64. If we consider the actual annualized EPS, price of the shares will become as follows:

Taking market P/E = Tk. 2.64 x 28.46 = Tk. 75.13Taking sectoral P/E = Tk. 2.64 x 33.77 = Tk. 89.15

From the above calculation it is clear that although as per accounting EPS of Tk.1.76 ended on 30 June 2010 based on 8 months operation prices of the shares of BEDL are a bit lower than that of the offer price, while considering the EPS of Tk 2.64 (annualize) prices goes higher. Hence offer price of Tk. 60 per share is justified.* Source: DSE monthly review, October 2010, Vol 25, No 10.

(iii) Projected earning Based Value per share

For the year ended on Projected ePs (tk. per share)30 June 2011 Tk. 2.5530 June 2012 Tk. 3.2730 June 2013 Tk. 3.43

Average tk. 3.08

Price of shares taking market P/E = Tk. 3.08 x 28.46 = Tk. 87.66Price of shares taking sectoral P/E = Tk. 3.08 x 33.77 = Tk. 104.01


41

(iv) Average market price of similar stocks

*closing price (tk.) as on

summit Power Limited

Dhaka electric supply co. Ltd.

Power Grid company of BD Limited

Khulna Power company Limited

November, 2009 134.52 145.72 72.12 -December, 2009 121.10 150.57 72.32 -January, 2010 132.02 163.80 80.07 -February, 2010 131.40 159.35 76.10 -March, 2010 139.80 172.32 76.05 -April,2010 126.82 184.65 79.40 253.70May, 2010 138.25 202.65 87.43 201.20June, 2010 133.82 229.33 102.50 140.50July, 2010 136.50 246.93 104.48 144.90August, 2010 144.90 252.65 103.73 141.70September, 2010 143.30 304.02 107.22 136.10October, 2010 150.40 342.50 134.28 130.70

Average of last one year 136.07 212.87 91.31 164.11

Average total 151.09

* Closing price considering Tk 10 per share

From the above record it is very clear that average market price of similar stocks is 151.09. So, offer price of Tk. 60 per share of BEDL is much lower than its expected market price. Hence the offer price is quite justified.

others factors

(v) Projected Net Asset Value Per share

Period (year) Projected NAV (tk. per share)

30 June 2011 Tk. 23.17

30 June 2012 Tk. 24.45

30 June 2013 Tk. 25.87

Average tk. 24.50

Consider prevailing Price to NAV ratio of 7.98 of similar companies price of the shares of BEDL stands at Tk. 24.50 x 7.98 = Tk. 195.51

calculation of Price to NAV ratio of similar stocks:Name of company Price/NAV ratio

Summit Power Limited 9.60 timesDhaka Electric Supply Company Limited 7.49 timesPower Grid Company of BD Limited 3.44 timesKhulna Power Company Limited 11.38 timesAverage 7.98 times

* Source: DSE monthly review, October 2010, Vol 25, No 10.

Price analysis at a glance:

sl. No. Method Price (tk.)1 Based on historical NAV Per Share (pre bonus issue) 11.702 Earning Based Value per share (considering P/E of Power sector) 89.153 Earning Based Value per share (considering P/E of market) 75.134 Projected Earning Based Value Per Share (considering P/E of Power sector) 104.015 Projected Earning Based Value Per Share (considering P/E of market) 87.666 Average market price of similar stocks 151.097 Based on Projected NAV Per Share 195.51Average 102.04

From the above analysis, it appears that every method used for determining offer price of shares of BEDL reveals a higher price than that of the offer price. Hence, the offer price of Tk. 60 per share including a premium of Tk. 50 each of ordinary shares of Barakatullah Electro Dynamics Limited is quite justified and reasonable.

The project accounts for 2011, 2012, 2013 assessed by the Company duly certified by the auditor HAQUE SHAHALAM MANSUR & CO, Chartered Accountants with the following assumptions:

PROSPECTUS42

Barakatullah Electro Dynamics Limited Projected Financial Statements (Balance sheet, Income Statement and Cash Flow Statements) of Barakatullah Electro Dynamics Limited for the year ended 30 June 2011, 2012 and 2013 have been prepared and presented by the Company. The data presented in these financial statements seem to be fair and rational. A. PROJECTED BALANCE SHEET Amount in taka as at 30.06.2011 30.06.2012 30.06.2013

ASSETSASSETS Non-Current Assets Property, Plant & Equipment 1,851,171,875 1,788,265,093 1,725,358,311 Intangible Assets 26,667 18,667 10,667 Pre-Operating Expenses 38,940,825 36,020,263 33,099,701 Total Non-Current Assets 1,890,139,367 1,824,304,023 1,758,468,679 Current Assets Inventories 19,822,254 35,838,044 57,840,140 Accounts Receivables 126,337,659 127,897,587 129,457,516 Advances, Deposits & Pre-payments 81,501,256 78,645,569 55,940,177 Cash & Bank Balances 145,806,905 359,711,087 514,510,719 Total Current Assets 373,468,074 602,092,287 757,748,552 TOTAL ASSETS 2,263,607,441 2,426,396,310 2,516,217,231 EQUITY & LIABILITIES EQUITY & LIABILITIES Shareholders’ Equity Share Capital 860,000,000 860,000,000 860,000,000 Share Premium 1,000,000,000 1,000,000,000 1,000,000,000 Retained Earnings 132,731,953 242,297,006 364,894,109 Total Shareholders’ Equity 1,992,731,953 2,102,297,006 2,224,894,109 Non-Current Liabilities Provision for Gratuity 700,000 1,400,000 2,100,000 Term Loan - Long term Portion 101,652,901 67,600,250 33,547,598 Total Non Current Liabilities 102,352,901 69,000,250 35,647,598 Current Liabilities Term Loan - Short term Portion 34,052,652 34,052,652 34,052,652 Liability for Expenses 7,037,890 7,100,286 7,162,684 Proposed Dividend 86,000,000 172,000,000 172,000,000 Accounts Payable 41,432,045 41,946,116 42,460,188 Total Current Liabilities 168,522,587 255,099,054 255,675,524 TOTAL EQUITY & LIABILITIES 2,263,607,441 2,426,396,310 2,516,217,231 Net Asset Value Per Share (NAVPS) 23.17 24.45 25.87

Sd/- HAQUE SHAHALAM MANSUR & CO.Chartered Accountants


43

B. PROJECTED INCOME STATEMENT Amount in taka for the year ended

30.06.2011 30.06.2012 30.06.2013 Revenue 753,309,908 762,656,646 772,003,383 Cost of Sales (363,991,525) (384,076,821) (406,396,003) Gross Profit 389,318,383 378,579,825 365,607,380 General & Administrative Expenses (49,327,156) (52,312,807) (53,010,599) Operating Profit 339,991,227 326,267,018 312,596,781 Financial Expenses (133,180,232) (14,195,699) (10,279,644) Profit before Tax 206,810,995 312,071,319 302,317,137 Income Tax Expenses (30,132,396) (30,506,266) (7,720,034) Profit for the year 176,678,599 281,565,053 294,597,103 Appreciation: Current year’s profit 176,678,599 281,565,053 294,597,103 Previous year’s profit 42,053,354 132,731,953 242,297,006 218,731,953 414,297,006 536,894,109 Proposed Dividend (86,000,000) (172,000,000) (172,000,000) Retained Earnings 132,731,953 242,297,006 364,894,109 Weighted average no. of ordinary share outstanding 69,333,333 86,000,000 86,000,000 Earnings per Share (EPS) 2.55 3.27 3.43

C. PROJECTED CASH FLOW STATEMENTS Amount in taka for the year ended

30.06.2011 30.06.2012 30.06.2013 Cash Flows from Operating Activities: Cash Receipts from Customer 761,550,803 761,096,718 770,443,455 Cash paid to Suppliers (428,280,948) (412,944,188) (399,311,529) Financial (Expenses)/Income (133,180,232) (14,195,699) (10,279,644) Net Cash Flow Used in Operating Activities 200,089,623 333,956,831 360,852,282 Cash Flows from Investing Activities: Acquisition of Property, Plant & Equipment - - - Advances, Deposits & Pre-payments - - - Net Cash Used in Investing Activities - - - Cash Flows from Financing Activities:

Share Capital 200,000,000 - - Share Premium 1,000,000,000 - - Payment of dividend - (86,000,000) (172,000,000)Payment of Term Loan (1,265,809,595) (34,052,649) (34,052,650)Net Cash Generated from Financing Activities (65,809,595) (120,052,649) (206,052,650) Net Cash Inflow/(Outflow) for the year 134,280,028 213,904,182 154,799,632 Opening Cash & Bank Balances 11,526,877 145,806,905 359,711,087 Closing Cash & Bank Balances 145,806,905 359,711,087 514,510,719

Sd/- HAQUE SHAHALAM MANSUR & CO.Chartered Accountants

PROSPECTUS44

D. BASIS OF ASSUMPTION 01 Revenue

Revenue is recognized as per reference Tariff multiplied by Dependable capacity of the plant. Consumer price index is taken into consideration at the time of calculating Non-Escalable rental received and Variable operating & maintenance payment (VOMP).

02 Cost of Sales

It is assumed that Gas, Spare parts and Lubricants are consumed at 33%, 5-10% and 3% respectively in upcoming years comparing to the consumption of previous year. Depreciation on plant is charged on straight line basis on cost over the useful life of the assets.

03 General & Administrative Expenses

It consists of depreciation expenses (other than plant), amortization expenses, employers’ contribution to provident fund, gratuity expenses, adjustment of prepayments and other general & administrative expenses. Depreciation on PPE & amortization expenses on Intangible assets is charged at straight line basis over the useful life of the assets. Gratuity expenses is equal to one basic of all entitled employee of the company and PF contribution is @10% of basic of all employee. It is also assumed that other General & administrative expenses is 3% of revenue in future considering the data of previous year.

04 Financial Expenses It is assumed that by using the IPO proceeds, the company will pay 90 % of its term loan. 05 Income Tax Expenses

It is assumed by the management that the tax is deducted at source @ 4% on revenue as per 52N of the Income Tax Ordinance, 1984

06 Dividend

The management of the company assume to propose cash dividend @ 10%, 20%, and 20% in the year 2011, 2012 and 2013 respectively.

07 Earnings per share Basic EPS for the year ended 30 June 2011 is calculated in the following way:

Weighted Average No. of Ordinary Share Outstanding as at 30 June 2011:

Date o allotment ordinary shareWeighted

no. of dayscalculation

Weighted Average No. of share

01-07-2010 60,000,000.00 - - 60,000,000.00

28-12-2010 (Bonus) 6,000,000.00 360 =60,00,000*360/360 6,000,000.00

01-05-2011 (IPO) 20,000,000.00 60 =2,00,00,000*60/360 3,333,333.33

86,000,000.00 69,333,333.33

Weighted Average No. of Ordinary Share Outstanding (a) 69,333,333

Profit attributable to the ordinary shareholders (b) 176,678,599

Basic Earnings per share (c=b/a) 2.55 Sd/- Dated, Dhaka HAQUE SHAHALAM MANSUR & CO.02 December 2010 Chartered Accountants


45

MARKET FOR THE SECURITIES BEING OFFEREDMARKET FOR THE SECURITIES BEING OFFERED

The issuer shall apply to:

Dhaka stock exchange Limited and chittagong stock exchange Limited9/F Motijheel C/A, CSE Building, 1080 Sk. Mujib Road Dhaka-1000 Agrabad, Chittagong-4100

within 07 (seven) working days from the date of consent accorded by the Commission to issue prospectus.

Declaration about listing of shares with the stock exchange(s)

None of the stock exchange(s), if for any reason, grants listing within 75 days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within fifteen days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (seventy five) days, as the case may be.

In case of non-refund of the subscription money within the aforesaid fifteen days, the company directors, in addition to the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (two percent) per month above the bank rate, to the subscribers concerned.

The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and submit compliance report thereon to the Commission within seven days of expiry of the aforesaid fifteen days time period allowed for refund of the subscription money.

trading and settlement

Trading and settlement regulation of the stock exchanges shall apply in respect of trading and settlement of the shares of the Company.

DESCRIPTION OF SECURITIES OUTSTANDING OR BEING OFFEREDDESCRIPTION OF SECURITIES OUTSTANDING OR BEING OFFERED

Dividend, voting, pre-emption rightsThe Share Capital of the company is divided into Ordinary Shares, carrying equal rights to vote and receive dividend in terms of the relevant provisions of the Companies Act 1994 and the Articles of Association of the company. All shareholders shall have the usual voting right voting right in person or by proxy in connection with, among others, election of Directors & Auditors and other usual agenda of General Meeting – Ordinary or Extra Ordinary. On a show of hand, every shareholder present in person and every duly authorized representative of a shareholder present at a General Meeting shall have one vote and on a poll every shareholder present in person or by proxy shall have one vote for every share held by him or her.

In case of any additional issue of shares for raising further capital the existing shareholders shall be entitled to Right Issue of shares in terms of the guidelines issued by the SEC from time to time.

Conversion and liquidation rightsIn terms of the provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are freely transferable. The Company shall not charge any fee for registering transfer of shares. No transfer shall be made to a firm, an infant or person of unsound mind.

Dividend policyThe profit of the Company, subject to any special right relating thereto created or authorized to be created by the a) Memorandum of Association and subject to the provisions of the Articles of Association, shall be divisible among the members in proportion to the amount of capital paid-up on the shares held by them respectively.

b) No larger dividend shall be declared than is recommended by the Directors, but the Company in its General Meeting may declare a smaller dividend. The declaration of Directors as to the amount of Net Profit of the Company shall be conclusive.

c) No dividend shall be payable except out of the profits of the Company or any other undistributed profits. Dividend shall not carry interest as against the Company.

PROSPECTUS46

d) The Directors may from time to time pay the members such interim dividend as in their judgment the financial position of the Company may justify.

e) A transfer of shares shall not pass the right to any dividend declared thereon before the registration of transfer.

f). There is no limitation on the payment dividends to the common stockholders of the Company.

Other rights of stockholdersIn terms of the provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are transferable. The Company shall not charge any fee, other than Government duties for registering transfer of shares. No transfer shall be made to a minor or person of unsound mind.

The Directors shall present the financial statements as required under the law & International Accounting Standard. Financial statements will be prepared in accordance with the International Accounting Standards consistently applied throughout the subsequent periods and present with the objective of providing maximum disclosure as par law and International Accounting Standard to the shareholders regarding the financial and operational position of the company. The shareholders shall have the right to receive all periodical statement and reports, audited as well as unaudited, published by the company from time to time.

The shareholder holding minimum of 10% shares of paid-up capital of the company shall have the right to requisition Extra-ordinary General Meeting of the company as provided for the section 84 of the Companies Act 1994.

DEBT SECURITIESDEBT SECURITIES

The Company has not issued or planning to issue any debt securities within six months.

LOCK-IN ON SPONSORS’ SHARESLOCK-IN ON SPONSORS’ SHARESAll issued shares of the issuer at the time of according consent to public offering shall be subject to a lock-in period of three years from the date of issuance of prospectus or commercial operation, whichever comes later.

Provided that the persons, other than directors and those who hold 5% or more, who have subscribed to the shares of the company within immediately preceding two years of according consent, shall be subject to a lock-in period of one year from the date of issuance of prospectus or commercial operation, whichever comes later.

sl.No. Name status No. of shares

Hold%

Holding

Date of Issuance of Prospectus

Period of Lock

In

expire date

of lock-in1 Mr. Faisal Ahmed Chowdhury Chairman 1,787,500 2.708 01 February 2011 03 years 31 January 2014

2 Mr. Gulam Rabbani Chowdhury Director & Managing Director 1,787,500 2.708 01 February 2011 03 years 31 January 2014

3 Mr. Md. Ahsanul Kabir Vice-Chairman 2,145,000 3.250 01 February 2011 03 years 31 January 2014

4 Mr. Abdul Bari Vice-Chairman 778,492 1.180 01 February 2011 03 years 31 January 2014

5 Mr. Nasim Ahmed Chowdhury Director 919,127 1.393 01 February 2011 03 years 31 January 2014

6 Mr. Nayem Ahmed Chowdhury Director 783,750 1.188 01 February 2011 03 years 31 January 2014

7 Mr. Fahim Ahmed Chowdhury Director 585,574 0.887 01 February 2011 03 years 31 January 2014

8 Mr. Alimus Sadat Chowdhury Director 178,750 0.271 01 February 2011 03 years 31 January 2014

9 Mr. Md. Shirajul Islam Director 1,163,492 1.763 01 February 2011 03 years 31 January 2014

10 Mr. Mohammed Abdul Ahad Director 668,492 1.013 01 February 2011 03 years 31 January 2014

11 Mr. Abdul Mumin Director 1,063,865 1.612 01 February 2011 03 years 31 January 2014

12 Mr. Robin Chowdhury Director 6,324,230 9.582 01 February 2011 03 years 31 January 2014

13 Mr. Kazi Mohammed Angur Miah Director 1,163,492 1.763 01 February 2011 03 years 31 January 2014

14 Mr. Nanu Kazi Mohammed Miah Director 1,346,092 2.040 01 February 2011 03 years 31 January 2014

15 Mr. Yeahyea Murad Khan Director 339,174 0.514 01 February 2011 03 years 31 January 2014

16 Mr. Manzur Ashraf Khan Director 270,600 0.410 01 February 2011 03 years 31 January 2014

17 Ms. Ubaydia Chowdhury Director 613,492 0.930 01 February 2011 03 years 31 January 2014

18 Mr. Afzal Rashid Choudhury Director 460,119 0.697 01 February 2011 03 years 31 January 2014

19 Mr. Monsur Alam Chowdhury Director 350,207 0.531 01 February 2011 03 years 31 January 2014

sub total 22,728,948 34.44


47


Hold%

HoldingAllotment

Date


Period of Lock

In

expire date

of lock-in

20 Mr. Alimul Ahsan Chowdhury Shareholder 10,000 15-07-2008315,000 25-04-200932,500 29-12-2010

Sub total 357,500 0.542 01 February 2011 01 Year 31 January 2012

21 Ms. Rushina Ahmed Chowdhury Shareholder 322,88032,288

355,168

25-04-200929-12-2010

Sub total 0.538 01 February 2011 01 Year 31 January 2012

22 Ms. Rohima Chowdhury Shareholder 10,000 15-07-2008152,500 25-04-200916,250 29-12-2010


23 Ms. Momthaz Chowdhury Shareholder 286,230 25-04-200928,623 29-12-2010


24 Mr. Lutfur Rahman Ali Shareholder 209,430 25-04-200920,943 29-12-2010


25 Mr. Md. Moududul Haque Shareholder 139,430 25-04-200913,943 29-12-2010


26 Ms. Mawduatun Naher Chowdhury Shareholder 81,250 25-04-20098,125 29-12-2010


27 Mr. Mijanur Rahman Choudhury Shareholder 40,000 15-07-20081,010,000 25-04-2009

105,000 29-12-2010Sub total 1,155,000 1.750 01 February 2011 01 Year 31 January 2012

28 Mr. M. K Safi Chowdhury Shareholder 650,000 25-04-200965,000 29-12-2010


29 Mr. Gulam Mohammed Chowdhury Shareholder 20,000 15-07-2008305,000 25-04-200932,500 29-12-2010


30 Mr. Nurul Haque Chowdhury Shareholder 108,330 25-04-200910,833 29-12-2010


31 Mr. Touhidul Islam Shareholder 108,330 25-04-200910,833 29-12-2010


32 Mr. Syed Nazrul Hossain Shareholder 11,000 15-07-2008267,860 25-04-200927,886 29-12-2010


33 Mr. Md. Rafiqul Haque Shareholder 11,000 15-07-2008267,860 25-04-200927,886 29-12-2010


34 Mr. Md. Abdul Kadir Shareholder 5,500 15-07-2008133,930 25-04-200913,943 29-12-2010


35 Mr. Md. Abdul Kalam Razu Shareholder 5,500 15-07-2008203,930 25-04-200920,943 29-12-2010


36 Ms. Tupa Rahman Shareholder 5,500 15-07-2008133,930 25-04-200913,943 29-12-2010


PROSPECTUS48


Hold%

HoldingAllotment

Date


Period of Lock

In

expire date

of lock-in37 Mr. Md. Babul Miah Shareholder 5,500 15-07-2008

133,930 25-04-200913,943 29-12-2010


38 Mr. Kabir A Khan Shareholder 5,500 15-07-2008133,930 25-04-200913,943 29-12-2010


39 Ms. Amina Begum Shareholder 5,500 15-07-2008273,930 25-04-200927,943 29-12-2010


40 Mr. Nurul Huda Shareholder 454,550 25-04-200945,455 29-12-2010


41 Mr. Alhaj Md. Ahmed Ali Shareholder 790,000 25-04-200979,000 29-12-2010


42 Ms. Nasreen Akhter (Runa) &Mr. Md. Mahmud Alam Shareholder 259,430 25-04-2009

25,943 29-12-2010Sub total 285,373 0.432 01 February 2011 01 Year 31 January 2012

43 Mr. Nurul Haque (Jamil) Shareholder 139,430 25-04-200913,943 29-12-2010


44 Mr. Abdul Kader Shareholder 139,430 25-04-200913,943 29-12-2010


45 Mr. Nazmul Karim Shareholder 227,270 25-04-200922,727 29-12-2010


46 Mr. Moynul Hoque Siddiqui Shareholder 227,270 25-04-200922,727 29-12-2010


47 Mr. Saydur Rahman Shareholder 139,430 25-04-200913,943 29-12-2010


48 Mr. Md. Shahidul Islam Mamun Shareholder 139,430 25-04-200913,943 29-12-2010


49 Mr. Masudur Rahman Shareholder 179,430 25-04-200917,943 29-12-2010


50 Mr. Abu Rashed Md. Mujib Noman Shareholder 139,430 25-04-200913,943 29-12-2010


51 Mr. Sourav Datta Chowdhury Shareholder 139,430 25-04-200913,943 29-12-2010


52 Mr. Asrafur Rashid Jaigirdar Shareholder 139,430 25-04-200913,943 29-12-2010


53 Mr. Kaisar Rashid Jaigirdar Shareholder 116,110 25-04-200911,611 29-12-2010


54 Mr. Mohammad Ashik Miah Shareholder 139,430 25-04-200913,943 29-12-2010


55 Ms. Sultana Begum Shareholder 139,430 25-04-200913,943 29-12-2010



49


Hold%

HoldingAllotment

Date


Period of Lock

In

expire date

of lock-in56 Mr. Md. Jalil Miah Shareholder 139,430 25-04-2009


57 Mr. Ahsanul Haque Shareholder 139,430 25-04-200913,943 29-12-2010


58 Ms. Latifa Khanom Shareholder 139,430 25-04-200913,943 29-12-2010


59 Mr. Gulam Mahmud Shareholder 139,430 25-04-200913,943 29-12-2010


60 Mr. Md. Dilwar Hossain Shareholder 139,430 25-04-200913,943 29-12-2010


61 Mr. Masum Ahmed Shareholder 139,430 25-04-200913,943 29-12-2010


62 Mr. Khasru Miah Shareholder 389,430 25-04-200938,943 29-12-2010


63 Mr. Sofiq Uddin Shareholder 139,430 25-04-200913,943 29-12-2010


64 Mr. Abu Zafar Enayet Rasul Shareholder 139,430 25-04-200913,943 29-12-2010


65 Mr. Sohal Al Razi Chowdhury Shareholder 139,430 25-04-200913,943 29-12-2010


66 Mr. Eftarul Hossain Chowdhury Shareholder 139,430 25-04-200913,943 29-12-2010


67 Mr. Md. Zillur Rahman Shareholder 139,430 25-04-200913,943 29-12-2010


68 Mr. Haji Md. Gousul Hossain Shareholder 139,430 25-04-200913,943 29-12-2010


69 Mr. Jilu Miah Shareholder 209,430 25-04-2009

20,943 29-12-2010


70 Mr. Nizam Uddin Shikder Shareholder 139,430 25-04-2009

13,943 29-12-2010


71 Mr. Rashedul Hasan Khaled Shareholder 139,430 25-04-2009

13,943 29-12-2010


72 Mr. Abdul Basith Tafader Shareholder 119,910 25-04-2009

19,520 30-06-2009

13,943 29-12-2010


73 Mr. Zakir Hussain Shareholder 139,430 25-04-200913,943 29-12-2010


74 Mr. Humayun Ahmed Shareholder 139,430 25-04-2009

13,943 29-12-2010


PROSPECTUS50


Hold%

HoldingAllotment

Date


Period of Lock

In

expire date

of lock-in75 Mr. Nillur Rahman Shareholder 139,430 25-04-2009

13,943 29-12-2010


76 Ms. Razia Khatun Shareholder 350,000 28-06-2009

150,000 30-06-2009

50,000 29-12-2010


77 Mr. Mohammed Ziaur Rahman Shareholder 40,470 30-06-2009

238,400 28-06-2009

27,887 29-12-2010


78 Mr. Mohammed Shafiqul Haque Shareholder 139,430 30-06-2009

13,943 29-12-2010


79 Mr. Musleh Uddin Chowdhury Shareholder 139,430 28-06-2009

13,943 29-12-2010


80 Mr. Abu Saleh Md. Shawkotul Islam Shareholder 150,000 30-06-2009

15,000 29-12-2010


81 Mr. Abdus S. Majid Shareholder 750,000 19-07-2009

75,000 29-12-2010


82 Mr. Abdul Rahman Shareholder 89,380 30-06-2009

8,938 29-12-2010


83 STFE Co. Ltd., Thailand Shareholder 100,000 05-08-2008

300,000 17-01-2008

1,600,000 25-04-2009

200,000 29-12-2010

Sub total 2,200,000 3.333 01 February 2011 01 Year 31 January 2012

84 Ms. Shaheda Begum Shanti Shareholder 2,740,000 19-07-2009

274,000 29-12-2010


85 Mr. Abdur Rahim Shareholder 760,000 19-07-2009

76,000 29-12-2010


86 Mr. Abdul Hannan Shareholder 2,090,000 19-07-2009

209,000 29-12-2010


87 Ms. Ifrat Jahan Chowdhury Shareholder 500,000 19-07-200950,000 29-12-2010


88 Mr. A T M Fokrul Islam Chowdhury Shareholder 450,000 19-07-200945,000 29-12-2010


89 Ms. Mahbuba Sultana Choudhury Shareholder 250,000 19-07-2009150,000 17-09-200940,000 29-12-2010


90 Ms. Tohmina Khatun Shareholder 891,720 19-07-200989,172 29-12-2010


91 Mr. Jafor Kibria Shujon Shareholder 750,000 19-07-200975,000 29-12-2010


92 Mr. Mamun Kibria Shumon Shareholder 750,000 19-07-200975,000 29-12-2010



51


Hold%

HoldingAllotment

Date


Period of Lock

In

expire date

of lock-in

93 Mr. Abdul Mannan Shareholder 250,000 19-07-200925,000 29-12-2010


94 Mr. Madhab Chandra Das Shareholder 100,000 19-07-200910,000 29-12-2010


95 Mr. Md. Al Mojahid Mullick Shareholder 300,000 19-07-200930,000 29-12-2010


96 Mr. Jashim Uddin Ahmed Shareholder 100,000 19-07-200910,000 29-12-2010


97 Mr. Mohsin Ahmed Shareholder 100,000 19-07-200910,000 29-12-2010


98 Mr. Mamunur Rashid Shareholder 100,000 19-07-200910,000 29-12-2010


99 Mr. Md. Gazi Toufiqur Rahman Shareholder 100,000 19-07-200910,000 29-12-2010


100 Mr. Mamunur Rashid Shahin Shareholder 100,000 19-07-200910,000 29-12-2010


101 Mr. Aminur Rashed Shareholder 100,000 19-07-200910,000 29-12-2010


102 Mr. Md. Tipu Sultan Shareholder 200,000 19-07-200920,000 29-12-2010


103 Mr. A M Aminuddin Shareholder 150,000 19-07-200915,000 29-12-2010


104 Mr. Syed Rafiqul Haque Shareholder 35,750 19-07-20093,575 29-12-2010


105 Mr. Md. Jasim Uddin Shareholder 100,000 19-07-200910,000 29-12-2010


106 Mr. Sayed Zabir Hossain Shareholder 200,000 19-07-200920,000 29-12-2010


107 Mr. Abdul Mosabbir Shareholder 250,000 19-07-200925,000 29-12-2010


108 Mr. Aminul Islam Choudhury Shareholder 333,330 19-07-200933,333 29-12-2010


109 Mr. Gulam Isdani Chowdhury Shareholder 404,280 19-07-200940,428 29-12-2010


110 Ms. Sayeda Yasmin Hussain Shareholder 502,750 19-07-200950,275 29-12-2010


111 Ms. Tahsina Chowdhury Shareholder 110,000 19-07-200911,000 29-12-2010


112 Ms. Shahrina Newaz Shareholder 325,330 19-07-200932,533 29-12-2010


PROSPECTUS52


Hold%

HoldingAllotment

Date


Period of Lock

In

expire date

of lock-in113 Ms. Farhana Aktar Chowdhury Shareholder 140,000 19-07-2009


114 Ms. Saleka Khanom Shareholder 394,280 19-07-200939,428 29-12-2010


115 Ms. Abeda Khanom Chowdhury Shareholder 309,280 19-07-200930,928 29-12-2010


116 Mr. Capt. Saifur Rahman Shareholder 1,000,000 19-07-2009100,000 29-12-2010


117 Mr. Umar Haider Khan Shareholder 500,000 19-07-200950,000 29-12-2010


118 Eminent Securities Ltd. Shareholder 500,000 19-07-200950,000 29-12-2010


119 Mr. Mohammed Tariq Ismail Shareholder 500,000 19-07-2009200,000 17-09-200970,000 29-12-2010


120 Mr. Mozammel Haque Bhuiyan Shareholder 200,000 19-07-200920,000 29-12-2010


121 Mr. Syed Golam Wadud Shareholder 200,000 19-07-200920,000 29-12-2010


122 Mr. M M Mustafa Zamal Shareholder 100,000 19-07-200910,000 29-12-2010


123 Mr. Engr. Md. Mokhlesur Rahman Shareholder 300,000 19-07-200930,000 29-12-2010


124 Foster Securities Ltd. Shareholder 130,000 19-07-200913,000 29-12-2010


125 Mr. A.B.M. Golam Moula Shareholder 100,000 19-07-200910,000 29-12-2010


126 Ms. Jesmin Sultana & Ms. Sultana Jesmin Chino Shareholder 100,000 19-07-2009


127 Mr. Mehdi Hasan Khan Shareholder 170,000 19-07-2009

17,000 29-12-2010


128 Mr. M. Emdadul Haque Shareholder 114,280 19-07-2009

11,428 29-12-2010


129 Mr. Suhel Ahmed Chowdhury Shareholder 249,000 19-07-2009

24,900 29-12-2010


130 Mr. Monowar Ahmed & Mr. Mufti Abdul Mokshit Al Malum Shareholder 300,000 19-07-2009

310,000 17-09-2009

61,000 29-12-2010



53


Hold%

HoldingAllotment

Date


Period of Lock

In

expire date

of lock-in

131 Ms. Afia Begum Shareholder 100,000 19-07-2009

10,000 29-12-2010


132 Bangladesh Mutual Securities Ltd. Shareholder 1,500,000 17-09-2009

150,000 29-12-2010


133 Mr. M A Kashem Shareholder 1,000,000 17-09-2009

100,000 29-12-2010


134 Mr. Tajul Islam Shareholder 1,000,000 17-09-2009

100,000 29-12-2010


135 Ms. Rezia Akhter Begum Shareholder 230,000 17-09-2009

23,000 29-12-2010


136 Mr. Engr. Alauddin Al Mamun Shareholder 230,000 17-09-2009

23,000 29-12-2010


137 Mr. Md. Kamal Uddin Shareholder 230,000 17-09-2009

23,000 29-12-2010


sub total 43,271,052 65.56

Grand total 66,000,000 100

REFUND OF SUBSCRIPTION MONEYREFUND OF SUBSCRIPTION MONEY

As per SEC Notification Dated February 9, 2010, the issuer shall refund application money to the unsuccessful applicant of the public offer by any of the following manner based on the option given by the applicant in the application form;-

Through banking channel for onward deposit of the refund money into the applicant’s bank account as provided in a) the respective application form for subscription; or

Through issuance of refund warrant in the name and address of the applicant as provided in the respective b) application form for subscription: Provided that, in case of deposit into the applicant’s bank account, the applicant will bear the applicable service charge, if any, of the applicant’s banker, and the issuer shall simultaneously issue a letter of intimation to the applicant containing, among others, the date and amount remitted with details of the bank through and to which bank such remittance has been effected.

PROSPECTUS54

SUBSCRIPTION BY AND REFUND TO NON-RESIDENT BANGLADESHI (NRB)SUBSCRIPTION BY AND REFUND TO NON-RESIDENT BANGLADESHI (NRB)A non-resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank payable (1) at Dhaka, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for the value of securities applied for through crossed bank cheque marking “Account Payee only”.

The value of securities applied for by such person may be paid in Taka or US Dollar or UK Pound Sterling or EURO (2) at the rate of exchange mentioned in the securities application form.

Refund against oversubscription shall be made in the currency in which the value of securities was paid for by (3) the applicant through Account Payee bank cheque payable at Dhaka with bank account number, bank’s name and branch as indicated in the securities application form. If the applicants’ bank accounts as mentioned in their IPO Application Forms are maintained with the Bankers to the Issue, refund amount of those applicants will be directly credited into the respective bank accounts as mentioned in their IPO Application Forms.

AVAILABILITY OF SECURITIESAVAILABILITY OF SECURITIESOffer

1. Shares

Particulars No. of shares Amount in tk.

A. 10% of IPO i.e. 2,000,000 Ordinary Shares shall be reserved for Non Resident Bangladeshis 2,000,000 120,000,000

B. 10% of IPO i.e. 2,000,000 Ordinary Shares shall be reserved for Mutual funds and Collective investment schemes registered with the Commission 2,000,000 120,000,000

c. The remaining 80% of IPO i.e. 16,000,000 Ordinary Shares shall be opened for subscription by the General Public 16,000,000 960,000,000

total 20,000,000 1,200,000,000

2. All shares as stated in clause 1.A, 1.B and 1.C shall be offered for subscription and subsequent allotment by the issuer, subject to any restriction, which may be imposed, from time to time, by the Securities and Exchange Commission.

3. In case of over-subscription under any of the categories mentioned in 1.A, 1.B and 1.C the Issue Manager shall conduct an open lottery of all the applications received under each category separately in accordance with the letter of consent issued by the Securities and Exchange Commission.

4. In case of under-subscription under any of the 10% categories mentioned in 1.A and 1.B, the unsubscribed portion shall be added to the general public category and, if after such addition, there is over-subscription in the general public category, the issuer and the issue manager shall jointly conduct and open lottery of all the applicants added together.

5. In case of under-subscription of the public offering, the unsubscribed portion of securities shall be taken up by the underwriter(s).

6. The lottery as stated in clause (3) and (4) shall be conducted in presence of representatives form the issuer, the stock exchanges, and the applicants, if there be any.

Application for subscriptionApplication for shares may be made for a minimum lot for 1. 200 Ordinary shares to the value of tk 12,000 and should be made on the Company’s Printed Application forms. Application Form and Prospectus may be obtained from the Registered Office & Corporate Office of the Company, members of Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd. or from the Bankers to the Issue. In case adequate forms are not available, applicants may use photocopied/cyclostyled/hand written/typed copies of the forms. Applications must not be for less than 200 shares. Any application not meeting this criterion will not be considered for allotment purpose.

Joint application form for more than two persons will not be accepted. In the case of joint application each party 2. must sign the application form.


55

Dhaka Bank LimitedGoran Business Center, DhakaKhilgaon Branch, DhakaMirpur Branch, DhakaSavar Bazar Branch, DhakaBulta Branch, NarayangonjCDA Avenue Branch, ChittagongCox’s Bazar Branch, Cox’s BazarComilla Branch, ComillakDA Avenue Branch, KhulnaUposhahar Branch, SylhetFirst security Islami Bank Ltd.Azampur Branch, DhakaBanani Branch, DhakaBangshal Branch, DhakaBanoshree Branch, DhakaBiswa Road Branch, DhakaDhanmondi Branch, DhakaDilkusha Branch, DhakaDonia Branch, DhakaGulshan Branch, DhakaIslampur Branch, DhakaMirpur Branch, DhakaMohakhali Branch, DhakaMotijheel Branch, DhakaRing Road Branch, DhakaSavar Branch, DhakaSenanibash Branch, DhakaTopkhana Road Branch, DhakaCollage Gate Branch, GazipurAgrabad Branch, Chittagong

Andar Killah Branch, ChittagongBohaddarhat Branch, ChittagongHat Hazari Branch, ChittagongJubilee Road Branch, ChittagongKhatungonj Branch, ChittagongPatia Branch, ChittagongProbortak Mor Branch, ChittagongChokioria Branch, Cox’s BazarCox’s Bazar Branch, Cox’s BazarComilla Branch, ComillaRangpur Branch, RangpurBogra Branch, BograRajshahi Branch, RajshahiAmbarkhana Branch, SylhetSylhet Branch, SylhetTaltola Branch, SylhetJessore Branch, JessoreKhulna Branch, KhulnaMoulvibazar Branch, MoulvibazarPatuakhali Branch, PatuakhaliSatkhira Branch, SatkhiraGobindagonj Branch, SunamgonjLakshmipur Branch, LakshmipurIcBHead Office, DhakaLocal Office, DhakaBarishal Branch, BarishalBogra Branch, BograChittagong Branch, ChittagongKhulna Branch, KhulnaRajshahi Branch, Rajshahi

Application must be in full name of individuals or limited companies or trusts or societies and not in the name 3. of firms, minors or persons of unsound mind. Applications from insurance, financial and market intermediary companies must be accompanied by Memorandum and Articles of Association.

4. An applicant cannot submit more than two applications, one in his own name and another jointly with another person. In case an applicant makes more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, whole or part of application money may be forfeited by the commission.

5. Bangladeshi Nationals (including non-resident Bangladeshi Nationals working abroad) and Foreign Nationals shall be entitled to apply for shares.

6. Payment for subscription by investors other than Non-Resident Bangladeshi may be made to the said branches/office of the banks mentioned below in Cash/Cheque/Pay Order/Bank Draft. The Cheque/Pay Order/Bank Draft shall be made payable to the bank to which it is sent and be marked “Barakatullah electro Dynamics Limited” and shall bear the crossing “A/c Payee only” and must be drawn on a bank in the same town of the bank to which application form is deposited.

7. A Non-Resident Bangladeshi (NRB) shall apply against the IPO either directly by enclosing a foreign demand draft drawn on a bank payable at Dhaka, or through a nominee (including a Bank or a Company) by paying out of foreign currency deposit account maintained in Bangladesh, for the value of securities applied for. The value of securities applied for may be paid in Taka, US Dollar or UK Pound Sterling or EURO at the spot Buying (TT Clean) rate of exchange prevailing on the date of opening of subscription. Refund against over subscription of shares shall be made in the currency in which the value of 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 draft or cheque to the Company. Copies of application form and prospectus shall be available with Bangladesh Embassy/High Commission in USA, UK, Saudi Arabia, UAE, Qatar, Kuwait, Oman, Bahrain, Malaysia and South Korea and web site of the issuer, issue manager, DSE, CSE and the SEC.

8. All completed application forms together with remittances for the full amount payable on application shall be lodged by investors other than Non-Resident Bangladeshis with the following branches of the Bankers to the Issue:

Bank Asia LimitedBashundhara Branch, DhakaCorporate Branch, DhakaDhanmondi Branch, DhakaGulshan Branch, DhakaMCB Banani Branch, DhakaMCB Dilkusha Branch, DhakaMirpur Branch, DhakaMitford Branch, DhakaMoghbazar Branch, DhakaMohakhali Branch, DhakaNorth South Rd. Branch, DhakaPrincipal Office Branch, DhakaProgoti Sarani Branch, DhakaScotia Branch, DhakaShantinagar Branch, DhakaUttara Branch, DhakaAgrabad Branch, ChittagongAnderkilla Branch, ChittagongBahadderhat Branch, ChittagongCDA Avenue Branch, ChittagongKamal Bazar Branch, ChittagongKhatunganj Branch, ChittagongMCB Sk. Mujib Road Br., ChittagongStation Road Branch, ChittagongSylhet Main Branch, SylhetSylhet Uposhahar Branch, SylhetRajshahi Branch, RajshahiKhulna Branch, KhulnaBogra Branch, BograJessore Branch, JessoreIshwardi Branch, Pabna

PROSPECTUS56

Sylhet Branch, Sylhetone Bank LimitedBanani Branch, DhakaBanasree Branch, DhakaBangshal Branch, DhakaDhanmondi Branch, DhakaElephant Road Branch, DhakaGanakbari (EPZ) Branch, DhakaGulshan Branch, DhakaImamganj Branch, DhakaJatrabari Branch, DhakaJoypara Branch, DhakaKakrail Branch, DhakaKawran Bazar Branch, DhakaMirpur Branch, DhakaMotijheel Branch, DhakaNawabgonj Branch, DhakaPrincipal Branch, DhakaProgati Sharani Branch, DhakaUttara Branch, DhakaNarayanganj Branch, NarayanganjAgrabad Branch, ChittagongCDA Avenue Branch, ChittagongJubilee Road Brahch, ChittagongKhatunganj Branch, ChittagongNanupur Bazar Branch, ChittagongCox’s Bazar Branch, Cox’s BazarDagonBhuiyan Branch, FeniFeni Branch, FeniIslampur Branch, SylhetSylhet Branch, SylhetChowmuhuni Branch, NoakhaliMaijdee Court Branch, NoakhaliChandragonj Branch, LakshmipurRaipur Branch, LaxmipurRamganj Branch, LaxmipurBogra Branch, BograJessor Branch, JessorLaksham Branch, ComillaSherpur Branch, Moulvi BazarSirajgonj Branch, Sirajgonjshahjalal Islami Bank LimitedBanani Branch, DhakaBangshal Branch, DhakaBijoynagar Branch, DhakaCollege Gate Branch, DhakaDhaka Main Branch, DhakaDhanmondi Branch, DhakaForeign Exchange Branch, DhakaGulshan Branch, DhakaGulshan Sourh Av. Br. DhakaKawran Bazar Branch, DhakaMirpur Branch, DhakaMitford Branch, DhakaMotijhee Branch, DhakaPanthapath Branch, DhakaSatmasjid Road Branch, DhakaSavar Branch, DhakaUttara Branch, DhakaAgrabad Branch, ChittagongChawkbazar Branch, Chittagong

Jubilee Road Branch, ChittagongKhatunganj Branch, ChittagongMuradpur Branch, ChittagongDargah Gate Branch, SylhetGoala Bazar Branch, SylhetSylhet Branch, SylhetComilla Branch, Comillasoutheast Bank LimitedAganagar Branch, DhakaAgargaon Branch, DhakaAshulia Branch (Rural), DhakaBanani Branch, DhakaBangshal Branch, DhakaBashundhara Branch, DhakaCorporate Branch, DhakaDhanmondi Branch, DhakaImamganj Branch, DhakaKakrail Branch, DhakaMohammadpur Branch, DhakaMouchak Branch, DhakaNew Elephant Road Branch, DhakaNew Eskaton Branch, DhakaPragati Sarani Branch, DhakaPrincipal Branch, DhakaSat Mashjid Road Branch, DhakaSavar Branch, DhakaShaymoli Branch, DhakaUttara Branch, DhakaMadhabdi Branch (Rural), NarshingdiNarayanganj Branch, NarayanganjTongi Branch, GazipurCDA Avenue Branch, ChittagongHalishahar Branch, ChittagongMadambibir Hat Branch, ChittagongMomin Road Branch, ChittagongPahartali Branch, ChittagongCox’s Bazar Branch, Cox’s BazarChhagalnaiya Branch, FeniFeni Branch, FeniKulaura Branch (Rural), Moulvi BazarMoulvibazar Branch, Moulvi BazarBandar Bazar Branch, SylhetChouhatta Branch, SylhetLaldighirpaar Branch, SylhetPathantula Branch, SylhetBarisal Branch, BarisalBashurhat Branch (Rural), NoakhaliBogra Branch, BograComilla Branch, ComillsKhulna Branch, KhulnaNaogaon Branch, NaogaonRajshahi Branch, RajshahiRangpur Branch, Rangpurstandard chartered BankMirpur(OPC) Branch, DhakaMotijheel(OPC) Branch, DhakaAgrabad Branch, ChittagongNasirabad Branch, ChittagongBogra Branch, BograKhulna Branch, KhulnaSylhet Branch, Sylhet

trust Bank LimitedDilkusha Corp. Branch, DhakaKafrul Branch, DhakaMillenium Branch, DhakaPrincipal Branch, DhakaRadisson Hotel Branch, DhakaSavar Cantonment Branch, DhakaSena Kalyan Bhaban Branch, DhakaUttara Corporate Branch, DhakaJoydebpur Branch, GazipurTongi Branch, GazipurChittagong Cant. Branch, ChittagongNaval Base Branch, ChittagongFeni Branch, FeniBeanibazar Branch, SylhetJalalabad Cant. Br., SylhetComilla Cant. Branch, ComillaAshugonj Branch, BrahmanbariaBogra Cantonment Branch, BograChowmohoni Branch, NoakhaliJessore Cantonment Branch, JessoreKhulna Branch, KhulnaKhwaja Yunus Medical College Br., SirajgonjMomenshahi Cant. Br., MymensinghNarsingdi Branch, NarsingdiRangpur Cant. Branch, RangpurS.S. Cantonment Branch, TangailBrAc Bank LimitedAsad Gate Branch, DhakaBanani Branch, DhakaBashundhara Branch, DhakaDonia Branch, DhakaEskaton Branch, DhakaGraphics Building Branch, DhakaGulshan Branch, DhakaManda Branch, DhakaMirpur Branch, DhakaNawabpur Branch, DhakaNarayangonj Branch, NarayangonjRampura Branch, DhakaShyamoli Branch, DhakaUttara Branch, DhakaAgrabad Branch, ChittagongCDA Avenue Branch, ChittagongHalisohor Branch, ChittagongKazirDeuri Branch, ChittagongMomin Road Branch, ChittagongBogra Branch, BograRajshahi Branch, RajshahiJessore Branch, JessoreKhulna Branch, KhulnaBarishal Branch, BarishalZindabazar Branch, Sylhet


57

9. The IPO subscription money collected from investors (other than Non-Resident Bangladeshis in US Dollar or UK Pound sterling or EURO) by the bankers to the issue will be remitted to the Company’s A/c # 1501201301509006 with BRAC Bank Limited, Gulshan Branch, Dhaka, Bangladesh for this purpose.

10. The subscription money collected from Non-Resident Bangladeshis in US Dollar or UK Pound Sterling or EURO shall be deposited to three FC accounts opened by the Company for IPO purpose are as follows:

sl. No. Name of the Fc Accounts Account No. Bank & Branch currency

1 Barakatullah Electro Dynamics Limited 1501201301509003 BRAC Bank Limited, Gulshan Branch US Dollar

2 -do- 1501201301509004 BRAC Bank Limited, Gulshan Branch GBP

3 -do- 1501201301509005 BRAC Bank Limited, Gulshan Branch EURO

11. The Company shall close the accounts mentioned above after refund of over-subscription, if any.

APPLIcAtIoNs Not IN coNForMItY WItH tHe ABoVe reQuIreMeNts AND tHe INstructIoNs PrINteD oN tHe APPLIcAtIoN ForM Are LIABLe to Be reJecteD.

AllotmentThe company shall issue share allotment letters to all successful applicants within 5 (five) weeks from the date of the subscription closing date. At the same time, the unsuccessful applicants shall be refunded with the application money within 5 (five) weeks from the closing of the subscription date by crediting directly to the recipients’ bank accounts. A compliance report shall be submitted with the Commission within 7(seven) weeks from the date of closure of subscription.

UNDERWRITING OF SHARESUNDERWRITING OF SHARES

The Initial Public Offering (IPO) is for 20,000,000 ordinary shares of Tk. 60 each including a premium of Tk. 50 per share amounting to Tk. 1,200,000,000. As per SEC’s guideline 50% of the said amount i.e. 10,000,000 ordinary shares of Tk. 60 each including a premium of Tk. 50 per share amounting to Tk. 600,000,000 has been underwritten by the following institutions:

sl.No. Name and address of underwriters Number of shares

underwritten Amount (tk)

1 Bangladesh Mutual securities LimitedShareef Mansion (7th Floor), 56-57, Motijheel C/A Dhaka-1000 300,000 18,000,000

2 Bank Asia LimitedTea Board Building (1st Floor), 111-113, Motijheel C/A Dhaka-1000 300,000 18,000,000

3swadesh Investment Management LimitedUnique Trade Center (Level 11), Suit No. 01, 8 PanthapathKawran Bazar, Dhaka-1215

300,000 18,000,000

4Mercantile securities LimitedParamount Heights (13th Floor), 65/2/1 Box Culvert Road, Purana Paltan, Dhaka-1000

300,000 18,000,000

5ec securities LimitedNafi Tower (6th Floor), Plot No. 53, Gulshan South C/A, Gulshan-1Dhaka-1212

600,000 36,000,000

6 Grameen capital Management LimitedGrameen Bank Bhaban (10th Floor), Mirpur-2, Dhaka-1216 600,000 36,000,000

7 IcB capital Management LimitedBDBL Bhaban (14th Floor), 8 DIT Avenue, Dhaka-1000 600,000 36,000,000

8 IDLc Finance LimitedEunoos Trade Center (Level 21), 52-53 Dilkusha C/A, Dhaka-1000 600,000 36,000,000

9 LankaBangla Finance LimitedA-A Bhaban (Level 6), 23 Motijheel C/A, Dhaka-1000 600,000 36,000,000

PROSPECTUS58

10 Prime Bank Investment LimitedPeoples Insurance Bhaban (11th Floor), 36 Dilkusha C/A, Dhaka-1000 600,000 36,000,000

11 southeast Bank LimitedEunoos Centre (Level 2), 52-53 Dilkusha C/A, Dhaka-1000 600,000 36,000,000

12 union capital LimitedNoor Tower (5th Floor), 73 Sonargaon Road, Dhaka-1205 600,000 36,000,000

13 uttara Finance and Investments LimitedJiban Bima Tower (6th Floor), 10 Dilkusha C/A, Dhaka-1000 600,000 36,000,000

14 Prime Finance capital Management Limited63, Dilkusha C/A (3rd Floor), Dhaka-1000 3,400,000 204,000,000

total 10,000,000 600,000,000

Principal terms and conditions of underwriting agreementPrincipal terms and conditions of underwriting agreement

If and to the extent that the shares offered to the public by a Prospectus authorized hereunder shall not have been 1. subscribed and paid for in cash in full by the closing date, the Company shall within 10 (ten) days of the closure of subscription call upon the underwriter in writing with a copy of said writing to the Securities and Exchange Commission, to subscribe for the shares not subscribed by the closing date and to pay for in cash in full for such unsubscribed shares in cash in full within 15 (fifteen) days of the date of said notice and the said amount shall have to be credited into shares subscription account within the said period.

If payment is made by Cheque/Bank Draft by the underwriter it will be deemed that the underwriter has not 2. fulfilled his obligation towards his underwriting commitment under the Agreement, until such time as the Cheque/Bank Draft has been en-cashed and the Company’s account credited.

In any case within 7 (seven) days after the expiry of the aforesaid 15 (fifteen) days, the Company shall send proof 3. of subscription and payment by the underwriter to the Commission.

In the case of failure by the underwriter to pay for the shares under the terms mentioned above, the said 4. Underwriter will not be eligible to underwrite any issue, until such time as he fulfils his underwriting commitment under the Agreement and also other penalties as may be determined by the Commission may be imposed on him.

In case of failure by any underwriter to pay for the shares within the stipulated time, the Company/Issuer will be 5. under no obligation to pay any underwriting commission under the Agreement.

In case of failure by the Company to call upon the underwriter for the aforementioned purpose within the stipulated 6. time, the Company and its Directors shall individually and collectively be held responsible for the consequences and/or penalties as determined by the Securities and Exchange Commission under the law may be imposed on them.


59

FINANCIAL

60 ProspectusPROSPECTUS60

AUDITORS’ REPORTAUDITORS’ REPORTTO THE SHAREHOLDERS OFTO THE SHAREHOLDERS OFBARAkATULLAH ELECTRO DynAmiCS LimiTEDBARAkATULLAH ELECTRO DynAmiCS LimiTED

We have audited the accompanying Financial Statements of Barakatullah ElEctro DynamicS limitED comprising of Balance Sheet as at June 30, 2010 and the related

income Statement, Statement of changes in Equity and cash Flow Statement together with related Notes thereto for the year ended June 30, 2010. The preparation of these financial statements is the responsibility of the company’s management. our responsibility is to express an independent opinion on these financial statements based on our audit.

We conducted our audit in accordance with Bangladesh Standards on auditing (BSa). those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the accounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements prepared in accordance with International Accounting Standards (iaS) as adopted by the institute of chartered accountants of Bangladesh (icaB) as Bangladesg accounting Standards (BaS), represent a true and fair view of the state of the company’s affairs as at June 30, 2010 and of the results of its operations and its cash flows for the year then ended and comply with the Companies Act, 1994, the Securities & Exchange Rules, 1987 and other applicable laws and regulations.

We also report that:We obtained all the information and explanations which to the best of our knowledge and a) belief were necessary for the purpose of our audit and made due verification thereof;in our opinion, the company has kept proper books of account as required by law so far b) as it appeared from our examination of those books;the company’s Balance Sheet and income Statement dealt with by the report are in c) agreement with the books of account; andthe expenditure incurred was for the purposes of the company’s business.d)

Sd/-HAQUE SHAHALAM MANSUR & CO.Chartered AccountantsDate, DhakaAugust 16, 2010

Barakatullah Electro Dynamics Limited 61Lighting Bangladesh, We Promise


61

Barakatullah Electro Dynamics Limited Barakatullah Electro Dynamics Limited Balance SheetBalance Sheet as at June 30, 2010

Notes 30-06-2010 30-06-2009 Taka TakaASSETS Non-Current Assets Property, Plant & Equipment 5.00 1,914,078,657 33,623,688 Preliminary Expenses - 532,600 Intangible Assets 6.00 34,667 - Pre-Operating Expenses 7.00 41,861,387 33,276,023 Capital Work-in-Progress 8.00 - 1,787,436,095 Total Non-Current Assets 1,955,974,711 1,854,868,406 Current Assets Inventories 9.00 8,522,606 - Accounts Receivables 10.00 134,578,553 - Advances, Deposits & Pre-payments 11.00 81,501,256 47,389,549 Cash & Bank Balances 12.00 11,526,877 67,952,619 Total Current Assets 236,129,292 115,342,168 TOTAL ASSETS 2,192,104,003 1,970,210,574 EQUITY & LIABILITIES Shareholders’ Equity Share Capital 13.00 600,000,000 350,000,000 Share Money Deposit 14.00 - 174,635,936 Retained Earnings 102,053,354 - Total Shareholders’ Equity 702,053,354 524,635,936 Non-Current Liabilities Term Loan-Long Term Portion 15.00 1,221,464,642 722,779,830 Total Non-Current Liabilities 1,221,464,642 722,779,830 Current Liabilities Term Loan-Short Term Portion 15.00 180,050,507 132,088,080 Deferred Liabilities for Plant & Equipment 16.00 - 541,800,000 Liability for Expenses 17.00 14,485,254 48,906,728 Accounts Payable 18.00 74,050,246 - Total Current Liabilities 268,586,007 722,794,808 TOTAL EQUITY & LIABILITIES 2,192,104,003 1,970,210,574 Net Assets Value Per Share (NAVPS) 11.70 14.99 The accounting policies and other notes form an integral part of these financial statements.

Sd/- Sd/- Sd/-

Company Secretary Managing Director Chairman

This is the Balance Sheetreferred to in our report of even date.

Sd/-Dated, Dhaka HAQUE SHAHALAM MANSUR & CO.August 16, 2010 Chartered Accountants.


Barakatullah Electro Dynamics Limited Barakatullah Electro Dynamics Limited Income Statement Income Statement for the year ended June 30, 2010

Particulars Notes 30-06-2010 30-06-2009 Taka Taka Revenue 19.00 514,542,637 -

Cost of Sales 20.00 (245,353,077) - Gross Profit 269,189,560 - General & Administrative Expenses 21.00 (50,514,638) -Operating Profit 218,674,922 - Financial Income 22.00 724,753 - 219,399,675 - Financial Expenses 23.00 (111,763,872) -Profit before Tax 107,635,803 - Provision for Tax 17.01 (5,582,449) -Profit for the year 102,053,354 - Earnings per Share: Basic Earnings per Share (par value Tk. 10 each) 24.00 1.76 - The accounting policies and other notes form an integral part of these financial statements.

Sd/- Sd/- Sd/-Company Secretary Managing Director Chairman

This is the Income Statementreferred to in our report of even date.




63

Barakatullah Electro Dynamics Limited Barakatullah Electro Dynamics Limited Statement of Changes in Equity Statement of Changes in Equity for the year ended June 30, 2010 Amount in TakaParticulars Share Share Money Retained Total Capital Deposit Earnings Taka Balance as on 01-07-2008 15,000,000 148,829,877 - 163,829,877 Net Profit/(Loss) during the year - - - - Transactions with the shareholders: Additional Deposit during the year - 25,806,059 - 25,806,059Issue of Ordinary Share 335,000,000 - - 335,000,000Balance as on 30-06-2009 350,000,000 174,635,936 - 524,635,936 Particulars Share Share Money Retained Total Capital Deposit Earnings Taka Balance as on 01-07-2009 350,000,000 174,635,936 - 524,635,936 Net Profit/(Loss) during the year - - 102,053,354 102,053,354 Transactions with the shareholders: Additional Deposit during the year - 75,364,064 - 75,364,064 Adjustment during the year - (250,000,000) - (250,000,000)Issue of Ordinary Share 250,000,000 - - 250,000,000 Balance as on 30-06-2010 600,000,000 - 102,053,354 702,053,354

The accounting policies and other notes form an integral part of these financial statements.


This is the Statement of Changes in Equityreferred to in our report of even date.



Barakatullah Electro Dynamics Limited Barakatullah Electro Dynamics Limited Cash Flow StatementCash Flow Statement for the year ended June 30, 2010 Particulars 30-06-2010 30-06-2009 Taka Taka Cash Flow from Operating Activities: Cash Receipts from Customer 379,964,084 - Cash paid to Suppliers (223,600,969) - Financial Expenses (111,039,119) Net Cash Flow Used in from Operating Activities 45,323,996 - Cash Flow from Investing Activities:

Acquisition of Fixed Assets (1,923,025,887) (17,430,947)Disposal of PPE 364,160 - Capital Work-in-Progress 1,787,436,095 (1,740,024,527)Advances, Deposits & Pre-payments (36,163,004) (45,764,549)Investment in Pre-Operating Expenses (10,532,405) (17,712,875)Intangible Assets (40,000) - Net Cash Used in Investing Activities (181,961,041) (1,820,932,898) Cash Flow from Financing Activities: Share Capital 250,000,000 335,000,000 Share Money Deposit (174,635,936) 25,806,059 Term Loan 498,684,812 854,867,910 Short Term Loan 47,962,427 (3,572,535)Payment of Deferred Liabilities for Plant & Equipment (541,800,000) 541,800,000 Net Cash Generated from Financing Activities 80,211,303 1,753,901,434 Net Cash Inflow/Outflow) for the year (56,425,742) (67,031,464) Opening Cash & Bank Balances 67,952,619 134,984,083 Closing Cash & Bank Balances 11,526,877 67,952,619 Net Operating Cash Flows Per Share (NOCFPS) 0.76 - The accounting policies and other notes form an integral part of these financial statements.


This is the Cash Folw Statementreferred to in our report of even date.




65

Notes to the Financial Statements Notes to the Financial Statements as at and for the year ended June 30, 2010 1.00 Reporting Entity: 1.01 Background of the Company:

Barakatullah Electro Dynamics Limited (the Company) was incorporated in Bangladesh on June 26, 2007 as a Private Limited Company. On September 25, 2008 the Company registered itself as a Public Limited Company under the Companies Act, 1994.

The principal activity of this Company is to set up power plants for generation and supply of electricity.

The plant, capacity of 51 MW at Fenchugonj, Sylhet, has successfully commissioned on 10 October, 2009 and started its commercial operation from 24 October, 2009 and supplying to National Grid.

The registered office of the Company is situated at 102 Azadi, Mirboxtula, Sylhet.

1.02 Power Purchase Agreement (PPA)

The Company has signed power supply agreement with Bangladesh Power Development Board on 28 April, 2008 for a term of 15 years to provide 51 MW net electrical power to Bangladesh Power Development Board (BPDB).

This agreement shall become effective upon signing and shall terminate 15 years after Commercial

Operations Date, unless extended or earlier terminated pursuant to the provisions of this Agreement. The purpose of this agreement is the supply by Company to BPDB of Net Energy Output and to make

available capacity and BPDB agrees to accept and pay for the Dependable Capacity & Net Energy Output under the terms and conditions provided herein. For this purpose Company shall be responsible for financing, complete design, supply, inspection, testing, delivery to the site, erection, testing & commissioning, operation and maintenance including overhauling and major overhauling of the plant for the entire term. Spares consumables required for the plant for the entire term shall be supplied by the Company at its own cost in accordance with this agreement.

The PPA stipulates a two elements tariff. One is Rental Payment (Rental Received) and another is

Energy Payment (Energy Sale) . The Rental Payment and Energy Payment payable to the Company for Dependable Capacity and Net Energy output respectively for each contract year through out the term. If power plant could not achieve dependable capacity for any particular billing month due to reasons other than the default of the Company, then BPDB shall pay monthly rental payment.

1.03 Gas Supply Agreement

The Company has signed gas supply agreement with Jalalabad Gas Transmission and Distribution System Ltd. (JGTDSL) on 22 June, 2008 for a term of 15 years.

This agreement shall become effective upon signing and shall continue subject to the other provisions of

this agreement for a period that ends on the expiry date which is the expiration date for the term of the Power Purchase Agreement.

Subject to the terms and condition of this agreement and availability of gas, gas seller shall sell and deliver to project company at all times all project company’s requirements for gas for the facility during the term hereof to meet start-up, commissioning and operation of the facility and project company shall accept, receive and pay for gas from gas seller at a gas price set by the Government or any authority assigned by it from time to time.


Notes to the Financial Statements as at and for the year ended June 30, 2010 2.00 Basis of Preparation and Presentation of the Financial Statements:

2.01 Statement of Compliance:

The financial statements have been prepared in accordance with Bangladesh Accounting Standards (BAS), Bangladesh Financial Reporting Standards (BFRS), Securities and Exchange Rules 1987, the Companies Act, 1994 and other laws and regulations applicable in Bangladesh.

2.02 Basis of Measurement:

All the elements of financial statements have been measured on “Historical Cost” basis which is one of the most commonly adopted basis as provided in “The Framework for the Preparation and Presentation of Financial Statements” issued by the Bangladesh Accounting Standards (BAS).

2.03 Responsibility for Preparation and Presentation of Financial Statements:

The Board of Directors is responsible for the preparation of financial statements under section 183 of the Companies Act, 1994 and as per the provision of “The Framework for the Preparation and Presentation of Financial Statements” issued by the Bangladesh Accounting Standard (BAS).

2.04 Use of Estimates and Judgment:

The preparation of financial statements in conformity with BASs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting

estimates are recognized in the period in which the estimates are revised if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods.

In particular, information about significant areas of estimation uncertainty and critical judgments

in applying accounting policies that have the most significant effect on the amount recognized in the financial statements are described in the following notes:

Note 17: Liabilities for Expenses Note 25: Contingent Liability

2.05 Functional and Presentational Currency and Level of Precision:

The financial statements are prepared in Bangladesh Taka (Taka/Tk./BDT) which is the Company’s both functional currency and presentation currency. All financial information presented in Taka and have been rounded off to the nearest taka.

2.06 Reporting Period:

The financial period of the Company under audit covers the period from July 01, 2009 to June 30, 2010.



67

Notes to the Financial Statements as at and for the year ended June 30, 2010 3.00 Significant Accounting Policies: The accounting policies set out below have been applied consistently through out the period presented in these

financial statements. 3.01 Property, Plant and Equipment:

a. Recognition and Measurement: In compliance with BAS-16 (Property, Plant & Equipment) items of property, plant and equipment

(PPE), excluding land, are initially measured at cost less accumulated depreciation and accumulated impairment losses, if any. Land is measured at cost. The cost of an item of PPE comprises its purchase price, import duties and non-refundable taxes, after deducting trade discount and rebates and any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the intended manner.

b. Capitalization of Borrowing Cost: Finance costs that are directly attributable to the construction of plants are included in the cost of those

plants in compliance with BAS-23: Borrowing Cost, allowed alternative treatment. Capitalization of borrowing costs cease from the date of the report submitted by commercial test witness committee which, in accordance with Power Purchase Agreement, confirms the availability of plants for use.

c. Subsequent Costs: The cost of replacing part of an item of property, plant and equipment is recognized in the carrying

amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The cost of the day to day maintaining cost on PPE are recognized in the income statement as incurred.

d. Depreciation: No depreciation is charged on land and land development. Depreciation is recognized in the Income Statement on a straight line basis over the estimated useful

lives of each item of property, plant & equipment. Each item of PPE are depreciated from the month in which the assets comes into use or capitalized. In

case of disposals, depreciation is charged for full month in the month of disposal. Depreciation of Power Plant has been charged considering 30 years of useful life and residual value

as 10% of original cost, on straight line basis on the ground that management intends to continue with operation after completion of 15 years as stated in the Power Purchase Agreement (PPA).


Notes to the Financial Statements as at and for the year ended June 30, 2010

The estimated useful lives of PPE for the current year as follows:

Name of the Assets as at June 30, 2010 (in years) Furniture & Fixtures 10 Office & Electrical Equipment 5 Office Decoration 5 Motor Vehicles 5 Maintenance Equipment 5 Building & Civil Construction 15 Plant & Machineries 30

No depreciation is charged on PPE due to non-operation of the company in the year ended June 30, 2009.

e. Retirements and Disposals: An asset is derecognized on disposal or when no future economic benefits are expected from its use and

subsequent disposal. Gains or losses arising from the retirement or disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized as gain and loss from disposal of asset under other income in the Income Statement.

3.02 Intangible assets:

Intangible assets includes IT software which is used to maintain Company’s accounts.

a. Recognition and Measurement:

Intangible assets are measured at cost less accumulated amortization and accumulated impairment loss, if any. It is recognized if it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and cost of the assets can be measured reliably as required by BAS 38: Intangible assets. The cost of the Intangible assets comprises its purchase price and any costs directly attributable to the assets.

b. Subsequent Costs: Subsequent expenditure is capitalized only when it increases the future economic benefits embodied

in the specific asset to which it relates. All other expenditures are recognized in the Income statement when incurred.

c. Amortization: Amortization is recognized in the income statement on a straight line basis over the estimated useful

lives of the assets, from the month that they are available for use.

The estimated lives of the IT software (Tally.ERP 9) is recognized 5 (five) years from the month of its recognition.

3.03 Advance:

Advances are initially measured at cost. After initial recognition advances are carried at cost less deductions, adjustments or charges to other account heads such as PPE or inventory etc.

3.04 Cash and Cash Equivalents:

For the purpose of Balance Sheet and Cash Flow Statements, Cash in hand and Bank balances represent



69


cash and cash equivalents considering the BAS-1 “Presentation of Financial Statements” and BAS-7 “Cash Flow Statement”, which provide that Cash and Cash equivalents are readily convertible to known amounts of Cash and are subject to an insignificant risk of changes in value and are not restricted as to use.

3.05 Cash Flow Statement:

Cash Flow Statement is prepared principally in accordance with BAS-7 “Cash Flow Statement” and the cash flow from the operating activities have been presented under direct method as prescribed by the Securities and Exchange Rules, 1987 and considering the provision of paragraph 19 of BAS-7 which provides that “Enterprises are Encouraged to Report Cash Flow from Operating Activities Using the Direct Method”.

3.06 Accounts Receivables:

Accounts receivables consists of unpaid bills receivables from Bangladesh Power Development Board (BPDB) and unbilled revenue recognized at the balance sheet date.

3.07 Inventories:

Inventories consisting of lube oil, alternator grease, coolnet water and spare parts. These are for use in the operation and maintenance of power plant. Cost of inventories include expenditure incurred in acquiring the inventories and other costs incurred in bringing them to use.

3.08 Provisions:

A provision is recognized on the balance sheet date if, as a result of past events, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

3.09 Income Tax:

Income tax expenses comprises current tax and deferred tax. Income tax expense is recognized in the income statement except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

a. Current Tax: Current tax is the expected tax payable on the taxable income for the year, using tax rates applicable in

Bangladesh. As per section 52N of Income Tax Ordinance, 1984, tax at sources shall be deducted from revenue income of the company which will be treated as final discharge of tax liability as per section 82C of said ordinance. Also current tax is payable in the year for interest on FDR.

b. Deferred Tax: In compliance with BAS-12: Income tax, there are no temporary difference is accrued as yet between

the carrying amount of assets and liabilities for financial reporting purpose and amounts used for taxation purpose. As no deferred tax is accrued.

3.10 Revenue Recognition:

Revenue is initially recognized in the income statement upon supply of electricity based on net energy output on a monthly basis. Net energy output is determined by the Joint meter reading and verification committee consisting of BEDL personnel’s and BPDB representatives. After initial recognition, adjustment is made on actual bill paid by the BPDB.


Notes to the Financial Statements as at and for the year ended June 30, 2010 3.11 Financial Income and Expenses:

Financial income comprise interest income received from bank on FDR and STD A/C. Financial expenses comprises interest expenses on term loan. All borrowing costs are recognized in the

income statement using effective interest method except to the extent that they are capitalized during construction period of the plants in compliance with BAS-23: Borrowing Cost.

3.12 Earnings per Share:

The Company presents basic and diluted (when applicable) earnings per share (EPS) data for its ordinary shares.

a. Basic Earnings per Share: Basic earnings per share is calculated by dividing the profit and loss attributable to the ordinary

shareholders of the Company by the weighted average number ordinary share outstanding during the period.

b. Diluted Earnings per Share: As there were no potential ordinary shares issued by the company, so no dilution is taken into effect.

3.13 Foreign Currency Translation:

Foreign currency transactions are translated into Bangladeshi taka at the rates ruling on the transaction date. All monetary assets and liabilities at the balance sheet date are translated using rates prevailing on that day. Gain/Loss arising from translation of foreign currency is recognize as Income/Expenses in the Income statement. However management feel the impact of translation of foreign currency is not material during the year.

3.14 Employees’ Benefit:

Employees of the Company is entitled to get 2 (two) festival bonus in a year and management will be shortly introduced Contributory Provided Fund and Gratuity Scheme. Both the fund is taken into effect from 01 July 2010.

3.15 Contingencies:

Contingencies arising from claim, litigation assessment, fines, penalties etc. are recorded when it is probable that a liability has been incurred and the amount can reasonably be measured.

3.16 Events after Balance Sheet Date:

Events after the balance sheets date that provide additional information about the Company’s position at the balance sheet date are reflected in the financial statements. Events after the balance sheet date that are not adjusting event are disclosed as off balance sheet items.

4.00 Future Prospect: The Company’s net current liabilities stood at Tk. 32,456,715 at the balance sheet date. On that date, a substantial

amount of current liabilities comprise of Company’s commitment for it debt service on account of project loans falling due within next 12 months. Management is confident of meeting the obligation from the resources generated from its operation coupled with continued support of bankers.



71

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276,

023


Notes to the Financial Statements as at and for the year ended June 30, 2010 30-06-2010 30-06-2009 Taka Taka 7.01 Pre-operating Expenses: Tk. 43,808,428 Particulars Salary & Allowances 8,071,972 4,880,562 Director’s Remuneration 10,045,000 9,034,000 Entertainment & Others 1,785,370 1,490,757 Travelling & Conveyance 6,883,213 6,565,357 Printing & Stationery 523,518 495,154 Trade License & Others 952,700 874,600 Tender Document Expenses 1,173,863 1,137,363 General Repair & Maintenances 1,125,734 532,074 Legal Fees & Professional Consultancy 3,433,253 2,981,553 Business Development Expenses 5,697,822 4,680,870 Donation & Subscription 1,505,365 1,041,365 Office Rent 1,530,000 1,046,000 Utility Expenses 281,546 152,594 Vehicle Running Expenses 1,222,219 740,541 Communication Expenses 504,749 360,907 Miscellaneous Expenses 345,530 343,117 Bank Charges & Commission 3,014,656 2,970,203 Advertisement & Publicity 485,358 446,558 Bank Guarantee Expenses 833,977 - AGM Expenses 366,974 - Fooding & Lodging 148,117 - Uniform Expenses 5,220 - Newspaper, Books & Periodicals 5,664 - Office Decoration Written Off 364,160 - Audit Fees 95,000 95,000 50,400,980 39,868,575 Less: Interest Income 6,592,552 6,592,552 Total 43,808,428 33,276,023 8.00 Capital Work-in-Progress: Tk. Nil Particulars Building & Civil Construction - 58,852,178 Plant & Machinery - 1,728,583,917 Total - 1,787,436,095 9.00 Inventories: Tk. 8,522,606 Particulars Opening Balance - - Purchase during the year 27,219,929 - Balance available for consumption 27,219,929 - Consumption during the year 18,697,323 - Closing Balance (Note-9.01) 8,522,606 -



73

Notes to the Financial Statements as at and for the year ended June 30, 2010 30-06-2010 30-06-2009 Taka Taka 9.01 Closing Balance of Inventories: Tk. 8,522,606 Particulars Spare Parts 1,067,420 - Lube Oil 7,178,169 - Grease 173,057 - Coolnet Water 103,960 - Total 8,522,606 - The balance of inventories are verified and reconciled by the management team at the year end. 10.00 Accounts Receivables: Tk. 134,578,553 Particulars Bangladesh Power Development Board (BPDB): Rental Bill 52,781,427 - Energy Bill 81,797,126 - Total 134,578,553 - This balance represents the arrear bill from BPDB for the month of May & June 2010. 11.00 Advances, Deposits & Pre-payments: Tk. 81,501,256 Particulars Advances: Advance to Employees & Others 20,000 6,000 Advance against Building & Civil Construction - 1,724,062 Advance against Land - 320,000 Advance against Furniture & Fixtures - 100,000 Advance against Other Expenses 465,588 465,588 Advance against Issue Management Fees 200,000 200,000 Advance to Other Parties 50,000 - Advance Income Tax 72,475 - Advance against assets/inventory 26,290 - Sub Total 834,353 2,815,650 Deposits: Deposit for Bank Guarantee 73,524,954 44,403,899 Sub Total 73,524,954 44,403,899 Prepayments: Prepayment for Office Rent 100,000 170,000 Prepayment against Bank Guarantee Expenses 5,819,726 - Prepayment against Insurance Premium 1,222,223 - Sub Total 7,141,949 170,000 Grand Total 81,501,256 47,389,549


Notes to the Financial Statements as at and for the year ended June 30, 2010 30-06-2010 30-06-2009 Taka Taka 12.00 Cash & Bank Balances: Tk. 11,526,877 Particulars Cash in Hand 633,867 624,105 Sub Total 633,867 624,105 Cash at Bank Trust Bank Ltd., Sylhet Br. 618,966 9,002,698 EXIM Bank Ltd., Fenchugong Br. 17,986 75,375 Mercantile Bank Ltd., Mohakhali Br. 165,096 177,541 BRAC Bank Ltd., Gulshan Br. 10,049,772 39,088,762 Prime Bank Ltd., Gulshan Br. 2,700 3,850 Standard Bank Ltd., Topkhana Road Br. 350 1,500 Islami Bank Ltd., Sylhet Branch 770 - Shahjalal Islami Bank Ltd., Dhaka Main Br. 37,370 378,788 Sub Total 10,893,010 48,728,514 FDR Accounts BRAC Bank Ltd., Gulshan Br. - 11,100,000 Trust Bank Ltd., Sylhet Br. - 7,500,000 Sub Total - 18,600,000 Grand Total 11,526,877 67,952,619 The bank balances have been confirmed and reconciled with respective bank statements. Cash in hand has been verified by the management at the close of the year and a cash custody certificate was

furnished to the auditors.

13.00 Share Capital: Tk. 600,000,000 Authorised: 100,000,000 Ordinary Shares of Tk. 10 each 1,000,000,000 1,000,000,000 Issued, Subscribed and Paid-up: 60,000,000 Ordinary Shares of Tk. 10 each 600,000,000 350,000,000 (3,500,000 ordinary shares of Tk. 100 each in the year 2009)



75


Shareholding Position was as follows:

Sl. No. Name of shareholders Percentage of shareholdings Amount in Tk. 30-06-2010 30-06-2009 30-06-2010 30-06-2009

1 Faisal Ahmed Chowdhury 2.71 4.64 16,250,000 16,250,000 2 Gulam Rabbani Chowdhury 2.71 4.64 16,250,000 16,250,000 3 Md. Ahsanul Kabir 3.25 5.57 19,500,000 19,500,000 4 Nasim Ahmed Chowdhury 1.39 2.39 8,355,700 8,355,700 5 Nayem Ahmed Chowdhury 1.19 2.04 7,125,000 7,125,000 6 Fahim Ahmed Chowdhury 0.89 1.52 5,323,400 5,323,400 7 Alimus Sadat Chowdhury 0.27 0.46 1,625,000 1,625,000 8 Manzur Ashraf Khan 0.41 0.70 2,460,000 2,460,000 9 Muhammed Monsur Alam Chowdhury 0.53 0.91 3,183,700 3,183,700 10 Yeahyea Murad Khan 0.51 0.88 3,083,400 3,083,400 11 Nanu Kazi Mohammed Miah 2.04 3.19 12,237,200 11,154,400 12 Md. Shirajul Islam 1.76 3.02 10,577,200 10,577,200 13 Mohammed Abdul Ahad 1.01 1.74 6,077,200 6,077,200 14 Abdul Mumin 1.61 2.48 9,671,500 8,671,500 15 Robin Chowdhury 9.58 16.33 57,493,000 57,153,000 16 Abdul Bari 1.18 1.59 7,077,200 5,577,200 17 Kazi Mohammed Angur Miah 1.76 3.02 10,577,200 10,577,200 18 Ubaydia Chowdhury 0.93 0.00 5,577,200 - 19 Afzal Rashid Choudhury 0.70 1.20 4,182,900 4,182,900 20 Other shareholders 65.56 43.68 393,373,200 152,873,200 Total 100.00 100.00 600,000,000 350,000,000

Details of the Shareholding is given below: The distribution schedule showing the number of Shareholders and their shareholding in percentage has been disclosed below as a requirement of the “Listing Regulation” of Dhaka and Chittagong Stock Exchange. Range of holdings in number of Shares No. of Shareholders Holding %

30-06-2010 30-06-2009 30-06-2010 30-06-2009 Less than 500 shares - - - - 500 to 5,000 shares - - - - 5,001 to 10,000 shares - - - - 10,001 to 20,000 shares - - - - 20,001 to 30,000 shares - - - - 30,001 to 40,000 shares 1.00 - 0.73 - 40,001 to 50,000 shares - - - - 50,001 to 100,000 shares 14.00 2.00 10.22 2.47 100,001 to 1,000,000 shares 107.00 70.00 78.10 86.42 1,000,001 to 10,000,000 shares 15.00 9.00 10.95 11.11 Total 137.00 81.00 100.00 100.00

Split of Face Value of Share: A special resolution is passed and duly certified from RJSC dated 30 December 2009 to adopt a new Articles of Association. By the said special resolution the company’s face value of share is reduced from Tk. 100 to Tk. 10.


Notes to the Financial Statements as at and for the year ended June 30, 2010 30-06-2010 30-06-2009 Taka Taka 14.00 Share Money Deposit: Tk. Nil

Particulars Share Money Deposit - 174,635,936 - 174,635,936

15.00 Term Loan: Tk. 1,401,515,149 Particulars Long Term Portion: Interest Rate Infrastructure Development Finance Company Ltd. (IDCOL) 13% 430,555,554 325,366,491 BRAC Bank Ltd. 13% 236,363,636 169,229,348 Trust Bank Ltd. 13% 118,181,816 84,614,672 AB Bank Ltd. 13% 118,181,817 84,614,673 Janata Bank Ltd. 13% 78,787,879 39,303,097 Industrial & Infrastructure Development Finance Co. Ltd. (IIDFC) 14% 39,393,940 19,651,549 Prime Finance & Investment Ltd. 15% 200,000,000 - Sub Total 1,221,464,642 722,779,830 Short Term Portion: Infrastructure Development Finance Company Ltd. (IDCOL) 13% 55,050,507 27,777,777 BRAC Bank Ltd. 13% 50,000,000 42,657,213 Trust Bank Ltd. 13% 25,000,000 21,328,607 AB Bank Ltd. 13% 25,000,000 21,328,607 Janata Bank Ltd. 13% 16,666,667 12,663,918 Industrial & Infrastructure Development Finance Co. Ltd. (IIDFC) 14% 8,333,333 6,331,958 Sub Total 180,050,507 132,088,080 Grand-Total 1,401,515,149 854,867,910 Infrastructure Development Finance Company Ltd. (IDCOL) along with other banks/non-banking financial institution has

arranged syndication loan of Tk. 1,250,000,000 as lead arranger in January, 2009. From this amount, company has availed full amount of Tk. 1,250 million in June, 2010. The interest rate of this syndication loan is 13.00% per annum for IDCOL and other lenders except IIDFC with semi-annual review by the agent and lenders from August, 2009. The first drawdown was made on January 26, 2009. The grace period of this syndication loan is of 12 months from the first drawdown date. The term loan facility in case of IDCOL shall be repaid in equal 36 quarterly installments and in case of other lenders shall be repaid in equal 22 quarterly installments on repayment dates commencing from the immediate quarter-end upon the expiry of the grace period.

The security package for the project is as follows: -Mortgage of project land; -Hypothecation of all fixed and floating assets including but not limited to machinery, book debts, furniture, fixture and

equipment on first ranking pari passu basis creating present and future charge with the RJSC; -Establishment of Escrow Account and Debt Service Account with appropriate cash waterfall arrangement to the satisfaction

of the lenders; -Co-payee of benefits under all insurance policies insuring the relevant moveable and immoveable assets of the issuer. A term loan is taken from Prime Finance & Investment Ltd. for a period of 18 months (including a grace period of 3 months)

at Interest rate of 15% p.a. on 08 March, 2010. Repayment of interest will be paid from the 4th month to 18th month starting from the end of the grace period and principal repayment will be paid at the end of the term.



77

Notes to the Financial Statements as at and for the year ended June 30, 2010 30-06-2010 30-06-2009 Taka Taka 16.00 Deferred Liability for Plant & Machinery: Tk. Nil Fifty percent (50%) value of 15 (fifteen) Gen Set (JGS 620 GS-N.L) purchased from GE Jenbacher Gmbh &

Co. OHG, Austria @ $ 1,032,000/Engine, have been paid during the year. Particulars Gen Set (JGS 620 GS-N.L)-15 nos engine - 541,800,000 Total - 541,800,000 17.00 Liability for Expenses: Tk. 14,485,254 Particulars Salary & Allowances 1,218,878 878,492 Director’s Remuneration 500,700 734,000 Audit Fees 50,000 40,000 Provision for Tax ( Note-17.01 ) 5,582,449 3,359,633 Utility Expenses 98,190 - Office Rent 15,000 23,283 Legal Fees & Professional Expenses 5,000 - Vehicle Running Expenses 96,615 - Infrastructure Development Company Limited (IDCOL) - 19,390,535 BRAC Bank Limited - 11,566,297 Trust Bank Limited - 5,764,261 AB Bank Limited - 4,584,864 Janata Bank Limited - 1,709,361 Industrial & Infrastructure Development Finance Co. Ltd. (IIDFC) 120,644 856,002 Prime Finance & Investment Limited 6,797,778 - Total 14,485,254 48,906,728 17.01 Provision For Tax: Taka 5,582,449 Provision for tax on Revenue Tax applicable on total revenue 20,581,705 Tax paid on revenue received (15,198,563) Provision for tax on Revenue 5,383,142 Provision for Tax on Other Income Tax applicable on bank interest 271,782 Tax deducted by bank (72,475) Provision for tax on other income 199,307 Total 5,582,449 As per section 52N of the Income tax ordinance 1984, BPDB has deducted source tax on company’s revenue,

which is the final discharge of tax liability as per the said ordinance. But the company has earned an amount of bank interest on FDR & STD A/C. As such the management feels to create tax provision for this income at applicable rate enforced in Bangladesh.


Notes to the Financial Statements as at and for the year ended June 30, 2010 30-06-2010 30-06-2009 Taka Taka 18.00 Accounts Payable: Tk. 74,050,246 Particulars Jalalabad Gas T & D Co. Limited 61,419,970 - Mobil Jamuna Lubricants Limited 6,085,622 - United Bricks 676,015 - Mr. M K Babul 268,100 - Arti Sun Craft 205,000 - Technic Construction 4,000,000 - Sumon Brothers 31,783 - Rakin Traders 26,035 - Fahim Electric 12,721 - Blue Bird Auto Ltd. 1,325,000 - Total 74,050,246 - 19.00 Revenue: Tk. 514,542,637 Particulars Rental Received 215,630,995 - Energy Sale 298,911,642 - Total 514,542,637 - 20.00 Cost of Sales: Tk. 245,353,077 Particulars Gas Consumption 189,405,258 - Lube Oil Consumption 18,485,270 - Grease 184,443 - Coolnet Water 11,040 - Spare Parts-Others Consumption 16,570 - Depreciation on Plant & Machinery 36,750,574 - Repair & Maintenances 499,922 - Total 245,353,077 -



79


30-06-2010 30-06-2009 Taka Taka 21.00 General & Administrative Expenses: Tk. 50,514,638 Particulars Salary & Allowances 10,855,859 - Director’s Remuneration 5,724,500 - Communication Expenses 333,211 - Travelling & Conveyance 1,097,603 - Utility Expenses 171,299 - Office Rent, Rates & Taxes 677,500 - AGM & EGM Expenses 38,036 - Vehicle Running Expenses 1,395,472 - General Repair & Maintenances 368,208 - Entertainment & Others 736,870 - Business Development Expenses 281,354 - Plant Inauguration Expenses 2,117,956 - Legal Fees & Professional Consultancy 66,132 - Staff Fooding & Lodging 367,644 - Advertisement & Publicity 50,985 - Tender Document Expenses 70,340 - Audit Fees 50,000 Photocopy & Stationeries 46,169 - Uniform 113,175 - Newspaper, Books & Periodicals 15,072 - Printing Expenses 66,756 - License Renewal Fees 566,108 - Bank Charges & Commission 131,488 - Miscellaneous 58,204 - Donation & Subscription 527,348 - Insurance Premium 977,777 - Training & Workshop Expenses 34,943 - Gardening Expenses 151,981 - Annual Sports Expenses 17,680 - Gift & Greetings 8,297 - ISO Certification Expenses 106,950 - Rest House Keeping Expenses 150,000 - Preliminary Expenses Written Off 532,600 Advance Income Tax Paid 15,198,563 Amortization Expenses 1,952,374 - Depreciation Expenses 5,456,184 - Total 50,514,638 - 22.00 Financial Income: Tk. 724,753 Particulars Bank Interest 724,753 - Total 724,753 -


Notes to the Financial Statements as at and for the year ended June 30, 2010 30-06-2010 30-06-2009 Taka Taka23.00 Financial Expenses: Tk. 111,763,872 Particulars Interest Expenses: BRAC Bank Limited 24,026,000 - Trust Bank Limited 12,014,415 - Infrastructure Development Company Limited (IDCOL) 40,252,804 - Industrial & Infrastructure Development Finance Co. Ltd. (IIDFC) 4,347,429 - Janata Bank Limited 7,903,301 - AB Bank Limited 12,014,393 - Prime Finance & Investment Limited 9,856,778 - Sub Total 110,415,120 - Bank Guarantee Expenses 1,348,752 - Sub Total 1,348,752 - Grand Total 111,763,872 - 24.00 Earnings Per Share (EPS): Tk. 1.76

Particulars Profit Attributable to Ordinary Shareholders 102,053,354 Weighted Average Number of Ordinary Shares Outstanding during the year (Note 23 A) 57,944,444

Basic Earnings Per Share (EPS) 1.76

24.01 Weighted Average Number of Ordinary Shares: 57,944,444 The weighted average number of ordinary shares outstanding during the year is the number of ordinary shares

outstanding at the beginning of the year, adjusted by the number of ordinary shares issued during the year multiplied by a time-weighted factor. The time-weighted factor is the number of days that the shares are outstanding as a proportion of the total number of days in the year (considering 360 days in a year).

Outstanding ordinary shares as at July 01, 2009 35,000,000 Effect of issue of additional shares during the year 22,944,444 Total 57,944,444 24.02 Dilution of Earnings Per Share: No diluted earnings per share is required to be calculated for the year presented as there was no potential

ordinary shares has been issued by the company, as such no scope for dilution during the year. 25.00 Contingent Liability: Tk. 212,463,647 Contingent liability existed for the Company of Tk. 212,463,647 as at 30 June, 2010 in relation to issue of bank

guarantee in favor of Bangladesh Power Development Board, JGT&DCL, Commissioner of Customs, Customs House (Import)-Dhaka, Chittagong & Benapole.

The company has been filed few petition involving an amount of Tk. 10,11,76,307 (writ # 868/2009, 2100/2009, 2788/2009, 3272/2009, 3807/2009, 5641/2009) against BPDB, NBR, Custom and other parties for taking the exemption facility of import duty, VAT, Supplementary duty etc.



81

Notes to the Financial Statements as at and for the year ended June 30, 2010 Nature of Contingent Liability Expiry date 30-06-2010 30-06-2009 Taka Taka Bank Guarantee-Bangladesh power development board 22.10.2009 - 75,000,000 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Dhaka Open ended 591,537 591,537 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Dhaka Open ended 682,346 682,346 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Dhaka Open ended 159,980 159,980 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Dhaka Open ended 48,688 48,688 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Dhaka Open ended 65,839 65,839 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Dhaka Open ended 108,712 108,712 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Dhaka Open ended 55,356 55,356 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Dhaka Open ended 12,844 12,844 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Dhaka Open ended 866,530 866,530 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Dhaka Open ended 750,053 750,053 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Dhaka Open ended 100,459 100,459 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Dhaka Open ended 280,801 280,801 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 21,927,458 21,927,458 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 8,257,227 8,257,227 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 421,806 421,806 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 6,757 6,757 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 118,496 118,496 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 88,616 88,616 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 3,215,448 3,215,448 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 926,706 926,706 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 617,796 617,796 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 2,176,655 2,176,655 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 5,775,934 5,775,934 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 664,022 664,022 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 1,992,065 1,992,065 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 6,317,980 6,317,980 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 207,146 207,146 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 6,530,548 6,530,548 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 6,526,384 6,526,384 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 6,526,384 6,526,384 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 4,350,923 4,350,923 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 120,615 120,615 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 112,935 112,935 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Benapole Open ended 1,801,023 1,801,023 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Benapole Open ended 1,530,870 1,530,870 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Benapole Open ended 1,368,777 1,368,777 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Benapole Open ended 900,512 900,512 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Benapole Open ended 5,752,018 5,752,018 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Benapole Open ended 33,196 33,196 Bank Guarantee-Commissioner of Customs, Customs House (Import) - Ctg. Open ended 9,184,865 - Bank Guarantee-Jalalabad Gas Transmission & Distribution Co. Ltd. -Sylhet Aug.30, 2012 60,886,080 - Bank Guarantee-Bangladesh Power Development Board, Dhaka 16 Nov. 2013 50,401,260 - Total 212,463,647 166,991,442


Notes to the Financial Statements as at and for the year ended June 30, 2010 26.00 Commitment of Capital Expenditure: Tk. 3,770,897 Name of the company L/C Number Currency Value as at 30-06-2010 Value as at 30-06-2009 in FCY in BDT in FCY in BDT Forain S. R. I. Italy 308509010046 EURO - - 238,805 24,035,723 Eagle Power Ltd. England 308509010515 POUND - - 23,969 2,796,703 Siemex Power Generation Company N/A BDT - - - 1,970,000 Quantum Builders & Engineering Ltd. N/A BDT - - - 7,904,335 Technic Construction Company N/A BDT - - - 2,204,296 Ningbo Demy (D&M) Bearing Co. Ltd., China 308510010470 USD 54,238 3,770,897 - - Total 54,238 3,770,897 262,774 38,911,057 27.00 Remittance of Foreign Currency: Tk. 570,078,001 Name of beneficiary L/C Number Currency Value as at 30-06-2010 Value as at 30-06-2009 in FCY in BDT in FCY in BDT Capital Equipment 175208010128 USD - - 4,000,000 277,680,000 Capital Equipment 235908010338 USD - - 208,800 14,494,896 Capital Equipment 235908010339 USD - - 974,000 67,615,080 Capital Equipment 235908010340 USD - - 40,000 2,776,800 Capital Equipment 235908010341 EURO - - 25,980 2,614,887 Capital Equipment 235908010342 USD - - 255,500 17,736,810 Capital Equipment 308509010021 USD - - 2,580,000 179,103,600 Capital Equipment 308509010047 EURO - - 27,132 2,730,836 Capital Equipment 308509010048 USD - - 251,500 17,459,130 Capital Equipment 308509010049 USD - - 117,764 8,175,203 Capital Equipment 308509010050 USD - - 60,158 4,176,157 Capital Equipment 308509010081 USD - - 52,800 3,665,376 Capital Equipment 308509010111 USD - - 28,000 1,943,760 Capital Equipment 308509010164 USD - - 27,442 1,905,024 Capital Equipment 308509010263 USD - - 109,966 7,633,812 Capital Equipment 308509010295 USD - - 42,500 2,950,350 Capital Equipment 308509010046 EURO 238,805 23,915,700 - - Capital Equipment 308509010515 POUND 23,969 2,790,471 - - Capital Equipment 308509010021 USD 2,642,068 183,743,015 - - Capital Equipment 308509010080 USD 4,644,000 323,315,280 4,644,000 322,386,480 Capital Equipment 308509010109 USD 516,000 35,965,200 516,000 35,820,720 Spare Parts 308510010283 USD 5,000 348,335 - - Total 8,069,842 570,078,001 13,961,542 970,868,920 28.00 Value of Imports Calculated on CIF Basis: 30-06-2010 30-06-2009 Taka Taka Spare Parts (includes inventory) 348,335 - 29.00 Related Party Transactions: A. During the year, the Company carried out a number of transactions with related party in the normal course of business.

The names of the related parties and nature of these transactions have been set out in accordance with the provisions of BAS 24: Related Party Disclosures.

Transaction with key management personnel: 30-06-2010 30-06-2009 Taka Taka Employee Benefits 10,234,600 8,175,000 Total 10,234,600 8,175,000

Key management personnel includes Chairman, Managing Director, Directors, Director-Technical, Company Secretary and Plant Manager.



83

Notes to the Financial Statements as at and for the year ended June 30, 2010 B. Other Related Party Transactions:

Name of the Related Party

Nature of Relationship

Nature of Transaction

Transactions during the year Receivables/Payables30-06-2010 30-06-2009 30-06-2010 30-06-2009

Taka Taka Taka Taka

Royal Homes Ltd.Owned by key management

personnel of BEDL

Short term loan

8,115,000 3,572,535 - -

30.00 Capacity

Name of Plant Licensed Capacity (MW)

Installed Capacity

(MW)

Plant factor(% on Licensed Capacity)

Energy Generation

(MwH)

Energy Sold (MwH)

Average MaximumFenchugonj, Sylhet 51.00 55.14 79.94 98.97 275,894.77 264,199.43

31.00 Disclosure as per Requirement of Schedule XI, Part II of Companies Act, 1994 a. Disclosure as per Requirement of Schedule XI, Part II Para 4: Payment to Directors during the year ended 30 June 2010 Name Designation Period Amount in Taka Remarks Mr. Faisal Ahmed Chowdhury Chairman July’09 to June ‘10 1,980,000 Remuneration Mr. Gulam Rabbani Chowdhury Managing Director July’09 to June ‘10 1,980,000 Remuneration Mr. Md. Ahsanul Kabir Vice-Chairman July’09 to June ‘10 990,000 Remuneration Mr. Fahim Ahmed Chowdhury Director July’09 to June ‘10 967,500 Remuneration Mr. Nayem Ahmed Chowdhury Director July’09 to Oct. ‘09 330,000 Remuneration Mr. Alimus Sadat Chowdhury Director Dec. ‘09 to June ‘10 140,000 Remuneration Mr. Md. Monsur Alam Chowdhury Director July’09 to Nov. ‘09 348,000 Remuneration Total 6,735,500 32.00 General Disclosures:

32.01 Number of regular employees receiving remuneration of Tk 36,000 or above per annum was 80 (eighty) as at 30 June 2010 and was 50 as at 30 June 2009 as disclosure required by the Schedule XI, Part II, note 5 of para 3 of Companies Act, 1994.

32.02 Comparative figures have been rearranged wherever considered necessary to conform to the current year’s presentation.

33.00 Events after the Balance Sheet Date:

a. Introduction of Employees’ Benefit Scheme: Provident Fund:

The board of directors of the company have been decided to introduce a Contributory Provident Fund with effect from 01 July, 2010 for all of it’s permanent employees, which is a defined contribution plan. The fund is governed by the Board of Trustee and funded by contribution of employee @ 10% of the basic pay and equal contribution is funded by the employer also. These contributions are invested separately from the company’s business. Management is hopeful for getting recognition from the National Board of Revenue (NBR). Gratuity Fund:

The board of directors of the company also decided to introduce an unfunded gratuity scheme which is defined benefit scheme. A provision in respect of this made periodically covering all permanent employees by applying period of employment to latest basic salary.

PROSPECTUS84

Selected RatiosBarakatullah Electro Dynamics Limited Barakatullah Electro Dynamics Limited

Auditors’ Certificate regarding calculation of EPS & Ratios We have examined the following earnings per share (EPS) and other ratios of Barakatullah Electro Dynamics Limited as on 30 June 2010, 2009 and 2008 & for the year ended 30 June 2010, 2009 and 2008, which have been produced by the management of the company to us. The preparation of the EPS and other ratios is the responsibility of the company’s management. Our responsibility is to review them and certify as to whether they have been properly prepared using acceptable principles on the basis of audited financial statements for the year ended 30 June 2010, 2009 and 2008. Based on our review, we certify that the company has properly prepared the following EPS and other ratios using acceptable principles on the basis of audited financial statements for the year ended 30 June 2010, 2009 and 2008.

Name of ratio Formula

Amount in taka

2010 2009 2008

calculation result % calculation result % calculation result %

A. Liquidity ratios

1 Current Ratio Current Assets 236,129,292

0.88 115,342,168

0.16 136,609,083

21.38 Current Liability 268,586,007 722,794,808 6,388,173

2 Quick Ratio Current Assets -

Inventory 227,606,686 0.85

115,342,168 0.16

136,609,083 21.38

Current Liability 268,586,007 722,794,808 6,388,173

3 Time Interest Earned Ratio (Times)

Operating Income 218,674,922 1.96 N/A - N/A -

Interest expenses 111,763,872

4 Debt to Equity Ratio Total Debt 1,401,515,149

2.00 854,867,910

1.63 N/A - Total stockholder’s

equity 702,053,354 524,635,936

B. operating ratios

1 Accounts Receivable Turnover Ratio (Times)

Gross Turnover 269,189,560 2.00 N/A - N/A -

Receivables 134,578,553

2 Inventory Turnover Ratio (Times)

Cost of goods sold 245,353,077 28.79 N/A - N/A -

Inventory 8,522,606

3 Assets Turnover Ratio (Times)

Gross Turnover 269,189,560 0.12 N/A - N/A -

Total Assets 2,192,104,003

c. Profitability Ratios

1 Gross Margin Ratio Grass Profit 269,189,560

0.52 N/A - N/A - Gross Revenue 514,542,637

2 Operating Income Ratio

Operating Profit 218,674,922 0.42 N/A - N/A - Total Operating

Revenue 514,542,637

3 Net Income Ratio Profit After Tax 102,053,354

0.20 N/A - N/A - Total Operating Revenue 514,542,637

4 Return on Assets Ratio

Profit After Tax 102,053,354 0.05 N/A - N/A -

Total Assets 2,192,104,003

5 Return on Equity Ratio

Profit After Tax 102,053,354 0.15 N/A - N/A -

Share Holders Equity 702,053,354

6 Earnings Per Share (EPS) (Tk.)

Profit After Tax 102,053,354

1.76* N/A - N/A - Weighted Average No. of Shares Outstanding

57,944,444

* Denomination of Face Value of Share from Tk 1,000 to Tk 100

Denomination of Face Value of Share from Tk 100 to Tk 1030-Nov-0830-Dec-09

Sd/-

HAQUE SHAHALAM MANSUR & CO.Chartered Accountants.

Dated, Dhaka02 December 2010


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Barakatullah Electro Dynamics LimitedBarakatullah Electro Dynamics Limited Auditors’ Report under section 135(1) and paragraph 24(1) of Part -II of Third Schedule of the Companies Act, 1994, For the periods from 26 June 2007 to 30 June 2010 We have examined the financial statements of Barakatullah Electro Dynamics Limited for the years ended 30 June 2008 , 2009 and 2010 . In pursuance of Section 135(1) under Paragraph 24(1) of Part -II of Third Schedule of the Companies Act 1994, our report is as under- A. Statement of Assets and Liabilities: Amount in Taka As At 30.06.2010 30.06.2009 30.06.2008

ASSETSASSETS Non-Current Assets Property, Plant & Equipment 1,914,078,657 33,623,688 16,192,741 Preliminary Expenses - 532,600 532,600 Intangible Assets 34,667 - - Pre-Operating Expenses 41,861,387 33,276,023 13,343,378 Capital Work-in-Progress - 1,787,436,095 3,540,248 Total Non-Current Assets 1,955,974,711 1,854,868,406 33,608,967 Current Assets Inventories 8,522,606 - - Accounts Receivables 134,578,553 - - Advances, Deposits & Pre-payments 81,501,256 47,389,549 1,625,000 Cash & Bank Balances 11,526,877 67,952,619 134,984,083 Total Current Assets 236,129,292 115,342,168 136,609,083 TOTAL ASSETS 2,192,104,003 1,970,210,574 170,218,050 EQUITY & LIABILITIESEQUITY & LIABILITIES Shareholders’ Equity Share Capital 600,000,000 350,000,000 15,000,000 Share Money Deposit - 174,635,936 148,829,877 Retained Earnings 102,053,354 - - Total Shareholders’ Equity 702,053,354 524,635,936 163,829,877 Non-Current Liabilities Term Loan-Long Term Portion 1,221,464,642 722,779,830 - Total Non-Current Liabilities 1,221,464,642 722,779,830 - Current Liabilities Term Loan-Short Term Portion 180,050,507 132,088,080 - Short Term Loan - - 3,572,535 Deferred Liabilities for Plant & Equipment - 541,800,000 - Liability for Expenses 14,485,254 48,906,728 2,815,638 Accounts Payable 74,050,246 - - Total Current Liabilities 268,586,007 722,794,808 6,388,173 TOTAL EQUITY & LIABILITIESTOTAL EQUITY & LIABILITIES 2,192,104,003 1,970,210,574 170,218,050

Dated, Dhaka Sd/- October 3, 2010 HAQUE SHAHALAM MANSUR & CO. Chartered Accountants.

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B. Statement of Operating Results: Amount in Taka For the year ended 30.06.2010 30.06.2009 30.06.2008

Revenue 514,542,637 - - Cost of Sales (245,353,077) - - Gross Profit 269,189,560 - - General & Administrative Expenses (50,514,638) - - Operating Profit 218,674,922 - - Financial Income 724,753 - - 219,399,675 - - Financial Expenses (111,763,872) - - Profit before Tax 107,635,803 - - Provision for Tax (5,582,449) - - Profit for the year 102,053,354 - -

C. Cash Flow Statement Amount in Taka For the year ended 30.06.2010 30.06.2009 30.06.2008

Cash Flow from Operating Activities: Cash Receipts from Customer 379,964,084 - - Cash paid to Suppliers (223,600,969) - - Financial Expenses (111,039,119) - - Net Cash Flow Used in Operating Activities 45,323,996 - - Cash Flow from Investing Activities: Acquisition of Fixed Assets (1,923,025,887) (17,430,947) (16,192,741) Disposal of Property, Plant & Equipment 364,160 - - Capital Work-in-Progress 1,787,436,095 (1,740,024,527) (3,540,248) Preliminary Expenses - - (532,600) Advances, Deposits & Pre-payments (36,163,004) (45,764,549) (1,625,000) Investment in Pre-Operating Expenses (10,532,405) (17,712,875) (10,527,740) Intangible Assets (40,000) - - Net Cash Used in Investing Activities (181,961,041) (1,820,932,898) (32,418,329) Cash Flow from Financing Activities: Share Capital 250,000,000 335,000,000 15,000,000 Share Money Deposit (174,635,936) 25,806,059 148,829,877 Term Loan 498,684,812 854,867,910 - Short Term Loan 47,962,427 (3,572,535) 3,572,535 Payment of Deferred Liabilities for Plant & Equipment (541,800,000) 541,800,000 - Net Cash Generated from Financing Activities 80,211,303 1,753,901,434 167,402,412 Net Cash Inflow/(Outflow) for the year (56,425,742) (67,031,464) 134,984,083 Opening Cash & Bank Balances 67,952,619 134,984,083 - Closing Cash & Bank Balances 11,526,877 67,952,619 134,984,083



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D. Dividend: The Company’s data relating to dividend is as under: For the year ended 30.06.2010 30.06.2009 30.06.2008 Cash Dividend - % Nil Nil Nil Stock Dividend (Bonus shares) - % 10 (Proposed) Nil Nil

The company has started its commercial operation from 24 October 2009. So that the company did not declared any dividend for the year ended 30 June 2008 & 30 June 2009.

E. The company was incorporated on 26 June 2007 as Private Limited Company. On 25 September 2008, The company registered itself as a Public Limited Company under the Companies Act, 1994. The share of the company is denominated from Tk. 1,000 to Tk. 100 at 30 November 2008 and from Tk. 100 Tk. 10 at 30 December 2009; F. The Statement of Assets and Liabilities (Balance Sheet) as at 30 June 2010, 2009 and 2008 of the Company has been duly certified by us; G. We also certify the Statement of Operating Results (Income Statement) for the years ended 30 June 2010, 2009 and 2008 of the Company; H. The Cash Flow Statement for the years ended 30 June 2010, 2009 and 2008 of the Company are enclosed and certified by us; I. The Company has no subsidiaries; K. No proceeds or part of proceeds of the issue of shares were applied directly or indirectly by the company in the purchase of any other business; L. The Company did not prepare any financial statements for any period subsequent to 30 June 2010; and M. Figures related to previous years have been rearranged wherever considered necessary.


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CREDIT RATING CREDIT RATING

CRAB Ratings Corporate


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CREDIT RATING REPORT Barakatullah Electro Dynamics Limited

Long Term Rating: AA2

Date of Rating : 06 September 2010Validity : 31 December 2011

Analysts:

Md. Abdullah OmarFinancial [email protected]

Niaz AhmedFinancial [email protected]

01. RATIONALE

Credit Rating Agency of Bangladesh (CRAB) Limited has assigned AA2 (Pronounced as Double A Two) rating in the Long Term to the 51 MW gas based power project of Barakatullah Electro Dynamics Limited (hereinafter referred to as BEDL or the Company).

Corporate entities rated AA2 in the long term belong to ‘Very Strong Capacity’ cohort. These Companies are judged to be of very high quality to meet financial commitments and are subject to very low credit risk.

In CRAB’s view, power shortage in Bangladesh has made the sector highly attractive for investment. Power sector investment offers the lenders very low business risks compared to corporate entities. Highly supportive authority offers implied sovereign support to ensure reliability of gas supply and regulatory framework allows full cost recovery. Large well protected service area and support for the electric transmission system outweigh user considerations. Competition is absent in the sector and monopoly or oligopoly is contained by contract with public sector entities and regulatory authority. Regulatory framework is designed fundamentally to achieve balance between supply reliability and service, efficiency, price and financial returns to the project undertaker.

Electricity is wholly sold under 15 years contract to creditworthy counter party BPDB (a government owned company), which assumes all risk of fluctuation in the market prices of fuel and electricity resulting in lowest business risks.

Under Rental Power Agreement, the power company receives a capacity charge, which covers the portion of the fixed costs in relation to the

power availability. These fixed payments cover partial debt service and are made irrespective of electricity generation or not. In addition, energy charge is received for energy generation to cover the partial debt and variable costs of the project. The rating accounts for the risk management pass through capability, price considerations, excess reserve capacity of the plant, risk-sharing arrangements and default provisions embedded in the 15 year term supply contract.

Bangladesh has adopted an “ex-ante” approach, under which the tariff structure is set in advance. In spite of moderate leverage, the rating draws comfort for the predictable revenue stream of the project, zero level of demand and product risk, inflation adjusted pricing mechanism and 15 year contracted period vis a vis 9 years of debt maturity. The debt holders’ interests are protected for longer term of contracted period. However, the project may exposed to operating and maintenance risk to some extent in spite of reserve capacity margin of 8.11%. The rating is constrained to this operating risk as most of the overhauling except major one would be done by local qualified engineers and technicians.

The set up cost of the 51 MW power plant was BDT 2,050 million (debt/equity ratio of 71:29). Delayed by 9 months from anticipated timeframe, the Company managed to start commercial operation in 24 October 2009. Therefore, the Company was exposed to liquidated damages but got waiver from the concerned authority (BPDB).

The debt redemption schedule indicates that in 2011 there will be a bullet payment of BDT 200 million in addition to quarterly installment payments. As such, the cash flow may squeeze due to this bullet payment. However, the rating remains comfortable owing to the proposed initial public offering. Delay in public offering could be a negative trigger for the rating.


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02. COMPANY PROFILE & BUSINESS OVERVIEW02. COMPANY PROFILE & BUSINESS OVERVIEWBarakatullah Electro Dynamics Limited is the first private sector power generating company developed by a group of NRB investors and local entrepreneurs of Bangladesh which was incorporated on 26 June 2007 as a Private Limited Company. The Company was converted into a public limited company on 25 September 2008 under the Companies Act 1994. Its registered office is at 102 Azadi, Mirboxtola, Sylhet-3100, corporate office at 6/A/1 (2nd Floor), Segunbagicha, Ramna, Dhaka - 1000 and power plant at Fenchuganj, Sylhet.

BEDL along with foreign partner STFE Co. Ltd. from Thailand bid a tender for 50 MW (±10%) power plant initiated by Bangladesh Power Development Board (BPDB). They won the bid for implementing, generating, and supplying electricity to national grid with contracted capacity of 51 MW and operating it on Build-Own-Operate (BOO) basis for a period of 15 years. It signed an agreement with BPDB for supply of electricity on rental basis on 28 April 2008. The plant was successfully commissioned on 10 October 2009 and started commercial operation from 24 October 2009. The major milestones of the Company are presented below:

Exhibit 01: Major milestones of the Company

26 June, 2007 Incorporation of the Company

15 August, 2007 Consortium agreement with STFE Co. Ltd., Thailand

21 January, 2008 Notification of award issued by BPDB

28 April, 2008 Signing of project agreement

22 June, 2008 Gas supply agreement with Jalalabad Gas Transmission and Distribution System Ltd. (JGTDSL)

12 August, 2008 Gen-set supply contract

25 September, 2008 Conversion from private to public limited company

29 September, 2008 Sub station equipment supply contract

24 November, 2008 Gas RMS supply contract

22 January, 2009 Signing syndicated term loan facility

03 March, 2009 Gen-set arrival at site

07 September, 2009 Interconnection facility

10 October, 2009 Commissioning started

24 October, 2009 Commercial operation started

03 April, 2010 Formal Inauguration by Honorable Prime Minister

01 September, 2010 Got ISO 9001:2008 certification from Moody International for quality management system

The overall plant area of the Company is 6 acres where power house area is 3,5931.50 sqft. Government owned 90 MW and 105 MW power plants already exist near the project site. All required facilities like- national grid line, gas transmission centre and river etc are available at the site. The plant is comprised of 19 units of generator sets from the world renowned gas fuelled reciprocating engine manufacturer GE Jenbacher, Austria and the sponsors procured all other auxiliary equipments from reliable sources. Total installed capacity of the plant is 55.138 MW where contracted capacity is 51 MW of electricity. Because of safety, the project has 8.11% of reserve margin to ensure the contracted capacity output. Following table shows an overview of the plant:

Exhibit 02: An overview of the plant InstalledCapacity Engine type Unit Each unit

capacityEngine model

Engine manufacturer

Engine supplier Fuel

55.138 MW Reciprocating engine 19 2.902 MW JGS 620

GS-N.L GE Jenbacher Orion Energy Systems Ltd.

Natural gas



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03. INDUSTRY OVERVIEW 03. INDUSTRY OVERVIEW

The power supply situation in the country has aggravated. The acute power shortage continues to hit the country hard with no sign of an immediate respite from load shedding that hovered around 1,000-1,500 MW during the peak. Average power generation during May and June 2010 was 4,072.24 MW and 4,076.27 MW. The power production in 30 June 2010 was 3,775.50 MW during evening (3593 MW during morning) against the forecast demand of 5,000 MW (shortage of 1,224.50 MW), due to shut down of few power plants, shortages of gas, maintenance and under capacity to meet the demand. Sometimes major debacle in power supply occurred due to system loss, sudden shut down of production units having worn out machinery. The load shedding not only causes loss of work hours but also causes damage to the production systems of the industries and electrical home appliances.

Present Power Situation

The installed generation capacity of Bangladesh was about 5,719 MW (Hydro: 4.19%, Steam Turbine: 48.03%, Gas Turbine: 18.15%, Combined Cycle: 24.74%, Diesel: 4.89% as on June 2009) from a meager 88 MW in 1960. Electricity generation grew at about 7% p. a. during last fifteen years compared with average annual GDP growth rate of about 5.5%. The maximum generation in FY 2009 was 4,162 MW against the forecast demand of 6,066 MW as per updated Power System Master Plan (PSMP-2006). The net energy generated during FY 2009 total including Independent Power Producer (IPP) but excluding energy purchased by REB from private generation was about 25,622 Giga Watt hour (GWh). The per capita electricity generation of Bangladesh is 183.74 kWh in FY2008-09 which is still among the lowest in the world. About 47% of the population has access to electricity which is also low compared to many developing countries. This implies that there is a scope for significant growth in power sector.

Exhibit 03: Energy Generation

Power Generation Pattern (FY 2009) Year wise total Gross Energy Generation

In the east zone, electricity generation was mainly done by indigenous gas based power plants and a small percentage from hydro power plant. In the west zone, imported liquid fuel, domestic coal, and natural gas were used for generation of electricity. Low cost electricity generated in the east zone, was also transferred to the west zone through 230 kV East-West Inter-connector (EWI). The energy transferred through EWI at the Ghorasal and Ashuganj end in FY2009 was 2548.99 GWh. The average fuel cost per unit generation of thermal power plants in the east and west zone under BPDB was BDT 0.82/kWh and BDT 3.87/kWh respectively.

Government is committed for providing affordable and reliable electricity to all citizens by 2020 for economic and social development. As per election manifesto of the present government, electricity generation in the country would be 7,000 MW by the year 2013, 8,000 MW by 2015 and 20,000 MW by the year 2021. Meanwhile, the government has declared its vision for power sector to make the country free from load shedding beyond 2011 and to make electricity available for all by the year 2020. In order to fulfill the vision, additional 9,000 MW electricity will be required to be produced within next 5 years under short, medium and long term out of which 5,400 MW would be produced under private


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sector. Adequate transmission and distribution facilities would also be developed to get access to this electricity. Estimated total investment US$ of 9.5 billion would be required all together for generation, transmission and distribution of power. In fact power sector reforms started in late 70’s through the creation of REB. However as part of reform programs, following activities have been done so far.

Policies:

National Energy Policy (NEP) in 1996 Private Sector Power Generation Policy in 1996 Policy Guidelines for Small Power Plants in Private Sector in 1998 Vision Statement and Policy Statement on Power Sector Reforms in June 2000 Energy Regulatory Commission Act 2003

Sector Restructuring:Creation of PGCB & DESCO in 1996 Corparatization of Ashugonj Power Station in 2002 Creation of West Zone Power Distribution Company (WZPDC) in 2003 Energy Regulatory Commission Starts functioning in 2004 Approval to convert BPDB into a Holding Company in January 2004

Private Power Generation

Power sector is a capital-intensive industry that requires huge investment. Competing demands on government resources and declining levels of external assistance from multilateral/bilateral donor agencies further constrained the potential for public investment in the power sector. Recognizing these trends, GOB amended its industrial policy to enable private investment in the power sector and Private Sector Power Generation Policy was framed in 1996 for promoting private sector participation in the generation of electricity.

Power Cell, created under Power Division of Ministry of Power, Energy & Mineral Resources, got the mandate to lead private power development. The Government is committed to attract private investment for installing new power generation capacity on build-own-operate (BOO) basis. A number of fiscal incentives are provided in the Policy for the private power companies. Under the Private Sector Power Generation Policy, number of power plants have been established and under operation and most of which was established during the year 1999-2002.

Fuel Supply

Presently, natural gas is the only significant source of commercial energy in Bangladesh. While sustained energy supply is a prerequisite for economic development, current information indicates that the existing gas reserves will be able to meet the gas demand (at 7% per annum) up to 2016 though with the present production capacity it can not meet the existing demand. As such there exists a demand and supply gap. The demand would reach to 5.6 billion cubic feet by 2025. As the current reserves (12 trillion cubic feet) would be unable to meet the increasing demand, there will be a requirement of investments of over $ 9 billion for exploration, development and transmission network expansion by 2025. The current average daily gas production is about 1970 MMCF against actual demand of 2200 MMCF resulting deficit of around 230 MMCF per day. About 3.3 billion tons of coal reserves comprising 5 deposits at depths of 118-1158 meters have been discovered so far. Out of which 4 deposits (118-509 meters) are extractable at present while one deposit may not be viable for extraction by present day’s technology due to greater depth (640-1158 meters). Only one deposit (Barapukuria) has been developed and coal is being extracted mainly for one thermal power plant.

Power System Reliability

In Bangladesh today, the power system is unreliable. Often, not enough generation is available to serve demand. BPDB sheds load by disconnecting distribution circuits on a rotating basis throughout the country. It is clear that more generation must be built to supply customer demand.

A key question is how much generation is enough to supply customer demand with appropriate reliability. In the demand forecast, we ignore the need for operating reserves and the chance that some of the installed generation would not be available due to scheduled (planned) or unscheduled (forced) maintenance outages. These outages keep any individual unit out of service from 10-25%, or more, of the time. Thus, the power system needs substantially more than projected demand to meet actual



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demand. Units experience random forced outages at rates of 10-15% of the time. Typically, power system operators do not schedule outages during times when peak demand is likely to occur. Thus, the forced outages become the dominant factor.

However, there is very small chance that all units will be out of service at the time of peak demand, leaving the system unable to meet all demand. No matter how many units are installed, there will always be some chance that enough units will be forced out of service that the system is unable to meet all demand. As more units are added, the chance of this occurring becomes very small, but they are never zero. As such actual installed capacity should be higher than the projected demand.

04. BOARD COMPOSITION

The Company comprises of 137 shareholders but the Board of Directors comprises of 19 members all from different tracks. The authorized share capital of the Company is BDT 1,000.00 million divided into 100 million ordinary shares of BDT 10 each and the paid up capital is BDT 600.00 million divided into 60 million ordinary shares of BDT 10 each. The present shareholdings pattern of the Company is as follows:

Exhibit 04: Shareholding Structure

Name of Shareholders Designation No. of shares % of Holdings

Mr. Faisal Ahmed Chowdhury Chairman 1,625,000 2.71

Mr. Md. Ahsanul Kabir Vice-Chairman 1,950,000 3.25

Mr. Abdul Bari Vice-Chairman 707,720 1.18

Mr. Gulam Rabbani Chowdhury Managing Director 1,625,000 2.71

Mr. Nayem Ahmed Chowdhury Director 712,500 1.19

Mr. Fahim Ahmed Chowdhury Director 532,340 0.89

Mr. Robin Chowdhury Director 5,749,300 9.58

Mr. Nanu Kazi Mohammed Miah Director 1,223,720 2.04

Mr. Md. Shirajul Islam Director 1,057,720 1.76

Mr. Mohammed Abdul Ahad Director 607,720 1.01

Mr. Kazi Mohammed Angur Miah Director 1,057,720 1.76

Mr. Abdul Mumin Director 967,150 1.61

Mr. Nasim Ahmed Chowdhury Director 835,570 1.39

Mr. Manzur Ashraf Khan Director 246,000 0.41

Mr. Alimus Sadat Chowdhury Director 162,500 0.27

Mr. Afzal Rashid Chowdhury Director 418,290 0.7

Mr. Monsur Alam Chowdhury Director 318,370 0.53

Mr. Yeahyea Murad Khan Director 308,340 0.51

Mrs. Ubaydia Chowdhury Director 557,720 0.93

Others Shareholders 39,337,320 65.56

Total 60,000,000 100%

Mr. Faisal Ahmed Chowdhury is the Chairman of BEDL who possesses 20 years of successful leadership in business. In 1996 he settled in England. He worked for several British companies and after that started his own business in London by founding Apex Printing and Publishing Ltd. Later, he established another printing wing in the name of Imprint Trading Ltd. He is an Executive Member of Bangladesh Red Crescent Society, Sylhet Unit and Mujib-Jahan Blood Bank. He is currently acting as Chairman of Royal Homes- a large real estate company in Bangladesh.

Mr. Md. Ahsanul Kabir is the Vice-Chairman of BEDL having 24 years of business experience. He started his career with own proprietorship business in civil planning & construction. He is also the proprietor of Ahsan Trading Center and Architect & Builders Ltd.


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Mr. Abdul Bari is the Vice-Chairman of BEDL having 40 years of business experience. He started his business career in tourism sector in the early 70’s. Later, he started garments business and also invested in some other potential projects such as Sylhet Shishu Park Ltd. and Sylhet Women’s Medical College & Hospital. He also has a UK based restaurant business on partnership.

Mr. Gulam Rabbani Chowdhury is the Managing Director of BEDL, Alim Industries Ltd., Royal Homes Ltd. and also Director of Sylhet Chamber of Commerce & Industries. He has 24 years of work experience in industrial sector such as tea processing machinery, electric generator assembling, textile machinery & agro-machinery production, research, development, quality improvement, field demonstration and marketing domestic & overseas.

05. MANAGEMENT EVALUATION & CORPORATE GOVERNANCE

5.1 Management Overview

The overall management of the Company is vested with its Board of Directors, who formulates the policies and strategies for the business. Moreover, the Managing director is the Chief Executive to dictate and supervise the overall functions and day to day operational performance of the Company. However, for uninterrupted operational speed of the Company, the MD seeks advice, valued comments and guidance from the Director. In addition, a team of skilled professionals is working in the Company for advice and consultancy services for smooth operation. The overall management is separated into corporate office and plant office comprising different departments. Top executives of the Company are experienced in their own field and most of them serve the group for a long time. As the sponsors are directly involved with the Company management, their personal credit history and net worth play an important role in determining the Company’s credit quality.

5.2 Human Resources

Presently the Company has 84 employees working in Dhaka office, registered office at Sylhet and plant site. There are 49 skilled employees and 35 unskilled workforces. Officers are recruited by top management through internal recruitment process based on education, skills, experiences etc. Workers are recruited locally by the Plant Manager of the plant with necessary approval by top management.

5.3 External Audit

The accounts are audited by Haque, Shahalam, Mansur & Co., Chartered Accountants for the period under analysis. The financial year of the Company ended at 30th June. The financial statements have been prepared in line with accounting policies following Bangladesh Accounting Standards (BAS) based on accrual basis following going concern assumption. The audit report provides adequate disclosures of the financial statements.

06. OPERATIONAL REVIEW

6.1 Contracts & Agreements

Power Purchase Agreement: BEDL signed power supply agreement on rental basis with BPDB on 28 April 2008 for a term of 15 years to provide 51 MW net electrical power and operating it on Build-Own-Operate (BOO) basis.

Gas Supply Agreement (GSA): BEDL signed gas supply agreement with Jalalabad Gas Transmission and Distribution System Ltd (JGTDSL) on 22 June 2008 for a term of 15 years to supply gas in required quantity and specifications throughout the agreement period. Under the contract, the Maximum Hourly Gas Usage (MHGU) shall be 13,500 Standard Cubic Meter (Sm3) per hour, the Maximum Daily Gas Usage (MDGU) shall be 324,000 Sm3 per day, the Maximum Monthly Gas Usage (MMGU) shall be 7,776,000 Sm3 per month and the Annual Contract Gas Usage (ACGU) during a Contract Year shall be 74,503,800 Sm3 per annum commencing on the initial delivery date.



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Supply contract & Spare Parts Contract:

BEDL has entered into a supply contract with Orient Energy Systems Ltd., local authorized distributor of GE Jenbacher GmbH & Co on 12 August 2008 for delivery of 19 units JGS 620 GS-N.L model gas engines. It has also signed spare parts contract with GE Jenbacher GmbH & Co for supply of all necessary spare parts for a period of 15 years with 1 year warranty period from the date of delivery.

Sub-Station Contract:

The contract for setting up electric sub-station signed with Simex Power Generation Ltd for supply, installation, testing & commissioning of 11/132KV sub-station equipment including power transformer 132KV switchyard equipment, 132KV protection panel, 11KV switchgear, LV switchgear, 132KV cable, 11KV cable with termination etc.

Engineering, Procurement and Construction (EPC) Contract:

For erection and installation of the plant, BEDL engaged local firms to do the task as per plant layout design provided by GE Jenbacher GmbH & Co. BEDL has appointed suitable EPC contractor after negotiating with a number of local firms namely Energy Pac Engineering Ltd., Simex Power Generation Ltd. etc. in this regard. Moreover, the plant was installed by the EPC contractor under top supervision of GE Jenbacher GmbH representative at the project site. GE Jenbacher GmbH will also be responsible for testing and commissioning of the plant.

Operation & Maintenance (0&M) Contract:

The plant is being operated and maintained by BEDL. For 0&M of the plant, BEDL has appointed local qualified engineers and technicians who have experience to work in the power plants. During major overhaul, BEDL will engage GE Jenbacher GmbH & Co. for providing the overhaul services. Besides, STFE Co. Ltd., Thailand, one of the shareholders of BEDL, will also oversee operational and maintenance aspects of the power plant. STFE Co. Ltd., has experiences in the field of engineering, design, consultancy and turnkey solution of power generation projects in Thailand.

6.2 Raw Materials

The major raw material of the project Company is natural gas, which is supplied by Jalalabad Gas Transmission and Distribution System Limited (a company of Petrobangla). The Company has entered into Gas Supply Agreement (GSA) which specifies the sale of all times all project Company’s requirements for gas for the facility during the term hereof to meet start-up, commissioning and operation of the facility. Again, lube oil is needed for operating machines. Total monthly average consumption of lube oil is 10,422 liters at BDT 215 per liter.

For smooth operation and avoidance of any future conflicts, the agreement specifies the maximum quantity (daily, monthly and/or annually) of fuel with defined minimum and/or maximum quality specifications, with an agreed date and agreed term. The fuel quality specification is already in the agreement, which satisfy the fuel quality requirements related to the equipment manufacturer’s warranties. The key features of the GSA are given at Annexure-A in this report.

6.3 Technology

The Company has an infrastructure with most sophisticated state-of-the-art machinery and equipments. The production facilities are based on currently available technology. The Company has been equipped with both imported and local machinery. Imported machinery includes gas generator, gas pipe, gas chromatograph, 132 KV CT, transformer, surge suppressors, lighting arrestor etc from world renowned suppliers like GE Jenbacher, Symtec, Siemex in Austria, Germany, China etc.


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6.4 Cost Structure

Cost of sales includes gas consumption which constituted to nearly 47% and lube oil consumption to 5% of total cost in FY 2009-10. Other expenses includes grease expense, cool net water, spare parts consumption, repair & maintenance which were quite low constituted to only 0.26% of total cost.

Salary and Director’s remuneration contributed to 4% of total cost as it doesn’t require maintaining large size of human resources. General & administrative expenses contributed to around 6% and depreciation & amortization expenses contributed to 11% of total cost. Financial expenses are the second large component contributed to 27% of total cost as the operation is running with huge bank financing.

Exhibit 05: Cost Structure FY 2009-10

07. EVALUATION OF RENTAL POWER AGREEMENT (RPA)

The Rental Power Agreement was signed on 28 April 2008 between BPDB and BEDL for a term of 15 years. Whereas BPDB is a public utility engaged in generation, distribution and sale of electric capacity and energy in Bangladesh and BEDL desired to set up a gas fired power plant located at Fenchugong to provide 51 MW of electric capacity and energy output of the plant to BPDB on rental basis. For this purpose, the Company would be responsible for financing, complete design, supply, inspection, testing, delivery to the site, erection, testing & commissioning, operation & maintenance including overhauling and major overhauling of the plant for the entire term. Spares consumables required for the plant for the entire term would be supplied by the Company at its own cost in accordance with the agreement.

The tariff structure as laid down in the RPA is presented below:

Exhibit 06: Tariff Structure as per RPA

RNERP: Reference Non-Escalable Rental Price in BDT/KW/Month



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RERP: Reference Escalable Rental Price in BDT/KW/Month. Adjustment is applicable to the Local Inflation Indexation Factor applicable to the Month. Local Inflation Indexation Factor (LIIF) to be calculated by dividing the value of the Bangladesh Consumer Price Index as published by the Bangladesh Bank for the 1st month of the quarter by the value of the Bangladesh Consumer Price Index as published by the Bangladesh Bank for the month in which the agreement is signed.

RVOMP: Reference Variable O&M Price in BDT/KWh. Adjustment is applicable to the Local Inflation Indexation Factor applicable to the Month. Local Inflation Indexation Factor to be calculated by dividing the value of the Bangladesh Consumer Price Index as published by the Bangladesh Bank for the 1st month of the quarter by the value of the Bangladesh Consumer Price Index as published by the Bangladesh Bank for the month in which the agreement is signed.

RFP: Reference Fuel Price in BDT/KWh for each contract year and plant factor. Fuel Price Indexation Factor (FPIF) applicable to the billing month and shall be calculated by dividing the price of natural gas in BDT per 1000 Scft as declared by GOB prevailing for the billing month by the price of natural gas in BDT 73.91 per 1000 Scft.

The reference tariff is composed of two components i.e. Rental Payment (Capacity Price) for Dependable Capacity and Energy Payment for Net Energy Output. Capacity price is made up of two sub components i.e. RNERP and RERP. Energy price is made up of two sub components i.e. RVOMP and RFP. If power plant could not achieve dependable capacity for any particular billing month due to reasons other than the default of the Company, BPDB would pay monthly rental payment. The calculation methodology is cited in the followin Exhibit.

Exhibit 07: Calculation Methodology of Rental and Energy Payment

Where, RPNE= RNERP X Dependable Capacity (DC)

Where, RPE= RERP X Dependable Capacity (DC) X Local Inflation Indexation Factor (LIIF)

Where VOMP= RVOMP X Net Energy Output measured in KWh for the billing month X LIIFWhere FP= RFP X Net Energy Output measured in KWh for the billing month X Fuel Price Indexation Factor (FPIF)

Note:Where, RPNE = Non-Escalable Rental Payment payable in BDT RPE = Escalable Rental Payment payable in BDT RNERP = Reference Non-Escalable Rental Price in BDT per KW-Month RERP = Reference Escalable Rental Price in BDT per KW-Month Agreement VOMP = Variable Operation and Maintenance Payment payable in BDT RVOMP = Reference Variable Operation and Maintenance Price in BDT-KW FP = Fuel Payment payable in BDT RFP = Reference Fuel Price in BDT-KW

It is revealed from the tariff calculation that, the Company would receive rent for dependable capacity composed of fixed rental price of BDT 370.60 per kW-month for its dependable capacity and escalable rental price of BDT 123.53 per kW-month for its dependable capacity which is adjustable with local inflation indexation factor. This capacity payment methodology partially offset the risk arising from future inflation. Dependable capacity means at any given time the net amount of capacity of the plant expressed in kW, measured at the Delivery Point as determined by the most recent Dependable Capacity Test. Contracted Capacity means 51 MW net at Reference Site Conditions at a power factor 0.85, measured at Delivery point. If the Dependable Capacity is above the Contracted Capacity then Dependable Capacity shall be set at the value not exceeding the Contracted Capacity of 51 MW.

Capacity Price = RPNE + RP

Energy Price (EP) = VOMP + FP


PROSPECTUS

98

In addition to the capacity price, the Company would receive payment for supplying net energy output which will be calculated through adding VOMP and FP. VOMP is the product of Reference Variable O&M Price (fixed), Net Energy Output measured in the billing month and Local Inflation Indexation Factor. On the other hand, Fuel Price (FP) is the product of Reference Fuel price (fixed), Net Energy Output measured in the billing month and Fuel Price Indexation Factor. The both part of the Energy Price (EP) partially takes care of the inflation as well as future changes in gas price.

Tariff structure of the power project is considered favorable considering the rental price (i.e. capacity price), which covers the debt service obligation, partial fixed O&M expenses as well as compensation for equity investment. Given the 67% debt to capitalization ratio, the aggregated rental payment at 51 MW available capacity and energy payment could service the debt obligation and fixed O&M expenses.

The terms of the RPA serves two important functions. First, BPDB agrees to pay the capacity price of the plant irrespective of energy output generation for its dependable capacity. So the Company should ensure the level of dependable capacity. BPDB will not pay the capacity price if dependable capacity is below 80% of the contracted capacity and such derating has not been rectified within a period of 6 month from the date of such derating has occurred. At the same time, the Company should also ensure the contracted capacity of 51 MW and if dependable capacity falls below the contracted capacity level then the Company will pay liquidated damage to the BPDB. The rental payment for 51 MW could not service the debt obligation without the energy output price. Second, it defines in reasonable detail the rights, responsibilities and obligations of the project Company and the purchasing authority throughout the entire term of contract. Under the RPA, the Company agrees to make the contracted level of electricity generation capacity available to BPDB (subject to a certain amount of annual outage time for maintenance or other outages) by an agreed term and the purchaser agrees to pay the agreed tariff for capacity made available to it and the net electrical output dispatched to it. The RPA also incorporates the provisions and methodology related to the arrangements and mechanics of payments.

Although there are two parties in RPA, the responsibilities and obligations of each party under this umbrella agreement must be consistent and acceptable to all the stakeholders especially the gas supplier, EPC and O&M Contractor, and lenders. This broader consensus is important from lenders and rating point of view because the lenders should be ensured that the risks assumed by the Company under the RPA, which potentially affect its cash flow adversely, be passed through the other project agreements to the appropriate parties.

The RPA includes protections and damages designed to ensure the risks associated with load growth or shrinkage and gas price variations to the facility. Other key provisions of RPA include:

Tariff adjustment mechanism linked to local inflationFor delays and poor performance of the Company damages are levied but there is no provision of tariff adjustment for the purposeInvoicing and Payment procedures as well as metering requirementsForce Majeure provisionsTesting and Commissioning proceduresTermination procedureEvent of Default from both party and consequences there onDispute resolution

The RPA incorporates the major risks and its mitigation, which is viewed favorable for the project undertaker as well as lenders to the project’s point of view. Salient features of RPA are placed at Annexure-B in this report.

Liquidated Damages (LDs)LDs are damage penalties provided by the parties as a genuine pre-estimated of loss for failure to perform. LDs are generally payable for failure to (i) achieve certain performance parameters i.e. Performance LDs (PLDs) and (ii) meet time bound performance milestones i.e. Delay LDs (DLDs).

Liquidity Damages of different part is highlighted below:



99

Project Agreement Profile of LDs

RPA

• Delay in Commercial Operation:

The project company shall pay BPDB a sum equal to BDT 14,000 per MW per day or fraction thereof within 14 days after Commercial operation Date (COD).

• Contracted Capacity:

If the company fails to maintain contracted capacity (dependable capacity is less than contracted capacity) i.e. 51 MW then the Company has to pay one time as liquidated damages to BPDB an amount equal to BDT 70,000 per KW within 7 days after COD.

• Forced Outages and Maintenance Outages:

If sum of (a) equivalent forced outages energy for the facility; (b) maintenance outages energy and (c) scheduled outages energy exceed ( p) average dependable capacity for that contracted year multiplied by (q) 876 hours in that year, then the power company shall pay to BPDB as liquidated damages as follows:

Rental Factor Amount x [ (a + b + c ) – (p + q) ]

Rental Factor Amount = Reference Rental Price x 1.37

• Security Deposit:

(a) Performance Security Deposit: The Company shall provide Performance Security Deposit to BPDB to meet Commercial Operation Liquidity Damages an amount equivalent to 3 months Rental Payment which will be maintained upto COD.

(b) Operations Security Deposit: An amount equal to 2 months Rental Payment to ensure the proper operation and maintenance of the facility which will be maintained at all times for 4 years from COD.

GSA

• Minimum Gas Purchase

Under the GSA, the Company has to pay LDs to the gas supplier for failing to consume minimum purchase obligation after scheduled COD an Annual Deficiency Payment amount based upon the gas price in effect for such contract year for the full amount of Annual Gas Deficiency.


PROSPECTUS

100

Project Agreement Profile of LDs

EPC

• Delivery LDsIf actual delivery date is delayed more than 14 days beyond the scheduled delivery date, seller shall pay buyer as LDs a sum equal to 0.25% of the equipment price for each subsequent full week of delay in delivery, up to an aggregate maximum of 5% of the contract price. Seller shall have no liability to buyer for the foregoing LDs, unless delay causes deferment of the initial operation date of the equipment and the buyer suffers actual damages.

• Performance LDsSeller guaranteed that if tested in accordance with the specification and technical instructions of GE Jenbacher, the equipment will achieve the values set forth as follows:

Criterion Liquidated DamagesOutput 0.25% of the contract price allocable to the non-

performing unit for each full 1.0% deficiency in accordance to the technical description.

ElectricalEfficiency

0.25% of the contract price allocable to the non-performing unit for each full 1.0% deficiency in

accordance to the technical description.

The LDs payable in respect of deficiencies in performance shall not exceed 5% of the contract price for the non-performing unit(s).

08. CAPITAL STRUCTURE OF POWER PROJECT

Total cost of the project was estimated at BDT 1,581.86 million taking into consideration reconditioned machineries. However, actual project cost was BDT 2,050 million since the management decided to procure brand new machineries instead of reconditioned machineries resulting in 29.59% increase of initial project cost. The present capital structure of the Company comprises of BDT 1,450 million (syndicated loan BDT 1,250 million and term finance BDT 200 million) of debt and BDT 600 million of equity at a debt-equity ratio of 71:29. Detailed breakup of the project cost is given below:

Exhibit 08: Total Project Costs (BDT in Million)

Particulars Total Cost %

Land & land development 26.59 1.30%Building & civil construction 77.61 3.79%Main equipments (Gen-sets) 1390.00 67.80%Other equipments 347.82 16.97%Vehicles, furniture & office equipments 14.32 0.70%Pre operating expenses 43.81 2.14%Interest on bank loan 85.00 4.15%Loan arrangement fees & others 15.00 0.73%Other expenses 49.85 2.43%Total Cost 2,050.00 100.00%

The major part of the project cost was accounted for imported main equipments which was BDT 1,390 million contributed to 67.80% of total cost. Other equipments include gas line to facilitate interconnection between gas transmission and plant, which was BDT 347.82 million contributed to 16.97% of total cost. Per MW project cost stood at BDT 40.20 million.



101

It is found that per MW cost of equipment and installation of the rated project is around BDT 33.33 million. After reviewing the project cost it is also found that the cost estimation is mostly congruent with the standard cost estimation required per MW. However, it can be justified that major part of the project is accounted for plant & machinery and prices of plant & machinery could vary from vendor to vendor and accompanying auxiliaries. Cost reduction is not justifiable through sacrificing quality. Quality sacrifice could adversely affect the project during operation time, which leads to higher outage time, and shut down of the plant thereby reduces the cash flow generation ability of the project.

09. RISK ANALYSIS

The key success factors to assess the Company include favorable industry, modern technology and upgraded machinery, maximum capacity utilization, efficient procurement of raw materials as well as effective cost control strategy. So, assessing related risks are crucial for the success of the business. Power project is free from market risk, product risk, demand risk and price risk because the project has agreement with the government regarding purchase of contracted power generation and rental price is pre fixed with a provision of inflation adjustment. Thus, the evaluation of credit quality covers the broad areas of risks like business risk, technology risk, operational risk, management evaluation, and financial risk.

9.1 Financial Risk:

As per agreement, BPDB agrees to pay capacity price for its contracted capacity of 51 MW. But if dependable capacity is below the contracted capacity then BPDB will pay up to the dependable capacity. Again, if dependable capacity is below 80% of the contracted capacity and such derating has not been rectified within a period of 6 month from the date of such derating has occurred, BPDB will terminate the contract. This capacity generation is fully reflected in revenue generation of the Company, which will be used for debt repayment of BDT 1450 million. Due to maintenance or machinery problem, the Company may not provide contracted capacity which may affect the revenue generation and ultimately affect the debt servicing ability.

9.2 Fuel Price Escalation & Availability Risk:

As per agreement, Jalalabad Gas Transmission and Distribution System Ltd. will ensure gas supply in required quantity and specification throughout the agreement period. As the plant is located in Sylhet which is a gas prone area and the state body (JGTDSL) also makes sure the uninterrupted supply of gas, it would reduce the fuel availability risk to a greater extent. Moreover, any increase/decrease in gas price is adjusted with energy payment by BPDB which will offset the risk of future changes in gas price. However, adjustment of gas price is incorporated in the RPA.

9.3 Operating Risk:

Operational risk covers the ability of the project to achieve the performance as envisaged. The evaluation is done based on technology, fuel supply arrangement, operation and maintenance arrangements etc.

Cost of Engine as well as operation and maintenance cost (O&M) governs the generation cost of electricity. Fuel cost for operating of engine is the major component of O&M cost. The overhauling of machine depends on running hours and no. of starts and stops. The plant is being operated and maintained by BEDL itself. The plant vendor GE Jenbacher GmbH & Co will supply all necessary spare parts for a period of 15 years with 1 year warranty period from the date of delivery. During major overhaul, BEDL will engage GE Jenbacher GmbH & Co. for providing the overhaul services. As BEDL installed 19 units of gen-set, there is a scope of partial supply of electricity to the national grid in case of scheduled maintenance or any minor problem. As such, the project is flexible during operation. Even in worst possible case, the whole operation need not to be completely shutdown at a time due to maintenance or problem in any engine as the residuals can be engaged in power generation.

Power project in general has operational risk and for this project it is quite high considering 15 years of operation. However technical expertise availability in the country, supply contract with the vendor as well as reserve margin of around 8.11% (installed capacity) mitigates the operational risk to some extent.


PROSPECTUS

102

9.4 Project Implementation Risk:

As per agreement, the implementation period was 9 months from the contract signing date of 28 April 2008. But the actual implementation period was delayed by another 9 months because of delay in L/C opening due to higher bank financing cost. The Company reported that, the management had appealed to the concerned authority and got waiver of fine due to liquidity damage provision laid down in the agreement.

If the authority did not waive the fine, then the project Company would incur a cost of maximum BDT 64.26 million (BDT 14,000 per MW per day x 51 MW of contracted capacity x 3 months; the total damages should not exceed 3 months equivalent rental payment as per RPA) which might squeeze its cash flows. However, the project is on full operation since October 2009. At this level, the Company does not have any implementation risk.

9.5 Counter Party Risk:

Revenue generation for the power project depends upon the financial strength of the buyer. The buyer of power is the government body BPDB. The power purchase agreement made by the government is the sovereign guarantee. As the off-taker is the government, credit risk of the off-taker assumes very low from national point of view. BPDB’s historical behavior regarding payments to the power Company does not provide any substantial default behavior. Again, payment security is backed by BPDB letter of credit equal to 2 months rental payment, which shall have initial term of 1 year and shall provide for annual renewal immediately prior to each relevant expiry date for further period of 1 year. In the last 8 months, the Company received payment on an average 5 days prior of last due date.

10. FINANCIAL PERFORMANCE ANALYSIS

The quantitative aspect of CRAB’s ratings focuses on a review of the Company’s policies in relation to financial strength like- the ability to generate cash, service debt, financial leverage targets, generate sufficient return to enable continuous access to fund market etc. The overall performance of the Company can be assessed by analyzing different ratios based on some factors- internal liquidity, operating efficiency, operating profitability, coverage and leverage structure.

Exhibit 09: Financial Performance FY 2009-10 (BDT in Million)

Particulars Amount % of Revenue

Rental Revenue 215.63 41.91%Energy Revenue 298.91 58.09%Total Revenue 514.54 100.00%Cost of Sales 245.33 47.68%Gross Profit 269.22 52.32%General & Administrative Expenses 50.51 9.82%Operating Profit 218.70 42.50%Financial Income 0.72 0.14%EBIT 219.43 42.65%Financial Expenses 111.76 21.72%Net Profit Before Tax 107.66 20.92%Provision for Taxation 5.58 1.08%Net Profit After Tax 102.08 19.84%

The reported turnover of the Company was BDT 514.54 million during FY 2009-10 in its 8 months of operation. The major component of cost of sales includes gas consumption of BDT 189.41 million. The net profit after tax was BDT 102.08 million representing net profitability margin of 19.84%. Going forward, in the upcoming years the project would incur financial expenses as well as requires schedule maintenance and overhauling. As such, it needs to build up overhauling reserve which may affect net profitability. Gross profit margin and EBITDA margin stands at 52.32% and 51.23% respectively.



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In the following exhibits, month wise as well as sub head wise rental payment from BPDB along with consumption of gas and payment for gas is depicted. Total revenue is calculated by taking CPI adjustment into consideration. On the other hand, total gas payment is adjusted with the additional bill made by JGTDSL due to heating value.

Exhibit 10: Monthly Billing History (BDT in Million)

Sl. No. Bill No. Month

Dependable Capacity (Kwh)

Net Energy Output (Kwh)

Rate ofRevenue/Kwh(BDT)

NERP Amount

ERPAmount

VOMP Amount

FPAmount

Supplementary Invoice Amount

Total Payment

01 BEDL/BPDB/0001.1/2009(Before COD) Oct-09 37,944,000 16,956,237 0.92 --- --- --- 15.53 --- 15.53

BEDL/BPDB/0001.2/2009(After COD) Oct-09 36,720,000 10,507,163 1.79 4.88 1.63 2.10 9.62 0.56 18.78

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

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

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

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

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

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

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

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

Total 264,199,425 156.08 52.03 49.44 241.94 15.05 514.54

Exhibit 11: Monthly Gas Bill History(BDT in Million)

Sl. No. Bill No. Month Billing Date Sm3 Rate

(BDT) Due Date Total Amount Remarks

01 39.0334/114 Oct-09 02 Nov-09 6,916,062.53 2.82 22 Nov-09 19.69 Paid

02 39.0334/135 Nov-09 08 Dec-09 6,532,774.92 2.82 27 Dec-09 18.71 Paid

03 39.0334/154 Dec-09 05 Jan-10 4,446,352.50 2.82 18 Feb-10 12.66 Paid

04 39.1908/180 Jan-10 08 Feb-10 5,902,160.01 2.82 24 Mar-10 16.78 Paid

05 39.1908/217 Feb-10 11 Mar-10 7,634,877.64 2.82 24 Apr-10 21.71 Paid

06 39.1908/247 Mar-10 19 Apr-10 9,409,616.87 2.82 02 Jun-10 26.60 Paid

07 39.1908/266 Apr-10 05 May-10 8,343,009.05 2.82 18 Jun-10 23.70 Paid

08 391908/322 May-10 02 Jun-10 8,518,150.48 2.82 18 Jul-10 24.02 Paid

09 39.1908/358 Jun-10 08 Jul-10 9,055,379.89 2.82 22 Aug-10 25.54 Paid

Total 66,758,383.89 189.41

Exhibit 12: Present performance at a Glance (BDT in Million)

Sl. No. Month

Plant Factor (%)

Billing Date Bill Received Date

Deviation(Days)

Gross BillAmount

Gas BillAmount

Net BillAmount

01 Oct-09 72.38 12 Nov-09 15 Dec-09 33 34.31 19.69 14.62

02 Nov-09 69.56 06 Dec-09 11 Jan-10 36 55.39 18.71 36.68

03 Dec-09 45.52 06 Jan-10 09 Feb-10 34 45.92 12.66 33.26

04 Jan-10 63.10 07 Feb-10 09 Mar-10 30 53.87 16.78 37.09

05 Feb-10 90.04 07 Mar-10 12 Apr-10 36 61.41 21.71 39.70

06 Mar-10 98.97 07 Apr-10 12 May-10 35 69.07 26.60 42.47

07 Apr-10 89.59 05 May-10 07 Jun-10 33 63.76 23.70 40.07

08 May-10 88.65 06 Jun-10 30 Jun-10 24 64.61 24.02 40.59

09 Jun-10 95.40 06 Jul-10 10 Aug-10 35 66.20 25.54 40.66

Grand Total 514.54 189.41 325.14


PROSPECTUS

104

From the balance sheet below, total assets of the Company stood at BDT 2,192.10 million. Total liabilities stood at BDT 1,490.05 million of which long term liabilities represents 81.97%. Total equity stood at BDT 702.05 million of which retained earnings constituted to BDT 102.05 million. Therefore, debt to equity ratio is 2.00 times and debt ratio is 63.93%. Cash flow coverage ratio and times interest earned ratio are 1.31 times and 1.96 times respectively which is found satisfactory. On the other hand, current ratio and quick ratio are 0.88 times and 0.85 times respectively. Average collection period of the Company is 64 days which indicates BPDB takes around 2 months to settle down the accounts. Again, return on assets (ROA) and return on equity (ROE) stands at 4.66% and 14.54% respectively.

Exhibit 13: Balance Sheet FY 2009-10 (BDT in Million)

Assets

Current Assets 236.13

Inventories 8.52

Accounts Receivable 134.58

Advances, Deposits & Prepayments 81.50

Cash & Bank Balances 11.53

Non-Current Assets 1955.97

Property, Plant & Equipments 1914.08

Intangible Assets 0.03

Pre-Operating Expenses 41.86

Total Assets 2192.10

Liabilities & Owner’s Equity

Current Liabilities 268.59

Term Loan- Short Term Portion 180.05

Liability for Expenses 14.49

Accounts Payable 74.05

Non Current Liabilities 1221.46

Term Loan- Long Term Portion 1221.46

Total Liabilities 1490.05

Owner’s Equity 702.05

Share Capital 600.00

Retained Earnings 102.05

Total Liabilities & Owner’s Equity 2192.10

11. STRESS RESULTS

Key variability of the projected cash flow and its ability to service debt on time depends on number of factors. Major sources of uncertainty for which revenue and cost can vary are plant load factor, achievement of contracted capacity, machine heat rate, gas heat rate and provision for schedule and force outage. For running Monte-Carlo Simulation (this technique involves generating random numbers for the assumption variables), following ranges of assumption variables have been taken. We have used triangular distribution for the assumption variables where the parameters are minimum, likeliest, and maximum and run thousand trials to get statistics, percentile and sensitivity results of output variables. Assumption Ranges are depicted in the following exhibit:



105

Exhibit 14: Assumptions for Stressing

After stressing the key output variable of Debt Service Coverage Ratio (DSCR), the following stress results are generated. The result of each indicator implies the debt service capacity of the project under stress. If all the assumption variables run together at a time then the Mean and Median values as well as Minimum and Maximum values of output variable are depicted as follows:

Exhibit 15: Stress Output

Statistics DSCR Y-1

DSCR Y-2

DSCR Y-3

DSCR Y-4

DSCR Y-5

DSCR Y-6

DSCR Y-7

DSCR Y-8

DSCR Y-9

DSCR Y-10

Trials 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

Mean 1.26 0.65 1.20 1.30 1.42 1.87 4.72 5.21 5.82 25.12

Median 1.26 0.65 1.19 1.29 1.42 1.86 4.71 5.20 5.81 25.07

Standard Deviation 0.07 0.04 0.08 0.08 0.09 0.12 0.30 0.34 0.38 1.62

Variance 0.01 0.00 0.01 0.01 0.01 0.01 0.09 0.11 0.14 2.63

Coeff. of Var. 0.0566 0.0647 0.0644 0.0651 0.0656 0.0647 0.0645 0.0645 0.0645 0.0645

Minimum 1.03 0.51 0.94 1.02 1.11 1.47 3.71 4.10 4.58 19.75

Maximum 1.51 0.79 1.46 1.59 1.74 2.28 5.77 6.37 7.11 30.69

Mean Std. Error 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.01 0.01 0.05

Percentiles DSCR Y-1

DSCR Y-2

DSCR Y-3

DSCR Y-4

DSCR Y-5

DSCR Y-6

DSCR Y-7

DSCR Y-8

DSCR Y-9

DSCR Y-10

5% 1.15 0.58 1.08 1.17 1.27 1.68 4.24 4.69 5.23 22.58

95% 1.38 0.72 1.33 1.44 1.58 2.08 5.25 5.80 6.48 27.94

Sensitivity Data Assumptions

DSCR Y-1

DSCR Y-2

DSCR Y-3

DSCR Y-4

DSCR Y-5

DSCR Y-6

DSCR Y-7

DSCR Y-8

DSCR Y-9

DSCR Y-10

Contracted Capacity 0.66 0.61 0.62 0.61 0.60 0.61 0.62 0.62 0.62 0.62

Gas Heat Rate 0.63 0.67 0.67 0.68 0.68 0.68 0.67 0.67 0.67 0.67

Machine Heat Rate -0.28 -0.30 -0.30 -0.30 -0.31 -0.30 -0.30 -0.30 -0.30 -0.30

Plant Load Factor 0.18 0.14 0.14 0.13 0.13 0.14 0.14 0.14 0.14 0.14

It is identified that the output variable DSCR is highly sensitive with the contracted capacity and gas heat rate. Distribution of DSCR on year by year basis is plotted below:


PROSPECTUS

106

Exhibit 16: Distribution of DSCR on year by year basis

DSCR Y-1 DSCR Y-2

Entire range is from 1.03 to 1.51 Base case is 1.25 After 1,000 trials, the std. error of the mean is 0.00

Entire range is from 0.51 to 0.79Base case is 0.64After 1,000 trials, the std. error of the mean is 0.00

DSCR Y-3 DSCR Y-4



DSCR Y-5 DSCR Y-6





107

DSCR Y-7 DSCR Y-8Entire range is from 3.71 to 5.77Base case is 4.66After 1,000 trials, the std. error of the mean is 0.01


DSCR Y-9 DSCR Y-10



12. BANK FACILITY & CREDIT HISTORY

The Company has banking relationship with four banks namely BRAC Bank Ltd., AB Bank Ltd., Trust Bank Ltd. and Janata Bank Ltd. It has also financing relationship with three other non-banking financial institutions namely Infrastructure Development Company Limited (IDCOL), Industrial & Infrastructure Development Finance Company Limited (IIDFC) and Prime Finance & Investment Limited. In January 2009, the Company arranged a Syndicated Loan facility of BDT 1,250 million where IDCOL is the lead arranger and BRAC Bank is the co-arranger and agent of this facility. Again, the Company arranged a Term Finance facility of BDT 200 million with Prime Finance & Investment Ltd. (PFIL) in January 2010.

The Company has availed the full amount of funds from the banks/NBFIs at different times over the period of its operations. The interest rate of this syndication loan is 13.00% per annum for IDCOL and other lenders except IIDFC with semi-annual review by the agent and lenders from August 2009. The first drawdown was made on 26 January 2009. The grace period of this syndication loan is of 12 months from the first drawdown date. The term loan facility in case of IDCOL shall be repaid in equal 36 quarterly installments and in case of other lenders shall be repaid in equal 22 quarterly installments on repayment dates commencing from the immediate quarter-end upon the expiry of the grace period. As on 11 July 2010 the Company had outstanding long term loan of BDT 1,174.52 million which was 81.00% of total sanctioned limit of BDT 1,450.00 million. On the other hand, the term financing facility shall be repaid within 18 months bullet payment in nature with 3 months grace period from the date of first disbursement.


PROSPECTUS

108

According to the banker’s report, BEDL’s relationship with the Bank is found satisfactory. Its financial relationship with suppliers and customers in payment through issuing cheque drawn on the banks is satisfactory. The outstanding debt of the Company as on 11 July 2010 is given below:

Exhibit 17: External Borrowings (BDT in Million)

Bank/NBFI Interest Rate Limit of Loan Disburse Repayment

of Term LoanOutstanding as on

11 July 2010

BRAC Bank Limited 13% 300.00 300.00 21.53 278.47

IDCOL 13% 500.00 500.00 21.65 478.35

AB Bank Limited 13% 150.00 150.00 10.77 139.23

Trust Bank Limited 13% 150.00 150.00 10.77 139.23

Janata Bank Limited 13% 100.00 100.00 7.18 92.82

IIDFC 14% 50.00 50.00 3.59 46.41

PFIL 15% 200.00 200.00 --- 200.00

Total 1,450.00 1,450.00 75.48 1,374.52

Collateral Value:Collateral Value:

Mortgage of Project Land.

Hypothecation of all fixed and floating assets including but not limited to machinery, book debts, furniture, fixture and equipment on first ranking pari passu basis creating present and future charge with the RJSC.

Establishment of Escrow Account and Debt Service Account with appropriate cash waterfall arrangement to the satisfaction of the lenders.

Co-payee of benefits under all insurance policies insuring the relevant moveable and immoveable assets of the issuer.

A tri-partite agreement has been signed among Prime Finance, BEDL and BRAC Bank regarding payment of installment of Prime Finance.

Personal guarantee of all the sponsor directors of BEDL including spouses of MD and chairman of the Company.



109

Annexure- A

Key Features of Gas Supply Agreement

Parameters Covenant

Purchase and Sale of Gas

Gas seller shall sell gas and deliver to the gas delivery point to the Company at all times up to maximum specification subject to the availability of gas. And the Company shall pay for gas at a gas price set by the govt. or any authority assigned by it from time to time.

Increase/Decrease in gas price is at the discretion of the gas seller. But gas price adjustment with tariff offset the risk of future changes in gas price.

Construction and Cost of Gas Interconnection Facilities

The Company shall at its own cost and expense, construct the gas interconnection facilities to deliver gas to the gas delivery point including Regulating & Metering Station (RMS) and gas pipeline.

It is the responsibility of the Company to provide gas seller with a commissioning program and schedule of commissioning test and test procedures include among others pressure testing, gas metering system, the quality of the gas, the capability of gas seller’s system to supply the Maximum Hourly Gas Usage.

Gas Nominations

During the period of testing and startup, the gas seller shall make gas available the amount of gas necessary for commissioning of the facility to the Company. The covenants include annual gas nominations, monthly adjustments, daily nomination amount and procedures as per standard terms.

Gas Usage and Security Deposit

The covenant specifies the maximum amount of gas usage by the Company and may request excess quantities of gas. The gas seller would provide excess gas if available.

The Company shall pay to the gas seller a security deposit an amount equivalent to 3 months gas bills based upon Maximum Monthly Gas Usage and the prevailing gas tariff.

Minimum Purchase ObligationThe Company for each contract year shall pay Minimum Purchase Obligation, which is 50% of the Annual Contract Gas Usage.

Payment Obligation

The Company would get 45 days for making payment to the gas seller. The Gas seller entitled the right to suspend deliveries of gas at any time outstanding invoice or invoices remain unpaid as per terms.

There is also a provision of price adjustment for Heating Value. The standard Heating Value is 950 BTU per standard cubic foot. The price will be adjusted at the same direction and in proportion to the ratio between actual heating value and standard value.


PROSPECTUS

110

Parameters Covenant

Metering and Monitoring System Adequate provisions are incorporated in the agreement.

Maintenance and Repair

The Company is responsible to maintain and repair the facilities. Schedule maintenance program to be chalked out with the consent of gas seller and in accordance with the Purchase Power Agreement. For any unscheduled maintenance, it is to be done through both party consultations.

Force Majeure

Force Majeure events are described as Bangladesh political events, foreign political events, Force Majeure-natural. The party affected by the Force Majeure shall use its reasonable efforts to mitigate the effects of any event constituting the Force Majeure, including but not limited to the payment of all reasonable sums of money by or on behalf of the affected party.

Event of DefaultThe event of default by either party may lead to termination of the agreement but there is no provision of termination benefit or penalties in the deed.

Gas Specification

It is agreed that gas delivered will have a Higher Heating Value (HHV) of 950 BTU per standard cubic foot but shall not at any time a HHV of less than 900 BTU per standard cubic foot. The pressure at which the gas will be delivered to the Company at the gas delivery point shall be maximum 350 psig. The temperature of the delivered gas shall not be less than 59 degrees Fahrenheit (15 degree Celsius) and not more than 140 degrees Fahrenheit (60 degree Celsius).



111

Annexure- BKey Features of Rental Power Agreement

Component of Risk Measures in RPA

Demand & Price: Revenue may fluctuate as a result of potential decrease in tariff for capacity and energy output level and demand volatility

From demand and supply analysis, it can be assumed that risk arises from demand volatility is very low.

BPDB agrees to provide the Company the rental payment and energy payment over the life of the contract: (a) agreed capacity subject to some conditions (b) net energy output price.

Capacity payment depends on the performance of the Company and its plant. As such a considerable amount of due diligence is required by lenders for dimensioning the probability of such events occurring.

The risk arises from price variability of the product mitigates through per-fixed tariff structure and calculation methodologies.

Capacity

BPDB agrees to pay capacity price for its contracted capacity of 51 MW if dependable capacity is above the contracted capacity and pay to the Company for making available the dependable capacity after dependable capacity test. Because BPDB does not take this risk.

Inflation: High domestic inflation negatively affects O&M costs, resulting in lower operating profit

The purchaser assumes this risk by agreeing to index the local components of output price as well as capacity price against the appropriate local cost index. Hence, an increased cost of 0&M caused by economic variables over which the project has no control partially takes care of through this index mechanism.

Foreign Currency: Foreign currency rises in value with respect to local currency and tariff revenues are inadequate to pay operating costs, debt service and equity return

There is no substantial currency parity risk as the Company revenues and costs are in the same currency.

Credit Risk: Off-taker fails to honour its contractual payment obligations

Where the credit of the off-taker is in question, we looked into the position of the purchaser. The purchaser here is the Bangladesh Power Development Board (BPDB), a statutory body constituted under P.O. 59 of 1972 of the Peoples Republic of Bangladesh- a public utility body engaged in the generation, distribution and sale of electric capacity and energy in the Peoples Republic of Bangladesh. From national point of view, as the off taker is the government, credit risk of the off-taker assumes low.

BPDB’s Letter of Credit in favour of Company from Sonali Bank or any other Issuing Bank equal to two months rental payments reduces the credit risk to some extent.


PROSPECTUS

112

Component of Risk Measures in RPA

Force Majeure (FM) Events

As per the RPA, FM means an event or situation beyond the control of the affected party that is not foreseeable, is unavoidable, and its origin is not due to negligence or lack of care on the part of the affected party. Such events may include acts of BPDB in its sovereign capacity, wars or revolutions, fires, floods, non availability or reduction or any interruption of gas due to national gas grid failure, epidemics, quarantine restrictions and freight embargoes.

In case of FM, the affected party shall use all reasonable efforts to mitigate the effects of a FM Event. The affected party shall not be liable for any failure or delay in performing its obligations (other than an obligation to make a payment) during the existence of a FM Event. And performance deadline shall be extended and the unaffected party shall not bear any liability for any loss or expense suffered by the affected party as a result of FM Event.

Payment Mechanism for FM Event:

If FM Event occurs after Commercial Operation date, then during the FM Event, BPDB shall pay to the Company (a) energy payments for net energy output delivered during such FM Event plus (b) Rental Payments in an amount equal to the amount due to the Company immediately prior to such FM Events multiplied by FM Ratio.

FM Ratio shall be calculated in the following way:

If FM declared by the Company, where the plant is capable of partly operation, a fraction, the ratio of: Dependable Capacity after the FM Event / Dependable Capacity most recent test prior to the FM Event.If FM declared by the Company and plant is not capable of operation, FM ratio shall be zero.In case of National Gas Grid failure in which case plant is not capable of operation, FM ratio shall be zero.

The Company shall not be entitled to any additional energy payments and rental payments from BPDB arising during any FM Event.

Event of Default and Termination

Events of Default by either party may lead to termination of the agreement. And in such case BPDB does not guarantee any sort of guaranteed revenue and there is virtually no other market where the Company could sell power generated by the plant.



113

CRAB RATING SCALES AND DEFINITIONS –Long Term (Corporate)

Long Term Rating Definition

AAA

Triple A

Companies rated in this category have extremely strong capacity to meet financial commitments. These companies are judged to be of the highest quality, with minimal credit risk.

AA1, AA2, AA3*

Double A

Companies rated in this category have very strong capacity to meet financial commitments. These companies are judged to be of very high quality, subject to very low credit risk.

A1, A2, A3

Single A

Companies rated in this category have strong capacity to meet financial commitments, but are susceptible to the adverse effects of changes in circumstances and economic conditions. These companies are judged to be of high quality, subject to low credit risk.

BBB1, BBB2, BBB3

Triple B

Companies rated in this category have adequate capacity to meet financial commitments but more susceptible to adverse economic conditions or changing circumstances. These companies are subject to moderate credit risk. Such companies possess certain speculative characteristics.

BB1, BB2, BB3

Double B

Companies rated in this category have inadequate capacity to meet financial commitments. Have major ongoing uncertainties and exposure to adverse business, financial, or economic conditions. These companies have speculative elements, subject to substantial credit risk.

B1, B2, B3

Single B

Companies rated in this category have weak capacity to meet financial commitments. These companies have speculative elements, subject to high credit risk.

CCC1, CCC2, CCC3

Triple C

Companies rated in this category have very weak capacity to meet financial obligations. These companies have very weak standing and are subject to very high credit risk.

CC

Double C

Companies rated in this category have extremely weak capacity to meet financial obligations. These companies are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

C

Single C

Companies rated in this category are highly vulnerable to non-payment, have payment arrearages allowed by the terms of the documents, or subject of bankruptcy petition, but have not experienced a payment default. Payments may have been suspended in accordance with the instrument’s terms. These companies are typically in default, with little prospect for recovery of principal or interest.

D(Default)

D rating will also be used upon the filing of a bankruptcy petition or similar action if payments on an obligation are jeopardized.

*Note: CRAB appends numerical modifiers 1, 2, and 3 to each generic rating classification from AA through CCC. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.© Copyright 2008, CREDIT RATING AGENCY OF BANGLADESH LIMITED (“CRAB”). All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT CRAB’S PRIOR WRITTEN CONSENT. All information contained herein is obtained by CRAB from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, such information is provided “as is” without warranty of any kind and CRAB, in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any such information. Under no circumstances shall CRAB have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of CRAB or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if CRAB is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings and financial reporting analysis observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY CRAB IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each provider of credit support for, each security that it may consider purchasing, holding or selling.


PROSPECTUS

PROSPECTUS114

APPLICATION FORMSInterested persons are entitled to a prospectus, if they desire, and that copies of prospectus may be obtained from the issuer and the issue manager

Barakatullah Electro Dynamics LimitedApplication Form

APPLIcAtIoN For sHAres BY INVestors otHer tHAN NoN-resIDeNt BANGLADesHI(s)Warning: Please read the instructions at the back of this form. Incorrectly filled applications may be rejected.

Banker’s Sl. No.the Managing DirectorBarakatullah Electro Dynamics Limited6/A/1 (2nd floor), SegunbagichaRamna, Dhaka-1000, Bangladesh

Dear Sir,I/we apply for and request you to allot me/us the …………..........… number of Shares and I/we agree to accept the same or any smaller number that may be allotted to me/us upon the terms of the Company’s approved Prospectus and subject to the Memorandum and Articles of Association of the Company. Further, I/we authorize you to place my/our name(s) on the Register of Members of the Company and deposit the said shares to my BO (Beneficiary Owner) Account and/or in respect of any application money refundable by crediting directly to the first applicant’s bank account stated below:

No. of Ordinary Shares …………..……............… of Tk. 60/- each including a premium of Tk. 50/- per share.1.

Amount of Tk. (in figure), ……………..…, Taka (in words) ……………….………………………………………………..only deposited vide Cash/Cheque/Draft/Pay Order No. …………………................................................…………………… dated ………………......……..…

on ………………..........…………………........................………................……… Bank ……………………….....………......…………. Branch

4. I/We agree to fully abide by the instruction given herein.

5. Particulars of Applicant(s):

a) sole/First ApplicantName:Father’s/Husband’s name:Mother’s name:Postal address: Occupation: Nationality: Telephone No. (if any)For refund warrant (Application will not be treated as valid if anyone uses a non-scheduled bank. To avoid this complication, investors are requested not to use the name of any non-scheduled bank) Please write the correct and full name of bank and branch.

For refund purpose: I/we want refund through Bank Account Hand Delivery/Courier (please put tick mark in which refund will be made)

the applicant shall provide with the same Bank Account number in the application form as it is in the Bo account of the applicant. otherwise the application will be considered invalid and the subscription money may be forfeited.In Case of deposit into the applicant’s bank account. the applicant will bear the applicable charge, if any, of the applicants banker and the issuer shall symultaneously issue a letter on intimation to the applicant consisting, among others, the date and amount remitted with details of the bank through and to which bank such remittance has been effected.

Applicant’s Bank A/C No.:Name of the Bank: Branch:

b) second ApplicantName:Father’s/Husband’s name:Mother’s name:Postal address:Occupation: Nationality:

6. I/we hereby declare that I/we have read the Prospectus of Barakatullah electro Dynamics Limited and have willingly subscribed for …………… no. of shares of Tk. 60/- each including a premium of Tk. 50/- per share on this form.

7. Specimen Signature(s):

(i) Name (in Block Letters) Signature:

(ii) Name (in Block Letters) Signature:

BANKer’s AcKNoWLeDGeMeNtCertified that this bank has received Tk. ……………………… (in word) ………………………………………………………………………… only from Mr./Mrs./Ms. …………………………………………………………………..…….……… being the Application Money for …………… nos. Ordinary Shares of Barakatullah electro Dynamics Limited.

Authorized signatureBanker’s sl. No. ………………. seal and Date (Name & Designation)

3. Depository (B/O) Account Number

(If you do not mention your valid BO (Beneficiary Owners) account, your application will be treated as invalid)


115PROSPECTUS115

InstructionsInstructions1. As per provision of Depository Act, 1999 and regulations made thereunder shares will be only be issued in dematerialized condition. Please mention your BO (Beneficiary Owner)

Account number in the Application form. If you do not mention your valid BO (Beneficiary Owner) Account, your application will be treated as invalid.2. All information must be typed or written in full (in block letters) in English or in Bengali and must not be abbreviated.3. Application must be made on the Company’s printed form/photocopy or on typed copy/hand written form thereof.4. Application must not be for less than 200 Ordinary shares and must be for a multiple of 200 ordinary shares. Any application not meeting these criterions will not be considered for allotment

purpose.5. Remittance for the full amount of the shares must accompany each application and must be forwarded to any of the Bankers’ to the Issue. Remittance should be in the form

of cash/cheque/bank draft/pay order payable to one of the Bankers’ to the Issue favoring “Barakatullah electro Dynamics Limited” and crossed “A/c Payee only” and must be drawn on a bank in the same town as the bank to which the application form has been sent.

6. In the case of a joint application form, the allotment letter will be dispatched to the person whose name appears first on this application form.7. Joint application form for more than two persons will not be accepted. In case of joint application, each party must sign the application form.8. Applications must be in the full name of individuals or companies or societies or trusts and not in the name of firms, minors or persons of unsound mind. Application from

financial and market intermediary companies must be accompanied by Memorandum of Association and Articles of Association and Certificate of Incorporation.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

more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, whole or part of application money may be forfeited by the commission.

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.11. In the case of non-allotment of securities, if the applicants’ bank accounts as mentioned in their IPO Application Forms are maintained with the Bankers to the Issue, refund amount

of those applicants will be directly credited into the respective bank accounts as mentioned in their IPO Application Forms. Otherwise, refund will be made only through “Account Payee” cheque(s) with bank account number and name of bank branch as mentioned in the application payable at Dhaka or Chittagong, as the case may be.

12. Allotment shall be made solely in accordance with the instructions of the Securities and Exchange Commission.13. Making of any false statement in the application or supplying of incorrect information therein or suppressing any relevant information shall make the application liable to

rejection and subject to forfeiture of application money and/or forfeiture of share (unit) before or after issuance of the same by the issuer. The said forfeited Application money or share (unit) will be deposited in account specified by the Securities and Exchange Commission (SEC). This may be in addition to any other penalties as may be provided for by the law.

14. Applications which do not meet the above requirements, or applications, which are incomplete, shall not be considered for allotment purpose.15. The Bankers to the issue Banks shall be obliged to receive the A/C Payee Cheque (s) on the closing day of the subscription.16. No sale of 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

published.Bankers to the Issue

Bank Asia LimitedBashundhara Branch, DhakaCorporate Branch, DhakaDhanmondi Branch, DhakaGulshan Branch, DhakaMCB Banani Branch, DhakaMCB Dilkusha Branch, DhakaMirpur Branch, DhakaMitford Branch, DhakaMoghbazar Branch, DhakaMohakhali Branch, DhakaNorth South Rd. Branch, DhakaPrincipal Office Branch, DhakaProgoti Sarani Branch, DhakaScotia Branch, DhakaShantinagar Branch, DhakaUttara Branch, DhakaAgrabad Branch, ChittagongAnderkilla Branch, ChittagongBahadderhat Branch, ChittagongCDA Avenue Branch, ChittagongKamal Bazar Branch, ChittagongKhatunganj Branch, ChittagongMCB Sk. Mujib Road Branch, ChittagongStation Road Branch, ChittagongSylhet Main Branch, SylhetSylhet Uposhahar Branch, SylhetRajshahi Branch, RajshahiKhulna Branch, KhulnaBogra Branch, BograJessore Branch, JessoreIshwardi Branch, PabnaDhaka Bank LimitedGoran Business Center, DhakaKhilgaon Branch, DhakaMirpur Branch, DhakaSavar Bazar Branch, DhakaBulta Branch, NarayangonjCDA Avenue Branch, ChittagongCox’s Bazar Branch, Cox’s BazarComilla Branch, ComillakDA Avenue Branch, KhulnaUposhahar Branch, SylhetFirst security Islami Bank LimitedAzampur Branch, DhakaBanani Branch, DhakaBangshal Branch, DhakaBanoshree Branch, DhakaBiswa Road Branch, DhakaDhanmondi Branch, DhakaDilkusha Branch, DhakaDonia Branch, DhakaGulshan Branch, DhakaIslampur Branch, DhakaMirpur Branch, DhakaMohakhali Branch, DhakaMotijheel Branch, DhakaRing Road Branch, DhakaSavar Branch, DhakaSenanibash Branch, DhakaTopkhana Road Branch, DhakaCollage Gate Branch, GazipurAgrabad Branch, ChittagongAndar Killah Branch, ChittagongBohaddarhat Branch, ChittagongHat Hazari Branch, ChittagongJubilee Road Branch, ChittagongKhatungonj Branch, ChittagongPatia Branch, Chittagong

Probortak Mor Branch, ChittagongChokioria Branch, Cox’s BazarCox’s Bazar Branch, Cox’s BazarComilla Branch, ComillaRangpur Branch, RangpurBogra Branch, BograRajshahi Branch, RajshahiAmbarkhana Branch, SylhetSylhet Branch, SylhetTaltola Branch, SylhetJessore Branch, JessoreKhulna Branch, KhulnaMoulvibazar Branch, MoulvibazarPatuakhali Branch, PatuakhaliSatkhira Branch, SatkhiraGobindagonj Branch, SunamgonjLakshmipur Branch, LakshmipurInvestment corporation of BangladeshHead Office, DhakaLocal Office, DhakaBarishal Branch, BarishalBogra Branch, BograChittagong Branch, ChittagongKhulna Branch, KhulnaRajshahi Branch, RajshahiSylhet Branch, Sylhetone Bank LimitedBanani Branch, DhakaBanasree Branch, DhakaBangshal Branch, DhakaDhanmondi Branch, DhakaElaphant Road Branch, DhakaGanakbari (EPZ) Branch, DhakaGulshan Branch, DhakaImamganj Branch, DhakaJatrabari Branch, DhakaJoypara Branch, DhakaKakrail Branch, DhakaKawran Bazar Branch, DhakaMirpur Branch, DhakaMotijheel Branch, DhakaNawabgonj Branch, DhakaPrincipal Branch, DhakaProgati Sharani Branch, DhakaUttara Branch, DhakaNarayanganj Branch, NarayanganjAgrabad Branch, ChittagongCDA Avenue Branch, ChittagongJubilee Road Brahch, ChittagongKhatunganj Branch, ChittagongNanupur Bazar Branch, ChittagongCox’s Bazar Branch, Cox’s BazarDagonBhuiyan Branch, FeniFeni Branch, FeniIslampur Branch, SylhetSylhet Branch, SylhetChowmuhuni Branch, NoakhaliMaijdee Court Branch, NoakhaliChandragonj Branch, LakshmipurRaipur Branch, LaxmipurRamganj Branch, LaxmipurBogra Branch, BograJessor Branch, JessorLaksham Branch, ComillaSherpur Branch, Moulvi BazarSirajgonj Branch, Sirajgonj

shahjalal Islami Bank LimitedBanani Branch, DhakaBangshal Branch, DhakaBijoynagar Branch, DhakaCollege Gate Branch, DhakaDhaka Main Branch, DhakaDhanmondi Branch, DhakaForeign Exchange Branch, DhakaGulshan Branch, DhakaGulshan Sourh Av. Br. DhakaKawran Bazar Branch, DhakaMirpur Branch, DhakaMitford Branch, DhakaMotijhee Branch, DhakaPanthapath Branch, DhakaSatmasjid Road Branch, DhakaSavar Branch, DhakaUttara Branch, DhakaAgrabad Branch, ChittagongChawkbazar Branch, ChittagongJubilee Road Branch, ChittagongKhatunganj Branch, ChittagongMuradpur Branch, ChittagongDargah Gate Branch, SylhetGoala Bazar Branch, SylhetSylhet Branch, SylhetComilla Branch, Comillasoutheast Bank LimitedAganagar Branch, DhakaAgargaon Branch, DhakaAshulia Branch (Rural), DhakaBanani Branch, DhakaBangshal Branch, DhakaBashundhara Branch, DhakaCorporate Branch, DhakaDhanmondi Branch, DhakaImamganj Branch, DhakaKakrail Branch, DhakaMohammadpur Branch, DhakaMouchak Branch, DhakaNew Elephant Road Branch, DhakaNew Eskaton Branch, DhakaPragati Sarani Branch, DhakaPrincipal Branch, DhakaSat Mashjid Road Branch, DhakaSavar Branch, DhakaShaymoli Branch, DhakaUttara Branch, DhakaMadhabdi Branch (Rural), NarshingdiNarayanganj Branch, NarayanganjTongi Branch, GazipurCDA Avenue Branch, ChittagongHalishahar Branch, ChittagongMadambibir Hat Branch, ChittagongMomin Road Branch, ChittagongPahartali Branch, ChittagongCox’s Bazar Branch, Cox’s BazarChhagalnaiya Branch, FeniFeni Branch, FeniKulaura Branch (Rural), Moulvi BazarMoulvibazar Branch, Moulvi BazarBandar Bazar Branch, SylhetChouhatta Branch, SylhetLaldighirpaar Branch, SylhetPathantula Branch, SylhetBarisal Branch, BarisalBashurhat Branch (Rural), NoakhaliBogra Branch, Bogra

Comilla Branch, ComillsKhulna Branch, KhulnaNaogaon Branch, NaogaonRajshahi Branch, RajshahiRangpur Branch, Rangpurstandard chartered BankMirpur(OPC) Branch, DhakaMotijheel(OPC) Branch, DhakaAgrabad Branch, ChittagongNasirabad Branch, ChittagongBogra Branch, BograKhulna Branch, KhulnaSylhet Branch, Sylhettrust Bank LimitedDilkusha Corp. Branch, DhakaKafrul Branch, DhakaMillenium Branch, DhakaPrincipal Branch, DhakaRadisson Hotel Branch, DhakaSavar Cantonment Branch, DhakaSena Kalyan Bhaban Branch, DhakaUttara Corporate Branch, DhakaJoydebpur Branch, GazipurTongi Branch, GazipurChittagong Cant. Branch, ChittagongNaval Base Branch, ChittagongFeni Branch, FeniBeanibazar Branch, SylhetJalalabad Cant. Br., SylhetComilla Cant. Branch, ComillaAshugonj Branch, BrahmanbariaBogra Cantonment Branch, BograChowmohoni Branch, NoakhaliJessore Cantonment Branch, JessoreKhulna Branch, KhulnaKhwaja Yunus Medical College Br., SirajgonjMomenshahi Cant. Branch, MymensinghNarsingdi Branch, NarsingdiRangpur Cant. Branch, RangpurS.S. Cantonment Branch, TangailBrAc Bank LimitedAsad Gate Branch, DhakaBanani Branch, DhakaBashundhara Branch, DhakaDonia Branch, DhakaEskaton Branch, DhakaGraphics Building Branch, DhakaGulshan Branch, DhakaManda Branch, DhakaMirpur Branch, DhakaNawabpur Branch, DhakaNarayangonj Branch, NarayangonjRampura Branch, DhakaShyamoli Branch, DhakaUttara Branch, DhakaAgrabad Branch, ChittagongCDA Avenue Branch, ChittagongHalisohor Branch, ChittagongKazirDeuri Branch, ChittagongMomin Road Branch, ChittagongBogra Branch, BograRajshahi Branch, RajshahiJessore Branch, JessoreKhulna Branch, KhulnaBarishal Branch, BarishalZindabazar Branch, Sylhet

PROSPECTUS116 Barakatullah Electro Dynamics Limited Lighting Bangladesh, We Promise

116

Interested persons are entitled to a prospectus, if they desire, and that copies of prospectus may be obtained from the issuer and the issue manager

Barakatullah electro Dynamics LimitedApplication Form

APPLIcAtIoN For sHAres BY NoN-resIDeNt BANGLADesHI(s)(TO BE SENT DIRECTLY TO THE COMPANY’S CORPORATE OFFICE)

Warning: Please read the instructions at the back of this form. Incorrectly filled applications or failing to comply with any of the instructions there in, applications may be rejected.

the Managing DirectorBarakatullah Electro Dynamics Limited6/A/1 (2nd floor), SegunbagichaRamna, Dhaka-1000, Bangladesh

Dear Sir,I/we apply for and request you to allot me/us the following number of Shares and I/we agree to accept the same or any smaller number that may be allotted to me/us upon the terms of the Company’s approved Prospectus and subject to the Memorandum and Articles of Association of the Company. Further, I/we authorize you to place my/our name(s) on the Register of Members of the Company as the holder(s) of …………………Shares allotted to me/us pursuant to this application and credit the said shares to my BO (Beneficiary Owner) Account and/or in respect of any application money refundable by crediting directly to the first applicant’s bank account stated below:

No. of Shares ……………………………. of Tk. 60/- each including a premium of Tk. 50/- per share.1. Amount of Tk (2. in figure) …………………, (in words) …………………………………………………………………….. only Convertible into US Dollar 1.00 = Tk …………, UK Pound Sterling 1.00 = Tk …………, and Euro 1.00 = Tk …………

3. Payment by cheque/draft no. ………………………………. dated ………….…………… for US Dollar or UK Pound Sterling or Euro or Tk. ……………… drawn on ………………………..…………… Bank ………………………… Branch.

4. Depository (B/O) Account Number

(If you do not mention your valid BO (Beneficiary Owners) account, your application will be treated as invalid)

I/we agree to fully abide by the instructions given herein.5.

Particulars of Applicant(s):6. a) sole/First Applicant

Name:Father’s/Husband’s name:Mother’s name:Mailing Address: Occupation: Nationality:Passport No.: Valid up to:Date of Birth:For refund warrant: Applicant’s Bank A/C No.:Name of the Bank: Branch:

the applicant shall provide with the same Bank Account number in the application form as it is in the Bo account of the applicant. otherwise the application will be considered invalid and the subscription money may be forfeited.

b) second Applicant Name:Father’s/Husband’s name:Mother’s name:Mailing Address:Occupation: Nationality:Passport No.: Valid up to:Date of Birth:

Nominee:

Name:Mailing Address:

I/we hereby declare that I/we have read the Prospectus of 7. Barakatullah electro Dynamics Limited and have willingly subscribed for ……………. no. of shares of Tk. 60/- each including a premium of Tk. 50/- per share on this form.

specimen signature(s):8.

Name in Block Letters signature

Sole/First Applicant:

Second Applicant:

Nominee:


117

InstructionsAs per provision of Depository Act, 1999 and regulations made thereunder shares will be only be issued in 1. dematerialized condition. Please mention your BO (Beneficiary Owner) account number in the Application form. If you do not mention your valid BO (Beneficiary Owner) Account, your application will be treated as invalid.All information must be written or typed in block letters in English and must not be abbreviated.2. Application must not be for less than 3. 200 Ordinary shares and must be for a multiple of 200 ordinary shares. Any application not meeting this criterion will not be considered for allotment purpose.An application must be accompanied by a foreign demand draft drawn on a bank payable at Dhaka or cheque 4. drawn out of foreign currency deposit account maintained in Bangladesh for the full value of shares favoring “Barakatullah electro Dynamics Limited” and crossed “Account payee only”.An application shall be sent by the applicant directly to the Company by 5. 10/03/2011 so as to reach the Company by 19/03/2011. Applications sent after 10/03/2011 or received by the Company after 19/03/2011 will not be considered for allotment purpose.Refund against over-subscription shall be made in the currency in which the value of shares was paid for by the 6. applicant at the same rate as stated on the application form through Account Payee cheque payable at Dhaka with bank account number, bank’s name and branch as indicated in the securities application form.In case of over-subscription, allotment shall be made by lottery solely in accordance with the instructions by 7. SEC.Money receipt on clearance of draft or cheque, as the case may be, shall be sent by post to the applicant by the 8. Company.Joint application by two persons will be acceptable. In such a case, allotment or refund shall be made to the first 9. applicant.Application must be made by an individual, a corporation or company, a trust or a society and not by a firm, minor 10. or persons of unsound mind.In the case of non-allotment of securities, if the applicants’ bank accounts as mentioned in their IPO Application 11. Forms are maintained with the Bankers to the Issue, refund amount of those applicants will be directly credited into the respective bank accounts as mentioned in their IPO Application Forms. Otherwise, refund will be made only through “Account Payee” cheque(s) with bank account number and name of bank branch as mentioned in the application payable at Dhaka or Chittagong, as the case may be.Making of any false statement in the application or supplying of incorrect information therein or suppressing any 12. relevant information in the application shall make the Application liable to rejection and subject to forfeiture of application money and/or forfeiture of share (unit) before or after issuance of the same by the issuer. The said forfeited Application money or share (unit) will be deposited in account specified by the Securities and Exchange Commission (SEC). This may be in addition to any other penalties as may be provided for by the law.The intending NRB applicants shall deposit share money by US$/UK Pound Sterling/EURO draft drawn on any 13. Bank and payable in Dhaka, Bangladesh, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for the value of securities applied for through crossed bank cheque marking “Account Payee only”. So that the issuer’s collecting bank can clear the proceeds and deposit the same into issuer bank’s account in time.The spot buying rate (TT Clean) in US$, UK Pound Sterling and EURO of Sonali Bank at the day of subscription 14. opening will be applicable for the Non-Resident Bangladeshi (NRB) applicants.the applicant shall furnish photocopies of relevant pages of valid passports in support of his being 15. a NrB, duel citizenship or of the foreign passport bearing an endorsement from the concerned Bangladeshi embassy to the effect that no visa is required for him to travel to Bangladesh.In case of joint NRB application joint applicants shall also submit supporting papers/documents in support of their 16. being an NRB as mentioned in para-15 above.An applicant cannot submit more than two applications, one in his/her own name and another 17. jointly with another person. In case an applicant makes more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, whole or part of application money may be forfeited by the commission.No sale of securities shall be made nor shall any money be taken from any person, in connection with 18. such sale until twenty five days after the prospectus have been published.

tHe NrB APPLIcAtIoN ALoNG WItH tHe ForeIGN currNeNcY DrAFt, As ABoVe, Is to Be suBMItteD to tHe coMPANY’s corPorAte oFFIce DIrectLY WItHIN tHe stIPuLAteD tIMe MeNtIoNeD IN PArA 5.

PROSPECTUS118

ADDITIONAL DISCLOSURE BY THE AUDITOR AS PER REQUIREMENT BY THE SECURITIES AND EXCHANGE COMMISSION (SEC)

sec Query No 1Detail calculation of weighted average number of shares outstanding during the year

compliance with Query No 1earnings Per share (ePs): Basic Earnings Per Share: Weighted Average No. of Ordinery Share Outstanding as at 30 June 2010:

Date of Allotment ordinery share Weighted no. of Days calculation Weighted Average No.

of share

01-07-2009 35,000,000.00 - - 35,000,000.00

19-07-2009 20,000,000.00 342 =20000000*342/360 19,000,000.00

17-09-2009 5,000,000.00 284 =5000000*284/360 3,944,444.44

60,000,000.00 57,944,444.44

Weighted Average No. of Ordinery Share Outstanding (a) 57,944,444 Profit attributable to the ordinery shareholders (b) 102,053,354 Basic Earnings per share (c=b/a) 1.76

sec Query No 2

Break up of employee benefits as included in note 29.00A of the Audited Accounts for the year ended 30th June , 2010

compliance with Query No 2Break up of employee benefit as details below:

Name Position Period Amount in tk. remarks

Mr. Faisal Ahmed Chowdhury Chairman, Head of Planning & Business Development July’09 to June’10 1,980,000 Remuneration

Mr. Gulam Rabbani Chowdhury Managing Director July’09 to June’10 1,980,000 Remuneration

Mr. Md. Ahsanul Kabir Vice Chairman, Head of Administration July’09 to June’10 990,000 Remuneration

Mr. Fahim Ahmed Chowdhury Director, Project Director July’09 to June’10 967,500 Remuneration

Mr. Nayem Ahmed Chowdhury Director, Former Head of Administration July’09 to Oct ‘09 330,000 Remuneration

Mr. Alimus Sadat Chowdhury Director, Head of Procurement Dec. ‘09 to June’10 140,000 Remuneration

Mr. Md. Monsur Alam Chowdhury Director, Former Asstt. Head of Procurement July’09 to Nov ‘09 348,000 Remuneration

Mr. Khijir Khan Director-Technical July’09 to June’10 1,200,000 Honorarium

Mr. Muhammed Monirul Islam Chief Financial Officer & Company Secretary July’09 to June’10 1,222,200 Salary

Mr. Abdullah Al Saiful Islam Plant Manager July’09 to June’10 1,076,900 Salary

totAL 10,234,600

sec Query No 3

Note 8.00 of the audited accounts shows amount of capital work-in-progress as Tk.178,74,36,095.00 as on 30.06.2009 which is shown as nil on 30.06.2010. Explain it.

compliance with Query No 3

In note 8.00 of the audited accounts as on 30 June 2010 state that work in process is nil as on 30th June 2010 which was Tk. 178,74,36,095.00 as on 30th June 2009 due to the said capital expenditure has been recognized and capitalized under plant & machinery and building & civil construction in current year.

SEC Query No 4Confirm whether holding of the post of head of planning and business development by Mr. Faisal Ahmed Chowdhury, head of procurement by Mr. Alimus Sadat Chowdhury and Project director by Mr. Fahim Ahmed Chowdhury are in line with the section 104 of the Companies Act, 1994.

Compliance with Query No 4Holding of the post of head of planning and business development by Mr. Faisal Ahmed Chowdhury, Mr. Md. Ahsanul kabir- head of administration, head of procurement by Mr. Alimus Sadat Chowdhury and Project director by Mr. Fahim Ahmed Chowdhury are in line with the section 104 of the Companies Act, 1994.

Dated, Dhaka Sd/-02 December 2010 HAQUE SHAHALAM MANSUR & CO. Chartered Accountants


119

ADDITIONAL DISCLOSURE BY THE MANAGEMENT OF BARAKATULLAH ELECTRO DYNAMICS LIMITED AS REQUIRED BYTHE DHAKA STOCK EXCHANGE LIMITED (DSE)

Query-1: Pre-operating expenses not recognized as expenses when incurred

Barakatullah Electro Dynamics Limited was incorporated on 26 June 2007 and started its commercial operation on 24 October 2009. Pre-operating expenses amounting to Tk. 41,486,387 is the accumulated figures of all deferred expenses of revenue nature incurred between the date of incorporation and date of commercial operation.

The Company has prepared its financial statements in compliance with the requirement of the Companies Act 1994. Since the Company is not a listed Company, the Company followed the requirement of Companies Act 1994 in recognizing pre-operating expenses. Para-M, Part-I, Schedule-XI of Companies Act 1994 permits deferral of administrative expenses which can reasonably be amortized over a certain period of time. Para-N, Part-I, Schedule-XI of Companies Act 1994 also stipulates that if costs are deferred, those should be allocated on systematic basis to future accounting periods.

The Board of Directors of the Company decided to defer the administrative expenses incurred between the date of incorporation and date of commercial operation and amortized over 15 years from the year of commercial operation [Amortization period and amortization expenses are disclosed in the notes 7 and 21 to the financial statements].

In the past, Securities and Exchange Commission has also allowed in some cases to recognize pre-operating expenses in accordance with the requirement of Para-M, Part-I, Schedule-XI of the Companies Act 1994. We refer the following prospectus in this regard for your perusal.

Deshbandhu Polymer Limitedo BSRM Steels Limitedo Summit Power Limitedo Lafarge Surma Cement Limited o

Query-2: No Workers Participation Fund and Workers welfare Fund The Board of Directors of the Company is fully aware of the employees’ benefit stated in the Bangladesh Labor Act 2006 and already introduced a Contributory Provident Fund recognized by the National Board of Revenue vide its letter no. dated 26 October 2010 (enclosed)and also implemented a Gratuity Fund for the employees with effect from 1 July 2010 which was disclosed in the note 33.00a to the audited financial statements. Since the Company is a capital intensive company rather than labor intensive, the Board of Directors of the Company found it impracticable to form Workers’ Profit Participations Fund in the initial stage of the Company.

However, The Board of Directors of the company will be introducing a Workers’ Profit Participation Fund from January 2011.

Query-3: Wrong accounting treatment of advance payment of tax

The Company made a Power Purchase Agreement (PPA) with Bangladesh Power Development Board (BPDB) agreeing to supply 51 MW net electrical power to BPDB for a period of 15 years. As per section 52N of the Income Tax Ordinance 1984, at the time of payment to power rental company on account of purchase of rental power from the company, BPDB shall deduct tax @ 4% which shall be treated as final discharge of tax liability of the rental power company regarding the sale of such rental power.

In accordance with the above section, income tax deducted at source by the BPDB amounting to Tk. 15,198,563 is the final discharge of tax liability and which is the ultimate tax expense of the Company for the current year.

Income Tax paid under section 52N of the Income Tax Ordinance 1984 was presented under the head ‘General & Administrative expenses’ which is not an advance tax in nature rather current tax expenses of the Company and should have been presented under the head ‘Provision for tax’ in the Income Statement. This was an inadvertent mistake in presentation.

sd/-Gulam rabbani chowdhuryDirector & Managing DirectorDated: 19 December 2010

PROSPECTUS120

ADDITIONAL DISCLOSURE BY THE MANAGEMENT OFADDITIONAL DISCLOSURE BY THE MANAGEMENT OFBARAKATULLAH ELECTRO DYNAMICS LIMITEDBARAKATULLAH ELECTRO DYNAMICS LIMITED

Disclosure 1: Increase of Authorized capital

The shareholders of the Company in its 6th extra ordinary general meeting held on 28 December 2010 unanimously approved to increase authorized capital of the company from Tk. 100 crore to Tk. 300 crore. The relevant clauses of Memorandum of Association & Articles of Association have been amended accordingly. RJSC certified copy of Special Resolution with related documents have been submitted to the Securities and Exchange Commission in this respect.

Disclosure 2: Approval of stock Dividend

The shareholders of the Company in its 3rd Annual General Meeting held on 28 December 2010 unanimously approved 10% stock dividend for the year ended 30 June 2010. Presently paid up capital of the company is Tk. 66 crore. RJSC certified copy of Return on Allotment with related documents have been submitted to the Securities and Exchange Commission in this regard.

Sd/-Gulam rabbani chowdhuryDirector & Managing DirectorDated:20 January 2011

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