ATULLAH ELECTRO DYNAMICS LIMITED

(1)

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

PROS

PROSP

P

PECTUS

ECTUS

For 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

BARAKA

R

A

TU

LLAH 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

MANAG

MANAGERERER TOTOTO TTTHHHEEE IIISSUESSUESSUE

Prime Finance Capital Management Limited

63 Dilkusha C/A (3rd Floor), Dhaka-1000, Phone: 9563883 Fax: 9563692 E-mail:LQIR#SULPH¿QFDS.com ; Website: www.SULPH¿QFDS.com

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UNDNDNDERERERWR RRRRRRWWRRIIITERSTERSTERS

Bangladesh Mutual Securities Limited

Shareef Mansion (7th Floor), 56-57, Motijheel C/A Dhaka-1000 Tea Board Building (1st Floor), 111-113, Motijheel C/A, Dhaka-1000Bank Asia Limited

EC Securities Limited

1D¿7RZHUWK)ORRU3ORW1R*XOVKDQ6RXWK&$*XOVKDQ Dhaka-1212

Grameen Capital Management Limited

*UDPHHQ%DQN%KDEDQWK)ORRU0LUSXU'KDND

ICB Capital Management Limited

BDBL Bhaban (14th Floor), 8 D.I.T Avenue, Dhaka-1000 Eunoos Trade Center (Level 21), 52-53 Dilkusha C/A, Dhaka-1000IDLC Finance Limited

LankaBangla Finance Limited

Safura Tower (Level 11), 20 Kemal Ataturk Avenue, Banani, Dhaka-1213

Mercantile Securities Limited

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

Prime Bank Investment Limited

Peoples Insurance Bhaban (11th Floor), 36 Dilkusha C/A, Dhaka-1000 Prime Finance Capital Management Limited63, Dilkusha C/A (3rd Floor), Dhaka-1000

Southeast Bank Limited

Eunoos Centre (Level 2), 52-53 Dilkusha C/A, Dhaka-1000

Swadesh Investment Management Limited

Unique Trade Center (Level 11), Suit No. 01, 8 Panthapath Kawran Bazar, Dhaka-1215

Union Capital Limited

Noor Tower (5th Floor), 73 Sonargaon Road, Dhaka-1205 Jiban Bima Tower (6th Floor), 10 Dilkusha C/A, Dhaka-1000Uttara Finance and Investments Limited BANK

BANK

BANKERSERSERS TOTOTO TTTHHHEEE IIISSUESSUESSUE Investment Corporation of Bangladesh (ICB)

Bank Asia Limited Dhaka Bank Limited

First Security Islami Bank Limited One Bank Limited

BRAC Bank Limited

Shahjalal Islami Bank Limited Southeast Bank Limited Standard Chartered Bank Trust Bank Limited CRE

CRE

CREDIDITDITT RRR TRRRRRRRRRRARRAAAA INGAAAATTINGING

Credit Rating by: Credit Rating Agency of Bangladesh Limited (CRAB)

Rating: Long termA A2

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

( A N I S O 9 0 0 1 : 2 0 0 8 C E R T I F I E D C O M P A N Y )

REGISTERED OFFICE 102-Azadi, Mirboxtola, Sylhet-3100 Phone: 0821-2832117 ; Fax : 0821-2830282 E-mail: [email protected] Website: www.bedlbd.com

CORPORATE OFFICE

6/A/1 (2nd Floor), Segunbagicha, Ramna, Dhaka-1000 Phone: 02-9572305, 02-9560339 ; Fax : 02-9559015 E-mail: [email protected]

Website: www.bedlbd.com

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(2)

(3)

AVAILABILITY OF PROSPECTUS

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

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Companyompany CContact Personontact Person TTelephone Numberelephone Number Barakatullah

BarakatullahEElectro Dynamics Limitedlectro Dynamics Limited

5HJLVWHUHG2I¿FH$]DGL0LUER[WROD6\OKHW 5HJLVWHUHG2I¿FH$]DGL0LUER[WROD6\OKHW &RUSRUDWH2I¿FH$QG)ORRU6HJXQEDJLFKD &RUSRUDWH2I¿FH$QG)ORRU6HJXQEDJLFKD Ramna, Dhaka-1000 Ramna, Dhaka-1000

Monoj Das Gupta Monoj Das Gupta Assistant Manager

Assistant Manager

Nasirul Islam (Kazol) Nasirul Islam (Kazol)

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

Manager to the issue

Manager to the issue CContact Personontact Person TTelephone Numberelephone Number Prime Finance

Prime FinanceCCapital Management Limitedapital Management Limited 63, Dilkusha C/A (3rd Floor)

63, Dilkusha C/A (3rd Floor)

Dhaka-1000

M. Mosharraf Hossain PhD, F M. Mosharraf Hossain PhD, FCCAA

Managing Director & CEO

Managing Director & CEO 95638839563883

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Underwritersnderwriters CContact Personontact Person TTelephone Numberelephone Number Bangladesh Mutual

Bangladesh MutualSSecurities Limitedecurities Limited Shareef Mansion (7th Floor), 56-57, Motijheel C/A

Shareef Mansion (7th Floor), 56-57, Motijheel C/A

Dhaka-1000

S

SumanumanCChandra Modakhandra Modak Assistant Vice President

Assistant Vice President 71694287169428

Bank Asia Limited Bank Asia Limited

Tea Board Building (1st Floor) , 111-113, Motijheel C/A,

Dhaka-1000

Md. Ashrafuddin Ahmed Md. Ashrafuddin Ahmed

Senior Vice President

Senior Vice President 7177031-327177031-32

EC

ECSSecurities Limitedecurities Limited

1D¿7RZHUWK)ORRU3ORW1R*XOVKDQ6RXWK&$

*XOVKDQ'KDND

Mohammad Khurshid Alam Mohammad Khurshid Alam

Head of Monitoring &

Settlement

Settlement 8818108-98818108-9

Grameen

GrameenCCapital Management Limitedapital Management Limited

*UDPHHQ%DQN%KDEDQWK)ORRU0LUSXU

*UDPHHQ%DQN%KDEDQWK)ORRU0LUSXU Dhaka-1216

Dhaka-1216

S

Shieadul Morsalinhieadul Morsalin Head of Merchant Banking

Head of Merchant Banking 9005257-699005257-69

I

ICCBBCCapital Management Limitedapital Management Limited BDBL Bhaban (14th Floor), 8 D.I.T Avenue

BDBL Bhaban (14th Floor), 8 D.I.T Avenue

Dhaka-1000

Md. Abdur Md. AbdurRRoufouf

&KLHI([HFXWLYH2I¿FHU

&KLHI([HFXWLYH2I¿FHU 7160326-77160326-7

IDL

IDLCC Finance Limited Finance Limited

Eunoos Trade Center (Level 21), 52-53 Dilkusha C/A

Dhaka-1000

Md. Moniruzzaman Md. Moniruzzaman Head of Merchant Banking

Head of Merchant Banking 95711709571170

LankaBangla Finance Limited LankaBangla Finance Limited A-A Bhaban (Level 6), 23 Motijheel C/A

A-A Bhaban (Level 6), 23 Motijheel C/A

Dhaka-1000

M.

M.SShakil Islam Bhuiyanhakil Islam Bhuiyan Head of Merchant Banking

Head of Merchant Banking 95612389561238

Mercantile

MercantileSSecurities Limitedecurities Limited

Paramount Heights (13th Floor), 65/2/1 Box Culvert Road,

Purana Paltan, Dhaka-1000

Mustofa Kamal Mustofa Kamal

&KLHI([HFXWLYH2I¿FHU 71196547119654

Prime Bank Investment Limited Prime Bank Investment Limited

Peoples Insurance Bhaban (11th Floor), 36 Dilkusha C/A,

Dhaka-1000

S

Sheikh Mortuza Ahmedheikh Mortuza Ahmed

&KLHI([HFXWLYH2I¿FHU 95556749555674

Prime Finance

Prime FinanceCCapital Management Limitedapital Management Limited 63, Dilkusha C/A (3rd Floor)

63, Dilkusha C/A (3rd Floor)

Dhaka-1000

M. Mosharraf Hossain PhD, F M. Mosharraf Hossain PhD, FCCAA

Managing Director & CEO

Managing Director & CEO 95638839563883

S

Southeast Bank Limitedoutheast Bank Limited

Eunoos Centre (Level 2), 52-53 Dilkusha C/A

Dhaka-1000

Farjana Akter Farjana AkterSSadiadi Assistant Vice President

Assistant Vice President 95711159571115

S

Swadesh Investment Management Limitedwadesh Investment Management Limited

Unique Trade Center (Level 11), Suit No. 01, 8 Panthapath,

Kawran Bazar, Dhaka-1215

Mamun Ahmed Mamun Ahmed Managing Director

Managing Director 81581668158166

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UnionnionCCapital Limitedapital Limited

Noor Tower (5th Floor), 73 Sonargaon Road

Dhaka-1205

Abul Munim Khan Abul Munim Khan Executive Vice President &

Executive Vice President &

Head of Business

Head of Business 96628889662888

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Uttara Finance and Investments Limitedttara Finance and Investments Limited Jiban Bima Tower (6th Floor), 10 Dilkusha C/A

Jiban Bima Tower (6th Floor), 10 Dilkusha C/A

Dhaka-1000

Mohammad

MohammadSShahinurhahinurRRRRRRahmanahman

3ULQFLSDO2I¿FHU

3ULQFLSDO2I¿FHU Merchant Banking

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S

StocktockEExchangesxchanges Available AtAvailable At TTelephone Numberelephone Number Dhaka

DhakaSStocktockEExchange Ltd.xchange Ltd.

9/F Motijheel C/A

Dhaka–1000

Dhaka–1000 DSE LibraryDSE Library 9564601-79564601-7

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ChittagonghittagongSStocktockEExchange Ltd.xchange Ltd.

1080 Sheikh Mujib Road, Agrabad

Chittagong–4100

Chittagong–4100 CSE LibraryCSE Library

(031) 714632-3

(031) 720871-3

Prospectus is also available on these web sites

Prospectus is also available on these web siteswww.secbd.orwww.secbd.orgg,,wwwwww..SULPH¿QFDSSULPH¿QFDS..comcom,,www.bedlbd.www.bedlbd. co

comm,, www.dsebd.orwww.dsebd.orgg,, www.csebd.cowww.csebd.comm and public reference room of the Securities and Exchange and public reference room of the Securities and Exchange

Commission (SEC) for reading and study.

CORPORATE DIRECTORY

RE

REGIGIGISTERESTERESTEREDDD OOOFFIFFIFFICE CORCE CORPCE CORPPORORORARR TERRRRRRRRRRAAAAAAAATETEOOOFFIFFIFFICECECE PLANPLANPLANTTT 102-Azadi, Mirboxtola

102-Azadi, Mirboxtola 6/A/1 (2nd Floor), Segunbagicha, Ramna6/A/1 (2nd Floor), Segunbagicha, Ramna FenchugonjFenchugonj

Sylhet-3100, Bangladesh

Sylhet-3100, Bangladesh Dhaka-1000, BangladeshDhaka-1000, Bangladesh Sylhet, BangladeshSylhet, Bangladesh

Tel: +880-821-2832117

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

Fax: +880-821-2830282

Fax: +880-821-2830282 Fax: +880-2-9559015Fax: +880-2-9559015

E-mail:

E-mail:[email protected]@bedlbd.comm

Web Site:

Web Site:www.bedlbd.cowww.bedlbd.comm

AUDITOR

HAQ

HAQUEUESSHAHALAM MANHAHALAM MANSURSURRR & & COCO.. Chartered Accountants

Chartered Accountants

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

Dhaka-1000, Bangladesh Dhaka-1000, Bangladesh Tel: +880-2-8311197, 9358787 Tel: +880-2-8311197, 9358787 Fax: +880-2-9362649 Fax: +880-2-9362649 E-mail:

(5)

TABLE OF CONTENTS

Item Page No.

Disclosure in respect of issuance of securities in demat form 7

Conditions under Section 2CC of the Securities and Exchange Ordinance, 1969 7

General information 11

'HFODUDWLRQVDQGGXHGLOLJHQFHFHUWL¿FDWHV 12

Declaration about the responsibility of the Directors including the CEO of the Company in respect of the prospectus 12

Consent of the Director(s) to Serve a Director(s) 13

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'XH'LOLJHQFH&HUWL¿FDWHVRIWKH8QGHUZULWHUV

Risk factors & management perceptions about the risks 16

Capital structure 18

Use of IPO proceeds 18

Description of business 19

Company at a glance 19

Important dates 19

Nature of business 19

Principal products and services 19

Market for products and services 19

Relative contribution of the product/service that account for more than 10% of the total revenue 19

Associate, subsidiary/related holding company 19

Distribution of products/services 19

Competitive condition in business 20

Sources and availability of raw materials and the name of principal suppliers 20 Sources of, and requirement for power, gas and water or any other utilities 20

Customer providing 10% or more revenues 20

Description of contract(s) with principal suppliers/customers 20

Material patents, trademarks, licenses or royalty agreements 21

Number of employees 21

Production or service rendering capacity and current utilization 22

Description of property 23

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Internal and external sources of cash 23

Material commitment for capital expenditure 24

Causes for material changes from period to period 24

Seasonal aspect of the company’s business 24

Known trends, events or uncertainties 24

Changes in the assets of the company used to pay off any liabilities 24

Loan taken from holding/parent company or subsidiary company 24

Loan given to holding/parent company or subsidiary company 24

Future contractual liabilities 24

Future capital expenditure 24

VAT, income tax, customs duty or other tax liability 25

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Financial lease commitment 25

Personnel related scheme 25

Breakdown of issue expenses 26

Revaluation of assets 27

Transactions with subsidiary/holding company or associate companies 27

(6)

Material information which is likely to have an impact 27

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Information regarding directorship 28

Directors’ involvement in other organization 29

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Short bio-data of the directors 31

Credit Information Bureau (CIB) report 31

Description of senior executives and departmental heads 34

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Certain Relationships and Related Transactions 35

Transaction with related parties 35

Directors’ facilities 35

Executive compensation 36

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Future compensation 36

Pay increase intention 36

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Transaction with the Directors and Subscribers to the Memorandum 36

Tangible assets per share 38

Ownership of the Company’s securities 39

Shareholding structure 39

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Dividend, voting, pre-emption rights 45

Conversion and liquidation rights 45

Dividend policy 45

Other rights of stockholders 46

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Refund of subscription money 53

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Offer 54

Application for subscription 54

Allotment 57

Underwriting of shares 57

Principal terms and conditions of underwriting agreement 58

Financial Statements 59

Auditors’ report to the shareholders 60

Selected ratios 84

Auditors’ report in pursuance of Section 135(1) under Para 24(1) of Part II of Third Schedule of the Companies Act, 1994 85

Credit Rating Report 88

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Additional disclosure by the auditor 118

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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.

6XI¿FLHQWFRSLHVRISURVSHFWXVVKDOOEHPDGHDYDLODEOHE\WKHLVVXHUVRWKDWDQ\SHUVRQUHTXHVWLQJDFRS\PD\ 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 XQWLOWZHQW\¿YHGD\VDIWHUWKHSURVSHFWXVKDVEHHQSXEOLVKHG

The company shall submit 40 (forty) copies of the printed prospectus to the Securities and Exchange Commission for 4.

RI¿FLDOUHFRUGZLWKLQ5 (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 ZLWKLQ¿YHZRUNLQJGD\VRIWKHSXEOLFDWLRQGDWHE\([SUHVV0DLO6HUYLFH(06RIWKHSRVWDOGHSDUWPHQW$ 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.

(8)

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.

,QFDVHRIQRQUHIXQGRIWKHVXEVFULSWLRQPRQH\ZLWKLQWKHDIRUHVDLG¿IWHHQGD\VWKH'LUHFWRUVRIWKH&RPSDQ\LQ 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 DIRUHVDLG¿IWHHQGD\VWLPHSHULRGDOORZHGIRUUHIXQGRIWKHVXEVFULSWLRQPRQH\´

The subscription list shall be opened and the sale of securities commenced

10. DIWHUWZHQW\¿YH 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 LQ 7DND VXSSRUWHG E\ IRUHLJQ FXUUHQF\ HQFDVKPHQW FHUWL¿FDWH LVVXHG E\ WKH FRQFHUQHG EDQN IRU WKH YDOXH RI 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.

WKH&RPPLVVLRQDQGWKHVWRFNH[FKDQJHVZLWKWKHSUHOLPLQDU\VWDWXVRIWKHVXEVFULSWLRQZLWKLQ¿YHZRUNLQJ 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.

YDOLGDQGLQYDOLGDSSOLFDQWVLH¿QDOVWDWXVRIVXEVFULSWLRQLQHOHFWURQLFIRUPLQ7ZR&'VDQG¿QDOVWDWXVRI subscription to the Commission within3 (three) weeks after the closure of the subscription along with bank VWDWHPHQWRULJLQDOEUDQFKZLVHVXEVFULSWLRQVWDWHPHQW7KHOLVWRIYDOLGDQGLQYDOLGDSSOLFDQWVVKDOOEH¿QDOL]HG 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 DVVSHFL¿HGLQWKHOLVWLQJUHJXODWLRQVRIWKHVWRFNH[FKDQJHVFRQFHUQHGRU

At 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

(9)

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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 WKHDSSOLFDQWVDOORFDWLQJRQHLGHQWL¿FDWLRQQXPEHUIRUHDFKDSSOLFDWLRQLUUHVSHFWLYHRIWKHDSSOLFDWLRQPRQH\,Q 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. IRXUZHHNV from closure of the subscription date.

The company shall issue share allotment letters to all successful applicants within

22. ¿YHZHHNV 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, within7ZHQW\)RXUKRXUV 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 alock- in period of three yearsfrom 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 alock-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 EDQNVKDOOEHIXUQLVKHGWRWKH&RPPLVVLRQMRLQWO\E\WKHLVVXHUDQGLVVXHPDQDJHUVDORQJZLWKDFRQ¿UPDWLRQ 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 LVVXHUZLOOVXEPLWDGHPDWHULDOL]DWLRQFRQ¿UPDWLRQUHSRUWJHQHUDWHGE\&'%/DQGDWWHVWHGE\0DQDJLQJ'LUHFWRU RIWKHFRPSDQ\DORQJZLWKORFNLQFRQ¿UPDWLRQZLWK6(&ZLWKLQRQHZHHNRIOLVWLQJRIWKHVKDUHVZLWKWKHVWRFN 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

OHWWHUDQGVKDOOVLPXOWDQHRXVO\VXEPLWWRWKH&RPPLVVLRQDWWHVWHGFRSLHVRIWKHDSSOLFDWLRQ¿OHGZLWKWKHVWRFN exchanges.

(10)

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 DVUHTXLUHGXQGHUµ'XH'LOLJHQFH&HUWL¿FDWHV¶SURYLGHGZLWK6(&

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)

daysof 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.

3URFHHGVRIWKH3XEOLF2IIHULQJVKDOOQRWEHXVHGIRUDQ\SXUSRVHRWKHUWKDQWKRVHVSHFL¿HGLQWKHSURVSHFWXV$Q\ 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.

$QDSSOLFDQWLQFOXGLQJ15%VKDOOQRWEHDEOHWRDSSO\IRUDOORWPHQWRIVKDUHVZLWKRXW%HQH¿FLDO2ZQHUV%2DFFRXQW 7KH FRPSDQ\ VKDOO GHSRVLW WD[ WR WKH *RYHUQPHQW 7UHDVXU\ RQ WKH VKDUH SUHPLXP RI WKH ,32 DQG VXEPLW 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/2010/97dated 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.

(11)

(12)

DECLARATIONS 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 IRUWKHDXWKHQWLFLW\DQGDFFXUDF\RIWKHVWDWHPHQWVPDGHLQIRUPDWLRQJLYHQLQWKHSURVSHFWXVGRFXPHQWV¿QDQFLDO VWDWHPHQWVH[KLELWVDQQH[HVSDSHUVVXEPLWWHGWRWKH&RPPLVVLRQLQVXSSRUWWKHUHRIDQGFRQ¿UPDIWHUPDNLQJDOO 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 ZKLFKWKH&RPPLVVLRQPD\WDNHDQ\FLYLOFULPLQDORUDGPLQLVWUDWLYHDFWLRQDJDLQVWDQ\RUDOORIXVDVLWPD\GHHP¿W :HDOVRFRQ¿UPWKDWIXOODQGIDLUGLVFORVXUHKDVEHHQPDGHLQWKLVSURVSHFWXVWRHQDEOHWKHLQYHVWRUVWRPDNHDZHOO informed decision for investment.

Sd/-Faisal Ahmed

Faisal AhmedCChowdhuryhowdhury Chairman Chairman Sd/-Md. Ahsanul Kabir Md. Ahsanul Kabir Vice Chairman Vice Chairman Sd/-Abdul Bari Abdul Bari Vice Chairman Vice Chairman Sd/-Nayem Ahmed

Nayem AhmedCChowdhuryhowdhury Director

Director

Sd/-Fahim Ahmed

Fahim AhmedCChowdhuryhowdhury Director

Director

Sd/-R

RobinobinCChowdhuryhowdhury Director Director

Sd/-Nanu Kazi Mohammed Miah Nanu Kazi Mohammed Miah

Director Director

Sd/-Md.

Md.SShirajul Islamhirajul Islam Director Director

Sd/-Mohammed Abdul Ahad Mohammed Abdul Ahad

Director Director

Sd/-Kazi Mohammed Angur Miah Kazi Mohammed Angur Miah

Director Director Sd/-Abdul Mumin Abdul Mumin Director Director Sd/-Nasim Ahmed

Nasim AhmedCChowdhuryhowdhury Director

Director

Sd/-Manzur Ashraf Khan Manzur Ashraf Khan

Director Director

Sd/-Alimus

AlimusSSadatadatCChowdhuryhowdhury Director

Director

Sd/-Afzal

AfzalRRashidashidCChowdhuryhowdhury Director

Director

Sd/-Monsur Alam

Monsur AlamCChowdhuryhowdhury Director

Director

Sd/-Yeahyea Murad Khan Yeahyea Murad Khan

Director Director

Sd/-U

UbaydiabaydiaCChowdhuryhowdhury Director Director

Sd/-Gulam

GulamRRabbaniabbaniCChowdhuryhowdhury Director & Managing Director Director & 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

Faisal AhmedCChowdhuryhowdhury Chairman Chairman Sd/-Md. Ahsanul Kabir Md. Ahsanul Kabir Vice Chairman Vice Chairman Sd/-Abdul Bari Abdul Bari Vice Chairman Vice Chairman Sd/-Nayem Ahmed

Nayem AhmedCChowdhuryhowdhury Director

Director

Sd/-Fahim Ahmed

Fahim AhmedCChowdhuryhowdhury Director

Director

Sd/-R

RobinobinCChowdhuryhowdhury Director Director

Sd/-Nanu Kazi Mohammed Miah Nanu Kazi Mohammed Miah

Director Director

Sd/-Md.

Md.SShirajul Islamhirajul Islam Director Director

Sd/-Mohammed Abdul Ahad Mohammed Abdul Ahad

Director Director

Sd/-Kazi Mohammed Angur Miah Kazi Mohammed Angur Miah

Director Director Sd/-Abdul Mumin Abdul Mumin Director Director Sd/-Nasim Ahmed

Nasim AhmedCChowdhuryhowdhury Director

Director

Sd/-Manzur Ashraf Khan Manzur Ashraf Khan

Director Director

Sd/-Alimus

AlimusSSadatadatCChowdhuryhowdhury Director

Director

Sd/-Afzal

AfzalRRashidashidCChowdhuryhowdhury Director

Director

Sd/-Monsur Alam

Monsur AlamCChowdhuryhowdhury Director

Director

Sd/-Yeahyea Murad Khan Yeahyea Murad Khan

Director Director

Sd/-U

UbaydiabaydiaCChowdhuryhowdhury Director Director

Sd/-Gulam

GulamRRabbaniabbaniCChowdhuryhowdhury Director & Managing Director Director & Managing Director

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Companies & Firms

$GDWHGDQGVLJQHGFRS\RIWKH3URVSHFWXVKDVEHHQ¿OHGIRUUHJLVWUDWLRQZLWKWKH5HJLVWUDURI-RLQW6WRFN&RPSDQLHV )LUPV*RYHUQPHQWRIWKH3HRSOHV¶5HSXEOLFRI%DQJODGHVKDVUHTXLUHGXQGHU6HFWLRQRIWKH&RPSDQLHV$FW 1994 before Publication of the Prospectus.

(14)

'XHGLOLJHQFHFHUWLÀFDWHRIPDQDJHUWRWKHLVVXH

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:

:HZKLOH¿QDOL]LQJWKHGUDIWSURVSHFWXVSHUWDLQLQJWRWKHVDLGLVVXHKDYHH[DPLQHGYDULRXVGRFXPHQWVDQGRWKHU 1.

materials as relevant for adequate disclosures to the investors; and

2QWKHEDVLVRIVXFKH[DPLQDWLRQDQGWKHGLVFXVVLRQVZLWKWKHLVVXHUFRPSDQ\LW¶V'LUHFWRUVDQG2I¿FHUVDQG 2.

RWKHU$JHQFLHVLQGHSHQGHQWYHUL¿FDWLRQRIWKHVWDWHPHQWVFRQFHUQLQJREMHFWVRIWKHLVVXHDQGWKHFRQWHQWVRIWKH documents and other materials furnished by the issuer company.

WE CONFIRM THAT:AA

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, FCA Managing Director & CEO

Prime Finance Capital Management Limited Date: 01 February 2011

(15)

'XHGLOLJHQFHFHUWLÀFDWHRIWKHXQGHUZULWHUV

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:

:HZKLOHXQGHUZULWLQJWKHDERYHPHQWLRQHGLVVXHRQD¿UPFRPPLWPHQWEDVLVKDYHH[DPLQHGWKHGUDIWSURVSHFWXV 1.

other documents and materials as relevant to our underwriting decision; and

2Q WKH EDVLV RI VXFK H[DPLQDWLRQ DQG WKH GLVFXVVLRQ ZLWK WKH LVVXHU FRPSDQ\ LW¶V 'LUHFWRUV DQG 2I¿FHUV DQG 2.

RWKHU$JHQFLHVLQGHSHQGHQWYHUL¿FDWLRQRIWKHVWDWHPHQWVFRQFHUQLQJREMHFWVRIWKHLVVXHDQGWKHFRQWHQWVRIWKH documents and other materials furnished by the issuer company;

-WE CONFIRM THAT:AA

(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 ¿IWHHQGD\VRIFDOOLQJXSWKHUHRIE\WKHLVVXHUDQG

(c) this underwriting commitment is unequivocal and irrevocable. For Underwriters

Sd/-Md. Golam Sarwar Bhuiyan Managing Director

Bangladesh Mutual Securities Limited

Sd/-Erfanuddin Ahmed President & Managing Director

Bank Asia Limited

Sd/-Tanjil Chowdhury &KLHI([HFXWLYH2I¿FHU EC Securities Limited Sd/-Md. Aliuzzaman Managing Director *UDPHHQ&DSLWDO0DQDJHPHQW/LPLWHG Sd/-Md. Abdur Rouf &KLHI([HFXWLYH2I¿FHU ICB Capital Management Limited

Sd/-Selim R. F. Hussain CEO & Managing Director

IDLC Finance Limited

Sd/-0D¿]XGGLQ6DUNHU

Managing Director LankaBangla Finance Limited

Sd/-Mustofa Kamal &KLHI([HFXWLYH2I¿FHU Mercantile Securities Limited

Sd/-Sheikh Mortuza Ahmed &KLHI([HFXWLYH2I¿FHU Prime Bank Investment Limited

Sd/-M. Mosharraf Hossain PhD, FCA Managing Director & CEO Prime Finance Capital Management

Limited

Sd/-Syed Imtiaz Hasib Deputy Managing Director

Southeast Bank Limited

Sd/-Mamun Ahmed Managing Director Swadesh Investment Management

Limited

Sd/-0XVK¿T8O4XD\RRP

Managing Director (Current Charge) Union Capital Limited

Sd/-606KDPVXO$UH¿Q

Managing Director & CEO Uttara Finance and Investments

(16)

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 risks

9RODWLOLW\RIPRQH\PDUNHWPD\LQÀXHQFHVWKHRYHUDOOLQWHUHVWUDWHVWUXFWXUHRIWKHFRXQWU\2Q-XQHDVWKH 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 perception

Management 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 risks

7DNDKDVEHHQGHYDOXHGVLJQL¿FDQWO\DJDLQVWGROODUDQGLWLVYHU\XQOLNHO\WRDSSUHFLDWHLQQHDUIXWXUH%XWGHYDOXDWLRQ of local currency against major international currencies will not affect the company’s business.

Management perception

Since 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 risks

The 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.

Currently 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

LQGH[+HQFHWKHFRPSDQ\LVSURWHFWHGDJDLQVWDQ\VRUWRIORVVGXHWRFRPSHWLWLRQRULQÀDWLRQ

Market and technology-related risks

Capacity 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.

The 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 regulations

Although existing government rules and regulations are very favorable for the company, chances are there that the JRYHUQPHQWPLJKWWDNHDQ\SROLF\WKDWPD\DGYHUVHO\DIIHFWSUR¿WDELOLW\DQGRSHUDWLRQRIWKHFRPSDQ\

(17)

+HQFHPDQDJHPHQWRIWKHFRPSDQ\LVFRQ¿GHQWHQRXJKWKDWUHJDUGLQJJRYHUQPHQWSROLF\%('/ZLOO

not have to face any unfavorable situation. Potential changes in global or national policies

Changes 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 RQWKHSUR¿WDELOLW\RIWKH&RPSDQ\

Management perception

Modern life is totally dependent on electricity. Without electricity modern life cannot sustain. Without

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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-operation

If 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 perception

The 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 risks

Operational 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

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of 15 years with 1 year warranty period from the date of delivery. During major overhaul, BEDL will

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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 DJUHHPHQWVKDOOEHFRPHHIIHFWLYHXSRQVLJQLQJDQGVKDOOWHUPLQDWH¿IWHHQ\HDUVDIWHUWKHFRPPHUFLDORSHUDWLRQV 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.

(18)

CAPITAL STRUCTURE

1. Authorized Capital Tk. 3,000,000,000

2. Capital structure prior to IPO Issued, subscribed and paid up capital Total paid up capital prior to IPO

Tk. 660,000,000 Tk. 660,000,000 3. Capital structure after IPO

a) Issued, subscribed and paid up capital prior to IPO Tk. 660,000,000

b) 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 PROCEEDS

a. Barakatullah Electro Dynamics Limited will utilize the net proceeds of public offer as per following schedule: Use of proceeds

S

Sl. No.l. No. ParticularsParticulars Amount of Amount of TTTTakaaka

01 Bank Loan pay off 1,142,350,000

Total

T

Means of Finance

S

Sl. No.l. No. ParticularsParticulars Amount of Amount of TTTTTTakaaka

01 From IPO 1,200,000,000

02 Less: IPO expenses 57,650,000

Total

T

Sd/-

Sd/-(Gulam RabbaniRR Chowdhury) (Muhammed Monirul Islam)

'LUHFWRU 0DQDJLQJ'LUHFWRU &KLHI)LQDQFLDO2I¿FHU Company Secretary b. Implementation schedule of use of IPO proceeds

S

Sl. No.l. No. ParticularsParticulars Amount of Amount of TTTTTTakaaka Approximate date forApproximate date forpaymentpayment

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

06 Loan 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 RabbaniRR Chowdhury) (Muhammed Monirul Islam)

(19)

DESCRIPTION OF BUSINESS

Company at a glance

%DUDNDWXOODK(OHFWUR'\QDPLFV/WGLVWKH¿UVWSULYDWHVHFWRUSRZHUSURGXFLQJFRPSDQ\GHYHORSHGE\1RQ5HVLGHQW Bangladeshi (NRB) investors and local entrepreneur established in 2007 with the main focus on power generation in %DQJODGHVK7KH*RYHUQPHQWRI%DQJODGHVK*2%UHFRJQL]HVWKDWSRZHUGHYHORSPHQWKDVWREHDFFHOHUDWHGLQRUGHU WRDFKLHYHRYHUDOOHFRQRPLFGHYHORSPHQWWDUJHWVRIWKHFRXQWU\DQGDYRLGORRPLQJSRZHUVKRUWDJHV+HQFHWKH*2%LV 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, 6\OKHW )LQDOO\ WKH FRPSDQ\ KDV EHHQ VHOHFWHG DV D TXDOL¿HG FRPSDQ\ E\ %DQJODGHVK 3RZHU 'HYHORSPHQW %RDUG (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)

Incorporation of the Company (as Private Limited) 26 June 200726 June 2007 Date of signing power supply agreement with BPDB

Date of signing power supply agreement with BPDB 28 April 200828 April 2008 'DWHRIVLJQLQJJDVVXSSO\DJUHHPHQWZLWK-*7'6/

'DWHRIVLJQLQJJDVVXSSO\DJUHHPHQWZLWK-*7'6/ 22 June 200822 June 2008 'DWHRIVLJQLQJ*HQVHWVXSSO\DJUHHPHQWZLWK*(-HQEDFKHU*PE+ &R$XVWULD

'DWHRIVLJQLQJ*HQVHWVXSSO\DJUHHPHQWZLWK*(-HQEDFKHU*PE+ &R$XVWULD 12 August 200812 August 2008

Date of conversion into Public Limited

Date of conversion into Public Limited 25 September 200825 September 2008 Denomination of Face Value of Share from Tk 1000 to Tk 100

Denomination of Face Value of Share from Tk 1000 to Tk 100 30 November 200830 November 2008 Denomination of Face Value of Share from Tk 100 to Tk 10

Denomination of Face Value of Share from Tk 100 to Tk 10 30 December 200930 December 2009 Date of commercial operation

Date of commercial operation 24 October 200924 October 2009

Date of formal inauguration by Honorable Prime Minister

Date of formal inauguration by Honorable Prime Minister 03 April 201003 April 2010 'DWHRI,62FHUWL¿FDWLRQIRUTXDOLW\PDQDJHPHQWV\VWHP

'DWHRI,62FHUWL¿FDWLRQIRUTXDOLW\PDQDJHPHQWV\VWHP 01 September 201001 September 2010

Nature of business

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

Principal products and services

At present generating and supplying electricity is the principal product/service of the company.

Market for products and services

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.

Relative contribution of the product/service that accounts for more than 10% of total revenue

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Associate, subsidiary/related holding company

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

Distribution of products/services

The company is generating electricity through its power plant located at Fenchugonj, Sylhet and supplying the electricity to National *ULG

(20)

Competitive condition in business

The 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:

S

Sl. No.l. No. Name of Name of CCompetitoreompetitore

01 Summit Power Limited 02 Khulna Power Company Limited

Sources and availability of raw materials and the names of the principal suppliers

7KHPDLQUDZPDWHULDOIRUJHQHUDWLQJHOHFWULFLW\LVQDWXUDOJDV7KH&RPSDQ\KDVVLJQHG*DV6DOHV$JUHHPHQWZLWK -DODODEDG*DV7UDQVPLVVLRQDQG'LVWULEXWLRQ6\VWHP/WGRQ-XQHIRUVXSSO\RIJDVWR0:)HQFKXJDQM Rental Power Plant, Sylhet shall commence on the execution date and shall continue subject to the other provisions RI*DV3XUFKDVH$JUHHPHQWIRUDSHULRGWKDWHQGVRQWKHH[SLU\GDWHZKLFKLVWKHH[SLUDWLRQGDWHIRUWKHWHUPRIWKH power purchase agreement.

Sources of, and requirement for power, gas and water or any other utilities

Power: 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.

*DV 7KH&RPSDQ\UHTXLUHVQDWXUDOJDVIRUJHQHUDWLRQRIHOHFWULFLW\7KHUHTXLUHGJDVLVVXSSOLHGE\-DODODEDG *DV7UDQVPLVVLRQDQG'LVWULEXWLRQ6\VWHP/WG7KHDQQXDOFRQWUDFW*DVXVDJH$&*8GXULQJDFRQWUDFW 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 revenues

The 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 SURYLGHG KHUHLQ )RU WKLV SXUSRVH FRPSDQ\ VKDOO EH UHVSRQVLEOH IRU ¿QDQFLQJ FRPSOHWH GHVLJQ VXSSO\ LQVSHFWLRQ 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.

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DESCRIPTION OF PROPERTY

7KHFRPSDQ\¶VEXVLQHVVLVRSHUDWHGWKURXJKUHJLVWHUHGRI¿FHDW$]DGL0LUER[WROD6\OKHWFRUSRUDWH x

RI¿FH DW $ QG )ORRU 6HJXQEDJLFKD 5DPQD 'KDND DQG SRZHU SODQW DW )HQFKXJRQM 6\OKHW 7KH UHJLVWHUHG RI¿FH DQG WKH FRUSRUDWH RI¿FH DUH VLWXDWHG RQ UHQWHG SUHPLVH ZKLOH SUHPLVH RI WKH SRZHU SODQW LV owned by the company.

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

Sl. No.l. No. Name of Fixed AssetName of Fixed Asset 01

01 Land and Land DevelopmentLand and Land Development 02

02 Furniture and FixturesFurniture and Fixtures 03

03 2I¿FHDQG(OHFWULFDO(TXLSPHQW2I¿FHDQG(OHFWULFDO(TXLSPHQW

04

04 2I¿FH'HFRUDWLRQ2I¿FH'HFRUDWLRQ

05

05 Motor VehiclesMotor Vehicles 06

06 Building and Civil ConstructionBuilding and Civil Construction 07

07 Maintenance EquipmentMaintenance Equipment 08

08 Plant and MachineryPlant and Machinery

$OOWKHDVVHWVRIWKHFRPSDQ\DUHVLWXDWHGDWFRPSDQ\¶VRI¿FHSUHPLVHVDQGSRZHUSODQWSUHPLVHV$OOWKHDVVHWV x

of the company are in good operating condition. The properties are purchased in brand new condition. x

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

The plant & machinery and other assets of the company are mortgaged (1

x 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 5}th_{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 CONDITION

Internal and external sources of cash

(as per audited accounts)

30-June-10

Amount in

Amount inTTakaaka Amount inAmount in30-June-0930-June-09TTakaaka Amount inAmount in30-June-0830-June-08TTakaaka Internal sources of cash

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

Retained earnings* 102,053,354 -

-Sub-total 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

Grand Total

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Material commitment for capital expenditure

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

Causes for material changes from period to period

(as per audited accounts) Particulars

Particulars Amount inAmount inTTakaaka

30-Jun-10 30-Jun-10 Income Income Revenue Revenue 514,542,637514,542,637 Cost of sales Cost of sales 245,353,077245,353,077 *URVVSUR¿W *URVVSUR¿W 269,189,560269,189,560 *HQHUDO $GPLQLVWUDWLYHH[SHQVHV *HQHUDO $GPLQLVWUDWLYHH[SHQVHV 50,514,63850,514,638 2SHUDWLQJSUR¿W 2SHUDWLQJSUR¿W Financial income Financial income 724,753724,753 219,399,675 219,399,675 Financial expenses Financial expenses 111,763,872111,763,872 3UR¿WEHIRUHWD[ 3UR¿WEHIRUHWD[ 107,635,803107,635,803

Provision for tax

Provision for tax 5,582,4495,582,449

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The company has started its commercial operation from 24 October 2009. During the year ended on 30 June 2010 RSHUDWLQJSUR¿WRIWKHFRPSDQ\ZDV7NFURUHDQGQHWSUR¿WDIWHUWD[ZDV7NFURUH

Seasonal aspect of the company’s business

The operation of the company is not, in general, affected by any seasonal variances.

Known trends, events or uncertainties

)RUFHPDMHXUHVXFKDVSROLWLFDOXQUHVWÀRRGDQGRWKHUQDWXUDOFDODPLWLHVDUHJHQHUDOO\NQRZQHYHQWVWKDWPD\DIIHFW the business operations of the company.

Changes in the assets of the company used to pay off any liabilities

No asset of the company has been disposed to pay off the liabilities of the company.

Loan taken from holding/parent company or subsidiary company

The 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 company

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

Future contractual liabilities

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

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VAT, income tax, customs duty or other tax liability

VATAA

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 GHGXFWHGWD[DWVRXUFH#GXULQJWKHSD\PHQWRISRZHUJHQHUDWLRQLQYRLFHZKLFKLVWUHDWHGDV¿QDOGLVFKDUJHRI 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:

Financial Financial Year Year Assessment Assessment Year Year Assessed Assessed Income Income T Tax Assessedax Assessed by D

by DCTCT PaidPaid RRemarksemarks

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 RWKHUOLDELOLW\DVSHUDXGLWHGDFFRXQWVIRUWKH\HDUHQGHGRQ-XQHGXHWR¿OLQJRISHWLWLRQDJDLQVW%3'%1%5 Customs and other parties for taking exemption facility of import duty, VAT, Supplementary duty etc.

2SHUDWLQJOHDVHGXULQJWKHODVWÀYH\HDUV

7KH FRPSDQ\ KDV HVWDEOLVKHG LWV UHJLVWHUHG RI¿FH DW 6\OKHW DQG FRUSRUDWH RI¿FH DW 'KDND RQ OHDVHGUHQWHG accommodation. Other than these rented accommodations the company did not had any operating lease during the ODVW¿YH\HDUV3DUWLFXODUVRIWKHOHDVHGUHQWHGDFFRPPRGDWLRQVDUHDVIROORZV

S

Sl.l.

No.

No. BranchBranchNameName LocationLocation CContract periodontract period ((AreaAreaSSft.)ft.) rent (rent (MonthlyMonthlyTTk.)k.)

Advance outstanding on Advance outstanding on 30-06-2010 ( 30-06-2010 (TTk.)k.) 1. Registered 2I¿FH 102-Azadi, Mirboxtola

Sylhet – 3100. 2 years startingfrom 1-11-2008 1550 15,000 -2. Corporate 2I¿FH $QGÀRRU6HJXQEDJLFKD Ramna, Dhaka – 1000. 10 years starting from 1-11-2009 2,015 30,000 1,00,000

Financial lease commitment

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Personnel related scheme

The 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 1}st_{July 2010.The matter also disclose in note 33.A of the audited accounts as on 30}

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Breakdown of issue expenses

The total IPO expenses are estimated as follows:

Particulars

Particulars RRateate AmountAmount_T_Tk_k

Issue Management Fee: Issue Management Fee:

Manager to the Issue fee

Manager to the Issue fee 0.60% or maximum Tk. 20 lac0.60% or maximum Tk. 20 lac 2,000,0002,000,000

VAT against Issue Management fee

VAT against Issue Management fee 15% of Issue Management fee15% of Issue Management fee 300,000300,000

SEC SEC fee: fee:

Application fee

Application fee At actualAt actual 10,00010,000

Consent fee

Consent fee 0.15%0.15% 1,800,0001,800,000

Fees related to the stock exchanges: Fees related to the stock exchanges:

Application fee (DSE)

Application fee (DSE) At actualAt actual 5,0005,000

Listing fees for stock exchanges (DSE & CSE)

Listing fees for stock exchanges (DSE & CSE) @ 0.25% up to Tk. 10 crore@ 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)

Annual fee (DSE & CSE) As per listing regulationsAs per listing regulations 190,000190,000

C

CDBL fees and expenses:DBL fees and expenses:

Documentation fee

Documentation fee At actualAt actual 2,5002,500

Initial Public Offering fee

Initial Public Offering fee At actualAt actual 300,000300,000

Annual fee

Annual fee At actualAt actual 100,000100,000

C

Commission & other expenses:ommission & other expenses:

Underwriting commission

Underwriting commission 0.50%0.50% 3,000,0003,000,000

Bankers to the Issue commission

(assuming subscription of 5 times)

(assuming subscription of 5 times) 0.10%0.10% 6,000,0006,000,000

Credit rating fees

Credit rating fees At ActualAt Actual 312,500312,500

E

Expenses related to printing and publications:xpenses related to printing and publications:

Abridged version of prospectus

Abridged version of prospectus EstimatedEstimated 200,000200,000

Notice for subscription, lottery, refund etc.

Notice for subscription, lottery, refund etc. EstimatedEstimated 240,000240,000

Printing of prospectus and forms

Printing of prospectus and forms EstimatedEstimated 600,000600,000

Distribution and collection of forms and data processing

Distribution and collection of forms and data processing EstimatedEstimated 7,550,0007,550,000

Lottery related expenses including BUET fee

Lottery related expenses including BUET fee EstimatedEstimated 740,000740,000

Other expenses including MICR related expenses

Other expenses including MICR related expenses EstimatedEstimated 1,520,0001